PDL BioPharma. An update on several fronts. Valeant has not been reporting or paying on time. Auvi-Q recalled, but there is an interest reserve
|
|
- Donald Baldwin
- 5 years ago
- Views:
Transcription
1 PDL BioPharma An update on several fronts Q315 earnings Pharma & biotech In its Q315 earnings release, PDL announced that Valeant may not have met some of the contractual obligations of its Depomed royalty agreement and PDL is now expecting to begin a royalty audit process by the end of the year. In addition, due to the recall of the Auvi-Q allergy injector on 28 October, there is a question about the Kaleo note, as a long absence from the market could lead to constraints in cash flow from that company. We do not believe any of these issues is major and at this stage are not making any significant changes to our forecasts. More recently, PDL announced that LENSAR, a company that had been put up for sale, was sold, reviving that investment, which had been impaired. 18 November 2015 Price US$3.72 Market cap US$611m Net debt ($m) at end Q Shares in issue 164.2m Free float 92.3 Code PDLI Primary exchange NASDAQ Year end Revenue ($m) PBT* ($m) EPS* ($) 12/ /15e /16e /17e Note: *PBT and EPS are normalised, excluding intangible amortisation, exceptional items and share-based payments. DPS ($) P/E (x) Yield (%) Secondary exchange Share price performance N/A Valeant has not been reporting or paying on time Valeant is contractually obliged to report and pay monthly royalties on Glumetza, but appears to have failed to do so. PDL did not receive any payments in Q315, although it did receive payment in late October. In response to this and to other issues (note that Valeant acquired Glumetza via its takeover of Salix, which had been guilty of massive channel stuffing), PDL expects to initiate a royalty audit process by the end of The timing of its conclusion is unclear. Auvi-Q recalled, but there is an interest reserve Sanofi, which markets and manufactures Auvi-Q, announced its recall due to manufacturing issues, and it is unclear when Auvi-Q will return to the market. The $150m Kaleo note is backed by Auvi-Q royalties from Sanofi, so a long absence from the market could affect cash flow to PDL. However, with a $20m reserve account, interest payments to PDL should be covered through at least Q116. LENSAR sold with ALPHAEON assuming debt LENSAR has been sold to ALPHAEON with ALPHAEON, assuming $42m in debt and issuing PDL $12.5m in company stock. The note will now be functional again, providing PDL with cash flow through Q318. Valuation: $6.30 per basic share We have slightly increased our valuation from $1,024m or $6.20 per basic share to $1,034m or $6.30 per basic share. This increase is due to the inclusion of an additional note deal, the LENSAR acquisition, lower net debt and shares outstanding than we expected, although it was partially mitigated by lower than expected Glumetza royalties in % 1m 3m 12m Abs (18.8) (38.2) (52.4) Rel (local) (19.5) (36.6) (52.6) 52-week high/low US$8.26 US$3.72 Business description PDL BioPharma has reinvented itself through a two-pronged strategy of investing in royalty streams of marketed and development-stage therapeutics, and providing high-yield debt financing to medical device and diagnostic companies with near-term product launches. Next events Launch of Zalviso in EU Solanezumab Phase III data Analysts H116 Q416/Q117 Maxim Jacobs Christian Glennie +44 (0) healthcare@edisongroup.com Edison profile page PDL BioPharma is a research client of Edison Investment Research Limited
2 Q315 earnings With the final royalty payments linked to the Queen et al patents coming in Q116, PDL is about to turn a page on a new phase of its existence. In preparation, PDL has been acquiring both royalty and debt-based, income-generating assets, with the hopes of funding both its operations and dividend into the foreseeable future. Valeant s murkiness strikes Glumetza In October 2013, PDL acquired the royalty and milestone rights related to several products (see Exhibit 1) for the treatment of Type II diabetes from Depomed for a total of $240.5m, the largest royalty acquisition deal that PDL has made to date. Exhibit 1: Royalties acquired from Depomed Product Company Royalty rate 2014 sales Glumetza (extended release metformin) Santarus/Salix/Valeant 32% until 2014, 34.5% from 2015, gross $298m margin split post generic intro (~45%) Janumet XR (Januvia + extended release metformin) Merck ~2% $419m Invokana + extended release metformin Jannsen Unknown N/A Jentadueto XR (Tradjenta + extended release metformin) Boehringer Ingelheim Unknown N/A Jardiance + extended release metformin Boehringer Ingelheim Unknown N/A Extended release metformin in Korea and Canada LG Life Sciences and Valeant Unknown Unknown Source: PDL, Wolters Kluwer Currently, the bulk of the Depomed royalties comes from Glumetza, an extended-release metformin, which is the number one metformin on the market today. It had been receiving a 32% royalty until the end of 2014, will receive a 34.5% royalty for 2015 and later and then will split the gross margin once a generic is introduced (we estimate this should effectively translate to a 45% royalty, depending on the final price). In the Q315 earnings release, PDL announced that Valeant may not be meeting its reporting and payment obligations. It is contractually obligated to report and pay monthly royalties on Glumetza, but had failed to do so. PDL received no payments in Q315, although it did receive a net $16.9m payment in late October covering the July to September period. Valeant had also failed to provide timely explanation about the absence of reports on Glumetza sales in July and August. Given this situation and the fact that Glumetza was the subject of massive channel stuffing by Salix, which led to erratic and somewhat unverifiable royalties, PDL expects to initiate a royalty audit process by the end of It is unclear how long the process will take and whether PDL has in fact been underpaid any royalties. Good outcome for LENSAR following impairment LENSAR is commercialising its laser cataract surgery system in both the US and EU. This is a competitive area where the systems are expensive (~$400,000 per machine) and, based on comments from refractive surgeons, it remains unclear whether it improves outcomes. PDL had previously announced that it had entered into a forbearance agreement with LENSAR following violation of a liquidity covenant. As at the Q315 results, the LENSAR note was considered impaired while PDL funded LENSAR as it negotiated a sale. It is therefore good news that ALPHAEON has agreed to assume the $42m debt to PDL and has issued it with $12.5m in common stock. The note will now be functional again, providing PDL with cash flow through Q318. Auvi-Q recall may put Kaleo cash flow at risk Auvi-Q is an epinephrine product that was developed by Kaleo, but is manufactured and marketed by Sanofi. On 28 October, Sanofi announced that the product was being recalled as a result of inaccurate dosing in some of the units and it is unclear how long Auvi-Q will be off the market. PDL BioPharma 18 November
3 Kaleo currently owes PDL $150m, which is backed by 100% of Auvi-Q s royalties and 10% of Evzio (its naloxone-based product) sales. As part of the agreement with PDL, Auvi-Q created an interest reserve account with $20m of the $150m received from PDL. With this reserve account, PDL s cash flows from Kaleo are likely to be safe through to at least the end of Q116, but an extended market absence could put them at risk. For now we are not changing our forecasts for Kaleo cash flows to PDL. First CareView tranche paid On 29 June 2015, PDL announced a new credit agreement with CareView, a company focused on patient care monitoring. The company s products include virtual bed rails, which can detect if a patient is in danger of falling out of bed, and allow for remote patient monitoring, reducing the cost of having a sitter in the room with high-risk patients. As part of the agreement, PDL agreed to provide two tranches of $20m each based on the achievement of milestones. The first tranche was paid on 7 October after CareView acquired a new revenue-generating product and has a 13.5% coupon. The second tranche will be based on a milestone attained on or before the end of June 2017 and will have a 13% coupon. Each tranche will last for five years. PDL also received a warrant to purchase 4.4m shares of stock at $0.40 per share (approximately 5% warrant coverage), which expires on 26 June Following the payment of the first tranche, we are now including CareView in our NPV calculation and have increased our forecast accordingly. An additional $4m for Paradigm Spine Paradigm Spine is a spine implant technology company. Its coflex Interlaminar stabilization device is approved in the US and 40 other countries across six continents. Originally it owed PDL $50m at 13% interest, but has just amended the credit agreement so that Paradigm could receive an additional $4m for general purposes and promotional activities. As part of the deal, Paradigm can borrow a second tranche of up to $3m through Q216. Valuation We have slightly increased our valuation from $1,024m or $6.20 per basic share to $1,034m or $6.30 per basic share. This increase is due to the inclusion of the CareView deal in our NPV, an upward adjustment to the value of the LENSAR note following its acquisition and lower net debt than we had estimated for end Q315, as well as fewer shares outstanding, although it was partially mitigated by lower than expected Glumetza royalties in The company should remain profitable through 2018, although it may have to raise additional capital or cut the dividend to pay off all of the $300m in debt due in that year. It plans to make additional investments over the next few years that will have near-term, income-generating prospects, which should help PDL retain its cash flow-positive qualities. However, there is a question mark over the long-term sustainability of its model, as most of its income-generating deals are set to expire in (and a few are already impaired) and some of the royalty deals may disappoint. However, if solanezumab reaches the market as we expect in 2018, it could be a turning point for PDL s long-term prospects and cash flow position, as it is expected to be a multi-billion product from which PDL would receive 2% royalties. Solanezumab royalties would last 12.5 years and would not be associated with any additional costs. PDL BioPharma 18 November
4 Exhibit 2: PDL valuation Royalty/Note Type Expiration year PDL balance sheet NPV carrying value Queen et al Royalty 2015 N/A $138.4 Depomed Royalty on Glumetza and 2024 $178.2 $261.4 other products VB Royalty on Spine Implant Undisclosed $16.9 $23.6 University of Michigan Royalty on Cerdelga 2022 $71.6 $29.4 Lilly Royalty on solanezumab 2030 N/A $161.4 DirectFlow Note 2018 $51.8 $49.8 Wellstat Note (Impaired) Unknown $50.2 $50.2 Hyperion Note (Impaired) Unknown $1.2 $1.2 Avinger Royalty 2018 N/A $3.7 Lensar Note 2018 $50.3 $58.5 Paradigm Spine Note 2019 $49.9 $55.3 Kaleo Note 2029 $151.5 $155.0 Acelrx Royalty on Zalviso 2027 $65.3 $67.5 Ariad Royalty on Iclusig 2033 $49.9 $80.1 Careview Note 2022 N/A $19.0 Total $1,135 Net Debt (Q315) ($m) ($101.7) Total firm value ($m) $1,034 Total basic shares (m) Value per basic share ($) $6.30 Total options 0.8 Total number of shares Diluted value per share ($) $6.27 Source: Edison Investment Research, company reports Financials PDL reported $227.5m in cash and cash equivalents in Q315. This decrease was mainly due to the $115m that was invested in the Iclusig and Zalviso royalty streams. With PDL still receiving royalties for the Queen et al patents through 2015 and the beginning of 2016, we expect it to be very profitable and cash flow positive through this period, as it has a low operating cost base. However, in February 2018 it will have $300m in debt due, which will either need to be paid or refinanced. Based on our current projections, PDL may need to make an additional capital raise to pay it off in full or to cut the dividend. PDL BioPharma 18 November
5 Exhibit 3: Financial summary $ 000s e 2016e 2017e Year end 31 December IFRS IFRS IFRS IFRS PROFIT & LOSS Revenue 581, , ,266 73,265 Cost of Sales Gross Profit 581, , ,266 73,265 General & Administrative (34,914) (31,123) (33,612) (36,301) EBITDA 546, , ,653 36,964 Operating Profit (before GW and except.) 546, , ,653 36,964 Intangible Amortisation Other Exceptionals Operating Profit 546, , ,653 36,964 Net Interest (38,896) (26,151) (18,065) (18,023) Other (6,143) Profit Before Tax (norm) 501, , ,588 18,941 Profit Before Tax (FRS 3) 501, , ,588 18,941 Tax (179,028) (175,593) (54,106) (6,629) Deferred tax (0) (0) (0) (0) Profit After Tax (norm) 322, , ,482 12,312 Profit After Tax (FRS 3) 322, , ,482 12,312 Average Number of Shares Outstanding (m) EPS - normalised (c) EPS - FRS 3 (c) Dividend per share (c) Gross Margin (%) EBITDA Margin (%) Operating Margin (before GW and except.) (%) BALANCE SHEET Fixed Assets 606, , , ,241 Intangible Assets Tangible Assets Royalty rights 259, , , ,785 Other 347, , , ,345 Current Assets 355, , , ,263 Stocks Debtors Cash 291, , , ,342 Other 64,220 42,497 63,827 57,327 Current Liabilities (187,983) (36,267) (11,425) (299,384) Creditors (318) (421) (421) (421) Short term borrowings (175,496) (24,842) 0 (287,959) Other (12,169) (11,004) (11,004) (11,004) Long Term Liabilities (313,930) (330,759) (333,582) (48,474) Long term borrowings (276,228) (282,285) (285,108) 0 Other long term liabilities (37,702) (48,474) (48,474) (48,474) Net Assets 460, , , ,646 CASH FLOW Operating Cash Flow 292, ,284 49,147 (33,855) Net Interest Tax Capex (49) (18) (30) (30) Acquisitions/disposals 21,360 (77,398) 33,735 73,207 Financing Dividends (96,557) (98,307) (102,240) (104,284) Other (159,420) (7,252) 22,000 62,000 Net Cash Flow 57, ,308 2,612 (2,962) Opening net debt/(cash) 300, ,347 63,436 63,804 HP finance leases initiated Exchange rate movements Other 83,016 (8,397) (2,981) (2,851) Closing net debt/(cash) 160,347 63,436 63,804 69,617 Source: Company accounts, Edison Investment Research PDL BioPharma 18 November
6 Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals work with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority ( Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number ) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [ ] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [ ]. DISCLAIMER Copyright 2015 Edison Investment Research Limited. All rights reserved. This report has been commissioned by PDL BioPharma and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are wholesale clients for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a personalised service and, to the extent that it contains any financial advice, is intended only as a class service provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited ( FTSE ) FTSE FTSE is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE s express written consent. Frankfurt +49 (0) PDL Schumannstrasse BioPharma 34b 18 November 280 High Holborn Park Avenue, 39th Floor Level 25, Aurora Place Level 15, 171 Featherston St Frankfurt Germany London +44 (0) London, WC1V 7EE United Kingdom New York , New York US Sydney +61 (0) Phillip St, Sydney NSW 2000, Australia Wellington +64 (0) Wellington 6011 New Zealand
K3 Business Technology
K3 Business Technology Scandinavian retail software acquisition Acquisition Software & comp services K3 is acquiring DdD, a Danish point-of-sale (PoS) solution provider, for up to 10m/ 7.9m. The company
More informationOTC Markets Group. Record quarterly revenues. Q115 Corporate services revenue rises 54% Operating expenses rise 18% in Q115.
OTC Markets Group Record quarterly revenues Q115 results Financial services OTC Markets Group (OTCQX: OTCM) continued to perform well in Q115 with revenue rising as a result of its Corporate services initiative
More informationShanks Group. Global commodity crisis offsetting progress. Netherlands Commercial progress encouraging
Shanks Group Global commodity crisis offsetting progress Trading statement Industrial support services The trading statement on 3 February highlighted further progress in the Commercial division. However,
More informationGLG Life Tech. Luo Han Guo drives revenue growth. Tate & Lyle LHG contract boosts top line. H3 and H4 leaf should improve stevia margins
GLG Life Tech Luo Han Guo drives revenue growth Q2 update Pharma & biotech While Q215 stevia revenue was below our forecasts, net results matched our expectations of an adjusted C$0.11 EPS loss. We expect
More informationTXT e-solutions. Steady growth in Q3. Growth for both businesses in Q3. Outlook and changes to forecasts
TXT e-solutions Steady growth in Q3 Q3 results Software & comp services TXT reported a strong set of results for Q316: organic growth in both businesses was boosted by the contribution from April s acquisition
More informationSealegs Corporation. Sea change. H1 update. Changing business mix. Valuation: New focus improves valuation. H1 results
Sealegs Corporation Sea change H1 results Industrial engineering Sealegs (SLG) reported better than expected H1 results, driven by tighter cost management and increased sales from the higher-margin amphibious
More informationReNeuron Group. US exclusivity deal - more than non-dilutive cash. FY18 results: Strong cash balance. Funded for a busy programme
ReNeuron Group US exclusivity deal - more than non-dilutive cash FY18 results Pharma & biotech ReNeuron ended FY18 with a healthy cash balance and the 11 July announcement of an exclusivity agreement worth
More informationAvalon Rare Metals. Refining Nechalacho s future. Nechalacho changing shape significantly. Agreement with Northwest Territory Métis Nation
Avalon Rare Metals Refining Nechalacho s future Refining agreement Metals & mining Avalon s announcement that it has entered into a refining agreement with Belgian chemicals company Solvay can be seen
More informationInternational Stem Cell
International Stem Cell Third cohort ready to go Financial update Pharma & biotech International Stem Cell (ISCO) recently announced that the data safety monitoring board for its Phase I trial of ISC-hpNSC
More informationThe Quarto Group. Good visibility into H2. Building on strengths. Group in improving shape for CFO transition. Valuation: Discount remains substantial
The Quarto Group Good visibility into H2 Interim results Media As in FY14, Quarto s FY15 results will be heavily H2-weighted. The strong order book means that we maintain our FY15 forecast for a 10% increase
More informationartnet For art's sake FY15: Art fair partnerships and forays to China Intended reporting change Valuation: Overshadowed Q1 figures
artnet For art's sake Q1 figures Media The online element of the international fine art market has continued to appreciate in Q115, despite a duller auction market, and artnet s News platform has been
More informationEddie Stobart Logistics
Eddie Stobart Logistics Interims show delivery on growth plans Interim results Industrial support services Eddie Stobart Logistics (ESL) H1 numbers, well trailed at the trading update in July, showed high
More informationAntofagasta. Q3 production and costs better than forecast. Q313 production ahead of forecast. FY13 EPS forecast upgraded
Antofagasta Q3 production and costs better than forecast Production update Metals & mining Antofagasta reported a third successive decline in copper production and a seventh successive rise in cash costs
More informationQuixant. A very promising year ahead. Volume deliveries to new major customers. Current order book over double the prior year
Quixant A very promising year ahead 2013 final results Tech hardware & equipment Quixant s final results were slightly ahead of expectations and the outlook for 2014 is very positive, with the two major
More informationGFT Group. IT services pure-play focused on banks. Disposal of emagine. Acquisition of Adesis Netlife SL. Forecasts: Adjusted for effects of the deals
GFT Group IT services pure-play focused on banks Acquisition and disposal Software & comp services GFT Group has disposed of emagine, its staffing business. The disposal transforms GFT into an IT services
More informationMonitise. FY14 growth on track. Focus on expanding the network. Guidance maintained for FY14. Valuation: Reflects growth potential.
Monitise FY14 growth on track H114 results Software & comp services In H114, Monitise made progress in signing new customers, expanding geographically, enhancing its product offering and increasing its
More informationJackpotJoy plc. A transformational year. Revenue and EBITDA slightly ahead of estimates. Strong operating cash flow dividends from 2019
JackpotJoy plc A transformational year FY17 results Travel & leisure 2017 was a transformational year for JPJ, with a successful London listing followed by substantial improvements in the capital structure.
More informationGB Group. PCA acquisition an excellent fit. PCA adds SME reach to address intelligence services. Earnings enhancing despite growth investment
GB Group PCA acquisition an excellent fit Acquisition Software & comp services The acquisition of PCA Predict is an excellent fit with GB Group s (GBG) address intelligence services, adding SME reach and,
More informationTerraNet Holding. Irons in the fire. Five new strategic development orders won in Q317. Cash flow burn reflecting multi-project activity
TerraNet Holding Irons in the fire Q317 results release Software & comp services TerraNet (TERRNT) is an early-stage software group with a range of products under development deriving principally from
More informationEvolva. EverSweet. Delivering on the new strategy. FY17 results. Valuation: Fair value of CHF0.60 per share. FY17 results.
Evolva EverSweet FY17 results Food & beverages The announcement that Cargill has officially started producing EverSweet brings commercial reality to Evolva s stevia product, after years of R&D. In line
More informationUbisense. Geographic expansion. Ubisense acquires Asian partner. Expanding the opportunity in Asia. Changes to forecasts
Ubisense Geographic expansion Acquisition Tech hardware & equipment Ubisense has strengthened its position in the Asian market through the acquisition of Geoplan, its Asian partner. The deal provides Ubisense
More informationPaysafe Group. Growth normalises. Growth moderates in H117. Pro forma financials show potential impact of deals
Paysafe Group Growth normalises H117 results Software & comp services Paysafe s H117 results show that organic constant currency growth is moderating to low double-digit rates, after an exceptional period
More informationTXT e-solutions. Strong cash flow supports dividend boost. PACE acquisition boosts FY16 performance. Minor changes to earnings forecasts
TXT e-solutions Strong cash flow supports dividend boost FY16 results Software & comp services FY16 results confirmed that the PACE acquisition has been successfully integrated and TXT Next continues to
More informationAthersys. Progress on all fronts. Timeline for FDA approval accelerated. mrs shift analysis is primary endpoint. Moving forward in Japan
Athersys Progress on all fronts Regulatory update Pharma & biotech Recently, Athersys reported progress with both US and Japanese regulatory authorities. The company reached a deal with the FDA for the
More informationCentrale del Latte d'italia
Centrale del Latte d'italia Integration proceeding to plan Q316 results Food & beverages The domestic market remains challenging and beset by deflation, and Centrale del Latte d Italia s (CLI s) flat nine-month
More informationTourism Holdings. ROCE exceeds 14% long-term target. Key drivers remain positive. Deeper customer relationships to drive yield
Tourism Holdings ROCE exceeds 14% longterm target FY16 results Travel & leisure Tourism Holdings (THL s) FY16 NPAT of NZ$24.4m was in line with company guidance, 21% ahead of FY15 and 1.3% below our forecasts.
More informationGear4music Holdings. Market share gains and margin boost. Strong pre-christmas trading. FY18 forecast maintained
Gear4music Holdings Market share gains and margin boost January trading statement Retail Gear4music s (G4M) Christmas trading statement shows it continuing to take share in its niche markets to generate
More informationKEFI Minerals. Counting down to production. Outstanding matters. Valuation: 6.55p/sh in FY18 rising to 7.21p/sh in FY19.
KEFI Minerals Counting down to production Tulu Kapi update Metals & mining Since our last note, KEFI has: 1) raised 5.5m (US$7.4m) in equity; 2) signed a binding agreement with a consortium of Ethiopian
More informationCeres Power Holdings. Progressing towards commercialisation. Progressing the technology. Securing routes to market
Ceres Power Holdings Progressing towards commercialisation Interims Alternative energy During FY15 Ceres Power made good progress towards commercialising its Steel Cell technology, which offers a route
More informationPura Vida Energy. Reaction to drilling. Sharp sell-off on no news. Results expected no earlier than late July. Increased stock volatility not unusual
Pura Vida Energy Reaction to drilling Drilling reaction Oil & gas Since initiating on Pura Vida (PVD) on 26 May 2015, the company has commenced drilling of the MZ-1 well, offshore Morocco. Only three weeks
More informationCooks Global Foods. Focused on capital requirements results restated. CGF budgets for 650 stores, targets 800 by 2021
Cooks Global Foods Focused on capital requirements Company update Food & beverages Cooks Global Foods (CGF) has reaffirmed its 650-store budget for Esquires Coffee by March 2021, but has acknowledged that
More informationCentrale del Latte d'italia
Centrale del Latte d'italia Sales improvement FY17 results Food & beverages Centrale del Latte d Italia s (CLI) price increases, implemented during H1, continue to drive revenue growth, with total revenue
More informationGlobal Bioenergies. String of successes and new financing. Forecasts updated to reflect results & new financing
Global Bioenergies String of successes and new financing Trading update Alternative energy Global Bioenergies (GBE) has delivered a string of industrial and commercial successes, with completion of construction
More informationCarr s Group. Diversification continues to give resilience. PBT up for H117 as UK farmers gain in confidence
Carr s Group Diversification continues to give resilience Interim results General industrials Once again, Carr s Group results demonstrate how diversification gives resilience to cyclicity in any one market.
More informationCentrale del Latte d'italia
Centrale del Latte d'italia Strong revenue growth H117 results Food & beverages Price increases implemented during the course of H117 have been successful and organic sales growth of 4.8% is impressive.
More informationPhotocure. Nordic sales bounce back. Eight more blue light cystoscopy units placed in US. Hexvix/Cysview added to bladder cancer guidelines
Photocure Nordic sales bounce back Quarterly update Pharma & biotech Photocure announced the second quarter of record sales, NOK33.5m or 18% growth year-on-year and 26% growth in Hexvix/Cysview sales.
More informationHigh-impact exploration offshore Philippines
Otto Energy All clear for Hawkeye well spud in Q3 Farm-out deal Oil & gas Otto Energy (OEL) has announced a farm-out deal with independent E&P Red Emperor Resources (RMP) for a 15% working interest in
More informationInMed Pharmaceuticals
InMed Pharmaceuticals Entering the clinic by the end of the year Development update Pharma & biotech InMed recently reported results for the second quarter of FY19 and is on track to bring INM-750 for
More informationK3 Business Technology
K3 Business Technology Shifting from product to customer focus Interim results Software & comp services As previously flagged, delays in closing contracts in H117 hit profitability. Management launched
More informationMondo TV. YooHoo! Netflix deal drives significant upgrades. Global deal with Netflix, new Chinese productions. Significant increase to five-year plan
Mondo TV YooHoo! Netflix deal drives significant upgrades Budget update Media Underpinned by its recently announced Netflix global deal for YooHoo and Friends, as well as a couple of major new productions
More informationCooks Global Foods. Funded for growth. Growth plans. Interim results. Valuation: Upside in valuation. Interim results.
Cooks Global Foods Funded for growth Interim results Food & beverages Cooks Global Foods (CGF) has reported a net loss excluding impairment charges of NZ$1.556m for H116, a 31.7% increase year-on-year.
More informationRegional REIT. Asset growth and refinancing completed. Further portfolio growth and diversification. Acquisition benefit offset by underlying revision
Regional REIT Asset growth and refinancing completed Completion of acquisitions Real estate RGL s acquisition of two property portfolios, first announced in early December, for an aggregate consideration
More informationProgress in a backward market
China Aviation Oil (Singapore) Progress in a backward market H117 results update Aviation services China Aviation Oil (Singapore) Corporation (CAO) has made good progress in the first half of the year,
More informationPiteco. Bold entry into the US marketplace. Acquisition of US payments software provider. Forecasts: FY18 revenues rise by 34%, EPS by 12%
Piteco Bold entry into the US marketplace Acquisition Software & comp services Piteco is buying the principal assets of LendingTools (LT), a small, privately owned US payments software provider, for up
More informationEvolva. A cloudier picture. Production update agreement not yet reached. FY16 revenue lower than previously expected
Evolva A cloudier picture Stevia update Food & beverages The much-awaited stevia update has confirmed that EverSweet is still on track to be launched in 2018, and there is a new production plan. That said,
More informationCircle Property. Lifting estimates again. Revaluation gains and strong rent growth. Upside potential from refurbished assets
Circle Property Lifting estimates again Review of trading update Real estate Circle will publish results for the year to 31 March 2018 in June but recent updates show further strong momentum. Ongoing asset
More informationExpert System. Building the foundations for growth. Contract wins delayed by integration efforts. Company confident that outlook remains positive
Expert System Building the foundations for growth H1 results Software & comp services The focus on integrating the TEMIS acquisition slowed the pace of customer wins in H116, resulting in a dip in revenues
More informationMedserv. Pieces fitting into place H118. On track to deliver growth. Valuation: Backlog underpins uplift. H118 results. Industrial support services
Medserv Pieces fitting into place H118 results Industrial support services Medserv has demonstrated the success of its broadened geographic reach with strong H118 revenue growth and improved profitability.
More informationRegional REIT. Retail eligible bond 4.5% Regional markets have remained robust. Retail eligible bond offering. Launch of bond issue.
Regional REIT Retail eligible bond 4.5% 2024 Launch of bond issue Real estate Despite continuing Brexit uncertainty and some slowing of UK economic growth regional property markets have remained robust
More informationSigma Capital Group. New funding structure to finance project growth. JV to deliver initial 200m portfolio of 2,000 homes.
Sigma Capital Group New funding structure to finance project growth Joint venture with Gatehouse Bank Real estate Sigma has secured its first JV based on its new institutional funding model. This has been
More informationCarclo. Contract delays to affect H218 performance. Delayed placement of contracts by customers. Non-medical demand lower than forecast.
Carclo Contract delays to affect H218 performance Trading update Tech hardware & equipment Carclo has recently announced that its FY18 performance is likely to be lower than previously expected. This is
More informationCeres Power Holdings. Strengthening customer engagement. Customer engagement intensifying. Engagement underpinned by technology advances
Ceres Power Holdings Strengthening customer engagement Interim results Alternative energy During H116 Ceres Power continued to make good progress towards commercialising its Steel Cell technology, which
More informationAberdeen Asset Management
Aberdeen Asset Management Double-digit growth at a reasonable price Institutional update Investment companies In line with the sell-off in emerging markets, Aberdeen s share price has fallen c 20% since
More informationCaledonia Mining. Production in line, EPS down on macro factors. Record quarterly production. New (lower) gold price forecasts
Caledonia Mining Production in line, EPS down on macro factors Q3 results and site visit Metals & mining Caledonia Mining s (CMCL) third-quarter results indicate the Blanket mine operating in line with
More informationXP Power. Strong demand drives record performance in H1. H118 sees continuation of strong growth
XP Power Strong demand drives record performance in H1 H118 results Tech hardware & equipment XP Power reported strong H1 revenue and earnings growth, despite significant currency headwinds. Order intake
More informationBellus Health. Thallion deal likely as Jaguar backs revised CVRs. CVR revisions mostly modest; Jaguar supports bid
Bellus Health Thallion deal likely as Jaguar backs revised CVRs Revised CVRs for Thallion Pharma & biotech Bellus has amended the terms of the contingent value rights (CVRs) associated with its offer to
More informationAthersys. On track for a big Japanese trial. Japanese stroke trial design. Larger trial has multiple benefits
Athersys On track for a big Japanese trial Quarterly update Pharma & biotech Athersys and its Japanese development partner Healios are on track to begin a 150-200 patient registration trial for MultiStem
More informationThin Film Electronics
ADR research Thin Film Electronics R2R game changers Q216 results Tech hardware & equipment During Q216 Thin Film Electronics (Thinfilm) continued to build on the list of top brands looking to incorporate
More informationNAHL Group. Maiden interims show strong profit growth. Significant rise in margins in H114. FY14e and FY15e PBT and EPS estimates raised
NAHL Group Maiden interims show strong profit growth Interim results Financial services NAHL s maiden interim results show underlying 26% continuing operating profit growth on a 6% growth in continuing
More informationCarclo. All going to plan. TP benefiting from expansion to support customers. FLTC acquisition supports further Wipac growth
Carclo All going to plan Pre-close trading update, contract award & acquisition Tech hardware & equipment Both of Carclo s larger divisions, Technical Plastics (TP) and LED Technologies, grew in line with
More informationGLG Life Tech. Q314 results light, looking ahead. Q314 results below our forecasts. Luo Han Guo and Huinong 3 leaf to drive 2015 results
GLG Life Tech Q314 results light, looking ahead Update Q3 results Pharma & biotech Q314 results were below our expectations and we are reducing 2014 and 2015 estimates. We retain confidence in GLG s prospects,
More informationGLG Life Tech. Moving ahead with formal Luo Han Guo deal. Validation of firm s foray into the LHG market
GLG Life Tech Moving ahead with formal Luo Han Guo deal Update contract and results Pharma & biotech GLG has signed a 12-month agreement to sell between US$9m and US$12m of Luo Han Guo (LHG) extract to
More informationThe Quarto Group. 40 years young. Children s list delivers on promise. Investing in new titles, building IP for future sales
The Quarto Group 40 years young Final results Media At the start of its 41st year of operations, Quarto delivered a strong FY15 performance, as indicated by January s pre-close update. Revenue and margin
More informationBionomics. PTSD programme on track for results in Q3. PTSD treatment complete, results coming. Agitation study ongoing
Bionomics PTSD programme on track for results in Q3 Earnings update Pharma & biotech The fiscal year 2018, which ended in June, was a major transition for Bionomics as it realigned itself to focus on disorders
More informationSITO Mobile. A strong end to a transformational year. Transformational year ends on a high note. Pipeline looks promising
SITO Mobile A strong end to a transformational year Forecast change Software & comp services Fiscal 2014 finished on a high note for SITO Mobile with quarterly revenues up 43% y-o-y and all divisions performing
More informationLPE sector performance
LPE sector performance Outperforming through market uncertainty Financials Investors in European-listed private equity (LPE) have been presented with two sources of uncertainty recently: disclosures in
More informationADVA Optical Networking FY12 results
ADVA Optical Networking FY12 results Cautious start to the year ADVA reported Q4 revenues in line with guidance and better than expected profitability. However, guidance for Q113 was below our expectations
More informationChina Water Affairs Group
China Water Affairs Group Site trip confirms opportunity Site visit Utilities Edison visited three water sites belonging to China Water Affairs Group (CWA) in the heavily industrialised Guangdong province
More informationTransGlobe Energy. EGPC receivables issue resolved. EGPC makes significant receivables reduction. Focus in Egypt shifts from seismic to drilling
TransGlobe Energy EGPC receivables issue resolved Market update Oil & gas TransGlobe Energy (TGA) has announced a raft of measures aimed at seeing it through the current weak oil price environment, reducing
More informationKongsberg Automotive investment headwind, but technology wins results affected by investment, but progress
Kongsberg Automotive 2014 investment headwind, but technology wins Q4 and 2014 results Automobiles & parts Kongsberg Automotive s (KA) results showed an accelerated investment headwind in Q4 which, while
More informationaap Implantate AG Biomaterials for sale as LOQTEQ growth takes off Robust growth driven by LOQTEQ in FY14 Sale of Biomaterials under review
aap Implantate AG Biomaterials for sale as LOQTEQ growth takes off Trading update Healthcare equipment & services We expect aap to sustain solid growth driven by the international roll-out of LOQTEQ. Re-investing
More informationAstex Pharmaceuticals
Astex Pharmaceuticals SGI-110 moving along Pipeline update Pharma & biotech Astex has expanded its Phase II trial of SGI-110 to 200 patients, by adding a new cohort of relapsed/refractory (r/r) myelodysplastic
More informationCrossject. A reinforced cash position. Zeneo Midazolam targets under-served market. Pipeline expected to progress in 2017
Crossject A reinforced cash position Financial and development update Pharma & biotech Crossject recently announced that it has received regulatory approval to launch the bioequivalence study for Zeneo
More informationIntec Pharma. Phase III more than half the way there. Gastroscopy substudy complete. New pharmacokinetic study on deck. New plan for AP cannabinoids
Intec Pharma Phase III more than half the way there Earnings update Pharma & biotech The year 2017 was marked by steady progress in Intec s development program of AP-CDLD for the treatment of Parkinson
More informationTungsten Corporation. Focusing on growth and efficiency. AGM update. Outlook. Valuation. Company update. Financial services
Tungsten Corporation Focusing on growth and efficiency Company update Financial services Tungsten Corporation remains in its investment phase as it builds out its e-invoicing and related services. However,
More informationPolypipe Group. Strong Residential performance. Sector themes maintained, some portfolio tweaks. French disposal modestly dilutive to earnings
Polypipe Group Strong Residential performance FY17 results Construction and materials Newbuild residential was the standout sector for Polypipe in FY17 with relatively subdued performance in Commercial
More informationAFH Financial Group. Delivering on acquisitions and organic growth. FY15 results: Beating expectations on organic growth
AFH Financial Group Delivering on acquisitions and organic growth FY15 results to end October Financial services AFH s FY15 EPS was up 80% on FY14, driven by a 40% increase in turnover. Management highlights
More informationMondo TV. Guidance raised for full year. H117 highlights: Strong licensing sales. Outlook: Net profit guidance raised
Mondo TV Guidance raised for full year Interims; raised guidance Media Mondo s licensing activities advanced significantly in the first half of the year, supporting a 67% increase in net profit. With Mondo
More informationHelma Eigenheimbau. Scale research report - Update. Market bottlenecks limiting momentum. H117 results showing moderate growth
Scale research report - Update Helma Eigenheimbau Market bottlenecks limiting momentum Home builders 14 September 2017 Price 41.60 Market cap 166m Helma s H117 results confirmed the anticipated slowdown
More informationChatham Rock Phosphate
Chatham Rock Phosphate Delays and funding squeeze bite Mining Since our last update in May, Chatham Rock Phosphate s (CRP) momentum has slowed. Delays to regulatory approval processes have weighed on confidence
More informationWANdisco. Cloud OEM agreement with Virtustream/Dell. Second OEM, first for cloud. Cloud credentials strengthened
WANdisco Cloud OEM agreement with Virtustream/Dell New OEM agreement Software & comp services WANdisco s second OEM partnership, with Virtustream, Dell/EMC s cloud platform and software business, significantly
More informationCarr's Group. Profits dip as expected with FY18 recovery underway. FY17 impacted by external factors. FY18 recovery underway
Carr's Group Profits dip as expected with FY18 recovery underway Preliminary results General industrials As flagged at the interim stage, group profits dipped during FY17 as a result of weak demand for
More informationOxford BioMedica. Orchard deal adds to growing revenue stream. Orchard Therapeutics deal adds to growing list
Oxford BioMedica Orchard deal adds to growing revenue stream Company update Pharma & biotech Oxford BioMedica s (OXB s) recently announced strategic alliance with Orchard Therapeutics further underpins
More informationTransContainer. Russian rail volumes continue to grow. Story intact: Runaway market growth. EBITDA growth set to continue
TransContainer Russian rail volumes continue to grow FY16 results Industrial support services TransContainer s (TRC) FY16 results announcement on 29 March was in line with Edison and market expectations.
More informationPPHE Hotel Group. More of the same. Continued outperformance. Favourable asset management climate. Valuation: Closing the discount to NAV
PPHE Hotel Group More of the same Interim results Travel & leisure Premium RevPAR growth in London continues to drive PPHE. Robust trading and margin delivery saw the capital s H1 local currency EBITDA
More informationDeutsche Beteiligungs
Deutsche Beteiligungs Steady NAV growth in unquoted portfolio Half-year results Investment companies For the six months to 30 April 2014, Deutsche Beteiligungs (DBAG) reported a 6.7% ( 1.29) NAV total
More informationPan African Resources
Pan African Resources Déjà vu all over again full dividend reinstated FY13 results Metals & mining Headline earnings of 35.2m (+20.1% compared to FY12) were closely in line with Edison s estimate from
More informationTopotarget. Only a delay. Minor delay to the filing of NDA. Belinostat complements Spectrum s Folotyn. Wider orphan drug strategy unaffected
Topotarget Only a delay Belinostat update Pharma & biotech The filing of belinostat with the FDA has been delayed until Q413, following a pre-nda meeting. No new data are required; however, Topotarget
More informationparagon Accelerating progress Q2 displays accelerating performance Guidance changes reflect growth initiatives Valuation: Rating not reflecting growth
paragon Accelerating progress H1 trading performance Automobiles & parts paragon continues to make strong progress, with Q218 showing a clear acceleration that should enable increased group FY18 revenue
More informationMercia Technologies. Good progress across the portfolio. 17.7% growth in direct investment portfolio. Commercial traction in key companies
Mercia Technologies Good progress across the portfolio H119 results Investment companies Mercia s H119 results reflected continued steady progress across the portfolio, with net assets rising slightly
More informationGalaxy Resources. Mt Cattlin - early mover in lithium project pipeline. Innovation in lithium concentrate processing
Galaxy Resources Mt Cattlin - early mover in lithium project pipeline Contract signed Metals & mining Galaxy (GXY) has signed binding agreements for 2017 delivery for 120,000 tonnes of lithium concentrate
More informationCanadian Overseas Petroleum
Canadian Overseas Petroleum Liberia on autopilot, Nigeria the next step Market update Oil & gas 2014 looks set to be a definitive year for Canadian Overseas Petroleum (COPL) with exploratory drilling on
More informationRockhopper Exploration
Rockhopper Exploration Phase 1, a step closer to FID Sea Lion progress Oil & gas Premier Oil s (PMO) half-year results included several indications of the operator s intent to progress the development
More informationRNTS Media. Scaling up with acquisitions. Mediation platform very well received. Product launches - growth should pick up in H2
RNTS Media Scaling up with acquisitions Forecast change Software & comp services FY14 revenue growth of 55% for RNTS Media softened in Q1 to 23% as the market moved towards rewarded video. Having built
More informationSNP Schneider-Neureither & Partner
SNP Schneider-Neureither & Partner Attractive business drivers are sustained Interim results Software & comp services While SAP S/4HANA transformation project deferrals impacted on H1 performance, SNP
More informationK3 Business Technology Update on preliminary results
K3 Business Technology Update on preliminary results Back to business Technology FY12 was a year of integration for K3, digesting the five acquisitions made in H112 and the four in FY11. Despite tough
More informationS&U. Positioning for sustainable growth. H119 results. Adapting to market background. Valuation: Maintained on slightly lower estimates.
S&U Positioning for sustainable growth H119 results Financial services S&U s non-prime motor finance business has experienced a further increase in the rate of impairment as some of its customers have
More informationExpert System. Turning the AI hype into reality. Pace of new business accelerated in H2. Increasing interest in commercial application of AI
Expert System Turning the AI hype into reality FY16 results Software & comp services Expert System spent FY16 investing in its corporate structure post the TEMIS acquisition. While this led to a small
More informationRecord. Maintaining client commitment. FY18 result. Outlook: Seeing well-diversified interest. Valuation. FY18 results. Financial services
Record Maintaining client commitment FY18 results Financial services Record is in its 35 th year and underlying its longevity are expertise and service levels that have sustained a client base through
More informationVislink. Conditional sale of hardware division. Industry evolution affected VCS performance. Group expected to return to profitability in FY17
Vislink Conditional sale of hardware division Conditional disposal and Interims Tech hardware & equipment Vislink has announced that it has entered into a conditional agreement to sell the assets of Vislink
More information