Market Cap: £341.2m; Current Price: 276p
Interims: In line with pre-close and on track for FY
- Revenue +39% to £32.4m with organic growth of 18% and growth in both Identity Proofing (+36% to £15.4m) and Identity Solutions (+43% to £17.0m). Adj. operating profits +21% to £4.5m (although capitalised development spend increased £0.4m to £0.4m), PAT +32% to £2.3m but adj. EPS +3.0% to 3.4p reflecting a £0.6m negative swing in the tax charge.
- Net cash from operating activities increased 61% to £5.7m and net cash balances of £1.2m (2014: £8.6m) following the payments of dividends, the acquisition of Loqate (acquired April) and the earn-out relating to DecTech (acquired April 2014). New £50m RCF and A$7.4m term loan facility agreed in November for further acquisitions.
- Revenue from international clients now account for 26% of revenue with a number of financial services sector contract wins in APAC in H1. It can now conduct KYC checks for 40 countries.
- On track for FY – consensus FY16 EPS forecast of 7.3p.
Northland Capital partners view: Good H1 performance with revenue growth coming organically and via acquisitions across both Identity Proofing and Identity Solutions. Operating margin lagged, however, following increased investment and there was also £0.4m of capitalised development spend. Management remains committed to buy-and-build strategy in order to broaden its geographic reach and November’s facility provides considerable firepower. Growth opportunity is reflected in the rating of 38.0x FY16 EPS and 30.6x FY17.
Ariana Resources (LON:AAU): Red Rabbit update
Market Cap: £6.8m; Current Price: 0.85p
Positive drilling results at Arzu South
- Deep drilling at Arzu South returned 11m at 4.07g/t Au eq. from 92m (KTP-RC05-15), 7m at 2.96g/t Au eq. from 84m (KTP-RC02-15) and 7m at 2.24g/t Au eq. from 92m (KTP-RC01-15).
- Drilling is ongoing and will be included in an updated mineral resource estimate for the area.
Northland Capital partners view: This additional drilling at the Arzu South, which forms the main pit of the Red Rabbit Gold-Silver Mine, has confirmed the presence of several higher-grade plunging shoots within the existing pit shell, though it appears that these shoots enter a lower-grade zone at around 100m below the surface (depleted zone). Additional drilling will be undertaken to test if higher-grades are located in the shoots below the depleted zone. Higher-grades would likely be required for this area to become a target for underground mining.