finnCap Research Company Notes - 7 January 2019

Jan 07, 2019 / News

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Sector: Energy

Anglo African Oil & Gas (AAOG) : Corp

Multiple discoveries confirmed

Key data                               

  • Share price (p)                  16.6
  • Target price (p)                38.0
  • Market cap (£m)                              28.8
  • Enterprise value (£m)                    22.3

Very encouraging results from the wireline logging of the zones encountered so far within the TLP-103C well. An overall oil column of 44m exceeded expectations and includes three new reservoir zones in addition to the R2 and Mengo. Further work is needed to demonstrate commerciality of the Mengo. However, this well will be completed as a producer from at least one zone, boosting production and cash flow. The well is now being deepened to the higher-risk Djeno target, with management encouraged by the accuracy of its geological model so far.

Jonathan Wright | jwright@finncap.com

 

Sector:  Technology & Telecoms

Castleton Technology (CTP) : Corp

Contract win and client go-live

Key data                               

  • Share price (p)                  93.5
  • Target price (p)                125.0
  • Market cap (£m)                              76.0
  • Enterprise value (£m)                    80.7

Castleton has opened 2019 with the announcement of its selection as Housing Technology Partner for Connect Housing Association, with a £1.3m five-year contract for the entire suite of integrated Castleton solutions; and the go-live for Cluid Housing Association in Ireland, the first customer to take the complete suite, providing important referenceability for future customers. With proof points delivered for the full Housing ERP, and a large new customer, Castleton’s route to growth is being demonstrably delivered and we look forward to 2019 as a year to excel. Target 125p reiterated.

Tracsis (TRCS) : Corp

CEO succession

Key data                               

  • Share price (p)                  608.0
  • Target price (p)                725.0
  • Market cap (£m)                              172.7
  • Enterprise value (£m)                    150.4

Tracsis CEO of 14 years, John McArthur, has notified the board of his intention to step down from his position, and the board, during 1H19. CEO Designate Chris Barnes will join the Group on 4 February, for a period of handover and transition of between 3 and 6 months. John will continue to work with the board following handover, in a part-time M&A advisory capacity. We look forward to meeting Chris; and we congratulate John on a highly laudable track record at the helm since the company formation in 2004, including IPO in November 2007 at 40p (now 608p) and a market capitalisation of £7m (£173m). Target 725p reiterated, with recent contract announcements for TRACS Enterprise showing continuing development of momentum and visibility.

Andrew Darley | adarley@finncap.com

 

Sector: Life Sciences

OptiBiotix (OPTI) : Corp

SlimBiome® manufacturing/supply agreement

Key data                               

  • Share price (p)                  91.0
  • Target price (p)                U/R
  • Market cap (£m)                              72.2
  • Enterprise value (£m)                    70.9

The exclusive manufacturing and supply agreement with Zeon Life Sciences in India for SlimBiome and SlimBiome-containing products, in return for a 50% profit share, is another example of the building blocks OptiBiotix continues to put in place to commercialise its technology platforms. It represents the 30th commercial agreement across its product platforms and 9th for SlimBiome; following announced manufacturing deals with Nutrilnea (EUR), Morley and Knighton Foods (UK) and Cereal Ingredients (US). Zeon’s manufacturing expertise, customer base and market reach should create multiple product opportunities in the future. It is still too early to make meaningful forecasts; however, the commercial footprint continues to expand with highly relevant and experienced partners.

Mark Brewer | mbrewer@finncap.com
 

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