finnCap Research Company Notes - 18 February 2019
Feb 18, 2019 / News
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Sector: Energy
Anglo African Oil & Gas (AAOG) : Corp
SNPC payment received
Key data
- Share price (p) 9.7
- Target price (p) 52.0
- Market cap (£m) 23.1
- Enterprise value (£m) 16.3
The Congolese state-owned oil company, SNPC, has made an initial payment on the $10m it owes AAOG for the work programme on the Tilapia field. AAOG would have preferred the transfer of a substantial portion of SNPC’s licence interest instead. However, this is still welcome as it provides further confidence that AAOG is fully funded to complete the TLP-103C well and suggests SNPC sees considerable value in the field and are not willing to be diluted.
Jonathan Wright jwright@finncap.com
Sector: Life Sciences
Yourgene Health (YGEN) : Corp
Debt restructuring – room to grow
Key data
- Share price (p) 13.0
- Target price (p) 18.0
- Market cap (£m) 59.7
- Enterprise value (£m) 58.4
Yourgene Health announced that it has reached an agreement with Thermo Fisher’s Life Technologies division (TF), whereby: i) TF will convert 41.4m warrants into a c.9% shareholding; (ii) proceeds of £3.8m to be assigned to reducing TF loans outstanding; (iii) TF will write-off the remaining £12.7m loans and accrued interest. Taken with warrant exercise, this reduces liabilities by c.£13.0m and leaves the business essentially debt free. TF will enter into a new commercial agreement obtaining a 3-year period of exclusivity for Yourgene’s NIPT products in Southeast Asia. We raise our target price to 18p to reflect the loan write-off, which implies FY 2020 EV/Sales of 6.9x falling to 5.4x in FY 2021 – justified in our view given the strong (3-year CAGR 35%) revenue momentum and clear progress towards profitability that the debt write-off enables.
Mark Brewer mbrewer@finncap.com
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