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Northland Capital Partners View on the City - Active Energy Group; Starcom

Northland Capital Partners View on the City - Active Energy Group; Starcom

SECTOR: RENEWABLE ENERGY; TECHNOLOGY

 

ACTIVE ENERGY GROUP (AEG.L)

SECTOR – RENEWABLE ENERGY

RATING – CORP*

MARKET CAP – £39.0m

CURRENT PRICE – 4.0p#

ANALYST – MIKE JEREMY

 

Year-end Dec

2015A

2016A

 

 

 

Revenue (US$m)

24.38

19.20

No forecasts provided

EBITDA (adj) (US$m)

(1.63)

1.27

Adj. pre-tax Profit (US$m)

(3.39)

(0.95)

Adj. EPS (US$c)

(0.65)

(0.13)

DPS ($c)

-

-

Net Cash/(Debt) (US$m)

(6.79)

(5.52)

P/E (x)

-

-

Dividend yield (%)

-

-

EV/EBITDA (x)

-

46.2

 

SOURCE: Northland Capital Partners Limited estimates. #Priced at prior trading day close. *Northland Capital Partners Limited Acts as Nomad to Active Energy Group and therefore this information should be viewed as a Marketing Communication.

 

MoU to manage c.5m hectares of forest in Alberta to supply CoalSwitch™

 

NORTHLAND VIEW

  • Active Energy’s subsidiary Timberlands International Ltd. has signed a Memorandum of Understanding (MoU) to acquire a controlling interest in PowerWood Canada Corp, a privately owned Canadian company which holds substantial forestry assets in Alberta, under Forestry Management Agreements (FMAs) and Deciduous Cutting Rights issued by the Crown Province of Alberta. 
  • The purpose of the MoU is to secure feedstock for the proposed roll-out of CoalSwitch™, AEG’s proprietary biomass replacement for coal, in Alberta.  PowerWood Canada holds contracts and FMAs for 300,000 tonnes/year of merchantable timber - not including the biomass or residues from operations - within a total area of c5m hectares in established natural forest in Northern Alberta.  Active Energy via its subsidiary AEG CoalSwitch Ltd plans to construct a 25 tonne-per-hour CoalSwitch™ plant at the site (subject to formal contract and funding), improving forestry economics by processing timber waste and aspen, for both CoalSwitch™ fuel and PeatSwitch, a soil improvement product. AEG reported that offtake agreements, subject to the commencement of production, are in place.

AEG has sought to develop a presence in Alberta, in addition to similar efforts in Newfoundland, the aim being to combine efficient forestry with the provision of feedstock for the commercialisation of its CoalSwitch™ biomass replacement for coal in power generation. Today’s development is realisation of this aim.

 

COMPANY DESCRIPTION

Active Energy Group (AEG) is an international, vertically-integrated forestry management and renewable resource energy provider.  The group combines management of forestry resources with the commercial development of a proprietary solution (CoalSwitch™) to the integration of wood-based (biomass) fuel into existing coal-fired thermal power plants. 

 

STARCOM (STAR.L)

SECTOR – TECHNOLOGY

RATING – CORP*

MARKET CAP – £7.5m

CURRENT PRICE – 2.9p#

TARGET PRICE – 3.7p

ANALYST – MIKE JEREMY

 

Year-end Dec

2016A

2017A

2018E

2019E

 

Revenue (US$m)

5.131

5.440

5.901

6.276

Adj. EBITDA (US$m)

(0.781)

(0.193)

0.485

0.622

Adj. Pre-tax Profit (US$m)

(1.424)

(1.164)

(0.179)

(0.049)

Adj. EPS (US$c)

(1.136)

(0.622)

(0.069)

(0.019)

DPS (US$c)

-

-

-

-

Net Cash / (Debt) (US$m)

(0.92)

(0.57)

(0.19)

(0.09)

P/E (x)

N.M

N.M

N.M

N.M

Dividend yield (%)

N.M

N.M

N.M

N.M

EV/EBITDA (x)

N.M.

N.M.

22.1

17.3

 

SOURCE: Northland Capital Partners Limited estimates. #Priced at prior trading day close. *Northland Capital Partners Limited acts as Nomad and Broker to Starcom Plc and therefore this information should be viewed as a Marketing Communication.

 

Launch of Watchlock Cube under Starcom brand

 

 

NORTHLAND VIEW

  • Starcom has launched its ‘intelligent padlock’, Watchlock Cube, ahead of schedule, originally planned for release in Q318,.
  • Watchlock Cube is a stand-alone autonomous unit with GPS and cellular locational technology and a high-security padlock, which combines asset security and constant communication across a wide variety of applications, and is able to detect irregular events and immediately communicate an alert. Its electronic shell is adaptable to a variety of standard C10 padlocks from various manufacturers, whilst Starcom highlighted its lower price and longer battery life.  Starcom intends to market Watchlock Cube – developed in-house – under its own brand, rather than in partnership as previous versions have been indicating improved margins. 

It is significant that Starcom is able to market ‘Cube’ under its own brand and combine, attractive pricing with higher profitability.  In early April Starcom reported that Q1 revenue (US$1.5m) was ahead of its prior expectations, noting the positive impact of its own technology developments in 2017.

 

COMPANY DESCRIPTION

Starcom Group develops and manufactures technology using cellular and GPS systems designed for tracking vehicle fleets, equipment, people, containers and merchandise.

 

 

 

1. Northland Capital Partners Limited (“Northland”) acts as Nominated Advisor and/or Broker to the company.

2. Northland) and/or its affiliates companies do beneficially own 1% or more of any class of the issuer’s equity securities, as of the end of the month immediately preceding the date of issuance of the research report or the end of the second most recent month if the issue date is less than 10 calendar days after the end of the most recent month. 

3. The authoring analyst or any associate of the authoring analyst does maintain a long or short position in any of the issuer’s securities directly or through derivatives, including options or futures positions.

4. Northland, its affiliated companies, partners, officers, directors or any authoring analyst of Northland has provided services to the issuer for remuneration during the preceding 12 months other than investment advisory or trading services.

5. Northland or any of its affiliated companies has performed investment banking services for the issuer during the 12 months preceding the date of issuance of the report.  

6. A partner, director, officer, employee or agent of Northland or any of its affiliated companies is an officer, director, employee or advisor of the issuer.  Disclosures are applicable for all companies

7. The authoring analyst, or any associate of the authoring analyst, has viewed the material operations of the issuer. 

8. The authoring analyst, or any associate of the authoring analyst, received reimbursement for travel expenses.

9. Northland makes a market in the securities of this company.

 

 

DISCLAIMER

This document is provided solely to enable clients to make their own investment decisions. It may therefore not be suitable for all recipients and does not constitute a personal recommendation to invest. It does not constitute an offer or solicitation to buy or sell securities or instruments of any kind. If you have any doubts about the suitability of this service, you should seek advice from your investment adviser. This document is produced in accordance with UK laws and regulations. It is not intended for any person whose nationality or residential circumstances may render its receipt unlawful.

The past is not necessarily a guide to future performance. The value of shares and the income arising from them can fall as well as rise and investors may get back less than they originally invested. The information contained in this document has been obtained from sources which Northland Capital Partners Limited believes to be re¬li¬able. The Com¬pany does not warrant that such information is accurate or complete. All estimates and prospective figures quoted in this report are forecasts and not guaranteed. Opinions included in this report reflect the Company’s judgement at the date of publication and are subject to change without notice. If the investment(s) mentioned in this report are denominated in a currency different from the currency of the country in which the recipient is a resident, the recipient should be aware that fluctuations in exchange rates may have an adverse effect on the value of the investment(s). The listing requirements for securities listed on AIM or PLUS markets are less demanding, also trading in them may be less liquid than main markets.

Northland Capital Partners Limited and/or its officers, as¬sociated entities or clients may have a position, or other material interest, in any securities men¬tioned in this report. Northland Capital Partners Limited does not provide recommendations on securities of firms with which it has a corporate relationship. More information about our management of Conflicts of Interest, Investment Research Methodology & Definition of Recommendations can be found at www.northlandcp.co.uk 

Northland Capital Partners Limited is authorised and regulated by the Financial Conduct Authority and a Member of the London Stock Exchange.

Published by/copyright: Northland Capital Partners Limited, 2013. All rights reserved

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