finnCap Research Company Notes - 8 August 2018

Aug 08, 2018 / Research Notes

Read our regular corporate finance notes featuring updates from the finnCap Research team's sector experts.

Download the full research note for InnovaDerma here

Sector:  Life Sciences

InnovaDerma (IDP): CEO appointment; Roots ranged in Tesco

Key data                              

  • Share price (p): 111.0
  • Target price (p): 220.0
  • Market cap (£m): 16.0
  • Enterprise value (£m): 14.3

The announcement that Roots will be ranged in 432 of Tesco’s 3,000+ UK stores from November follows the announcement in June that it is also to be ranged in 359 of Boot’s largest stores in the UK from late August. It is a significant endorsement of the brand and underpins our revenue forecasts of c.£0.7m for FY 2019, rising to £1.0m in FY 2020. Additionally, Kieran Callan was appointed as Chief Executive Officer to manage the strong growth expected in 2019, major new retail chains and new product launches. We are leaving our forecasts and target price unchanged but view these announcements as significant positives that underpin our FY 2019 forecasts and provide potential upside to the longer term.

Mark Brewer | mbrewer@finncap.com

Download the full research note for Gooch & Housego here

Sector: Industrials

Gooch & Housego (GHH): Acquisition lifts Life Sciences earnings

Key data                              

  • Share price (p): 1500.0
  • Target price (p): 1610.0
  • Market cap (£m): 369.9
  • Enterprise value (£m): 371.0

The company has announced an interesting bolt-on acquisition, which boosts its Life Sciences operations and continues the group’s progress in moving up the value-added ladder. The purchase of ITL for a total price of up to £22.0m is expected to be EPS-enhancing in its first full year. We raise our 2019 earnings forecast by 6% to 63.3p, prompting a 6% increase in our price target from 1520p to 1610p. We think that the acquisition is a good fit and addresses some key targeted areas previously highlighted. Though highly rated, the shares have some further upside.

David Buxton | dbuxton@finncap.com