Ascent Resources (LON:AST) – BUT*: FY16 Results
Market Cap: £32m; Current Price: 1.9p; Target Price: 4.3p
FY16 Results LBT reduces as does net debt
LBT reduced to £2.7m in FY16 from £3.6m in FY15, largely due to a reduction in other administrative expenses and finance costs.
Net debt reduced substantially to £3.7m in FY16 from £12.1m in FY15, largely as a result of increased cash from equity placings and reduction in debt from repayment of short-term finance and conversion of loan notes.
First commercial sale of gas from well Pg-10 commenced in April.
Following the favourable decision of the Environment Ministry in March 2017, the Company remains optimistic that the IPPC Permit will be declared valid later this year, enabling the Company and its partners to begin construction of a new processing facility.
NORTHLAND CAPITAL PARTNERS VIEW: Ascent Resources has now transitioned from developer to producer, with the production of gas from its first recompleted well, Pg-10, at its 75%-owned Petišovci Gas Project, located in Slovenia. Ascent is now recompleting a second well, Pg-11A, which will allow the Company to increase production levels. Alongside this, Ascent is also upgrading the processing plant (CPP), to dehydrate and treat its gas it for sale under the contact with INA, this is expected to result in the sale of a higher margin product during Q217. Results for FY16 were in line with our expectations and we maintain our forecasts, price target of 4.3p and BUY rating.
Fishing Republic (LON:FISH) – BUY*: FY16 Results
Market Cap: £16.8m; Current Price: 44.5p; Target Price: 47p
Results for FY16 in line and a good start to FY17
FY16A was a good year for Fishing Republic (FISH) where five new stores were added to the store network in Hull, South Birmingham, Crewe, Lincoln and Mildenhall in Cambridgeshire taking the store network to 12 stores as at the end of FY16A. Overall revenue for the group in FY16A was £5.8m, +41% YoY and marginally ahead of the £5.7m reported at the time of the trading update in February citing 40% YoY growth. PBT is in line with forecasts at c. £0.4m, +32% YoY.
Stores performed strongly, where revenue was +82% YoY to £4.1m including the new stores and l-f-l store revenue was +16% YoY.
Online revenue decreased by c. 10% YoY to £1.7m as the business transitions away from generating revenue from third party websites to generating revenue from its own websites, and where margins are higher as a result. Revenue from own websites were +132% YoY to £0.7m, as previously stated.
The outlook statement reads well, where since the start of the year (1Q17) three new stores were opened in Milton Keynes, Ipswich and Reading with a further three store openings planned in King's Lynn, Huntingdon and Essex taking the store network to 18 stores in FY17. The main fishing season, typically begins in the 2Q of the year has started well, helped by recent warm weather. No changes to forecasts at this point and our forecasts at present does not include the recent store openings in the 1Q17 and neither the three new stores planned for opening during FY17.
NORTHLAND CAPITAL PARTNERS VIEW: The planned new store openings combined with the growth in own website revenue during FY16, is highly encouraging, as the business transitions to generating higher margin revenue from own sites. The balance sheet is in healthy shape with c. £2.1m of net cash as at the end of FY16, with which to fund further growth. We maintain our BUY rating on the stock.