finnCap Research Company Notes - 22 October 2018

Oct 22, 2018 / Research Notes

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Sector: Technology & Telecoms

D4T4 Solutions (D4T4):  Strong H1 performance sets up an excellent year

Key data                              

  • Share price (p): 194.5
  • Target price (p): 215.0
  • Market cap (£m): 74.2
  • Enterprise value (£m): 62.0

The Interim trading update reveals an impressive H1 revenue of £14.0m contrasting with the £4.7m revealed in H1 2017. This is c.60% of our FY target but it is still early in H2 with some deals to close before we feel sufficiently confident to upgrade our forecast for March 2019. The group is nevertheless comfortably on track; last year was very heavily H2-weighted and this year much more evenly balanced with a slight H1-weighting. Cash generation is equally impressive, net cash rising from £3.9m to £12.2m on collection of debtors. We reiterate our forecasts and with the greater security, take the opportunity to nudge forward our target price to 215p.

Lorne Daniel | ldaniel@finncap.com

Sector: Energy

President Energy (PPC): Positive Puesto Flores development drilling result

Key data                              

  • Share price (p): 8.2
  • Target price (p): 18.0
  • Market cap (£m): 88.5
  • Enterprise value (£m): 101.6

A very encouraging start to President’s three well development drilling programme on Puesto Flores. The first well has encountered oil in three intervals, with excellent reservoir characteristics, and results that are ‘at the upper end of expectations’. The well will now be tested and completed and details of the well flow rate released. The three wells have the potential to add 600 bopd to production by year-end, a material uplift on late September’s 2,700 boepd. The well economics are also highly attractive, with rapid payback and high returns. Argentine macro issues, which have minimal impact on President’s operations, alongside a weak AIM market have held back President’s shares, but ultimately, value will out.

Jonathan Wright | jwright@finncap.com

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