finnCap Research Company Notes - 23 May 2018

May 23, 2018 / Research Notes

Daily research and corporate finance advisory from finnCap's research desk.

Sector: Support Services

NAHL (NAH): Positive start to the year

Key data                              

  • Share price (p): 123.3
  • Target price (p): 257.0
  • Market cap (£m): 56.1
  • Enterprise value (£m): 68.9

NAHL’s AGM statement confirms that trading in the first four months of 2018 has been in line with management’s expectations. The Personal Injury division continues to make good progress with its three ABSs, and Critical Care has signed new commercial contracts which should start delivering sales in H2. While the residential property market continues to be challenging, the group overall has had a positive start to the year. We make no changes to our forecasts or target price. With an FY 2018E P/E of only 6.3x and dividend yield of 7.9% there is a very high degree of risk factored into the shares and little recognition of the potential reward NAHL has positioned itself for from the change in regulation.

Guy Hewett | ghewett@finncap.com

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Sector: Life Sciences

OptiBiotix (OPTI): FY 2017 results – transition to product-based company

Key data                              

  • Share price (p): 72.5
  • Target price (p): U/R
  • Market cap (£m): 56.3
  • Enterprise value (£m): 54.3

Full-year results to 30 November 2017 reflected the year of transitioning from a technology to product-based company. Revenues of £190k compared with £290k in the prior year, reflecting lower contract/research revenues. A pre-tax profit of £1.7m (versus a loss of £1.5m) includes a £4.1m profit on disposal of SkinBiotherapeutics, which listed in April 2017. Year-end cash was £1.25m with a monthly burn rate of c.£135k. The company has transitioned from a technology company with three platforms to a product company during the year, exemplified by 10 commercial agreements entered into during the period with a further 6 executed since the year end. This significantly de-risks the business. The focus for the current year will be to begin to convert these agreements into revenues; the timing and quantum of which remains difficult to forecast.

Mark Brewer | mbrewer@finncap.com

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