Anpario – 370p

29 April 2020 – COVID-19 update

The company has issued a trading update confirming that it is coping well with the COVID-19 virus and continues to operate with little disruption from this.  This is largely due to the business continuity plan implemented in early March which included remote working, split shifts in the production plant and building up inventories.  As well as continuing to service its existing customers the company has also gained some new customers who have experienced disruption in supply from other suppliers.  The company entered the crisis with a strong balance sheet and at 25 April had a cash balance of £13.8m.  The shares remain ATTRACTIVE


STM Group – 28.3p

28 April 2020 – final results

The multi-jurisdictional financial services group has announced final results for the 12 months ended 31 December 2019.  Underlying revenue increased from £20.5m to £22.9m, with reported revenue of £23.3m (2018: £21.4m).  Recurring annual revenue, which is seen as an important key performance indicator, remained steady at 77% of total revenues (2018: 76%).  Underlying profit before tax for the year amounted to £2.6m (2018: £3.7m).  Earnings per share were 5.73p compared to 6.20p for 2018.  Cash and cash equivalents amounted to £18.4m as at 31 December 2019 (2018: £17.3m) with a net cash inflow from operating activities of £3.1m for the year (2018: £2.6m).  Net cash and cash equivalents as at 31 December 2019 were £17.2m (2018: £15.6m) but a significant proportion of this balance forms part of regulatory and solvency requirements.  Instead of proposing a Final Dividend at the forthcoming AGM, a second interim cash dividend of 0.75p per share has been declared. This brings the total dividend proposed in respect of the year to 1.50p per share (2018: 2.00p).  The results were very reassuring and we believe a BUY rating is deserved.

Vodafone – 107.72p

23 April 2020 – placing of INWIT shares

The company has completed the placement of 41.7 million shares of Infrastrutture Wireless Italiane S.p.A., equal to approximately 4.3% of INWIT’s share capital, at a price of €9.60 per share.  This brought in gross proceeds to Vodafone of approximately €400m, which will be used to reduce leverage. TIM sold an equal number of shares in the placing.  As a result of this transaction, Vodafone and TIM’s ownership will decrease from 37.5% each to 33.2%.  Vodafone and TIM intend to retain joint control and to hold an equal stake in the share capital of INWIT.

The company has also announced that it has accelerated a payment of US$200m to Vodafone Idea, which was due in September 2020 under the terms of a contingent liability mechanism with Vodafone Idea.  This will provide Vodafone Idea with liquidity to manage its operations, and to support the approximately 300 million Indian citizens who are Vodafone Idea customers as well as the thousands of Vodafone Idea employees during emergency health measures, taken as a result of the Covid-19 pandemic.  Following the decision by India’s Supreme Court on the definition of Adjusted Gross Revenue in October 2019, India’s telecoms operators became liable for licence fees, penalties and interest dating back over 14 years.  The shares have started to recover but still look good value.  BUY.

Keller Group – 591p

23 April 2020 – trading statement

The leading geotechnical specialist contractor has provided an update on trading in the first quarter as well as announcing the sale of its Brazil operations and a delay to the forthcoming Annual General Meeting.  As announced on 25 March 2020, trading for January and February was marginally above expectations but activity fell away during the second half of March due to national and regional restrictions on travel and work.  The March result was less impacted than expected though and the performance for the quarter as a whole was better than expectations, also materially better than the previous year.  Trading in April remains mixed, with APAC and EMEA currently impacted more than North America.  Once current national and regional restrictions on travel and work are lifted, the company expects to return to work on the majority of those contracts currently being affected.  The order book in the near term remains largely unaffected.  As at 31 December 2019 net debt was £213m and as at 31 March 2020, the group had undrawn committed and uncommitted borrowing facilities totalling £238m.  The sale of Brazilian entity, Tecnogeo, will bring in £2.3m and result in a small non-underlying loss on disposal for the group.  The dividend timetable has been revised with a new ex-dividend date of 30 July and payment date of 21 August.  We now rate the shares as a HOLD.


Avacta – 68p

22 April 2020 – update

The company has announced that its testing programme to generate Affimer reagents to help in the battle against coronavirus is ahead of schedule.  In only four weeks it has successfully generated these reagents as part of its collaboration with Cytiva (formerly GE Healthcare Life sciences) and the next step is to develop a laboratory test for a virus antigen in the next few weeks.  This is clearly very exciting news for the company and there is considerable potential for further progress in its development.  Although the shares have moved up strongly there may be further to go and we rate them as a SPECULATIVE BUY.


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