Northland Capital Partners View on the City Fishing Republic, Management Resources, Savannah Resources

Fishing Republic (LON:FISH) – BUY*: Update Market Cap: £4.6m; Current Price: 17p; Target Price: 36p Additional stores increases Fishing Republic’s footprint to ten stores - Placing expands footprint: Fishing Republic placed 3,125,000 new shares at 16p in December. This provides the impetus to increase the store network from a previous eight stores to ten stores in FY16 and two recent senior appointments strengthens the senior management team. - Two new stores added on back of funding: The Cotswold Angling acquisition adds a 4,100 sq ft store in the South of England and caters for all fishing disciplines. Additionally, a new 11,000 sq ft store in Crewe takes the number of Fishing Republic retail stores to ten in 2016, previously eight, including Birmingham. We estimate the two stores will add over £0.9m of revenue and over £0.1m to EBITDA in FY16 - Forecasts & valuation: On the back of the acquisition and store expansion, we increase our revenue and profit forecasts for FY16 - revenue increases from a previous £5.1m to £6.5m and EBITDA from c. £0.6m to c. £0.7m. Our fully diluted EPS increases by c. 5% from 1.84p to 1.93p for FY16. The shares trade on c. 8.8x FY16 earnings. - We increase our price target to 36p (from 31p) and reiterate our BUY rating, note attached. Northland Capital partners view: The three new store additions (Birmingham, Crewe and Swindon) takes Fishing Republic’s footprint to ten stores in FY16 and gives the business exposure to customers in the South of England (Swindon). In our new forecasts for FY16, on the back of the acquisition and new store openings, we look for £6.5m of revenue (+62% YoY), £0.7m of EBITDA (+106% YoY) and 1.93p of EPS per fully diluted share (+63% YoY). The shares trade on 8.8x FY16 earnings and less than 6x EV/EBITDA. We maintain our Management Resource Solutions (LON:MRS) – CORP: Proposed acquisition and readmission on AIM Market Cap: £4.7m; Current Price: 14.3p From yesterday: Proposed acquisition of Bachmann Plant Hire and readmission on AIM - Proposed acquisition of Bachmann Plant Hire Pty, a bulk earthworks specialist providing civil construction services in Queensland, Australia, for a consideration of up to AUD$13.4m. Bachmann provides ‘wet’ plant hire (equipment and operators) with more than 100 staff and a fleet in excess of 200 vehicles (including scrapers, dozers, excavators, compactors, graders, dump trucks and water trucks). - The acquisition complements MRS’s existing service offering – the supply of technical and strategic services (Project Management and Contract Personnel) in the oil and gas, construction, aviation and resources industries. - Bachmann had revenue of AUD$21.7m in FY15 (June) and produced a PBT of AUD$2.0m. It has numerous long term contracts with a wide base of corporate and public sector clients. The Company has benefited from the government investment that has been initiated in the face of the slowing mining industry. Bachmann has recently started to work in the development of sub divisions and housing estates in the Ipswich, Queensland, region. - The acquisition constitutes a reverse takeover and is conditional on the approval by shareholders at a general meeting to be convened on 28th January. There is an initial cash consideration of AUD$8.2m on completion less an amount for outstanding equipment finance (c. AUD$4m), plus an adjustment for net assets and up to AUD$5.2m in three earn out payments (cash or shares) based on Bachmann’s FY16, FY17 and FY18 performance. The acquisition is being funded through a number of debt facilities with Westpac. - Appointment of Christopher Berkefeld as a NED with effect from Admission. He has more than 20 years’ experience in public and private companies in New Zealand and Australia with a background in industrial, waste and mining services in Australia and engineering and heavy transportation services in Europe and Asia. - MRS has continued to tender for additional work in APAC, including a project management assignment valued at AUD$77m and a New Caledonia training solution at AUD$3.5m p.a. that are still in the tender process. It also secured a new contract in PNG worth AUD$5.5m. The company reports a slowing in its traditional consulting work that has been offset by project management activity. Northland Capital partners view: The proposed acquisition of Bachmann represents a substantial step forward for MRS that more than doubles the Company in revenue terms, expands its offering into ‘wet’ plant hire and adds a number of long term contracts and a broader customer base. The proposed acquisition comes after the frustration of the aborted acquisition of D&M Group last year after the funding package fell away. The shares reacted positively to the restoration and announcement, climbing 46% on the suspension price. Savannah Resources (LON:SAV) – CORP: Oman update Market Cap: £4.6m; Current Price: 1.6p Completion of drilling - Savannah Resources has completed RC and diamond drilling over Blocks 4 and 5, located in Oman. - Ten RC holes (933m) and six diamond holes (833m) were completed. - Assay results from the first nine holes have been previously announced (09/12/15) and the remaining seven holes are expected to be announced by the end of January 2016. Northland Capital partners view: The initial set of assay results from this drill programme at Blocks 4 and 5 were very promising for Savannah Resources, expanding the known high-grade mineralisation at Mahab 4, as well as confirming the high-grade nature of mineralisation at the Dog’s Bone Zone and the presence of significant levels of gold mineralisation that could add further upside. The final results from this drill programme remain on target by the end of January with a resource upgrade expected to follow in due course.