9th Nov 2023. 9.03am
Regency View:
Update
Regency View:
Update
Argentex CEO and founder departs
Argentex (AGFX) share price dropped sharply in October after it confirmed the immediate departure of its CEO and founder, Harry Adams.
To fill the leadership gap, Jim Ormonde has been appointed as the interim CEO. Ormonde brings a wealth of experience, having previously served as the CEO of Cardsave, a credit card payments company that was once one of the largest in Europe. Moreover, he is currently the chairman of Gusbourne PLC, a wine producer.
Argentex’s chairman, Nigel Railton, revealed that the company have recently reviewed Argentex’s strategy and identified key areas for growth. Jim Ormonde, with his track record of successfully scaling technology businesses, has been chosen to lead the implementation of these strategies.
Investors dislike uncertainty and whilst we do not see the removal of Harry Adams as a game changer, it looks like the market will take some convincing that the new strategy will pay off.
AGFX Daily Candle Chart
Bioventix excels in full-year financial results
Bioventix (BVXP), reported a robust set of full-year results with revenue jumping 9% to £12.82 million, and profit before tax totalling £10.13 million.
The biotech’s core revenue source is its vitamin D antibody, used for detecting vitamin D deficiency, which saw a 7% sales increase to nearly £6 million. Bioventix also benefits from royalty payments, making up about 70% of its annual income.
Looking ahead, Bioventix indicated that the current research conducted in their labs is poised to generate sales between 2028 and 2038. Furthermore, the company foresees ongoing revenue growth from their troponin antibody, a vital biomarker for diagnosing heart attacks. Bioventix has secured a contract with Siemens that extends until 2032, ensuring a steady and predictable revenue stream for the foreseeable future.
Bioventix’s dividend policy is being maintained, with a second interim dividend of 90 pence per share for the current year, maintaining a total distribution to shareholders at 152 pence per share.
BVXP Daily Candle Chart
Eckoh warns of revenue dip in 2024, cites sales slowdown
Eckoh (ECK) released a disappointing half year trading update as it warned that its revenues for the 2024 financial year would be slightly lower.
Call centre payments and software company cited slowed sales processes and longer contract signing times for new clients in its half-year trading update. Some expected enterprise deals were pushed to the second half of the year.
Revenues for the first six months are expected to be around £18.8 million, down from £19.6 million in 2022, due to these challenges and the loss of a major UK-based client.
However, the transition to cloud-based solutions has led to a four-percentage-point increase in recurring revenues, accounting for 83% of sales, and a rise in operating margins to 21%.
Despite the revenue slowdown, full-year profits are expected to remain in line with guidance.
ECK Daily Candle Chart
Inspecs bounce on bullish trading update
Inspecs (SPEC) rallied last week after the eyewear and lens design house reported positive trading results for the first nine months of the year and provided an optimistic outlook for 2023.
During this nine-month period, the company experienced a revenue increase of 4.6%, reaching £159.1 million. When adjusted for currency fluctuations, this growth was still a healthy 2.4%.
The company demonstrated strong cash generation, and by the end of this period, they had successfully reduced their net debt by £6.4 million, bringing it down to £21.2 million.
In the third quarter, Inspecs invested an additional £0.8 million in the construction of a new manufacturing plant located in Vietnam. This facility is expected to be completed in the first half of 2024.
Despite ongoing macroeconomic uncertainties, Inspecs remains confident about their performance and ability to meet full-year results that align with market expectations.
CEO Richard Peck commented:
“Our focus on improving the group’s operational efficiencies continues and, notwithstanding the ongoing macroeconomic uncertainties, with our current order book the board remains confident of delivering full-year results in line with market expectations.”
SPEC Daily Candle Chart
Surface Transforms slide on production issues
Surface Transforms (SCE) share price dropped last week after the high-tech brake manufacturer said it is facing production issues due to single points of failure and a learning curve with new equipment maintenance.
As a result, the company has reduced its sales expectations for 2023 to £8.6 million, with full production now expected in the first quarter of 2024.
To address its cash needs, the company is in talks for a £13 million loan for capital expenditure to expand its capacity.
Surface Transforms aims to achieve a £50 million sales per year run rate in 2024 and a £75 million sales run rate in 2025, with the long-term goal of reaching £150 million in annual sales capacity by 2027.
CEO Kevin Johnson said:
“These ongoing production issues are frustrating for all of us, particularly as the issues are not, in themselves, insurmountable.
“The revision to our plan for 2023 both reflects recent performance and provides certainty for our customers over the next six months. Our customers continue to understand the issues we are facing.”
This latest profit warning is incredibly frustrating for investors after the positivity of recent contract wins. We have placed the stock under review and will keep clients updated accordingly.
SCE Daily Candle Chart
Solid State’s stellar growth: £88 million revenues in H1 2023
Specialist component supplier and manufacturer, Solid State (SOLI) has reported a strong performance in the first half of 2023.
Half year revenues reached approximately £88 million, which is over a 35% increase compared to the previous year. This growth is largely organic and demonstrates the company’s success in their core areas of computing, power, and communications products.
One of the key highlights is the adjusted profit before tax, which stands at least £7.0 million, marking a 67% year-on-year increase.
Solid State attributes its revenue growth to various factors, including the successful delivery of over £23 million worth of products under security and defence contracts. The full period contribution from Custom Power has also played a significant role in this growth. However, the company did face some challenges due to currency headwinds, primarily stemming from USD exchange rates.
The company’s open order book remains robust, amounting to £99.7 million at the end of September. While this is slightly lower than the previous year’s figure of £112.5 million, around 60% of these orders are expected to be delivered within the current financial year. The company anticipates more efficient conversion of these orders into billings due to shorter lead times.
Based on the strong start to the year, Solid State anticipate exceeding current consensus revenue and adjusted profit expectations for the year ending March 31, 2024.
SOLI Daily Candle Chart
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