finnCap Research Company Notes - 7 November 2018

Nov 07, 2018 / Research Notes

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Sector: Consumer & Other

Best of the Best (BOTB): BOTB delivers another positive profit surprise

Key data                              

  • Share price (p): 222.0
  • Target price (p): 350.0
  • Market cap (£m): 22.4
  • Enterprise value (£m): 20.2         

BOTB has announced an encouraging pre-close H1FY19 trading statement, highlighting “revenues and profit before tax generated tracking ahead of market expectations for the current financial year”. We therefore increase our FY19 PBT forecast by c14% to £1.6m from £1.4m. BOTB’s performance therefore stands out amidst the general malaise affecting companies exposed principally to UK consumer spending. Over the past month BOTB’s share price has fallen c15%, caught up in the aggressive market-wide sell-off, and therefore represents a buying opportunity, in our view.

Peter Smedley | psmedley@finncap.com

Sector: Life Sciences

InnovaDerma (IDP): AGM & trading update

Key data                              

  • Share price (p): 121.5
  • Target price (p): 220.0
  • Market cap (£m): 17.5
  • Enterprise value (£m): 15.6

The AGM statement provides an outlook for revenues in H1 and FY 2019 – the first half of the financial year to be similar to last year and the full year expected to be approximately £14m. Driving this expectation, which at first glance might appear challenging, as it requires c.55% growth in H2 revenues, is a 3x increase in the number of UK retail stores ranging its flagship products (Skinny Tan and Roots) from c.800 to c.2,400. By March 2019, Skinny Tan will see a 2.7x increase in store outlets and Roots will see a 4x expansion. We make no changes to forecasts and retain a 220p price target.

Mark Brewer | mbrewer@finncap.com

Sector: Mining

Savannah Resources (SAV): Exploration update – Portugal

Key data                              

  • Share price (p): 6.0
  • Target price (p): 20.0
  • Market cap (£m): 49.4
  • Enterprise value (£m): 36.4

Savannah Resources has reported on additional results from the current drilling campaign at its Mina do Barroso lithium project in northern Portugal. The drilling programme continues to return significant intersections of lithium mineralisation as Savannah aims to increase the current Mineral Resource Estimate of 20.1Mt at 1.04% Li₂O containing 209,000t of Li₂O. This is the largest known spodumene deposit in Western Europe. We maintain our 20p price target.

Martin Potts | mpotts@finncap.com

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