finnCap Research Company Notes - 9 July 2018

Jul 09, 2018 / Research Notes

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

Sector: Mining

Avesoro Resources (ASO): Q2 operating results

Key data                              

  • Share price (p): 261.0
  • Target price (p): 372.0
  • Market cap (£m): 212.9
  • Enterprise value (£m): 293.2

Avesoro Resources has reported Q2 operating results from its gold mines in Liberia and Burkina Faso. Total gold production of 60,231 ounces is on track to be towards the high end of FY 2018 guidance of 220,000 to 240,000 ounces. All three mines continue to perform well, with recent capital investment now delivering positive results. We maintain our 372p price target.

Martin Potts | mpotts@finncap.com

Sector: Technology and Telecoms

K3 Business Technology (KBT): Recovery reality

Key data                              

  • Share price (p): 205.0
  • Target price (p): 275.0
  • Market cap (£m): 88.0
  • Enterprise value (£m): 96.5

Interims for the period ending May 2018, demonstrate the recovery in operating fundamentals which best describe the turnaround in the group’s fortunes: steady revenue, with 3% growth vs 1H17, but expanding gross margin from 47% to 52%, compounded by a 7% decline in opex to move the EBITDA margin from -2% to 8%. Net debt shrank from £18.5m (May 17) to £8.5m, with FY18 expectations of £1.0m net debt unchanged; and prospects continue to look yet brighter. After a confident and well received Capital Markets Day where presentations by channel partner Avanade and major customers IKEA and the British Heart Foundation proved the customer appreciation of the value of K3’s solutions and focus, and with the consistent proof of sustained operational reform and recovery, we lift our target to 275p (250p).

Andrew Darley | adarley@finncap.com