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Good morning and welcome to this edition of “AIM’s Essential Top Ten”, a brief and early roundup of the main news announcements. This morning’s edition includes AO and PFD from the Main Market.
AO World (LSE:AO/)
Interim Management Statement: UK business has performed well, year-on-year growth in AO branded UK sales of 29% and total UK revenue growth of 25%, driven by improving brand recognition. Expectations.
GN view: I have been sceptical as regards to the quality and long-term sustainability of this business but it is executing its business plan and giving itself the best chance of eventually succeeding.
Empresaria (LSE:EMR)
Trading Update: Continued to perform well in first six months of the year. Net fee income 13% ahead of prior year. Strong in Germany, Japan, India, Chile and China. Slowdown in UK in run up to EU referendum, now stabilised.
GN view: It is very pleased with its geographical diversification and rightly so.
Jarvis Securities (LSE:JIM)
Interim Results: Cash under administration up 10.7%. Client numbers up 9.3%. Revenue down 1.3%. Pre-tax profit down 4.8%. Trading volumes significantly reduced since H2 2015. Expecting market volatility and increased trading in the second half.
GN view: Profit margin still high and while the growth runway available might be questioned, I think this is a fundamentally sound business. Excellent cash generation and returns on capital.
Monitise (LSE:MONI)
Trading update: Second-half FY2016 revenues similar to first-half revenues. Positive EBITDA thanks to material reduction in total costs. Cash outflows materially lower. £11 million reduction instead of £35 million reduction, leaving a cash balance in June of £42 million. Revenue in FY2017 to be lower due to product transition.
GN view: New product success is critical. CEO says contracts are taking longer to conclude but is encouraged by the response of potential customers. Highly uncertain.
MySale (LSE:MYSL)
Trading Update: Year to June 2016 ahead of market expectations for both revenue and underlying EBITDA. Underlying EBITDA expected at c. A$5 million, ahead of market forecast of A$4.7 million. Revenue up 7% to A$252 million.
GN view: The customer reviews looked poor to me, as the company initially appeared to have difficulty in fulfilling all customer orders. If the formula could be made to work, it could be highly attractive (e.g. negative working capital requirements as customers pay for ordered items before the company has to buy them).
Nichols (LSE:NICL)
Interim Results: Revenue up 3.33%, operating profit up 10.8%. Dividend up 12.5%. Outperformed the UK soft drinks market by a significant margin thanks to product launches but also thanks to an acquisition (The Noisy Drinks Co.) International sales down slightly.
GN view: I think this is one of the best companies on the LSE and today’s update does little to dispel this view. Finding an attractive entry point is the challenge for potential buyers.
Osirium Technologies (LSE:OSI)
Interim Results: Admitted to AIM in April 2016. Results to April 2016 show revenue of £162k (down from £175k), operating loss of £513k (down from a loss of £373k). Cash of £4.9 million after placing.
GN view: I’m not sure how it managed to raise so much money from the public markets, given its existing small scale and operating losses.
Premier Foods (LSE:PFD)
Trading Update: Q1 group sales up 1.9%, branded sales up 0.8%. Expectations for full year unchanged. Devaluation of Sterling to be supportive.
GN view: Non-branded sales are somewhat less attractive but they are growing significantly at a rate of 9.8% thanks to contract wins from retailers and discounters. For now, investors are probably still thinking about what might have been, after Premier’s failed takeover attempts.
Science in Sport (LSE:SIS)
Half year trading update: Sales up 24% to £6.5 million in six months to June 2016. Company website and other online retailers particularly strong. Websites launching in US and Germany and native language websites in Italy and Holland.
GN view: Looks well-funded for future growth and the Board remains confident for the full year outlook – worthy of further research.
Tristel (LSE:TSTL)
Trading Update, Special Dividend & Acquisition: Turnover for year ended June 2016 in excess of £17 million (2015: £15.3 million). Both turnover and profit ahead of market expectations. Overseas revenue 39% of group revenue – a record level. Special dividend declared and acquisition of Australian distributor for AU $1.35 million.
GN view: Lots of positive news here with a more attractive sales mix, strong cash generation and improved margins to look forward to. On track to enter the US market too.
