finnCap Research Company Notes - 10 June 2019
Jun 10, 2019 / News
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Sector: Life Sciences
Avacta (AVCT) : Corp
PD-L1 candidate selected
Key data
- Share price (p) 30.5
- Target price (p) 125.0
- Market cap (£m) 35.2
- Enterprise value (£m) 23.4
Avacta announced that it has selected its first clinical candidate Affimer against the cancer immunotherapy target PD-L1, to take into Phase I clinical trials, thereby remaining on track to submit an IND/CTA application by the end of 2020 and dosing of first patients shortly thereafter. PD-LI is an established target, and the long-term value of the anti PD-L1 Affimer is as the backbone and targeting Affimer for its TMAC® collaboration with Tufts and PD-L1/LAG-3 bispecific Affimer. A successful outcome will de-risk the Affimer platform for future partners and would be expected to result in an increased number and value of future therapeutic licensing deals. We reiterate our target price.
Mark Brewer mbrewer@finncap.com
Sector: Mining
Avesoro Resources (ASO) : Corp
Operational update, revised production, cost guidance
Key data
- Share price (p) 94.0
- Target price (p) U/R
- Market cap (£m) 76.7
- Enterprise value (£m) 173.4
Avesoro Resources has reported an operational update from its two gold mines in West Africa. Both mines encountered operating problems, as detailed below. Gold production for the five months to end of May totals 68,200 ounces, which is considerably below the run rate needed to achieve the previous guidance of 210,000-230,000 ounces. As a result, guidance has now been reduced by 30,000 ounces for the year to 180,000-200,000 ounces of gold. Guidance for operating cash costs have been increased from between US$850 and US$910 per ounce to US$889 to US$960 per ounce. All-in sustaining costs increase to between US$1,152 and US$1,248 per ounce from a previous range of US$1,110 to US$1,190 per ounce. We place our price target under review.
Martin Potts mpotts@finncap.com
Sector: Technology & Telecoms
Ideagen (IDEA) : Corp
Acquisition
Key data
- Share price (p) 144.0
- Target price (p) 180.0
- Market cap (£m) 316.5
- Enterprise value (£m) 317.8
Ideagen has announced the acquisition of Redland, a Bromsgrove-based provider of SaaS-based Regtech focused on the Senior Manager & Certification Regime (SMCR) and individual employee competency. The £15.8m net initial consideration, funded by group funds and an extended loan facility, acquires a fast-growing base with c£3m ARR (+50% in 12 months) with FY April revenue of £3.6m and EBIT of c£1.2m. Following the very successful capital markets day highlighting the target £100m revenue by 2022, including £35m acquired revenue and strong organic growth, the acquisition is classic Ideagen – a small business with strong tech with a top rate customer list and the opportunity to maximise cross sales. We lift forecasts for FY20 +7% EBITDA and +4% adj dil EPS, and look forward to results in July to review group performance and target price, after a strong May trading update and positive momentum such as the recent SaaS contract win.
Andrew Darley adarley@finncap.com
Sector: Financial & Insurance
Kingswood Holdings (KWG) : Corp
Building strong foundations, ready to execute
Key data
- Share price (p) 9.1
- Target price (p) 26.0
- Market cap (£m) 14.9
- Enterprise value (£m) 14.0
Kingswood Holdings makes another solid, very experienced hire that will help it build an internationally recognised wealth and investment firm. Development needs investment and the company are doing so to such an extent with regards to global management that we would expect positive outcomes, providing the opportunities available are grasped and executed in a structured, steady way. We estimate revenue to grow 35% into December 2019E and EBITDA to be positive, at £1.1m.
Nik Lysiuk nlysiuk@finncap.com
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