Leisure & Gaming (LNG, 9p, £8.47m) Q2 results to June 2009 showed healthy growth with amounts wagered rising to €38.5m (€28.4m) offset by a substantially lower net win margin of 13.5% (18.3%) – leading to a net win of €5.2m (€5.2m) and a halved EBITDA of €0.2m (€0.4m). The group was hit by lower overall sporting activity, predictable results in the final weeks of the season and the absence of the European football championships. The group is warning that Q3 is traditionally weaker and such does not warrant a buy recommendation in spite of a relatively low valuation-HOLD.
Maxima Holdings (MXM, 86.5p, £21.85m) Trading update for the year ending May 2009 for the IT business systems and managed services is in-line with expectations. Net debt is lower at £15.5m (down from £17.3m at the interim stage) and the group has total facilities available of £18.75m. Current forecasts are for broadly flat profits around £6.7m to May 2009 and 2010 with flat EPS around 19p – putting the group on a PER around 4.5 times. The rating is appropriate given the group is talking about reorganisation costs to be announced with the full year results in August. HOLD.
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Dialight (DIA, 145p, £45.3m) 2 North American metering companies have ordered more than 100,000 combined units of its PowerPulse 200 amp disconnect/reconnect switches worth just less than $3m. The group states that this shipment will be completed in the second half of the current year and represents just a fraction of the total available US market. We repeat our BUY recommendation, last made on 09/07/09 at 130p, with the same 166p price target.
Statpro (SOG, 77p, £45.96m) Half year trading update to June 2009 reports continued healthy activity levels which will lead to results ahead of Director’s previous expectations and significantly ahead of the 2008 H1. The provider of portfolio analytics and data solutions for the global asset management industry has been particularly pleased with its ability to win new clients. Net debt reduced from £14.6m at the end of December to £10.8m despite £0.8m of dividends and £0.5m of deferred considerations being paid. The group has good visibility of revenues and so forecasts of £6.2m pre-tax profits with 8.3p EPS and 2p DPS to December 2009 put the group on a prospective PER of 9.3x with a yield of 2.6%. Back on 20/05/09 we recommended the shares as a BUY at 61.5p with a price target of 80p. Given the confident statement and next year EPS forecast of 9.2p (up 10%) we are raising our target price to 100p – or 12 times with yield of 2%.
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Alphameric (ALM, 28.5p, £64.24m) Interim results to May 2009 for the solutions provider to the gaming industry, the electronic point of sales systems and 50% owner of AMRAc that has the rights to pictures and data from 31 horse race courses showed healthy progress. Revenues are up 17% to £19.9m (£16.9m) with a pre-tax profit of £4.1m (loss £3m) with net cash (including its share of the joint venture cash) of £27.4m. The group has re-joined the dividend list with an interim DPS of 0.75p. The interims underline the forecasts of £8.54m for the year and 3.05p EPS – putting the group on a prospective PER of 9.3x which is forecast to fall 20% in the following year. Still attractive - BUY to the 34p level.
Bglobal (BGBL, 26p, £19.27m) Final results to March 2009 from the smart metering solutions company saw 60,000 meters delivered to date with 120,000 ordered. Revenues rose to £6.64m (£4.50m) with repeat revenues of £0.97m (£0.55m). More importantly the group secured lease finance facilities of up to £15m In July. Increasing admin costs led to pre-tax losses of £4.28m (£3.47m). Cash at 2nd July was £1.17m and the group confirms it has sufficient cash resources for the future. On the spike of shares to 30.25p we recommended a sell down to the 26p level, so the shares now rate a HOLD.
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Qonnectis (QTI, 0.25p, £0.98m) Has signed a letter of intent with Primary Water PLC for its data monitoring products and services. After an initial valuation period Primary Water is expected to sign a 3 year exclusive distribution covering Australia and Russia with a non-exclusive distribution for all other countries except UK, Ireland & China. Clearly this is good news as it dramatically expands Qonnectis’ marketing push at little up front cost. However the group is still seeking funding and we maintain the sell recommendation until the level of dilution is known. SELL
NetDimensions (NETD, 11p, £2.75m) Interim trading update from the provider of performance, knowledge and learning management systems to June 2009 is in-line with market expectations. In June the group had net cash of $6.8m – or some 16.5p per share. Given the discount to net cash the group justifies our existing recommendation of SPECULATIVE BUY.
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Plexus Holdings (POS, 36p, £28.87m) Has won a contract for its High Pressure/High Temperature and standard pressure well head and mudline suspension equipment with Talisman Energy. The contract is worth an initial £1.5m over 2 years, starting in the last quarter of 2009. Forecasts to June 2009 are £1.8m pre-tax profits with 1.5p EPS followed by £2m profits with 1.8p EPS next year, putting the group on 24 times PER falling to 20 times next year. Although highly rated the group is gaining recognition for its systems and thus we rate the shares a BUY with a year price target of 43p.
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