finnCap Research Company Notes - 19 February 2019

Feb 19, 2019 / News

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Sector: Industrials

Transense Technologies (TRT) : Corp

Game-changing contracts – catapult to a rerating

Key data                              

  • Share price (p)                  58.5
  • Target price (p)                U/R
  • Market cap (£m)                              7.0
  • Enterprise value (£m)                    5.4         

Two game-changing contracts in the space of two weeks should be a catalyst to catapult the shares, turning Transense from a development company into a validated commercial operation. The company has announced a significant initial order for 50 iTrack II systems by an unnamed customer for use in North American mines. Two weeks ago, GE Aviation’s T901 engine was selected by the US Army to re-engine its Apache and Black Hawk helicopters. Transense’s SAW sensor will be used by GE on this huge programme. We see this as a massive technical endorsement by one of the world’s largest industrial companies. The current market cap is nowhere close to representing the company’s current prospects, even after the recent positive reaction to the announcements.

David Buxton


Sector: Mining

Armadale Capital (ACP) : Corp

Project Update

Key data                              

  • Share price (p)                  1.0
  • Target price (p)                U/R
  • Market cap (£m)                              2.4
  • Enterprise value (£m)                    2.0         

Armadale Capital is an investment company specialising in mining opportunities in Africa. The current focus is on a business that is exploring and developing the Mahenge Liandu graphite project in southern Tanzania. The company has announced that it has agreed an MOA for an offtake deal that covers some 30,000 tonnes per year of graphite concentrate over a five year period. This represents some 60% of planned production over the period. We do not at this point in time have a target price for Armadale.

Martin Potts


Sector: Technology & Telecoms

dotDigital (DOTD) : Corp

Robust interims

Key data                              

  • Share price (p)                  86.0
  • Target price (p)                135.0
  • Market cap (£m)                              255.7
  • Enterprise value (£m)                    239.1

In the first full six-month period since GDPR, DOTD has demonstrated that the Engagement Cloud platform continues to generate robust growth, through yet greater data integration and customer empowering insights. 33% headline growth from three strategic pillars included 15% organic revenue growth: pillar one, revenue from sales of additional functionality, grew 50%; pillar two, sales via strategic partners, grew 43% to constitute 41% of group revenue; and pillar three, international revenue, achieved growth of 40%. While Comapi suffered from UK retail exposure, the technology integration is well underway, leading to global opportunity from a fully omni-channel platform with broader functionality. With net cash of £16.7m at December 31st, the board has the benefit of balance sheet strength to consider all strategic opportunities. 12 month target 135p reiterated.

Andrew Darley


Sector: Financial & Insurance

HML Holdings (HMLH) : Corp

London acquisition

Key data                              

  • Share price (p)                  31.5
  • Target price (p)                53.0
  • Market cap (£m)                              14.3
  • Enterprise value (£m)                    15.3

The group has acquired a property management business based in London. The statement confirms that the acquisition is expected to be “immediately earnings enhancing”, although at this stage there are no changes to our forecasts or target price.

Mark Paddon


Sector: Technology & Telecoms

Pelatro (PTRO) : Corp

Vietnam revenue share contract underpins forecasts

Key data                              

  • Share price (p)                  80.0
  • Target price (p)                115.0
  • Market cap (£m)                              26.0
  • Enterprise value (£m)                    24.6

The global Multichannel Marketing Hub software specialist will supply its mViva Contextual Marketing Platform to a Vietnamese MNO - Vinaphone - in a deal worth c.$1.5m over 3 years. This contract is under a revenue-share model under which Pelatro receives a fixed monthly fee in addition to a share of the incremental revenue generated by the customers using the platform. It is also the company’s first sale in Vietnam, an important mobile market and helps to cement its market leadership in Asia. The contract underpins current expectations.

Lorne Daniel


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