21st Dec 2023. 9.03am

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Alumasc receives green light for ARP acquisition

Alumasc’s (ALU) awaited acquisition of ARP Group has received regulatory approval, sealing a deal valued at up to £10.0m.

ARP, specialising in metal rainwater and architectural aluminium goods, brings its expertise to complement Alumasc’s sustainable building products.

The strategic move bolsters Alumasc’s growth strategy by adding ARP’s strengths: robust contractor relationships and a product line that aligns seamlessly with Alumasc’s offerings. The synergy is poised to drive immediate earnings growth, enhancing Alumasc’s standing in the market.

CEO Paul Hooper underlined the strategic fit, emphasising how this aligns with Alumasc’s commitment to organic growth through strategic acquisitions.

ALU Daily Candle Chart

ALU Daily Candle Chart

Character anticipates market rebound and plans to initiate share buyback

Toy designer, Character Group (CCT) faced a challenging year marked by decreased revenue of £122.6 million compared to £176.4 million the previous year. However, the latter half saw a 12% revenue increase, contributing to a profit before tax of £5.2 million, meeting market expectations.

The company’s resilience stemmed from its diverse product portfolio featuring new toy releases like Goo Jit Zu, Chill Factor, and Teenage Mutant Ninja Turtles. While domestic markets in the UK and Ireland remain crucial, Character Group aims to expand internationally for substantial growth opportunities.

Financially, their net assets grew slightly to £39.4 million, with a net cash position of £9.6 million. Dividend recommendation stands at 19.0p per share, reflecting a 12% increase, supported by an underlying annual earnings cover of 1.1 times.

Foreign currency fluctuations affected profitability due to purchases in US dollars, resulting in a notional loss of £0.5 million. Excluding these adjustments, the company reported a profit before tax of £4.7 million.

Anticipating market rebound, the company plans new product launches at the London Toy Fair in 2024. The board also intends to seek shareholder approval for a share buy-back program to provide liquidity and potentially return excess capital.

CCT Daily Candle Chart

CCT Daily Candle Chart

Cohort’s half-year results show record growth

Cohort (CHRT) reported robust half-year results ending October 31, 2023, marked by significant growth in revenue, operating profit, and a record order book.

The defence tech company’s financial highlights included:

  • A 22% rise in revenue to £94.3m compared to £77.5m in 2022.
  • Adjusted operating profit increased by 20% to £6.0m from £5.0m in 2022.
  • Adjusted earnings per share reached 10.36 pence, influenced by higher tax rates and increased net interest charges.
  • A notable order intake of £119.1m, reflecting a substantial 1.3x period revenue ratio.
  • A record closing order book of £353.9m, showcasing strong future revenue commitments.

Operational achievements included increased revenue driven by higher UK MOD sales and notable growth in the Communications and Intelligence division. The Sensors and Effectors division saw slightly lower profit performance, yet SEA’s performance, particularly in naval business, contributed to the overall order intake surge.

Looking ahead, the company anticipates a robust second-half performance, supported by a record order book covering over 95% of the full-year forecast revenue. The Group expects enhanced delivery in the Sensors and Effectors division to drive overall growth, aligning with the positive outlook for organic growth in the medium term.

CHRT Daily Candle Chart

CHRT Daily Candle Chart

hVIVO secures £16.8m contract for antiviral drug testing

Human challenge clinical trials specialist, hVIVO (HVO), has secured a substantial £16.8 million contract with a top global pharmaceutical client.

The contract involves testing the client’s respiratory syncytial virus (RSV) antiviral drug using hVIVO’s RSV Human Challenge Study Model.

hVIVO said revenue from this contract will be spread across 2023, 2024, and 2025, with a major portion expected in 2024. The company plans to begin Good Manufacturing Practice (GMP) compliant virus production immediately, aiming for completion in the first half of 2024.

Alongside news of the contract, hVIVO also reported a strong trading performance, with revenues slightly exceeding expectations. Operational enhancements and facility funding have boosted EBITDA margins, projected to surpass 20% for the year ending December 31, 2023, surpassing previous market forecasts. The latest contract bolsters revenue visibility into 2024, with a comprehensive update anticipated in late January 2024.

HVO Daily Candle Chart

HVO Daily Candle Chart

Keywords snaps up MPG for £76.5m

Keywords Studios (KWS) has sealed a significant deal, purchasing The Multiplayer Group (MPG) for £76.5 million from Improbable, which had owned MPG since 2019.

MPG stands out for its expertise in developing AAA multiplayer games and technology for major industry players like Activision Blizzard, Bethesda, and Epic. They offer a broad spectrum of services, including co-development, full game development, data science, and AI, and employ over 360 staff worldwide.

The leadership team at MPG will continue after the acquisition and are set to participate in a management incentive plan based on ambitious growth targets over the next two years. This move is seen as a strategic step by Keywords Studios to cater to the escalating demand for specialised multiplayer game development, especially in the live services sector.

Bertrand Bodson, CEO of Keywords Studios, expressed excitement about integrating MPG into the group, highlighting the strategic synergy between MPG and Keywords Studios’ existing high-quality UK and global Create studios. The collaboration aims to leverage MPG’s strengths, driving further growth in the business.

MPG foresees robust revenue growth in 2024, aligning with the margins of Keywords Studios’ Create division. This acquisition is positioned to bolster Keywords Studios’ position in the gaming industry, enhancing their capabilities in providing specialized multiplayer game development services.

KWS Daily Candle Chart

KWS Daily Candle Chart

LBG Media’s growth misses the mark despite US expansion push

Our recent addition to the AIM Investor portfolio, LBG Media (LBG) has got off to a rocky start after the company published an underwhelming trading update.

LBG project a 6.6% revenue increase, expecting to reach £67 million for the year. This growth was attributed to its bolstered market leadership. However, adjusted earnings (EBITDA) growth, estimated to exceed 8%, was hindered by a decline in profitability within its Australia division, which impacted overall financial performance.

Despite the setback, LADbible saw an expansion in its followers, climbing from 410 million to over 440 million. Additionally, the recent acquisition of Betches Media for $24 million aimed to solidify the company’s position in the US market. Encouragingly, the UK and Ireland sectors displayed robust performance, showcasing high conversion rates and securing a significant number of new and expanding clients.

Conversely, the Australia segment experienced a £3 million reduction in profitability throughout the year. To counter this, LBG Media is restructuring its operating model for greater efficiency. It plans to consolidate social and web operations into its UK base, aiming for a more cost-effective structure to improve indirect and direct revenues.

LBG said it remains confident in its outlook for 2024. It anticipates capitalising on growth opportunities, notably through the integration of Betches Media for US expansion, restructuring strategies in Australia, and leveraging key advertising events like Euro 2024 and the Olympics.

LBG Daily Candle Chart

LBG Daily Candle Chart

Netcall’s AGM update: Continued growth and board evolution ahead

In an AGM statement released this week, Netcall (NET) said it delivered a strong performance in the first half of FY24, matching management’s projections. Their Liberty Cloud solutions witness robust demand, fostering double-digit growth in Annual Contract Value (ACV) and solid profitability.

The rising interest in cloud-based contact centre solutions continues, driving Netcall’s accelerated investment in this realm. They’ve successfully migrated and activated initial cloud contact centre customers within a single public cloud environment.

With a strong pipeline, a healthy financial standing, and plans for AI and intelligent automation investment, Netcall’s Board is confident in the company’s future success.

Board changes were announced previously, and following the meeting, Tamer Ozmen, a Non-Executive Director, steps down, while Nigel Halkes and Richard Hughes, both Non-Executive Directors, join the Board. Further changes in Chair and CEO roles will take effect from January 2024, with Michael Neville retiring from the Board in February 2024, as previously announced.

NET Daily Candle Chart

NET Daily Candle Chart

RWS leverages AI for resilience and growth

RWS Holdings (RWS) recently shared its financial results for the year ending September 30, 2023.

The tech-driven language services provider experienced a 2% decline in revenue, totalling £733.8 million. Profit before tax decreased by 11% to £120.1 million, impacting earnings per share which fell to (7.1)p from 16.1p.

Despite these challenges, RWS made notable progress. They secured new clients across different industries and emphasised higher-growth segments, resulting in incremental revenue. Cost-saving measures of £25 million were implemented, and the integration of Propylon, acquired in July, was successful.

The company’s divisions had mixed performances. Language Services reported a 4% revenue decline, while IP Services and Regulated Industries saw a 2% and 6% decrease, respectively. Language and Content Technology, however, experienced an 8% revenue rise.

Looking ahead, RWS remains optimistic. They are actively focusing on AI-driven solutions and expansion, highlighted by the acquisition of ST Communications, strengthening their African presence and language expertise.

Despite challenging market conditions, RWS emphasised its resilience and strategic initiatives. They’re leveraging AI and concentrating on growth segments to navigate the evolving industry landscape.

RWS Daily Candle Chart

RWS Daily Candle Chart


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