VELTYCO GROUP (LON:VLTY)
SECTOR – LEISURE
RATING – BUY*
MARKET CAP – £69m
CURRENT PRICE – 93p#
TARGET PRICE – 110p (From 83p)
Strong 1H17 ahead of expectations, forecasts double digit increase (note attached)
NORTHLAND VIEW
Strong interims: Significantly strong performance in the 1H17A, triple digit YoY growth. Revenue was €6.4m, +202% YoY and +4.5% ahead of revenue reported the whole of FY16A. EBITDA was €3.8m, +410% YoY, +80% ahead of EBITDA reported for the whole of FY16A and +29% ahead of our expectations for the 1H17. EBITDA margin in the 1H17 was c. 60%, as higher than expected revenue was achieved on efficient marketing spend. Balance sheet strengthened significantly, net cash was c. €1.3m. Finally, the Board now considers paying a dividend to shareholders in FY18, based on the final results for FY17.
Forecasts: Current trading remains strong, which prompts our double digit increase to profit forecasts. EPS increases by +18% to 8.4c (7.1c) in FY17E and by +10% to 8.8c (8c) in FY18E.
Valuation: The shares trade on an earnings multiple of c. 12.5x, a 19% discount to peers on c. 15.5x FY17 earnings. Our price target is based on the midpoint of our DCF and peer multiples, which points to 110p per fully diluted share.
The business significantly outperformed expectations in the 1H17 and trading remains strong in the 2H17, the catalyst for the double digit increases to our earnings forecasts. We reiterate our BUY rating on the stock.
COMPANY DESCRIPTION
Veltyco is a marketing and promotions business which refers customers to online casino, sports betting, lotteries and options trading brands.
SECTOR – OIL & GAS
RATING – CORP*
MARKET CAP – £2.5m
CURRENT PRICE – 0.4p#
Interim results
NORTHLAND VIEW
During H117 LBT totaled £115k up from £96k during H116.
Net debt totaled £412k in H117 compared to £747k in H116.
Clontarf is in discussions to finalise details for its Block 18 (EG-18), located in Equatorial Guinea over the coming months.
EG-18 is part of the Northern Rio Muni Basin, in a diverse Cretaceous sands play, with a distal fan and turbidite channels visible on historic seismic data. Clontarf has had tentative discussions with a number of parties that may lead to productive partnerships.
Clontarf Energy continues to be conservatively run. Once finalised the EG-18 should be a very exciting project for the Company. The Northern Rio Muni Basin is a prolific play elsewhere along the Atlantic Margin and the Company believes it offers great potential in Equatorial Guinea. Block 18 covers approximately 5,056 km2 of undrilled deep water acreage with several play types. Clontarf's focus is on large structural and or stratigraphic trap targets.
COMPANY DESCRIPTION
Clontarf Energy is an Oil & Gas Exploration Company with a 3% royalty in Peruvian Block 183 and a 60% interest in the Tano 2A Block located in offshore Ghana.