finnCap Research Company Notes - 26 March 2019
Mar 26, 2019 / News
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Sector: Life Sciences
LiDCO (LID) : Corp
FY 2019 results
Key data
- Share price (p) 4.0
- Target price (p) 11.0
- Market cap (£m) 9.9
- Enterprise value (£m) 8.2
LiDCO reported revenues in line with the 20 February trading update but adjusted pre-tax losses were c.£0.1m better than expected at £1.9m, helped by active cost management to offset the slower than expected transition to HUP SaaS licences in the US. We remain confident that LiDCO is pursuing the right course of action, given the recent HUP contract wins and recognition by leading hospital groups that the use of HUP is having a positive effect on both patient outcomes and haemodynamic monitoring costs. The company ended the year with £1.7m of net cash, which we expect to be sufficient to execute on its strategy. We expect this to fall to £1.2m by year-end FY 2020 before rising, as the company becomes adjusted EBITDA positive. We make minor changes to forecasts reflecting slower HUP adoption rates and UK growth, but reiterate our target price of 11p, at which level the stock would trade on 3.3x EV/Sales.
Mark Brewer mbrewer@finncap.com
Sector: Technology & Telecoms
Pelatro (PTRO) : Corp
FY 2018 was a year of profitable growth and expansion
Key data
- Share price (p) 90.0
- Target price (p) 125.0
- Market cap (£m) 29.3
- Enterprise value (£m) 27.9
FY 2018 revenues and profits beat our high-growth forecasts: revenue and adj. PBT have been growing at a CAGR of 125% and 194% respectively since 2016. Moreover, H2 saw significant improvement on the weak cashflow in H1. This has been a transformational period; in August it acquired assets from Danateq to expand geographic reach and subscriber base covered. It also broadened the product suite with additional solutions complementing its original precision marketing software; building a multi-product marketing hub. Its mobile network operating customers have more than doubled from 6 to 16 now with opportunities to up-sell and cross-sell across large multi-national telecoms groups, including Europe. The outlook is for continued profitable growth, supported by visibility on $5.2m of our $10.5m revenue forecast for FY 2019 and a further $15m in the pipeline. We reiterate FY 2019 and issue FY 2020 forecasts.
Lorne Daniel ldaniel@finncap.com
Sector: Technology & Telecoms
Quartix (QTX) : Corp
The recovery in UK Fleet growth continues in Q1
Key data
- Share price (p) 245.0
- Target price (p) 425.0
- Market cap (£m) 117.2
- Enterprise value (£m) 110.4
The AGM statement reveals that Q1 2019 trading was very encouraging, in line with market expectations. Fleet continues to perform well, although now driven by the UK again after the management’s remedial action in H2. Overseas markets also remain healthy and strong contributors to Fleet growth. The decline in insurance seems to be largely as expected. Due to growing demand, there is a strong focus on development of the self-install and self service solutions while also expanding the number of QTX websites localised for new markets and regions. We make no change to our forecasts or target price at this stage.
Lorne Daniel ldaniel@finncap.com
Sector: Technology & Telecoms
Quixant (QXT) : Corp
A record half and year despite market softening
Key data
- Share price (p) 301.5
- Target price (p) 530.0
- Market cap (£m) 200.1
- Enterprise value (£m) 192.7
As the YE update revealed, 2018 revenue growth slowed to 5% due to the cutting of low-margin Monitor lines in H1 and some market softening in H2. However, strong growth continues in Platforms, and together with an impressive H2 recovery in Monitors, it fuelled a record half and drove the group forward in 2018. Densitron remains relatively flat. Overall group margins held up well but with slower top line progress the 2018 Adj. PBT growth was just 3%. However an unusually low tax rate saw disproportionately strong Adj. EPS growth beat expectations (2019 EPS will look flatter as it normalises). A prudent outlook implies lowered 2019 expectations and a heavy H2-weighting, however we still expect strong long-term growth in both revenue and earnings.
Lorne Daniel ldaniel@finncap.com
Sector: Financial & Insurance
STM (STM) : Corp
A strong, simple business; well-positioned and ambitious
Key data
- Share price (p) 46.5
- Target price (p) 100.0
- Market cap (£m) 27.6
- Enterprise value (£m) 10.4
Strong results with revenue and PBT upgrades from existing acquisitions likely.
Nik Lysiuk nlysiuk@finncap.com
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