finnCap Research Company Notes - 5 November 2019
Nov 05, 2019 / News
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Sector: Consumer & Other
Best of the Best (BOTB) : Corp
Positive end to H1 FY20 confirmed with more profit upgrades
Key data
- Share price (p) 285.0
- Target price (p) 375.0
- Market cap (£m) 26.7
- Enterprise value (£m) 24.2
Today’s brief, qualitative H1 FY20 pre-close trading statement confirms our previously stated view on 11 September 2019 that H1 FY20 would end on a positive note with likely profit forecast upgrades. BOTB states today that PBT is “tracking ahead of market expectations” for FY20. The company is scheduled to announce H1 FY20 results on 30 January 2020. Ahead of then, we therefore raise our FY20 PBT forecasts by +16% to £2.2m. Noting that underlying trends and performance of the company’s move to being a 100% pure-play online operator are firmly positive, we also upgrade our FY21 PBT forecasts by +14% to £2.4m.
Peter Smedley
020 7220 0548
Sector: Life Sciences
LiDCO (LID) : Corp
China launch
Key data
- Share price (p) 4.3
- Target price (p) 11.0
- Market cap (£m) 10.4
- Enterprise value (£m) 9.2
LiDCO confirmed the launch of its latest haemodynamic monitor in China through its distribution partner, Beijing Gloryway Medical Co. This is in line with expectations, and we are consequently not changing forecasts at this time. However, we would point to the key attractions afforded by this launch into the world’s second-largest medical device market and an important contributor to the future growth of ROW sales, which accounted for 13% of LiDCO product sales in FY 2019.
Mark Brewer
020 7220 0556
Sector: Technology & Telecoms
Castleton Technology (CTP) : Corp
Interims – mapping out a steady second half
Key data
- Share price (p) 63.0
- Target price (p) 130.0
- Market cap (£m) 51.5
- Enterprise value (£m) 55.6
Interims reveal performance in line with unchanged expectations, bar IFRS16 amendments and minor tweaks since the October update. The merging of the two former divisions to create ‘One Castleton’ is expected to deliver benefits, along with rightsizing of the Professional Services team and a focus away from competing for low-margin Hardware revenue. New contract wins such as three Managed Services deals in the period show the continuing opportunity, as well as gaining preferred supplier status to the National Housing Federation (the Housing Association industry body). The Housing Association customer base has increased to 595 (FY19: 591), of whom 52% (FY19: 50%) take more than one product; the contracted order backlog has increased 5% since 1H19; recurring revenues constitute 66% of revenue into 2H20, giving confidence in forecasts; and the group remains well placed once the customer base assesses and commits to the inevitable future in cloud or hybrid software delivery. With 48% of revenue and 44% of EBITDA delivered in the first half (1H19: 49% and 47%), we look to the benefits of execution to deliver a solid 2H and a return to cloud-derived growth in visibility and quality of earnings into FY21. Target 130p reiterated.
Andrew Darley
020 7220 0547
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