finnCap Research Company Notes - 21 October 2019
Oct 21, 2019 / News
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Sector: Technology & Telecoms
D4T4 Solutions (D4T4) : Corp
H1 meets expectation and a record H2 is forecast
Key data
Share price (p) 213.0
Target price (p) 310.0
Market cap (£m) 83.5
Enterprise value (£m) 72.3
The trading update reveals that the H1 performance was in line with management expectations and the Board is confident of meeting FY forecasts. As previously flagged, FY 2020 will be H2 weighted, with £8.8m sales booked in H1 and thus £17.7m due in H2. As we noted in August, this HoH split (33/67) is not as extreme as the H2 weighting that D4t4 delivered back in FY 2018 (24/76). The expectation of a record second half is underpinned by substantial annual contract renewals from licences signed in H2 LY; strong visibility on new contracts due to initiate in H2; and a significant pipeline of new business in negotiation with existing clients who continue to derive substantial benefits from D4t4’s data management solutions. We reiterate our FY forecasts and TP.
Lorne Daniel
020 7220 0545
ldaniel@finncap.com
Sector: Energy
President Energy (PPC) : Corp
Acquisition and subscription
Key data
Share price (p) 4.0
Target price (p) U/R
Market cap (£m) 45.1
Enterprise value (£m) 66.9
President has announced the acquisition from Argentine oil company, CGC, of additional acreage in Rio Negro Province, leveraging its regional infrastructure position to secure complementary assets that will boost production by over 10%. CGC will also subscribe for $1.825m of new President shares, representing ~3% of the company at current prices. These actions further expand President’s Rio Negro footprint, boost the balance sheet and provide informed third-party validation of President’s assets/valuation.
Jonathan Wright
020 7220 0543
jwright@finncap.com
Sector: Life Sciences
Bioventix (BVXP) : Corp
FY 2019 results – signs of troponin progress
Key data
Share price (p) 3 560.0
Target price (p) 3 750.0
Market cap (£m) 183.0
Enterprise value (£m) 176.5
Bioventix reported full-year results in line with expectations, although 4% (£0.3m) higher than expected revenues were offset by higher costs. A 47p special dividend was proposed, resulting in full-year dividend of 120p, up 3%. Strong underlying revenue growth (c.16%), which excludes c.£0.8m of backdated royalties, supported by evidence of early sales traction of troponin, provides a solid base for future growth. We have made minor changes to FY 2020 forecasts as well as introducing FY 2021, which implies c.10% EPS growth. We nudge up our target price to 3750p, which implies a 3.1% FY 2020 free cash flow yield, underpinned by 54% free cash flow/capital employed and 71% ROCE.
Mark Brewer
020 7220 0556
mbrewer@finncap.com