EMIS Group Plc

EMIS Group Plc (LON: EMIS) is FTSE AIM UK 50 Index listed Company, which provides healthcare software, information technology and related services through key brands in the UK.

The Company will release interim results on 9 September 2020.

Update on Trading Performance ending 30 June 2020 (released on 14 July 2020)

Despite the uncertainty caused by the covid-19 crisis, the trading performance for H1 FY2020 stood in line with management expectations. The Company experienced uncertainty in the delivery of new sales and revenue for H1 FY2020 stood marginally behind last year data for the same period. EMIS did not change its full-year guidance. Both the enterprise and health businesses performed well, driven by new business sales with signs of market recovery. The Company has net cash of £44.1 million as on 30 June 2020 with no debt and banking facilities of around £60 million.

One Year Share Price Chart


Daily Chart as of August 21, 2020, before the market close (Source: Refinitiv,Thomson Reuters)

Key Risks

The Company’s performance is subject to various kinds of risk, such as the development of innovative software by competitors to capture the market, overdependence for revenue on NHS (National Health Service), and supply issues during the pandemic.

Valuation Methodology


Recommendation: EMIS Group Plc – Speculative Buy at GBX 1,016

In the first half of the financial year 2020, the Company’s trading performance stood in line with board expectations, despite the uncertainty created by the covid-19 pandemic. Due to some issues related to new sales delivery, the revenue in H1 FY2020 stood marginally lower than H1 FY2019 data. EMIS experienced market recovery in enterprise business, which could improve the recurring revenue. In Health business, the Company made new sales through different product mix and reduced costs and maintained the leading market share in NHS. From the technical standpoint, 14-day RSI is currently in an oversold zone, which means there is a good potential for a short term rebound in the stock price.

Based on the decent prospects and support from the valuation as done using the above method, we have given a “Speculative Buy” recommendation for EMIS Group Plc at the current price of GBX 1,016.00 (as on 21 August 2020, before the market close at 3:08 PM GMT+1), with lower double-digit upside potential based on 24.30x Price/NTM Earnings (approx.) on FY20E earnings per share (approx.).

AB Dynamics Plc

AB Dynamics Plc (LON: ABDP) provides the testing systems to the global motor industry. The Company designs products for automobile companies and the global automotive research and development sector.

Recent News

On 4 August 2020, AB Dynamics the selection of Peel Hunt LLP as Sole Broker and Adviser of the Company effective immediately.

Financial Highlights – H1 FY2020 (29 February 2020)


(Source: Interim Results, Company Website)
 
In the first half of the financial year 2020, the Company showed strong financial and operational performance. Driven by benefits from acquisitions and execution of strategic priorities resulted in good performance across both operating sectors. For the first half of 2020, the company’s revenue increased by 34% to £34.7 million (H1 FY19: £25.8 million). The adjusted profit after tax for H1 FY20 stood at £8.7 million, an increase of 36% from the corresponding period of the last year. The Company has delivered a strong debt-free balance sheet, with significant net cash of £35.1 million, providing resources to withstand the likely impact of the Coronavirus pandemic and to support the ABDP's investment requirements.

One Year Share Price Chart


Daily Chart as of August 21, 2020, before the market close (Source: Refinitiv,Thomson Reuters)

Key Risks

The market conditions in which the company operates is full of challenges and might impact the operational and financial performance. The ongoing outbreak of Coronavirus could impact the Company’s performance in the near term.

Valuation Methodology



Recommendation: AB Dynamics Plc – Speculative Buy at GBX 1,710

The Company has delivered strong revenue growth, driven by acquisitions, international expansion and increased service/support. The strong first-half performance shows the early benefit of the revised strategy, and the acquisitions are performing well. In the second half of 2020, the Group remains uncertain due to the COVID-19 pandemic, with the withdrawal of guidance and suspension of interim dividend. Future growth prospects stay supported by long-term structural and regulatory growth drivers in active safety and autonomous systems. From the technical standpoint, shares were trading above the short-term support level of 20-day simple moving average prices, which reflects an uptrend in the stock and carrying the potential to move up further.

Based on the above rationale and support from the valuation as done using the above method, we have given a “Speculative Buy” recommendation for AB Dynamics Plc at the current price of GBX 1,710.00 (as on 21 August 2020, before the market close at 12:45 PM GMT+1), with lower double-digit upside potential based on 36.80x Price/NTM Earnings (approx.) on FY20E earnings per share (approx.).

accesso Technology Group PLC – Progressing well with a virtual queuing system. 

accesso Technology Group PLC is a FTSE AIM All-Share Technology Company, which generates revenue from ticketing, e-commerce and mobile technologies and virtual queuing solutions. It serves leisure, entertainment, and cultural markets.

On 16 September 2020, the Company is expected to announce interim results for the six months ended 30 June 2020.

Recent News

9 June 2020: The Company issued 13,481,744 new equity shares at 290 pence per share to raise nearly £32.9 million in gross proceeds.

19 May 2020: The former CEO and a non-executive director of the Company, Tom Burnet, did not seek re-election to the Board and stepped down from his position.

Trading Update (as on 21 May 2020)

In this update, the Company announced that it had reached an agreement with Lloyds Bank PLC to waive leverage and interest cover covenants. It also agreed an additional facility of £8 million with the lending bank, committed until August 2021. Regarding the trading, it affirmed that trading in FY20 started well with revenue to the end of February higher than the same period in the last year by 12.9%. However, revenue for Q1 FY20 fell 11.9% year-on-year due to the lockdown measures. As of 8 May 2020, the Company had net debt of around $12.8 million.

One Year Share Price Chart

 
1-Year Chart as of 21 August 2020, before the market close (Source: Refinitiv, Thomson Reuters)

 
Risk Assessments

Venue closures and event postponements due to the pandemic and resultant lockdown state can lead to a sharp decline in FY20 revenue. Moreover, the adoption of new technologies can be delayed due to the disruption. It is also exposed to fluctuating exchange rates and international visitation patterns. 

Valuation Methodology

 

Conclusion: accesso Technology Group PLC – Speculative Buy at GBX 250.00

The Covid-19 pandemic has certainly impacted the business operations as revenue in April was 80% than the corresponding month in 2019. However, the Company is encouraged by the fact that in the first two months of FY20, trading was significantly ahead of expectations. Therefore, it is waiting for the industry to recover from the Covid-19 pandemic and it will remain focused on the long-term opportunity. Meanwhile, it has been adopting swift and decisive action to reduce the operating cost base to remain resilient during the period of reduced operations. Moreover, the recent equity placing has strengthened the financial position and will bring flexibility to support the recovery. Stock 52 week High and Low were GBX 960.69 and GBX 81.72, respectively. From the technical standpoint, 14-day RSI is currently in the oversold zone, which means there is a good potential for a short term rebound in the stock price.

Over the past three years (FY16 - FY19), the company’s revenue surged from USD 102.50 million in FY16 to USD 117.2 million in FY2019. Compounded annual growth rate (CAGR) stood at 4.57 per cent.

Based on the decent prospects, which are supported by valuation done using the above method, we have given a “Speculative Buy” recommendation on accesso Technology Group PLC at the current price of GBX 250.00 (as on 21 August 2020, before the market close at 12.25 PM GMT+1), with lower double-digit upside potential based 2.30x EV/NTM Sales (approx.) on FY20E Sales (approx.).

Sensyne Health Plc

Sensyne Health Plc (LON: SENS) is FTSE AIM All-Share listed Company, which provides clinical AI (artificial intelligence) products and services to accelerate the discovery and development of new medicines.

Recent News

On 19 August 2020, Sensyne Health announced the development of a new software application named DBm-Health for people with diabetes.

Update on Trading Performance for Year ending 30 April 2020 (released on 14 May 2020)

The Company anticipates ending the FY20 with £2.1 million of revenues (FY19: £0.136 million). The revenue growth is largely driven by momentum in H2 2020 and slightly ahead of guidance provided in January 2020. At the year (FY20) end, the Company reported around £31.6 million in cash and cash equivalents (FY19: £49.3 million), reflecting continued investment in R&D. Further, the Company updated regarding the signing of a commercial research agreement with NASDAQ listed Company, Alexion. Also, the Group announced the appointment of Sir Bruce Keogh KBE, as a permanent Chairman of the Board.

One Year Share Price Chart


Daily Chart as of August 21, 2020, before the market close (Source: Refinitiv,Thomson Reuters)

Key Risks

The business also must adhere to stringent regulatory requirements, which can affect the business. Due to Covid-19 pandemic, the priorities have been changed for the Company. It is currently focussing the resources to support the NHS. Moreover, the Company can face liquidity during the crisis period. 

Valuation Methodology 
 
 

Recommendation: Sensyne Health Plc – Speculative Buy at GBX 62.90

The Company has rapidly accelerated the implementation of digital technologies around the world. It is incorporating data science and machine learning technology as a foundation for advancing patient care. Moreover, it is witnessing an increasing demand for products and technology, which will rapidly digitize healthcare future. The Board anticipates performing in line with expectations, and it is well placed to deliver growth in FY2021. From the technical standpoint, shares were trading well above the short-term support level of 20-day simple moving average prices, which reflects an uptrend in the stock and carrying the potential to move up further.

Based on the above rationale and support from the valuation as done using the above method, we have given a “Speculative Buy” recommendation for Sensyne Health Plc at the current price of GBX 62.90 (as on 21 August 2020, before the market close at 10:22 AM GMT+1), with lower double-digit upside potential based on 28.00x EV/NTM Sales (approx.) on FY20E sales (approx.).

Sosandar Plc

Sosandar Plc (LON: SOS) is a United Kingdom-based online womenswear brand Company. The Group aims at providing fashion-conscious women with a variety of products while using an outsourced logistics provider that can help the planned progress over the upcoming years.

Trading Performance For July 2020 (released on 18 August 2020)

The Company continued to deliver strong performance in July 2020, with revenue growth of 57%, margin of 55% and reduced operating costs by 84%. The Company also delivered an improvement in the net loss by 83% versus previous year performance for the same period. The active customers went up by 98% versus last year data. A shift in customer behaviour across product categories resulted in 38% year to date return versus 50% in last year.

One Year Share Price Chart


Daily Chart as of August 21, 2020, before the market close (Source: Refinitiv,Thomson Reuters)

Key Risks

The Group expects to face challenges from macroeconomic and geopolitical uncertainties. Moreover, the push towards online sales has increased the variable costs, such as warehouse picking and delivery costs. In the near future, the Company will be facing uncertainties due to the increased aggressiveness of the competitor activities.

Recommendation: Sosandar Plc – Speculative Buy at GBX 16.20

The Company has shown robust performance in Q1 FY2020 and continued same performance level in July 2020 as well. SOS adapted quickly to unprecedented changes, which demonstrates the versatility and agility of the business model. The current trading performance boost confidence of the Company in increasing marketing activity at the end of Q2 to increase customer acquisition activity. In the second quarter of 2020, the Company signed contracts with Next and John Lewis to launch products on their website platforms. The Company has a robust cash position of £4.34 million as on 31 July 2020, demonstrating careful management of cost. From the technical standpoint, shares were trading above the short-term support level of 20-day simple moving average prices, which reflects an uptrend in the stock and carrying the potential to move up further.

Based on the decent prospects, we have given a “Speculative Buy” recommendation for SosandarPlc at the current price of GBX 16.20 (as on 21 August 2020, before the market close at 9:38 AM GMT+1).
 
*All forecasted figures and Industry Information have been taken from Refinitiv, Thomson Reuters.
*Dividend Yield may vary as per the stock price movement.

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