14th Sep 2023. 8.58am

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Regency View:


Argentex shares slide on market slowdown

Argentex (AGFX) has seen a significant increase in revenue per client and profits despite the current market slowdown.

The currency management group reported an 8% increase in clients using its trading services in the six months to the end of June, and an 18% increase in revenue per client traded, indicating it is attracting “higher quality” business.

Argentex’s Alternative Transaction Banking service, which allows clients to collect, hold, pay, and manage their currency exposure, now accounts for 15% of revenue at Argentex.

The board expects the group to trade in line with its expectations for the full year, but the half-year results also revealed a reduction in market activity in the group’s institutional and European divisions, cause the shares to slide more than 10%.

Despite the sell-off, the company’s track record of resilience bolsters the investment case at this price and Argentex is high on our list for a second tranche buy.

AGFX Daily Candle Chart

AGFX Daily Candle Chart

Beeks deliver double-digit growth and secures key contracts

Beeks Financial Cloud (BKS), the cloud computing and connectivity provider for financial markets, reported significant growth in the year ended 30 June 2023.

The company’s Private Cloud offering and a new Exchange Cloud contract with the Johannesburg Stock Exchange (JSE) contributed to the company’s success.

Beeks exited FY23 with over 20% growth in ACMRR, reaching £23.8m, which has since increased to over £25m. This growth, combined with the expected JSE Exchange Cloud deployment enhances the company’s FY24 expectations.

Revenue for FY23 is expected to be over 20% higher than FY22, with underlying EBITDA growth of over 35% and underlying profit before tax growth of approximately 10% compared to FY22.

Beeks achieved a positive free cash flow position in the second half of the year, with unaudited net cash of £4.41m at the end of the year.

CEO Gordon McArthur commented:

“We have entered the new year with high levels of revenue visibility and strong momentum and thus remain in line with management expectations for FY24, with further upside potential from new client wins.”

BKS Daily Candle Chart

BKS Daily Candle Chart

CentralNic rebrand as Team Internet Group

CentralNic (TIG) have recently rebranded as Team Internet Group, with its shares now trading under the ticker TIG.

The online marketing and domain name group said this rebranding reflects the company’s evolution and alignment with its foundational ethos of being a cohesive team focused on shaping the future of the internet.

The CentralNic brand will continue as the overarching brand for the Group’s Online Presence businesses. The rebranding does not affect the company’s operations or financial framework, and any legal name change will require shareholder approval.

CentralNic CEO, Michael Riedl said:

“Our mindset has always been about working smart, crafting solutions and innovations that we take pride in. And as we progress under the ‘Team Internet’ banner, our shared purpose becomes even more pronounced, reinforcing that in unity, we will succeed.”

TIG Daily Candle Chart

TIG Daily Candle Chart

Duke Royalty rally on jump in recurring revenue

Duke Royalty (DUKE) reported a record recurring cash revenue of £6m for Q1 FY24, an increase of 17% over Q1 FY23 and a £0.3m increase on the prior quarter. This resulted in an average monthly recurring cash revenue of £2m for the first time in the company’s history.

Total cash revenue reached £7.8m, surpassing the previous record of £6.7m in Q4 FY22.

The alternative capital solutions provider announced the successful exit of its investment in royalty partner Instor Solutions, Inc., resulting in net cash of $11.2m. Duke also completed two material follow-on investments in the quarter: a £1.9m investment into New Path Fire and Security to facilitate its acquisition of BDI Security Limited and a £1.8m investment in Tristone Healthcare to enable the company to complete its acquisition of South West Intervention Service Limited.

Duke expects to achieve recurring cash revenue of £6.2m in Q2 FY24, a 17% year-on-year increase and a further increase on Q1 FY24.

CEO Neil Johnson said:

“We are pleased to report another quarter marked by record-breaking cash performance, underpinned by solid growth. This underscores the resilience of Duke’s business model, especially in the face of ongoing economic challenges.”

“Looking ahead, we remain confident that the consistent quarterly growth we have generated in recurring revenue will continue, and Duke is committed to working with our partners for their long-term growth.”

DUKE Daily Candle Chart

DUKE Daily Candle Chart

Equals to pay maiden dividend due to strong performance

Equals (EQLS) released a strong set of interim results for the six months to end June which saw a significant jump in revenue, record adjusted earnings and a strong balance sheet.

The a fintech payments group which focuses on SME’s marketplaces company reported revenue growth of 43% to £45.0m, including £13.6m from the Solutions platform.

Gross profit margin improved to 52.4% from 47.4%, and adjusted earnings more than doubled to £9.8m compared to the same period last year.

Cash at Bank increased from £15.0m to £17.9m, and basic earnings per share (EPS) rose to 2.64p from 0.38 pence in H1-2022.

Operational and product highlights included the acquisition of Oonex, now called Equals Money Europe, and the integration of Roqqett, an open banking platform.

Equals said Q3-2023 trading saw year-to-date revenue of £63.6m, 39% ahead of the same period in 2022. And CEO, Ian Strafford-Taylor, said that the company’s strong financial performance and continued cash generation enabled it to announce its intention to pay a maiden dividend of 1.5 pence per share in respect of the financial year ending 31 December 2023.

EQLS Daily Candle Chart

EQLS Daily Candle Chart

MP Evans: Production up, profits down in first half

Sustainable palm oil producer, MP Evans (MPE) reported a 2% increase in total crop processed (721,100 tonnes) and a 3% rise in crude palm oil production (166,200 tonnes) for the first half of the year.

However, they faced a 27% drop in crude palm oil prices, which, along with a 26% rise in operational expenses, led to a 62% decline in operating profit to $23.4 million. Earnings per share (EPS) also decreased by 61% to 24.8p.

Despite these challenges, the company maintained its interim dividend per share at 12.5p. Their net cash position decreased from $13.5m to $2.5m.

Since the end of the first half, MP Evans reported increased cropping levels, with a total crop processed of 318,800 tonnes in the subsequent two months up to August. The group also signed an agreement to acquire an additional 8,350 planted hectares in East Kalimantan – a move poised to bolster its existing milling operations.

“The group continues to increase output, notably from its own production facilities, following the commissioning of the Musi Rawas mill this February,” said chairman Peter Hadsley-Chaplin.

“We are delighted to be reporting further strategic increases in planted hectarage, both at Simpang Kiri earlier this year, and the recently announced agreement to acquire over 8,000 planted hectares in East Kalimantan.

“These developments, along with increasing cropping levels, put the group in a strong position to deliver a productive and profitable 2023 and bodes well for its longer-term prosperity.”

MPE Daily Candle Chart

MPE Daily Candle Chart

Renold forecasts better than expected final results on strong trading

Chain maker Renold (RNO) reported strong financial performance in the first four months of its new financial year…

Revenue in the first four months was £85.1m, up 17% from £73.0m the previous year with recently acquired Yuk SA contributing £5.4m in revenue.

Renold maintained a strong order book and saw increased activity following its acquisition of Melbourne-based Davidson Chain PTY.

The company anticipates its full-year results to be “higher than previously expected” due to continued positive trading momentum and increased activity from the Davidson acquisition.

On the price chart Renold’s share are performing well and a bullish ascending channel has formed which sets a pathway back to the November 2021 highs.

RNO Daily Candle Chart

RNO Daily Candle Chart

Solid State’s order book tops £100m

Solid State (SOLI) has made a “strong start” to its financial year with its order book topping £100m.

In a bullish AGM Statement, released on Tuesday, the specialist component supplier said its security & defence sector has seen strong order intake, while the medical sector continues to experience robust demand and new design opportunities.

Solid State said Custom Power, acquired just over a year ago, has seamlessly integrated into the company and plays a vital role, especially in US battery power production. The collaboration between the UK and US teams has yielded fruitful results read the statement.

Solid State’s order book profile is normalising as lead times improve, and it remains strong, totalling £101.1m, with approximately 65% expected to be delivered in the current financial year.

The statement to shareholders reiterated the companies recently upgraded forecasts for the full year while being mindful of supply chain and input cost risks in the current economic landscape.

 “Solid State remains ambitious and continues to review acquisition opportunities and organic growth initiatives, with a view to meeting its new 2030 strategic objective of maintaining compound annual growth in total shareholder return in excess of 20%” read the statement.

SOLI Daily Candle Chart

SOLI Daily Candle Chart

TPXimpact reports strong Q1 performance and positive outlook

TPXimpact (TPX) released an upbeat trading statement for the first quarter of its financial year with like-for-like revenue growing by over 11%, meeting management’s expectations.

The public sector tech transformation consultancy said new business wins during the period exceeded £90m.

TPX’s said its operating margin was in line with its budget and the second quarter of 2024 has begun strongly, with like-for-like revenue growing by 26% in July.

As of June 30, 2023, TPXimpact had a net debt (excluding lease liabilities) of £17.9m. New banking covenants came into effect on July 1, 2023, and the company’s liquidity has comfortably surpassed the relevant thresholds since then.

TPX said its management team was committed to achieving its FY24 targets, which include like-for-like revenue growth of 15-20% and an adjusted earnings margin of 5-6%.

The trading statement has been well received by the market and prices have stabilised in recent months after heavy losses in 2022 and early 2023. Given the current positive newsflow and guidance we’re happy to continue to hold TPX in our list of open positions.

TPX Daily Candle Chart

TPX Daily Candle Chart


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