finnCap Research Company Notes - 14 May 2020
May 14, 2020 / News
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Sector: Technology & Telecoms
Bango (BGO) : Corp
Platform deal with major global telco
Key data
- Share price (p) 120.5
- Target price (p) 225.0
- Market cap (£m) 84.9
- Enterprise value (£m) 79.7
One of the expected major licence sales noted at the end of last year has now been delivered, in the shape of a Platform deal worth at least £1.5m to Bango over the next three years. The new customer – a global telecoms provider – will deliver a range of third-party products and services to its millions of customers over the Bango Platform, using all aspects of its connectivity. It will benefit from Bango data insights to optimise the success of third-party product offers such as bundled subscriptions. Intriguingly, there is a further revenue opportunity for Bango from upscaling this offering over the period. Given the complexity of connections and usage of data, we would expect this usage and the contract to roll on beyond the initial three-year period. This adoption by a major telecoms organisation and household name is a massive endorsement for the Bango Platform, underlining the quality and reliability of its connection and the unique selling point from Bango data insights. We feel it is likely to encourage further industry adoption. In financial terms, the contract was anticipated but helps considerably to underpin our current FY 2020 forecasts and we continue to target a 225p share price.
Lorne Daniel
020 7220 0545
Sector: Support Services
Belvoir Group (BLV) : Corp
Fully open for business again in England
Key data
- Share price (p) 112.5
- Target price (p) 169.0
- Market cap (£m) 39.5
- Enterprise value (£m) 46.4
Guidance from the Housing Secretary means that, from yesterday, anyone in England can move home. Estate agents offices can open, viewings are permitted, show homes can open, removal companies and the other essential parts of the sales and lettings process can restart. We expect Belvoir’s franchisees in England to reopen quickly, implementing the appropriate social distancing measures, driven by their entrepreneurial characteristics. While it remains to be seen what levels of demand are in the current economic environment, more than 450,000 people have been unable to progress their plans to move house. All buyers and renters are now able to complete purchases and view properties in person in line within social distancing advice. Our FY 2020 forecasts assume no sales activity for five months and a significant reduction in financial services alongside significant costs reductions. This compares with the near two months of complete lockdown in the UK before restrictions were eased in England. We reiterate our view that Belvoir is in good financial shape to weather the storm and support its franchisees before returning to normal activity. The success of the strategy was again evidenced by a strong start to 2020 prior to COVID-19, which supports our forecast of a 3.4% dividend yield this year rising to 6.6% post crisis.
Guy Hewett
020 7220 0549
Sector: Life Sciences
Byotrol (BYOT) : Corp
A pair of licences and a positive trading update
Key data
- Share price (p) 4.7
- Target price (p) 9.0
- Market cap (£m) 20.3
- Enterprise value (£m) 18.5
Byotrol announced a 10-year licence for Byotrol24 in the US and confirmed that the previously unnamed licence agreement signed in mid-April is with SC Johnson Professional. Not only does it remove associated costs, but both licensees will be able to place more substantial resources behind the products, resulting in a stronger and potentially recurring royalty stream. Coupled with a continuing positive short-term trading outlook and sustained £2m+ order book, we reiterate our 9p target price.
Mark Brewer
020 7220 0556
Sector: Energy
Iofina (IOF) : Corp
US SBA loan received
Key data
- Share price (p) 13.3
- Target price (p) U/R
- Market cap (£m) 25.5
- Enterprise value (£m) 32.0
Iofina’s application for a loan through the US Small Business Administration’s Paycheck Protection Program has been successful, and the company has received just over US$1m, the vast majority of which it is not expected to have to repay. This will help cushion the impact of the temporary shut-in at its IO#8 iodine plant, which management hopes will be operational again in Q3.
Jonathan Wright
020 7220 0543
Sector: Technology & Telecoms
KRM22 (KRM) : Corp
Completion of placing
Key data
- Share price (p) 27.5
- Target price (p) 75.0
- Market cap (£m) 5.8
- Enterprise value (£m) 7.0
KRM22 has announced the completion of a placing for £1.145m at 30p, expanding on the £1m announced at the beginning of the week – and to be supplemented by a further £135k (in aggregate) from the CEO, CFO, an NED and an employee of the company after results next week, taking the total placing to £1.28m. With the additional funds, net debt expectations of £0.3m at year-end FY20 lift to breakeven. We look forward to finals for FY19, expected next week, with the opportunity of those contracts worth £0.6m ARR and in advanced negotiations demonstrating continuing interest in the product set and the potential of the Global Risk Platform and wider solution set.
Andrew Darley
020 7220 0547
Sector: Life Sciences
Oncimmune Holdings (ONC) : Corp
Autoantibodies as predictors for survival
Key data
- Share price (p) 81.5
- Target price (p) 150.0
- Market cap (£m) 51.5
- Enterprise value (£m) 51.6
An abstract entitled “Autoantibodies as predictors for survival and immune-related adverse events in checkpoint inhibition therapy of metastasized melanoma” will be presented at ASCO, the world’s most prestigious cancer conference on 29-31 May, that used Oncimmune’ biomarker discovery engine Serotag® to profile the autoantibodies. Given the size of the checkpoint inhibitor market (c.$32bn in 2020) and the high potential for immune-related adverse events (up to 40%), to have a validated test that could be used on all potential cancer patients undergoing immunotherapy would be a valuable asset. We reiterate our 150p price target.
Mark Brewer
020 7220 0556
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