finnCap Research Company Notes - 5 February 2020

Feb 05, 2020 / News

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Sector: Technology & Telecoms

Filtronic (FTC) : Corp

Strategic contract wins in the mmWave markets

Key data                              

  • Share price (p)                  10.6
  • Target price (p)                10.5
  • Market cap (£m)                              22.3
  • Enterprise value (£m)                    19.8

Just ahead of its Interim results announcement, the designer and manufacturer of products for the critical coms and wireless telecoms markets has revealed two advanced mmWave design and development contracts – both in the US – with strategic importance to its future and its technology roadmap. The total values of both contracts together total c.£1.3m, mainly to be recognised in FY 2021, for which forecasts have yet to be firmed up. Both projects involve prototypes for testing and pre-commercialisation evaluation units with potential for commercial supply contracts. We make no change to expectations at this stage ahead of the Interims due out tomorrow. Our target price has been met by the recent appreciation in the share price and we will revisit it with the results.

Lorne Daniel

020 7220 0545

ldaniel@finncap.com

 

Sector: Technology & Telecoms

PCI Pal (PCIP) : Corp

Half-year update confirms sales momentum

Key data                              

  • Share price (p)                  42.5
  • Target price (p)                50.0
  • Market cap (£m)                              18.1
  • Enterprise value (£m)                    18.1

PCI Pal has released a positive trading update, confirming robust sales growth for the six months to December 2019. Revenue grew in excess of 70% to over £2m (1H19: £1.2m) and Total Annual Contract Value (TACV) rose to £5.0m, up 47% (£3.4m). Total Contract Value (TCV) from new customers increased to £4.0m during the period (up 18%), and Annual Contract Value remained strong at £1.2m against a tough YoY compare of £1.3m (which included two of the company’s largest deals at the time). ACV was further bolstered by the company’s second-largest contract ever, contributing £566k in ACV, signed via its direct sales force in December. Whilst the company continues to pursue direct opportunities, channel partners remain the core sales driver, contributing 82% of new business contracts signed during the period. We reiterate target price (50p) and forecasts, and look forward to further detail at interims in March.

Lorne Daniel

020 7220 0545

ldaniel@finncap.com

 

Sector: Energy

Europa Oil & Gas (EOG) : Corp

Managing the portfolio

Key data                              

  • Share price (p)                  1.6
  • Target price (p)                14.0
  • Market cap (£m)                              7.3
  • Enterprise value (£m)                    4.4

Europa has relinquished two of its more peripheral licences in Ireland that showed limited prospectivity or had a slim chance of attracting farm-out partners. This active portfolio management will preserve cash and allow management to focus on pursuing partners for its remaining Irish and Moroccan licences. Top of the list is the Inishkea gas prospect on FEL 4/19 in the Slyne basin. This prospect is large, low-risk, gas not oil, and adjacent to the producing Corrib gas field infrastructure. Our risked-NAV and price target did not ascribe any value to these licences and therefore remains unchanged at 14p/sh.

Jonathan Wright

020 7220 0543

jwright@finncap.com

 

 

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