Equiniti – 195.45p

19 November 2019 – trading update

A trading update for the period 1 July 2019 to 18 November 2019 has been released.  For the full year results are now expected to be towards the upper end of market expectations for revenue and towards the lower end for underlying EBITDA due to weaker higher margin UK corporate activity.  Revenue is currently forecast to be between £550m and £567m, whilst underlying EBITDA is forecast to be £136m to £142m.  The shares fell on the news and three directors subsequently bought shares at between 190p and 199p per share.  The news may hold the share price back in the near term but this remains a high quality business.  We now rate Equiniti as a LONG TERM BUY.

Polypipe – 464.8p

19 November 2019 – trading update

The leading provider of sustainable water and climate management solutions for the built environment has issued an update on trading for the 10 months ended 31 October 2019.  There has been resilient performance in difficult markets with revenue 4.3% higher at £381.7m (2018: £365.9m).  Operating margins were slightly higher, driven by margin accretive acquisitions and strong cost controls.  Acquisitions have continued to perform well and the M&A pipeline remains encouraging.  However, there has been flooding and poor ground conditions since the end of October, most notably in the North and the Midlands.  This means that contractors and developers have not been able to access sites for civils and groundworks activities.  As a result, underlying operating profit for the year is likely to be just below previous expectations.  The company remains highly cash-generative.  The share price has held up well given this news and we would now suggest that readers only BUY ON WEAKNESS.

Parity Group – 9.75p

19 November 2019 – director dealing

The data and technology focused professional services business has been notified that on 18 November 2019 Matthew Bayfield, Chief Executive Officer, and Roger Antony, Group Finance Director, bought shares in the company.  The purchases were 51,282 and 53,515 shares at 9.75p per share and 9.25p per share respectively.  The price has rallied and we now rate the shares as a SPECULATIVE BUY.

IQE – 50.65p

18 November 2019 – trading update

A disappointing trading update has been released and this has hit the company’s share price.  IQE now expects to deliver revenue of between £136m and £142m, compared to the previous guidance range of between £140m and £160m, including a forex tailwind of around £3m.  A mid-single digit adjusted operating loss is now expected due to lower than anticipated revenue, additional one-off commissioning costs at the new foundry in Newport, general diseconomies of scale associated with operating at low volume in some sites and the inclusion of losses for the Singapore CSDC entity as announced in October.  The company has been taking steps to reduce costs and capital expenditure and Capex will be towards the bottom end of the previous guidance of between £30m and £40m.  Net debt at the year end is expected to be between £15m and £20m.  The company expects that total revenue will return to moderate growth in 2020.  There are now better opportunities elsewhere and we downgrade to HOLD.

Volex – 119p

15 November 2019 – director share purchase

Chief Financial Officer Daren Morris has purchased 10,000 shares at a price of 113 pence per share. Following this purchase, he holds 671,093 shares in total, representing 0.45% of the ordinary issued share capital of the company.  The shares remain a BUY.

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