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Edison Insight | 27 August 2020 1

Contents Global perspectives 2 Company profiles 10 Edison dividend list 67 Stock coverage 68 Prices at 21 August 2020 Published 27 August 2020 US$/£ exchange rate: 0.7659

€/£ exchange rate: 0.90338

C$/£ exchange rate: 0.5753

A$/£ exchange rate: 0.5486

NZ$/£ exchange rate: 0.5055

SEK/£ exchange rate: 0.0876

HUF/£ exchange rate: 0.0026

NOK/£ exchange rate: 0.0849

CHF/£ exchange rate: 0.8390

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HKD/£ exchange rate: 0.0988

KZT/£ exchange rate: 0.0018

Welcome to the August edition of Edison Insight. We now have c 400 companies under coverage, of which 113 are profiled in this edition. Healthcare companies are covered separately in Edison Healthcare Insight. Click here to view the latest edition. This month we have added Brooge Energy and RADA Electronic Industries to the company profiles. We open with a strategy piece by Alastair George, who believes that investors should reflect on the multidimensional nature of the recovery from COVID-19. With the easing of lockdowns, global GDP is rebounding, but is also moving towards a rather different equilibrium compared to consensus forecasts at the start of 2020. Monetary and fiscal policy is on a completely different long-term setting. Furthermore, there is evidence of accelerated obsolescence in working practices and lifestyles. The COVID-19 pandemic also appears to be evolving into a different state, requiring a less aggressive public health response. Vaccine trials are progressing and may be reporting data by year-end. This is good news and lends weight to the idea that safe-haven assets such as gold and government bonds, in addition to the new class of ‘digital defensives’, may have seen their short-term high watermark. 2020 consensus earnings forecasts have stabilised in Europe and are rising in the US. We maintain a neutral view on global equities given the extent of the recovery of market valuations since the lows of March but are increasingly optimistic that further national lockdowns can be avoided. As a result, we believe it may be time to shift allocations away from the US and towards traditionally higher beta and more cyclical markets such as Europe and emerging markets. Readers wishing for more detail should visit our website, where reports are freely available for download (www.edisongroup.com). All profit and earnings figures shown are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. We welcome any comments/suggestions our readers may have. Neil Shah Director of research

http://www.edisoninvestmentresearch.com/

http://www.edisongroup.com/

mailto:[email protected]


Global perspectives: Think in three dimensions

Investors should reflect on the multidimensional nature of the recovery from COVID-19. With the easing of lockdowns, global GDP is rebounding, but is also moving towards a rather different equilibrium compared to consensus forecasts at the start of 2020. Monetary and fiscal policy is on a completely different long-term setting. Furthermore, there is evidence of accelerated obsolescence in working practices and lifestyles.

While infection rates have been rising in Europe, the case fatality rate appears to be falling. The COVID-19 pandemic also appears to be evolving into a different state, requiring a less aggressive public health response. Vaccine trials are progressing and may be reporting data by year-end. This is good news and lends weight to the idea that safe-haven assets such as gold and government bonds, in addition to the new class of ‘digital defensives’, may have seen their short-term high watermark.

2020 consensus earnings forecasts have stabilised in Europe and are rising in the US. Despite adverse headlines in respect of quarantines and further virus control measures, incoming data have surprised to the upside in the US and Europe. Nevertheless, the most recent August purchasing managers’ survey (PMI) data in Europe have been below expectations, highlighting the residual uncertainty in the outlook.

We maintain a neutral view on global equities given the extent of the recovery of market valuations since the lows of March but are increasingly optimistic that further national lockdowns can be avoided. As a result, we believe it may be time to shift allocations away from the US and towards traditionally higher beta and more cyclical markets such as Europe and emerging markets.

Analyst Alastair George +44 (0)20 3077 5700 [email protected]

mailto:[email protected]


A multidimensional recovery

Investors focused only on two-dimensional charts of the recent GDP contraction and rebound risk missing the multidimensional effects of coronavirus on economic behaviour. With the easing of lockdown, global GDP may be rebounding but is also moving towards a rather different equilibrium compared to consensus forecasts at the start of 2020. Monetary and fiscal policy is on a completely different long-term setting, while there is evidence of accelerated obsolescence in working practices and lifestyles, emphasising the shift to the digital economy. With 2020 earnings estimates now stable but market valuations up with events, we maintain a neutral outlook on global equities. However, within this view we are now more positive towards higher beta and more cyclical regions such as Europe and emerging markets, due to encouraging declines in the disease severity of the most recent wave of COVID-19 infections.

GDP data requires interpretation with care When visualising the effect of COVID-19 on the global economy, investors should take care to look beyond two-dimensional charts of economic output against time. While the GDP rebound is clear as national lockdowns have eased, a two-dimensional analysis masks the fact that COVID-19 has driven national economies to a very different economic place compared to that originally forecast for 2020.

Foremost for asset prices, monetary policy is on a wholly different footing. Not only have short-term interest rates plunged globally but rate expectations for years ahead have remained stuck at exceptionally low levels, even after the rebound in global GDP has become evident and uncertainty has diminished. The dramatically widening output gap, as measured by unemployment and the deviation of GDP from trend gives central banks ample scope, if judged by the prior decade’s reaction functions, to continue to pursue ultra-loose monetary policies.

The only constraint on policy may be the tail-risk of currency debasement, an evident fear of investors given the surge in the gold price during 2020. In the short-term however, the safe-haven bid for gold and other defensive assets may have reached its high watermark given the societal and medical progress in understanding and combating COVID-19.

The dissociation of work from its physical office location is a further step in the direction of ‘virtualising’ economic activities. Nevertheless, ‘virtual’ work, provided it is as productive, is equally valuable to the economy but may not be fully visible in national statistics. In some cases, it appears statistical quirks are quite naturally failing to capture the exceptionally rapid change in societal behaviours as a result of COVID-19. In other cases, efficiencies – such as less unnecessary commuting and use of office space are currently only evident in lower GDP. Nevertheless, higher productivity and this release of scarce resources is likely to offer scope for faster growth in future periods.

In terms of statistical quirks, if remote learning has effectively prepared students for university and the assessed examination results are a fair reflection of achievement, was there any lost output from the UK educational system as a result of COVID-19? Yet within the UK national statistics, the closure of physical school locations has been accounted as a loss of GDP and the continued employment of teachers has contributed to the surge in the GDP deflator (as costs have remained constant while the volume of output has apparently shrunk) of 7.9%.

We are not trying to argue that closing schools is an efficient way of delivering education. However, school closures certainly reduced UK GDP while remote learning (and unpaid parental support) was uncounted. In addition, there may be many more examples where the GDP contraction may have been overestimated. Increased utilisation of residential property for work purposes has not


been added to GDP – while lost office rent and travel has been counted. If previously office-based workers can effectively deliver their work in a virtual environment, the expected surge in unemployment may be rather more narrowly confined to specific sectors than previously thought.

In all cases, central banks will struggle to communicate any pre-emptive tightening of monetary policy if official statistics continue to indicate a very weak outturn for GDP.

Consensus forecasts stable in Europe and rising in the US The adverse calculation effects in terms of national accounts data also suggest that corporate profits may be more robust than would otherwise be expected, given the dramatic downturn in GDP.

We note for example that US consensus earnings forecasts have been rising since June, despite close to 40,000 new US COVID-19 cases per day and continued restrictions on social activity.

In Europe and the UK, estimates have been stable over the same period. The logic that the control measures rather than the virus itself represents the greater risk to corporate profits continues to hold true. While cases are rising, the reluctance of national governments to reimpose broad lockdowns has given markets confidence that even if there is a second wave of cases there will not necessarily be a second suppression of GDP as severe as that seen during Q220.

Exhibit 1: 2020 consensus forecasts stable in Europe, rising in the US

Source: Refinitiv, Edison calculations

We note that economic surprise indices, which measure the difference between incoming data and consensus expectations, have been strongly positive in recent weeks. This positive economic momentum in an environment where case rates in many developed nations remain relatively high has been a welcome development for equity investors and represents confirmation of an interim economic recovery, even as COVID-19 is yet to be clinically beaten.

Exhibit 2: Global economic surprise indices strongly positive for now

Source: Refinitiv

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Nevertheless, disappointing European PMI data for August highlight the problems with predictions for a smooth recovery out of the COVID-19 crisis. In real-time, it is difficult to be sure whether recently improved activity will prove durable or, on the other hand, whether growing new orders represents one-off inventory rebuilding. Investors should in the circumstances continue to expect significant volatility in the incoming data given the leads and lags in various sectors of the economy. We also note that the reintroduction of quarantine and local lockdown measures will have been unhelpful for sentiment in recent weeks. Historically, PMI survey respondents can overreact to near-term and transient newsflow.

The US data on the other hand are more positive. Not only have PMI data come in well ahead of expectations for both the service and manufacturing sectors of the economy, but earnings forecasts are on a rising trend following the earnings season. The US infection rate also appears to have stabilised.

For equities, the backdrop of progressively improving economic data and at least stable earnings forecasts is a clear positive. However, we retain a neutral view on global equity markets for the near term as these improving fundamental factors are balanced by the sheer extent of the market recovery to date, while in Europe the second wave of infections requires careful monitoring.

The recent re-imposition of quarantine requirements within Europe demonstrates that governments are still feeling their way towards a set of minimally invasive social restrictions that will keep the COVID-19 infection rate at bay during the upcoming winter. While significant progress has been made towards a vaccine, it still appears unlikely this will become widely available prior to Q121. Although we view further national lockdowns as unlikely given the economic costs, European governments are likely to maintain or even extend social restrictions, given rising case rates in recent weeks.

Nevertheless, given the encouraging absence of a corresponding rise in mortality following the second wave of cases, sentiment towards the hardest-hit sectors such as transport, leisure and hospitality may start to improve even if profitability is likely to remain depressed for at least the remainder of 2020.

Get back to school, back to work and muddle through The recent rise in European COVID-19 infection rates has raised fears of a harmful second wave in the region. Quarantine restrictions have been re-introduced across Europe while regional lockdowns have been re-imposed.

However, this second wave of infections is quite different from the first. Most importantly, hospital admissions and death rates have not surged in the days and weeks following the rise in detected infections.

Exhibit 3: COVID-19 mortality has not surged with infection rates in second wave

Source: Refinitiv aggregation of European government data

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We believe that this is a result of two factors. First, infections are focused on a much younger demographic compared to earlier. Second, the rapid increase in testing rates has meant the proportion of infections detected in the hospital setting, which would be expected to be severe cases, has dropped sharply. It is perhaps too early to speculate that mutations in the virus has reduced its severity. The recent rise in infections is therefore arguably not suggestive of the need to re-impose further severe national restrictions as there is insufficient threat to public health – and this is consistent with the response of national governments over the summer.

Investors should therefore take care to continue to discriminate between data which is indicative of a new public health crisis and infection rates which have relatively little consequence for the evolution of the economic recovery. A month ago it was too early to determine if the rise in new infections would lead to a similar surge in death rates but given the lag in the first infection wave was only a matter of weeks, this second wave now appears far less deadly than the first, and as a result should not give rise to a need to shut down national economies – or interrupt education systems. It is still the case that it is not the spread of the virus which is important for investors but the economic impact of public health control measures to contain it.

Furthermore, recent reports on the progress of the Oxford vaccine trial indicate that 20,000 patients have so far been recruited with the hope of sufficient data possibly being made available to regulators before the end of the year. Unsurprisingly in an election year, the current US administration appears to be exploring an emergency use authorisation for this vaccine, although the mooted timing of October still appears somewhat aggressive.

Nevertheless, the pattern of mitigation (or muddle through) with the minimum necessary restrictions on social activity followed by the relatively rapid availability of a vaccine is a scenario which should be carefully assessed by investors. If it proves increasingly likely, then a further sector rotation is likely away from technology, gold and government bonds and towards leisure, hospitality and travel where valuations remain significantly depressed.

This would also place European markets, due to the lower weighting of technology compared to the US, at something of a relative performance advantage over the remainder of 2020.

Accelerated obsolescence – but at what price? In some respects, COVID-19 has driven an accelerated obsolescence of 20th century working practices, and most notably the presumed necessity of office-based work. In terms of consumer behaviour post-lockdown, offline retail has suffered from accelerated online spend and the reaction of major retailers to accelerate investment in online suggests this shift is expected to be permanent.

The ubiquity and continuity of digital social activity as physical social events and contact has been interrupted directly benefits the world’s largest technology and media companies. These trends have also intersected with 21st century environmental concerns. Energy consumption and urban pollution levels have fallen while critical transport infrastructure is no longer full to capacity or beyond, even if urban centres have suffered a significant loss of revenue as commuter numbers have diminished.

A re-tooling in respect of hardware and software services, in order to allow working and living from home, has represented a mini-investment cycle. As a result, the global technology sector has benefited from the strongest relative earnings momentum since lockdown.

Furthermore, the rapid fall in the long-term discount rate for future earnings has disproportionately benefited a technology sector perceived by many investors to have quasi-monopoly characteristics in a number of key global markets. The resulting performance of technology this year has been remarkable and currently extended valuations do raise significant questions over the investment returns which should be rationally expected over coming years.


Much has been written over the years about the perceived over-valuation of the US equity market which has continued to outperform and defy the critics. Yet in many cases, ‘value’ and/or retail investors have been caught completely off-guard by the encroachment of Web 2.0 franchises into the profitability of old economy stocks, particularly those appearing to trade at a discount, with traditional retail the prime example.

Digital disruption has become a commonplace if not critical investment risk. A rising share of global profits growth has been won by US technology companies, leading to a shifting national share of the global profits pool. It may be unfortunate as it is quite arguably the result of a disciplined focus on business success, but it has had an effect sufficiently large to catch the eye of governments. Countries are now grappling with the problem of a shrinking corporate tax base as the profits of digital competitors often arise at a distance from the original, disintermediated, economic activity.

This fundamental success in profitability followed initial investor scepticism, as seasoned investors were still mindful of the outcome of the original dotcom bubble. This contributed to a technology sector outperformance which has been significant and of a long duration. Over this period, ‘Web 2.0’ has already become a quaint moniker for a sector which in many respects has morphed into the key driver of the US and global markets.

There remains the possibility however that what the wise person does in the beginning, the retail investor does in the end. Before COVID-19 struck, an argument could be made that the global market rally was likely to continue despite the ageing of the US economic expansion, at least until a peak in the participation of retail investors. The moment, if retail participation is a factor at all, appears to have arrived. A combination of stock market volatility, a reduction in sports betting opportunities and furlough schemes appear to have contributed to record levels of new account openings at both new and conventional brokerage firms on both sides of the Atlantic.

The performance of the US technology stocks this year is also remarkable as earnings have not rebounded significantly post COVID-19, despite the positive qualitative narrative. It may be sobering to note that the weighted average consensus earnings forecast for the NASDAQ 100 index is still 2% below its level at the start of the year while the index itself is up 34% year to date. Nor are all technology companies equal – the median consensus forecast remains down 13% since the start of the year.

The market value of the world’s seven largest US digital franchises now accounts for $8trn, which is close to 10% of world GDP. For these highly valued large cap companies, an average forward P/E ratio of over 30x embeds very high expectations for at least the next five years of profits growth.

This is in a world where developed markets will record negative GDP growth this year and are likely to have failed to grow at all in the 2019–2021 period. Furthermore, as the recent spat between Epic Games and Apple has shown, the highly lucrative 30% profit margins charged by digital platforms such as Apple and Google to third-party software developers are at greater risk of shrinking rather than growing.

In recent years we have dispassionately viewed the rise of the technology behemoths and the relatively laissez-faire approach to antitrust regulation (in comparison to the 1990s period) on a global basis. This policy has contributed to the highly consolidated markets in key digital service segments. Despite strong share price performance, the exceptional and scale profitability of these franchises has in the past justified maintaining positions, even if to do so required projecting excess returns on capital uncomfortably far into the future at times.

At this point however, we believe the US technology sector will struggle over the medium term to grow into the very high expectations for profits growth currently implied by market valuations, which have effectively doubled in a little over one year while profit forecasts have fallen over the same period. Given the weight of this sector in US indices, this also drives our view that investors should


now look towards European and emerging markets where valuations are less demanding, even if growth rates are somewhat lower.

Real rates at 25-year low and set for rebound as recovery broadens The driver of the rapid recovery in asset prices during 2020 has been central bank intervention. In many respects the economic costs of COVID-19 have been towards the higher end of expectations in terms of their duration, impact on global GDP and corporate profits. We note that US 10-year real rates are now at 25-year lows at -1.0%. This downward trend curiously started some time before the advent of coronavirus, around October 2018, Exhibit 4, and has more recently been accentuated by the loosening of US monetary policy and the surge in central bank asset purchases earlier this year.

Exhibit 4: Real rates still close to 25-year lows – set to rise on COVID-19 recovery?

Source: Refinitiv

Central banks on both sides of the Atlantic have adamantly insisted that low interest rates will remain in place until the recovery in employment has been well established, following the impact of COVID-19. However, it is difficult to see why investors will wait quite as long to re-price long-term interest rate markets if further national lockdowns can be avoided at the same time as fiscal and monetary stimulus continues apace.

While central banks will take care to ensure that any adjustment in policy is relatively smooth rather than abrupt, a steady rise in real interest rates from current levels is in our view a natural consequence of any recovery from the COVID-19 crisis and may allow an implicit tightening of monetary conditions, thus warding off risks to financial stability (the preferred central bank code word for an asset price bubble) without an explicit change in policy.

In turn, any increase in real rates may have an impact on the pricing of sectors perceived as defensive such as bond proxies, in addition to the new class of large-cap ‘digital defensives’ into which investors have crowded in recent months. We continue to believe that intellectual property and quality business franchises are not attributes exclusive to the headline large-cap technology sector. Investors may in coming quarters become increasingly likely to consider the more cyclical industrials sector as COVID-19 effects diminish, where forward price/book valuations are much closer to long-term averages.

Conclusion While infection rates have been rising in Europe, the case fatality rate appears to be falling. The COVID-19 pandemic also appears to be evolving into a different state, requiring a less aggressive public health response. Vaccine trials are progressing and may be reporting data as soon as year-end. This is good news and lends weight to the idea that safe-haven assets such as gold and

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government bonds, in addition to the new class of ‘digital defensives’, have likely seen their short-term high watermark.

We maintain a neutral view on global equities given the extent of the recovery of market valuations since the lows of March but are increasingly optimistic that further lockdowns can be avoided. As a result, we believe it may be time to shift allocations away from the US and towards traditionally higher beta and more cyclical markets such as Europe and emerging markets.

Sector: Technology

Price: 25.5pMarket cap: £28mMarket AIM

Share price graph (p)

Company description1Spatial’s core technology validates,rectifies and enhances customers’geospatial data. The combination of itssoftware and advisory servicesreduces the need for costly manualchecking and correcting of data.

Price performance% 1m 3m 12mActual 15.9 34.2 (19.1)Relative* 19.9 32.6 (4.7)* % Relative to local indexAnalystDan Gardiner

1Spatial (SPA)

INVESTMENT SUMMARY

In FY20 1Spatial grew revenues and pre-IFRS 16 EBITDA by 33% and 83% respectively. Italso achieved positive underlying cash flow and EBIT in H2. July’s AGM statement confirmsthat trading has remained resilient into FY21. Ongoing projects have continued largely asplanned and a healthy level of new business has been secured. It is too early to say that thecompany will emerge completely unscathed from a COVID-19 downturn (we are notreinstating forecasts at this stage), but the company remains confident in the long-termoutlook, has ample cash on the balance sheet and scope to reduce costs if needed.

INDUSTRY OUTLOOK

The GIS industry is large and growing. P&S Market Research estimates the global GISsoftware, services and hardware market generates sales of US$9.0bn annually and willgrow at a 10% CAGR to reach annual sales of US$17.5bn by 2023.

Y/E Jan Revenue EBITDA PBT EPS (fd) P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2019 17.6 1.2 (0.9) (1.06) N/A N/A

2020 23.4 3.2 (0.1) (0.05) N/A 49.1

2021e N/A N/A N/A N/A N/A N/A


Sector: Technology

Price: HUF646.00Market cap: HUF60724mMarket Budapest stock exchange

Share price graph (HUF)

Company description4iG is one of the leading IT servicesand systems integrators in Hungary,working with public sector clients, largecorporates and SMEs. Management isfocused on becoming the marketleader in Hungary by FY22 as well astargeting expansion in Central andEastern Europe.

Price performance% 1m 3m 12mActual 1.7 (3.3) (29.6)Relative* 0.2 (4.8) (22.6)* % Relative to local indexAnalystRichard Williamson

4iG (4IG)

INVESTMENT SUMMARY

4iG is a leading IT services and systems integrator in Hungary. A reinvigorated 4iG isaiming to become the market leader in Hungary by FY22. Q120 financials highlightedcontinuing momentum despite COVID-19 and the group has also announced a JV withAntenna Hungária to launch and operate Hungary's first geostationary satellite from 2024.4iG’s valuation neither reflects the transformation the business has already achieved nor itsfuture growth prospects and the stock remains at a substantial discount to regional peers.4iG's interim results are expected on 28 August.

INDUSTRY OUTLOOK

Management anticipates consolidation-driven growth of over 20% in the medium term, withorganic growth supplemented by market share gains and accelerating market consolidation.Management is positioning the group for growth by offering high-demand new technologiesincluding digitalisation, blockchain, deep learning, artificial intelligence, industry 4.0, cybersecurity and fintech.

Y/E Dec Revenue EBITDA PBT EPS P/E P/CF(HUFm) (HUFm) (HUFm) (HUF) (x) (x)

2018 14007.0 842.0 219.0 1.11 582.0 N/A

2019 41129.0 4075.0 3344.0 31.87 20.3 8.6

2020e 49083.0 4152.0 3358.0 31.84 20.3 17.7

2021e 58881.0 5631.0 4794.0 44.93 14.4 13.1

10Edison Insight | 27 August 2020

Sector: Media

Price: 2080.0pMarket cap: £584mMarket LSE


Company description4imprint is the leading direct marketerof promotional products in the US,Canada, the UK and Ireland. In FY19,97% of revenues were generated inthe US and Canada.

Price performance% 1m 3m 12mActual (11.9) (5.2) (27.3)Relative* (8.8) (6.4) (14.4)* % Relative to local indexAnalystFiona Orford-Williams

4imprint Group (FOUR)

INVESTMENT SUMMARY

4imprint’s first half trading was heavily affected by the commercial repercussions of theCOVID-19 pandemic across the US. With such uncertainty over the speed and extent of thereopening of the US economy, projections for the remainder of the year (and for FY21) aremore tentative than usual. Despite the difficult trading circumstances, 4imprint retains astrong, cash positive balance sheet, with low fixed costs and capital requirements. Webelieve that it retains its long-term attractions in a large, fragmented market and shouldrebuild quickly as the economy recovers.

INDUSTRY OUTLOOK

The latest survey of distributors by industry body ASI indicates Q2 sales down 44% on prioryear, a figure that would have been lower but for many pivoting to provide PPE. Q1 saleswere down 5%. Expectations for the full year indicate some recovery to a reduction of c.35% over 2019. The market remains substantial, estimated to have been worth US$25.8bnin 2019. 4imprint is the largest distributor in this diverse market yet has market share ofaround 3%.

Y/E Dec Revenue EBITDA PBT EPS P/E P/CF(US$m) (US$m) (US$m) (c) (x) (x)

2018 738.4 48.5 46.1 129.4 21.0 16.7

2019 860.8 59.2 55.6 153.9 17.6 13.0

2020e 550.0 13.7 8.8 20.5 132.5 116.1

2021e 600.0 32.8 28.0 73.9 36.7 22.6

Sector: General industrials

Price: SEK3.67Market cap: SEK353mMarket Nasdaq FN Premier

Share price graph (SEK)

Company descriptionHeadquartered in Sweden, AAC ClydeSpace is a world leader in nanosatelliteend-to-end solutions, subsystems andplatforms after merging with ClydeSpace in Scotland. The company alsosupplies a range of technologycomponents to other small satellitemanufacturers globally.

Price performance% 1m 3m 12mActual 10.9 5.2 (16.6)Relative* 10.8 (8.2) (28.2)* % Relative to local indexAnalystAndy Chambers

AAC Clyde Space (AAC)

INVESTMENT SUMMARY

AAC Clyde Space is at the forefront of the rapidly growing and revolutionary market forsmall satellites. As nanosatellite build rates and deployments rise sharply over the nextdecade, increasing systems supply and platform sales should be enhanced by operationaland service revenues. Management needs to navigate the growth phase and target otheropportunities in New Space. H120 saw 34% sales growth, a modest EBITDA loss reductionand a stable order backlog. H220 activity and recent orders remain encouraging.Management notes that if COVID-19-related supplier and customer order delays persist, itcould put pressure on FY21 guidance for a positive EBITDA and operating cash flow.

INDUSTRY OUTLOOK

Of over 1,000 nanosatellites launched since 1998, AAC Clyde Space is represented on30–40%. Over the next five years around 3,000 nanosatellites should be launched astechnology development extends the applications for low earth orbit (LEO) constellations,especially for communications. AAC Clyde Space has the capacity in Glasgow and Swedento facilitate such expansion as well as develop its 'Satellite as a Service' offering, whileincreasing sales of subsystems to third-party satellite providers.

Y/E Dec Net Sales EBITDA PBT EPS P/E P/CF(SEKm) (SEKm) (SEKm) (öre) (x) (x)

2018 77.9 (28.5) (38.3) (49.63) N/A N/A

2019 66.4 (27.3) (38.2) (44.46) N/A N/A

2020e 129.8 (1.2) (14.8) (14.57) N/A N/A

2021e 194.2 26.0 8.7 8.62 42.6 17.0





Company descriptionAccsys Technologies is a chemicaltechnology company focused on thedevelopment and commercialisation ofa range of transformationaltechnologies based on the acetylationof solid wood and wood elements foruse as high performance,environmentally sustainableconstruction materials.Price performance% 1m 3m 12mActual 6.4 21.1 (6.3)Relative* 10.1 19.6 10.3* % Relative to local indexAnalystToby Thorrington

Accsys Technologies (AXS)

INVESTMENT SUMMARY

The 21% revenue uplift in FY20 demonstrated the benefit of adding Accoya capacity in theprior year, driving a manufacturing gross margin of 30%. This was achieved while still beingcapacity constrained and planning for a fourth Anhem reactor is advancing. Tricoya salesshowed good growth, further developing this market ahead of the new Hull facility comingon stream (expected in Q421). Group operating profit of €1.6m represents anotherdevelopment milestone, while end FY20 net debt was c €20m (IAS17), plus c €5m leaseliabilities. In FY21 trading to date, management noted that April sales volumes were 43%lower y-o-y and there was some recovery in May as distribution channels and end marketprojects began to reopen. Long-term market prospects, including significant potentialpartnerships in the US and Asia, look attractive. Our estimates are under review.

INDUSTRY OUTLOOK

Accsys has a technically proven process and wide international market acceptance for itsmodified wood output. As well as successful capex execution, the sales and marketingchallenge is to pull through demand to absorb newly available capacity and develop licencepartners. Management has previously stated long-term market potential of 1m m3 pa ofAccoya wood and 1.6m+ m3 of Tricoya panel products.

Y/E Mar Revenue EBITDA PBT EPS P/E P/CF(€m) (€m) (€m) (c) (x) (x)

2019 75.2 0.9 (6.2) (0.38) N/A N/A

2020 90.9 7.0 (2.2) (0.08) N/A 61.5



Sector: Mining

Price: A$1.14Market cap: A$679mMarket ASX

Share price graph (A$)

Company descriptionAlkane Resources is an Australianproduction and development company.It previously produced 70,000oz pa ofgold from the open-pit operations atTomingley gold mine, but istransitioning to undergroundoperations and expects to produce c32,000oz pa of gold.

Price performance% 1m 3m 12mActual (6.9) 37.3 188.9Relative* (7.0) 24.0 202.8* % Relative to local indexAnalystCharles Gibson

Alkane Resources (ALK)

INVESTMENT SUMMARY

Alkane's FY20 production of 33,507oz (at an AISC of A$1,357/oz) was within guidance andis expected to increase by another 34.3–49.2% in FY21. At the same time, explorationdrilling has more than replenished reserves and resources as well as intersecting grades ashigh as 104g/t at Tomingley's San Antonio and Roswell extensions.

INDUSTRY OUTLOOK

Prior to the de-merger of ASM, our valuation of Alkane attributed 25c/share in value toTomingley plus cash (A$68.9m as at end-Q420). To this should then be added 14c for itsinvestments and at least 6c for its maiden Roswell and San Antonio resources and up to afurther 73c in value from contingent assets (mostly the Boda prospect in the NorthernMolong Porphyry Project which is developing into a genuine Au-Cu alkalic porphyry target),the final valuation for which will depend on future exploration success.

Y/E Jun Revenue EBITDA PBT EPS (fd) P/E P/CF(A$m) (A$m) (A$m) (c) (x) (x)

2018 128.8 67.4 31.5 4.81 23.7 10.7

2019 92.5 30.5 26.2 4.60 24.8 16.4

2020e 67.3 22.9 21.3 2.51 45.4 53.1

2021e 76.9 31.9 27.5 3.44 33.1 25.5


Sector: Technology



Company descriptionAllied Minds is a technologyinvestment company with aconcentrated portfolio focused onearly-stage spin-outs from US federalgovernment laboratories anduniversities.

Price performance% 1m 3m 12mActual 27.5 18.9 0.9Relative* 32.0 17.5 18.8* % Relative to local indexAnalystRichard Williamson

Allied Minds (ALM)

INVESTMENT SUMMARY

Allied Minds is focused on delivering value from its slimmed down portfolio of seveninvestee companies. It has achieved demonstrable progress at Federated Wireless in FY20and management is confident of progress at Spin Memory and BridgeComm, togetherrepresenting 95% of fair value. Management also announced the sale of TableUp toTouchBistro (a late-stage pre-IPO company) in an all-share deal in August. We estimatednet cash at 4 June 2020 of $31.9m and NAV of 90.9p/share (78.4p/share fully diluted). Theshares trade at a material discount to our estimated NAV.

INDUSTRY OUTLOOK

After a difficult 2019 for patient capital, investors have been seeing real value in thewidened discounts to NAV as COVID-19 fears ease. We expect investors to prefer stocksthat demonstrate progress and offer the potential for meaningful exits in a realistictimeframe. Transparency, consistency of performance, capital preservation and investorreturns are the key metrics by which to judge success.


2018 5.6 (77.5) 53.3 19.0 3.0 N/A

2019 2.7 (47.2) 49.5 21.0 2.7 N/A



Sector: Technology



Company descriptionApplied Graphene Materials (AGM)develops graphene dispersions thatcustomers use to enhance theproperties of coatings, composites andfunctional materials. It alsomanufactures high purity graphenenanoplatelets using a proprietaryprocess based on sustainable, readilyavailable raw materials instead ofgraphite.Price performance% 1m 3m 12mActual 38.1 205.3 11.5Relative* 42.9 201.6 31.3* % Relative to local indexAnalystAnne Margaret Crow

Applied Graphene Materials (AGM)

INVESTMENT SUMMARY

In October 2019 Applied Graphene (AGM) announced it was re-aligning resources arounddispersion and application technology to better support product development withcustomers presenting the nearest-term revenue opportunities. This focus supported sixcustomer launches of coating products containing AGM’s graphene dispersion during CY19.The launches are for both mass-market and specialist applications. The stock has recentlystarted to trade on the US OTCQB Venture Market.

INDUSTRY OUTLOOK

In August 2020 AGM announced distribution agreements with Maroon Group and Arpadis.These respectively strengthen AGM's route into the coatings and polymers markets in theUS and Canada and parts of Europe. In addition to its own commercial activity in the UKand the US, AGM now has distribution agreements with local expert chemicals and coatingsdistributors in Benelux, France, Germany, Greece, Italy, Japan, North America, Portugal,Scandinavia, Spain, South Africa and the UK.

Y/E Jul Revenue EBITDA PBT EPS P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 0.2 (4.0) (4.2) (7.5) N/A N/A

2019 0.1 (4.6) (4.8) (7.9) N/A N/A




Sector: Financials



Company descriptionAppreciate Group is a specialisedfinancial services business and is theUK’s leading provider of multi-retailerredemption products. Consumers canaccess products directly through itsmarket-leading Christmas Savingsoffering while corporate customers usethese products to supply a range ofincentive and reward products.Price performance% 1m 3m 12mActual 7.0 (7.7) (48.3)Relative* 10.7 (8.8) (39.2)* % Relative to local indexAnalystMartyn King

Appreciate Group (APP)

INVESTMENT SUMMARY

Results for the year to 31 March 2020 (FY20) were in line with recent guidance, takingaccount of year-end COVID-19 impacts. Billings were slightly lower (c £420m) and revenueincreased slightly (c £113m), positively affected by business mix, while adjusted PBT of£11.4m excludes £3.7m of previously flagged, mainly non-cash, one-off charges. Free cash(not including customer cash balances) was £29.6m. The current year COVID-19 impact willbe significant and given the remaining uncertainties, no final dividend was declared.Positively, the gradual improvement in customer trading activity since the April low iscontinuing, including an accelerated shift to card and digital. A £15m unsecured bankfinancing has been completed, providing additional flexibility to accelerate the medium- andlong-term growth and ongoing digitalisation that is targeted by the continuing strategicbusiness plan; this now includes a planned exit from hamper production. Meanwhile the£3.2m sale of the largely vacated Valley Road site has been completed.

INDUSTRY OUTLOOK

The market is estimated at c £6bn by the UK Gift Card & Voucher Association, and isfragmented, providing significant opportunities for market share growth.

Y/E Mar Revenue EBITDA PBT EPS (fd) P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2019 110.4 12.3 12.5 4.8 6.7 8.7

2020 112.7 11.6 11.3 3.0 10.8 8.8




Price: NZ$0.16Market cap: NZ$78mMarket NZSX

Share price graph (NZ$)

Company descriptionArborGen Holdings (formerly Rubicon)is an NZX-listed investment company.Its subsidiary ArborGen is the world’slargest integrated developer,commercial manufacturer and supplierof advanced forestry seedlings withoperations in the US, Brazil andAustralasia.

Price performance% 1m 3m 12mActual (2.5) (15.7) (15.7)Relative* (3.3) (23.3) (21.5)* % Relative to local indexAnalystToby Thorrington

ArborGen Holdings (ARB)

INVESTMENT SUMMARY

FY20 results included a 16% y-o-y increase in group revenue; all three regions served grewsales, most notably in Australasia (+c 50%). Gross margin also nudged up and thecompany reported EBITDA progress on both US GAAP and NZ IFRS bases. Expandednursery platforms in the US and Brazil and participation in NZ's One Billion Treesprogramme were the regional highlights. ArborGen also acquired its previously leased UShead office and property during the year. ArborGen ended FY20 with c US$32m net debt(IAS 17 basis) with some investment in working capital in addition to the US fixed assetacquisition being the key drivers of the y-o-y increase. At this stage, no major impact fromCOVID-19 has been flagged and the company currently expects its defined US GAAPEBITDA measure to show progress in FY21 over FY20. Our estimates are under review.

INDUSTRY OUTLOOK

Prior to the COVID-19 outbreak, the economic growth outlook in each of its core countries,the US, Brazil, New Zealand and Australia, was either good or improving, according toOECD data. At this point, the primary end-markets served by its plantation forestrycustomer base (ie construction and the pulp and paper industries) were in a positive cyclicalphase.

Y/E Mar Revenue EBITDA PBT EPS P/E P/CF(US$m) (US$m) (US$m) (c) (x) (x)

2019 49.1 4.6 4.7 1.1 9.6 12.8

2020 56.9 7.7 6.0 1.4 7.5 11.0




Sector: Financials

Price: €0.18Market cap: €81mMarket Athens Stock Exchange

Share price graph (€)

Company descriptionAttica is the fifth-largest bank inGreece, with assets of €3.45bn and 55branches centred around Athens. Ithas a 2% market share of businessbanking and around 2% market shareof most retail banking products.

Price performance% 1m 3m 12mActual (7.1) (4.6) (57.3)Relative* (6.3) (8.4) (43.9)* % Relative to local indexAnalystPedro Fonseca

Attica Bank (TATT)

INVESTMENT SUMMARY

Attica’s Q419 showed good progress with revenue sharply up and costs lower thanexpected. Impairment charges were higher, but underlying PBT was better than forecast.Uncertainty around COVID-19 complicates forecasting at this stage. Our new numbers havehigher impairments, mostly in 2020-21. However, Attica’s strategy of strong asset expansionand focus on the energy, infrastructure and green economy remains firm - just a time shift inachieving income targets. Successful execution would allow ROE to approach 6.8%(previously 7.4%) in 2022. This falls to 4.7–5.3% after factoring in needed rights issues andwould provide upside to shares, now trading at a PBV of 0.23x. Attica is currently planning athird securitisation as it strives to cut legacy NPLs to zero by 2021.

INDUSTRY OUTLOOK

Attica intends to focus on its SME business banking activity to exploit attractive margins andan existing 2% market share. Rebuilding profitability will be achieved through voluntaryretirement schemes; pricing leverage as the major Greek banks review their productofferings; and normalisation of impairments facilitated by reduced exposure to the collateralunderpinning impaired loans.

Y/E Dec Revenue EBITDA PBT EPS P/E P/CF(€m) (€m) (€m) (c) (x) (x)

2018 128.0 N/A 4.7 (0.51) N/A N/A

2019 71.6 N/A (23.6) 1.08 16.7 N/A

2020e 80.7 N/A (24.5) 0.01 1800.0 N/A

2021e 110.9 N/A 2.7 0.93 19.4 N/A

Sector: Industrial support services



Company descriptionAugean is a UK-based specialist wastemanagement business. The businessoperates via two divisions: Treatment& Disposal and North Sea Services.

Price performance% 1m 3m 12mActual (10.8) (12.5) 80.3Relative* (7.7) (13.5) 112.3* % Relative to local indexAnalystGraeme Moyse

Augean (AUG)

INVESTMENT SUMMARY

Augean's FY19 results showed impressive underlying growth. Revenue increased by 33%(adj.basis), to £91.5m, excluding the landfill tax (LFT), while adjusted EBITDA rose by 52%to £28.8m. However, despite payments (c £40m) made to HMRC in FY19, the balancesheet remains strong. Augean also recently filed a claim with HMRC for the repayment ofLFT of £11.1m related to engineering materials (fluff layer). Some other waste operatorshave successfully argued with the Upper Tax Tribunal that they should be able to reclaimLFT associated with the fluff layer. Any rebate of payments made to HMRC could provide ameaningful additional reward for shareholders. The interim results, scheduled for 21September, will reveal the extent, if any, of the impact of COVID-19 on the business. In themeantime, at the current share price the FY20 P/E multiple is less than 10x.

INDUSTRY OUTLOOK

A growing trend towards treatment, recovery and recycling in the waste hierarchy supportsAugean's specialist industry knowledge model.

Y/E Dec Revenue EBITDA PBT EPS P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 79.7 18.9 11.5 9.1 18.1 9.8

2019 107.1 28.8 19.3 21.0 7.9 N/A

2020e 120.8 33.2 22.8 17.9 9.2 5.6

2021e 131.5 37.2 26.4 20.7 8.0 5.0


Sector: Mining

Price: SEK6.70Market cap: SEK661mMarket NASDAQ OMX First North

Share price graph (SEK)

Company descriptionAuriant Mining is a Swedish junior goldmining company focused on Russia. Ithas two producing mines (Tardan andSolcocon), one advanced explorationproperty (Kara-Beldyr) and one earlystage exploration property(Uzhunzhul).

Price performance% 1m 3m 12mActual 19.6 61.5 111.4Relative* 19.6 40.9 82.1* % Relative to local indexAnalystCharles Gibson

Auriant Mining (AUR)

INVESTMENT SUMMARY

Auriant’s Tardan plant has been remodelled to a single carbon-in-leach process. In Q120(the first full quarter of CIL operations) this change resulted in an increase in metallurgicalrecoveries of c 40pp to 91.7% and an approximate halving in cash costs to US$476/oz sold.At the same time, Auriant is completing a DFS on Kara-Beldyr and, combined, the two areexpected to achieve management’s goal of c 3t (96.5koz) of gold output pa from FY24.Official production guidance of 900–940kg Au for FY20 compares with H120 production of521kg (16,750oz) and our full-year forecast of 960kg.

INDUSTRY OUTLOOK

On the basis that Auriant raises US$40m in equity at SEK4.40/share, we estimate that it iscapable of generating average cash flows of US$49.4m and EPS of 23.0c pa in the periodFY25–33. Discounted at 10% pa, we value the resulting (maximum potential) stream ofdividends to shareholders at US$0.83/share. This almost doubles to US$1.45/share in theevent of a future long-term (real) gold price of US$1,705/oz.

Y/E Dec Revenue EBITDA PBT EPS (fd) P/E P/CF(US$m) (US$m) (US$m) (c) (x) (x)

2018 17.4 (1.7) (10.2) (10.8) N/A 17.8

2019 29.8 7.2 (2.2) (1.2) N/A 8.2

2020e 57.0 29.3 15.8 9.9 7.7 4.2

2021e 43.0 19.9 13.1 5.8 13.2 6.1

Sector: Aerospace & defence



Company descriptionAvon Rubber designs, develops andmanufactures products in theprotection (77% of H120 sales) anddairy (23%) sectors. Its major contractsare with national security organisationssuch as the US DOD. Over 75% ofH120 sales were from the US.

Price performance% 1m 3m 12mActual 4.4 14.5 102.8Relative* 8.0 13.1 138.8* % Relative to local indexAnalystAndy Chambers

Avon Rubber (AVON)

INVESTMENT SUMMARY

Avon is delivering on its growth strategy focused on organically growing the core, supportedby selective product development and value-enhancing M&A. The addition of the Helmets &Armor division from Q220 immediately enhances EPS, extends Avon Protection's productportfolio and deepens customer engagement. H120 saw strong growth at Avon Protectionand order intake remains encouraging. The milkrite | InterPuls dairy business is being soldon attractive terms that will leave Avon Protection as the sole focus.

INDUSTRY OUTLOOK

Avon's long-standing, multi-level relationship with the US DoD is important to the group andthe end market backdrop is supportive. The focus on higher-price sophisticated masksystems is proving successful, with M50 mask system replenishment and the addition ofhelmets and body armour providing further opportunities. We maintain our view that Avonhas the market position, product portfolio and strategic ambition to further accelerate itsgrowth through organic and inorganic means.

Y/E Sep Revenue EBITDA PBT EPS (fd) P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 165.5 35.3 27.2 76.6 46.9 32.8

2019 179.3 41.3 31.4 90.9 39.5 72.0

2020e 233.0 50.2 35.4 93.1 38.6 22.8

2021e 288.4 65.1 49.2 129.5 27.7 19.0


Sector: Travel & leisure

Price: €37.65Market cap: €264mMarket Xetra


Company descriptionFounded in 1999, bet-at-home is anonline sports betting and gamingcompany with c 300 employees. It islicensed in Malta and headquartered inDusseldorf, Germany. Since 2009bet-at-home has been part of BetclicEverest, a privately owned Frenchonline gaming company.

Price performance% 1m 3m 12mActual (3.1) (8.4) (29.8)Relative* 0.0 (20.6) (35.1)* % Relative to local indexAnalystRussell Pointon

bet-at-home (ACXX)

INVESTMENT SUMMARY

The H120 headline figures were ahead of consensus expectations, which was encouraginggiven the regulatory changes (Poland and Switzerland) and the impact of COVID-19.Comparatives become easier as the year progresses and management has acted quickly toreduce unnecessary costs, so the company’s guidance for FY20 has been reiterated.Upcoming legislation in Germany will provide clarity but will likely result in responsiblegambling restrictions and potentially higher taxes.

INDUSTRY OUTLOOK

According to H2 Gambling Capital, the European online sports betting and gaming market isexpected to grow 6.5% CAGR between 2018 and 2023 to c €33bn (pre COVID-19 impact).BAH operates in 'grey' markets (no formal regulation but not illegal), which arecharacterised by strong cash flow, but also carry commensurately higher regulatory risks.

Y/E Dec Revenue EBITDA PBT EPS (fd) P/E P/CF(€m) (€m) (€m) (c) (x) (x)

2018 143.4 36.2 35.0 464.67 8.1 10.6

2019 143.3 35.2 33.1 425.52 8.8 8.8

2020e 127.9 26.1 24.0 278.66 13.5 13.4

2021e 130.4 26.5 24.3 282.54 13.3 13.2

Sector: Technology



Company descriptionBoku operates a billing and identityverification platform that connectsmerchants with mobile networkoperators in more than 50 countries. Ithas c 215 employees, with its mainoffices in the US, UK, Germany andIndia.

Price performance% 1m 3m 12mActual 5.1 6.3 (12.7)Relative* 8.8 5.0 2.7* % Relative to local indexAnalystKatherine Thompson

Boku (BOKU)

INVESTMENT SUMMARY

Boku recently announced that it had introduced three eWallet payment options (DANA,GoPay and OVO) in Indonesia for one of its global music streaming partners. This confirmsthat the company is making progress in building out its eWallet payment solution across itsmerchant base. Recently acquired Fortumo has expanded its direct carrier billing (DCB)reach to Myanmar via a partnership with mobile operator Mytel.

INDUSTRY OUTLOOK

DCB is an alternative payment method that uses a consumer’s mobile bill as the means topay for digital content or services such as games, music or apps. Growth in the underlyingdigital content markets as well as the increasing penetration of smartphones is expected todrive growth in DCB transactions. Boku is the dominant DCB player serving the largestmerchants such as Apple, Sony, Facebook, Spotify and Netflix. Boku's identity verificationservice enables merchants to sign up and transact with users while meeting regulatoryrequirements and avoiding fraud.


2018 35.3 6.3 4.3 1.6 75.5 N/A

2019 50.1 7.4 4.1 1.2 100.6 N/A

2020e 55.2 12.3 7.9 2.1 57.5 N/A

2021e 66.4 17.7 12.3 3.2 37.7 N/A



Price: €5.64Market cap: €519mMarket FRA


Company descriptionThe group operates BorussiaDortmund, a leading German footballcub, Bundesliga runners-up in2018/19, DFB Super Cup winners in2019/20 and DFB Cup winners in2016/17. The club has qualified for theChampions League in eight of the lastnine seasons.

Price performance% 1m 3m 12mActual (1.8) (11.8) (42.0)Relative* 1.3 (23.5) (46.4)* % Relative to local indexAnalystRussell Pointon

Borussia Dortmund (BVB)

INVESTMENT SUMMARY

Borussia Dortmund’s headline figures for FY20 highlighted that revenue was 2% below ourrecently revised forecasts, but EBITDA and net income were marginally ahead ofmanagement's recent guidance. Our forecasts will be reviewed when full financialstatements are available. The team has qualified for the Champions League in the 2020/21season. The share price looks well supported by asset valuations.

INDUSTRY OUTLOOK

Unsustainable spend on wages and transfers is increasingly being penalised by UEFAFinancial Fair Play requirements. A 'break-even requirement' obliges clubs to spend nomore than they generate over a rolling three-year period. Sanctions vary from a warning to aban from UEFA competition, fines and a cap on wages and squad size.

Y/E Jun Revenue EBITDA PBT EPS P/E P/CF(€m) (€m) (€m) (c) (x) (x)

2018 313.3 137.3 121.8 121.16 4.7 3.0

2019 369.3 116.0 101.5 87.95 6.4 3.6

2020e 379.1 65.4 51.5 44.63 12.6 30.9

2021e 424.8 125.5 110.4 95.70 5.9 15.0

Sector: Technology

Price: C$0.43Market cap: C$34mMarket TSX-V

Share price graph (C$)

Company descriptionBragg Gaming Group (formerlyBreaking Data Corp) is aToronto-based B2B online gamingholding company. The core asset isOryx Gaming, a predominantlyEuropean B2B online gaming platform.

Price performance% 1m 3m 12mActual (15.7) 16.2 45.8Relative* (17.5) 4.7 43.9* % Relative to local indexAnalystRussell Pointon

Bragg Gaming Group (BRAG)

INVESTMENT SUMMARY

Bragg Gaming’s core asset is Oryx Gaming, a fast-growing online B2B gaming solutionprovider. It has limited exposure to sports and therefore revenues should be relativelysecure in the light of fixture cancellations. Bragg’s Q120 results demonstrated strongrevenue growth (44% y-o-y), adjusted EBITDA margin expansion (to 8.7%) and improvedfree cash flow generation. Operationally, it continues to win new customers in newgeographies and enhance product functionality, which should continue to improve thecustomer offer, drive growth and de-risk the business. Management has reiterated FY20guidance for revenue and EBITDA growth of at least c 32% and 349%, respectively, vsFY19.

INDUSTRY OUTLOOK

According to H2 Gambling Capital (H2GC), the global online gaming market has grown at ac 10% CAGR over the past 10 years and amounted to c £40bn gross gaming revenues in2018. Driven largely by the opening of the US market, H2GC estimates online growth of 7%CAGR to 2023 (pre COVID-19 impact). As Oryx continues to gain market share, we wouldexpect the business to grow significantly faster than the sector, across all its major markets,particularly from newly regulating markets such as the US and Latin America.


2018 0.8 (0.4) (0.3) (0.86) N/A N/A

2019 26.6 1.2 (1.0) (2.04) N/A N/A

2020e 36.6 5.4 2.1 0.87 31.5 N/A

2021e 40.9 6.1 3.8 2.02 13.6 N/A


Sector: Oil & gas

Price: US$9.17Market cap: US$1005mMarket NASDAQ

Share price graph (US$)

Company descriptionBrooge Energy is an oil storage andservice provider strategically located inthe Port of Fujairah in the United ArabEmirates (UAE). Current storagecapacity stands at 399,324m3 and willbe increased by 602,064m3 oncePhase II is completed.

Price performance% 1m 3m 12mActual (8.3) (16.3) (10.0)Relative* (12.1) (27.3) (22.5)* % Relative to local indexAnalystCarlos Gomes

Brooge Energy (BROG)

INVESTMENT SUMMARY

Brooge Energy (BROG) is an independent oil and refined oil products storage and serviceprovider located in the Port of Fujairah, in the UAE. The company is initially developing itsterminal’s storage capacity in two phases and differentiates itself from competitors byproviding fast order processing times and high accuracy blending services with low oillosses using the latest technology. Phase I has been operational since late 2017 and PhaseII is expected to be completed by the end of 2020. The company is looking to develop aPhase III, which would increase its storage capacity by 3.5x. Our valuation is based on ablend of DCF, EV/EBITDA and P/E approaches, resulting in a valuation of $11.00/share.

INDUSTRY OUTLOOK

The COVID-19 pandemic highlighted the importance of oil storage infrastructure and thevital role the business plays in the logistics and trading of crude oil and refined oil products,as oil demand slumped in H120.


2018 36.0 30.0 16.0 20.1 45.6 26.2

2019 44.0 (65.0) 25.0 28.6 32.1 15.2

2020e 45.0 38.0 17.0 15.5 59.2 43.7

2021e 123.0 113.0 86.0 78.9 11.6 9.8

Sector: Oil & gas

Price: C$3.53Market cap: C$639mMarket TSX


Company descriptionCanacol Energy is a natural gasexploration and production companyprimarily focused on Colombia.


Canacol Energy (CNE)

INVESTMENT SUMMARY

In Q220 Canacol saw a c 25% reduction in sales from Q120 of 201mmscfd to 152mmscfd,as a consequence of the impact of COVID-19 outbreak in Colombia. As lockdown measureseased, production recovered in June to 165mmscfd. Canacol is also working with itspartners for a new export pipeline to Medellin that would expand export capacity to315mmscfd by the end of 2023. It strengthened its liquidity with two additional facilities of$46m and $75m. The $75m facility is a bridge term loan for Canacol to accelerateengineering and environment permitting of the Medellin pipeline. Ultimately, it expects totransfer majority ownership of this pipeline to a third party, but the loan will allow it tomaintain its schedule with the pipeline in the meantime. The Pandereta 8 development wellis being completed and the Porro Norte 1 exploration well was spudded with a second rig inAugust and will take c seven weeks to drill.

INDUSTRY OUTLOOK

The Colombian, Caribbean Coast gas market is expected to move into gas deficit in theabsence of LNG imports, incremental piped gas or the development of recent deepwaterdiscoveries. Canacol sells gas under long-term, fixed-price gas contracts, typically of five to10 years’ duration with inflation clauses to protect cash flows.


2018 204.5 138.6 7.3 (12.32) N/A 5.0

2019 219.5 162.8 64.7 19.21 13.8 4.4

2020e 255.7 214.9 109.1 51.98 5.1 2.4

2021e 289.6 245.3 133.0 50.67 5.2 2.3


Sector: Alternative energy

Price: €31.40Market cap: €251mMarket Euronext Paris


Company descriptionCarbios develops enzyme-basedprocesses for biodegradation andbioproduction of plastics, with along-term aim of displacing currentrecycling and production practices.

Price performance% 1m 3m 12mActual (6.0) 119.6 365.9Relative* (2.6) 98.9 416.2* % Relative to local indexAnalystGraeme Moyse

Carbios (ALCRB)

INVESTMENT SUMMARY

Carbios’s technology and processes ensure that it is well placed to exploit the trend for theminimisation of plastic waste. The company's financial position has been considerablystrengthened by the recent €27m capital increase (issue of 1.028m shares at a price of€26.25/share) and the company now expects to have sufficient financial resources to coverits investment and working capital requirements until 2Q23. The money raised will allowCarbios to fund its ongoing operating expenses, finance the second stage of theconstruction of the PET demonstration plant and to participate in a capital increase by itssubsidiary Carbiolice. We anticipate that Carbios will also continue to reinforce its position inthe PET recycling market by forging partnerships with collectors and producers of plastic, aswell as strengthening its ties with research partners. Our forecasts are under review.

INDUSTRY OUTLOOK

Growing focus on sustainability provides an attractive market opportunity for Carbios'stechnology.


2018 1.1 (3.9) (4.3) (67.39) N/A N/A

2019 1.5 (4.3) (4.6) (64.87) N/A N/A

2020e 1.7 (6.4) (6.7) (79.79) N/A N/A

2021e 1.5 (6.8) (7.1) (84.45) N/A N/A




Company descriptionCarr's Group's Agriculture divisionserves farmers in the North ofEngland, South Wales, the WelshBorders and Scotland, the US,Germany and New Zealand. TheEngineering division offers remotehandling equipment and fabrications tothe global nuclear and oil and gasindustries.Price performance% 1m 3m 12mActual 17.9 19.8 (0.6)Relative* 22.0 18.3 17.1* % Relative to local indexAnalystAnne Margaret Crow

Carr's Group (CARR)

INVESTMENT SUMMARY

Carr’s Group’s trading update for the 19 weeks ended 11 July 2020 notes that the companycontinues to trade in line with management expectations for FY20. The board is combiningthe two interim dividend payments this year into a single interim payment of 2.25p/share,equivalent to the two interim payments made in FY19. We leave our FY20 estimatesunchanged but reduce our FY21 EPS estimate by 12% to reflect lower cattle prices in theUS and weaker demand from the oil and gas industry, both related to the coronaviruspandemic.

INDUSTRY OUTLOOK

The UK agricultural businesses traded ahead of management expectations during theperiod because of marginally higher demand for feeds, feed supplements and fuels.However, the closure of large meat processing plants in the US because of COVID-19outbreaks led to a drop in cattle prices which adversely affected supplement sales in theregion. While the engineering businesses have been able to operate throughout thepandemic, there have been some temporary interruptions to nuclear and defence projectsbecause personnel have not been able to visit customer sites. In addition, the low oil pricehas resulted in a reduction in investment from the oil and gas industry.

Y/E Aug Revenue EBITDA PBT EPS (fd) P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 403.2 23.1 17.7 14.8 9.0 N/A

2019 403.9 24.7 18.9 15.2 8.8 N/A

2020e 372.0 21.3 15.2 11.7 11.4 N/A

2021e 382.5 22.7 16.6 13.0 10.2 N/A


Sector: Financials



Company descriptionCenkos is a leading UK securitiesbusiness, which acts as nominatedadvisor, sponsor, broker and financialadviser to companies across allsectors and stages of growth. Sinceinception in 2005, it has raised morethan £20bn in equity capital forcorporate clients, which currentlynumber c 100.Price performance% 1m 3m 12mActual 3.5 (3.1) 16.1Relative* 7.1 (4.3) 36.6* % Relative to local indexAnalystAndrew Mitchell

Cenkos Securities (CNKS)

INVESTMENT SUMMARY

Cenkos' AGM statement at the end of June indicated that despite challenging marketconditions the group has remained active in the current year. It carried out an AIM IPO forFRP Advisory in February and a number of placings, including 10 since the end of Marchlisted on the company's website. Five-month revenues were ahead of the same period in2019 (a relatively soft period) while fixed costs have been significantly reduced, whichshould benefit H220 in particular.

INDUSTRY OUTLOOK

Given continuing uncertainty resulting from the pandemic we have removed estimates forthe moment. Cenkos benefits from a flexible business model that rewards staff andshareholders in periods of strong activity and revenues but limits the downside when thelevel of transactions is depressed. Cenkos indicated in its statement that it was working on anumber of transactions with a potential pipeline of further deals. The group was thereforecautiously optimistic. The strong balance sheet and surplus regulatory capital are additionalsupportive features for both clients and investors.


2018 45.0 3.4 3.2 4.4 10.7 7.7

2019 25.9 0.4 0.1 (0.2) N/A N/A



Sector: Technology



Company descriptionCentralNic Group is a leading globaldomain name registry servicesprovider, operating through threedivisions: Reseller (number twoglobally); Corporate; and SME.Services include domain namereselling, hosting, website building,security certification and websitemonetisation.Price performance% 1m 3m 12mActual 6.8 (1.7) 57.3Relative* 10.5 (2.9) 85.2* % Relative to local indexAnalystRichard Williamson

CentralNic Group (CNIC)

INVESTMENT SUMMARY

CentralNic operates in a growing, low-value, high-volume technology-enabled globalmarket. In its August trading update, management indicated that it expects H120 revenuesin excess of US$110m, with adjusted EBITDA of at least US$15m. Cash increased toUS$27.6m at 30 June 2020, while net debt fell marginally to US$76.4m. Despite a five-yearrevenue CAGR of 69%, being a resilient business with 90%+ recurring revenues andoffering a proven management team, CentralNic continues to trade at a material discount toits global peers. CNIC reports its interim results on 1 September.

INDUSTRY OUTLOOK

CentralNic supplies the tools needed for businesses to develop their online presence,providing domain names, hosting, websites, email, website security, brand protection andonline domain monetisation services. It delivers services to c 40m domains, withcross-selling and upselling important drivers of future growth. Organic growth (estimated bymanagement to be c 6%) is supported by M&A.


2018 42.7 7.0 5.6 0.06 1882.3 21.7

2019 109.2 17.9 8.9 5.94 19.0 12.1

2020e 202.5 30.7 18.9 6.88 16.4 10.0

2021e 214.4 32.0 23.4 9.05 12.5 9.8



Price: HK$6.38Market cap: HK$10234mMarket HKSE

Share price graph (HK$)

Company descriptionChina Water Affairs (CWA) is apioneer in the privatisation of watersupply assets in China. The companyseeks to create growth viavolume/price increases.

Price performance% 1m 3m 12mActual 3.7 13.9 3.2Relative* 5.9 10.1 8.0* % Relative to local indexAnalystGraeme Moyse

China Water Affairs Group (855)

INVESTMENT SUMMARY

Despite a challenging environment, CWA performed strongly in FY20, achieving growth inall key financial metrics. Revenue rose 4.7%, helped by a strong performance from thewater business (c 90% of profits) and operating profit rose by 5.3%. Lower finance costs, astronger than forecast associate line and a lower than expected tax rate delivered a 17.7%rise in net profits (2.8% ahead of forecast). A lower than forecast attribution to minoritiesand a small fall in the share count (buy-back) saw EPS rise 20%. The DPS of HK$0.30 wasbelow our forecast (HK$0.33), but still up 7.1% y-o-y. Based on our updated forecastsCWA's share price rating appears modest despite requirements for significantenvironmental expenditure in the Chinese water sector presenting it with an opportunity togrow.

INDUSTRY OUTLOOK

Water supply in China remains fragmented. The central government encourages localgovernments to deleverage their own balance sheets with private–public partnerships. Thistrend remains positive for CWA.

Y/E Mar Revenue EBITDA PBT EPS P/E P/CF(HK$m) (HK$m) (HK$m) (c) (x) (x)

2019 8302.0 3536.0 2772.0 85.1 7.5 N/A

2020 8694.0 3781.0 3165.0 102.1 6.2 N/A

2021e 9731.0 4278.0 3374.0 108.0 5.9 N/A

2022e 10787.0 4725.0 3810.0 122.0 5.2 N/A

Sector: Financials



Company descriptionCircle Property is an AIM-listedproperty investment company thatactively manages its assets, placing anemphasis on total returns rather thanmaximising short-term income. Ittargets the acquisition of well-locatedregional office properties where it hasidentified a clear opportunity to addvalue.Price performance% 1m 3m 12mActual 0.0 (8.7) (17.1)Relative* 3.5 (9.8) (2.4)* % Relative to local indexAnalystMartyn King

Circle Property (CRC)

INVESTMENT SUMMARY

Circle plans to release results for the year ended 31 March 2020 (FY20) in late Septemberbut has previously stated an increase in the end-FY20 property valuation to £139.5m, drivenby continued leasing activity, and an estimated unaudited NAV per share of 290p. Incommon with peers, as a result of COVID-19, rent collection has since slowed whilesector-wide valuation uncertainty has increased. As at 14 July, 91% of March quarter rentshad been collected and 77% of June quarter rents (increasing to 91% of rents due includingagreed monthly payments). Also at 14 July, drawn debt was £62.3m (£100m of facilities with£2.7m immediately available) with cash of £4.3m (gross LTV 44.7%). The board expects topay a final dividend but no formal decision has yet been made.

INDUSTRY OUTLOOK

The commercial property market is cyclical, historically exhibiting substantial swings invaluation through cycles while income returns have been more stable, but still fluctuatingaccording to tenant demand and rent terms. The extent and duration of impact of the globalpandemic on the economic outlook remains uncertain. While the supply demand balance forregional office and industrial property has hitherto remained generally firm the weaknessthat was previously confined to the retail sector is likely to continue to broaden.

Y/E Mar Revenue EBITDA PBT EPS P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 5.5 N/A 14.0 9.0 17.5 N/A

2019 6.5 N/A 15.2 6.6 23.9 N/A




Sector: Financials



Company descriptionCivitas is the leading listed UK socialhousing REIT. Its investment objectiveis to provide an attractive level ofincome, with the potential for capitalgrowth, from investing in a diversifiedportfolio of fully developed socialhomes, particularly specialistsupported housing (SSH) forvulnerable adults.Price performance% 1m 3m 12mActual (2.5) 5.0 32.5Relative* 0.9 3.7 56.0* % Relative to local indexAnalystMartyn King

Civitas Social Housing (CSH)

INVESTMENT SUMMARY

The strong FY20 financial performance, driven by continuing portfolio growth and CPI-linkedrent increases, continued into Q121. With no impact on rent receipts from COVID-19, aQ121 DPS of 1.35p was declared in line with the target of 5.4p (1.9%) for the year whileIFRS NAV per share edged ahead to 107.92p. Acquisitions continued in Q121 (£3.9mbefore costs) and since, including the new 65-bed purpose-built state of the art supportedhousing and healthcare facilities in Wales. With an extensive pipeline of potentialinvestment opportunities, including those related to the broadened investment remit recentlyapproved by shareholders, the company is considering further capital raising options,including up to £140m of additional debt as it moves towards its target 35% gearing.

INDUSTRY OUTLOOK

The chronic shortage of SSH is forecast to increase, yet compared with the alternatives ofresidential care or hospitals it is widely recognised to improve lives in a cost-effectivemanner. SSH leases are of long duration and rents are paid directly to housing associationtenants by government via local authorities.


2019 35.7 26.1 19.9 3.63 30.3 N/A

2020 46.2 36.4 38.0 4.63 23.8 N/A

2021e 52.2 43.0 44.9 5.50 20.0 N/A

2022e 55.6 46.1 54.1 5.86 18.8 N/A

Sector: Technology



Company descriptionClaranova consists of threebusinesses focused on mobile andinternet technologies: Printing & Gifting(digital photo printing; personalisedgifts), Software and Internet of Things(IoT). Its headquarters are in Paris,and it has operations in Europe, theUS and Canada.

Price performance% 1m 3m 12mActual 13.3 18.1 (14.0)Relative* 17.4 7.0 (4.7)* % Relative to local indexAnalystKatherine Thompson

Claranova (CLA)

INVESTMENT SUMMARY

COVID-19 lockdowns were a positive driver of demand for FreePrints photo printingservices and also boosted demand for Avanquest’s proprietary software products. WithFY20 revenues (€409m unaudited) coming in 7% ahead of our expectations, we haverevised our FY20 forecasts resulting in a 47% upgrade to EBITDA and a 120% upgrade toour normalised EPS forecast. Our FY21 forecasts remain essentially unchanged. Thecompany will report FY20 results on 30 September.

INDUSTRY OUTLOOK

The digital photo printing business is benefiting from the growth in smartphone photographyas well as geographical expansion. The consumer software business recently acquired agroup of Canadian businesses to accelerate growth and is looking to leverage websitetraffic. The IoT business is targeting the SME space with its myDevices platform, whichprovides a simple and effective way to deploy IoT applications.

Y/E Jun Revenue EBITDA PBT EPS (fd) P/E P/CF(€m) (€m) (€m) (c) (x) (x)

2018 161.5 3.9 3.1 6.31 101.0 N/A

2019 262.3 16.0 12.0 24.66 25.8 N/A

2020e 408.6 19.2 11.1 19.74 32.3 N/A

2021e 459.3 32.5 24.1 35.08 18.2 N/A





Company descriptionCohort is an AIM-listed defence andsecurity company operating across fivedivisions: MASS (31% of FY20 sales),SEA (24%), MCL (11%), the80%-owned Portuguese business EID(14%), and 81%-owned ChessTechnologies based in the UK (19%).

Price performance% 1m 3m 12mActual 13.3 20.8 43.0Relative* 17.2 19.3 68.4* % Relative to local indexAnalystAndy Chambers

Cohort (CHRT)

INVESTMENT SUMMARY

Cohort delivered growth in FY20, despite disruption in the seasonally busy Q4 as permanagement's closing update in May so preliminary results contained few surprises andguidance for the FY21 performance to be in line with FY20 is unchanged. Our estimateshave not altered significantly. The year-end order book of £183m provided 62% cover forFY21 sales, and has increased to 85% following strong Q121 order intake. Healthy liquiditysupports the growth strategy and the proposed €11.3m acquisition of ELAC shouldcomplete by the end of September and prove to be financially compelling.

INDUSTRY OUTLOOK

Cohort is heavily influenced by activities in defence and security (90% of FY20 sales).These markets require highly differentiated technologies and services with high barriers toentry based on customer relationships, regulation and high-level security clearances.Defence is generally quite resilient in periods of significant economic disruption but thecurrent unprecedented pandemic could see renewed budget constraints in the mediumterm.

Y/E Apr Revenue EBITDA PBT EPS P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2019 121.2 17.3 15.9 33.6 19.0 22.5

2020 131.1 20.9 17.5 37.1 17.3 20.0

2021e 137.1 21.1 17.6 35.4 18.1 17.3

2022e 143.9 22.2 18.8 37.7 17.0 12.7

Sector: Oil & gas



Company descriptionCoro Energy is an upstream oil andgas company with a focus onSouth-East Asia. It targets discoveriesthat require commercialisation andhave exploration upside, with a focuson gas assets.


Coro Energy (CORO)

INVESTMENT SUMMARY

Coro Energy’s independent resource audit from Gaffney Cline and Associates in 2020 onthe Mako gas field saw 2C recoverable resource estimates increase to 495bcf, c 79%higher vs the 2019 audit. Coro Energy holds 15% of the Duyung PSC containing the Makofield. Gas volumes will be upgraded to 2P reserves once the gas sales agreement iscompleted and a final investment decision is taken. The company has a heads ofagreement already in place with a gas buyer in Singapore. In July, a sales and purchaseagreement with Zenith Energy to dispose of Coro’s Italian portfolio was terminated. Ourvaluation has been suspended since James Menzies, the company’s CEO, saw hisemployment terminated.

INDUSTRY OUTLOOK

South-East Asia possesses some of the world’s fastest-developing economies wheredemand for gas is increasing and already exceeds supply. It is also a mature hydrocarbonprovince, holding 57bnboe of discovered undeveloped resources and significant yet-to-findresources.


2017 N/A N/A N/A N/A N/A N/A

2018 0.0 (3.5) (3.5) 0.0 N/A N/A




Sector: Technology

Price: CHF99.20Market cap: CHF139mMarket Swiss Stock Exchange

Share price graph (CHF)

Company descriptionCREALOGIX Group provides digitalbanking technology solutions to banks,wealth managers and other financialservices companies. The company’ssuite of solutions includes online andmobile banking, digital payments,digital learning and security.


CREALOGIX Group (CLXN)

INVESTMENT SUMMARY

In its preliminary results at the end of July, CREALOGIX announced a sales increase of1.7% to CHF103.7m (FY19 CHF101.9m), 3.9% growth in constant currencies with adjustedEBITDA of CHF2.4m (FY19: CHF 1.86m). The SaaS transition will continue to drag onCLX's results in FY20/21 but, with net cash of CHF34m at end CY19, the group iswell-placed to weather any short-term impact from COVID-19 and complete its SaaStransformation. Our forecasts remain unchanged pending full-year results on 15 September2020.

INDUSTRY OUTLOOK

CREALOGIX continues to pursue its goal to become a leading global SaaS digital bankingsoftware provider. Its solutions are most often used by traditional banks to enable theirjourney to digitalisation, through the provision of a sophisticated, modern omni-channeloffering to clients. CREALOGIX has multi-award winning technology eg winning the 'Best ofShow' award at FinovateEurope for the last three years in a row.

Y/E Jun Revenue EBITDA PBT EPS P/E P/CF(CHFm) (CHFm) (CHFm) (CHFc) (x) (x)

2018 87.1 7.0 5.0 239.00 41.5 36.0

2019 101.9 1.9 (1.7) (93.57) N/A 274.3

2020e 105.5 2.6 (0.5) (27.49) N/A 17.0

2021e 111.1 4.7 1.6 83.24 119.2 28.5

Sector: Property



Company descriptionCREI is a London Main Market-listedREIT focused on commercial propertyin the UK outside London. It isincome-focused, with a commitment topay a high but sustainable andcovered dividend.

Price performance% 1m 3m 12mActual 3.1 3.9 (23.3)Relative* 6.7 2.7 (9.6)* % Relative to local indexAnalystMartyn King

Custodian REIT (CREI)

INVESTMENT SUMMARY

The Q121 DPS of 0.95p was 27% ahead of the minimum level of 0.75p previously indicatedfor each of the first two quarters of FY21. It was fully covered by net cash receipts, reflectingbetter than expected rental collection, and was 140% covered by EPRA earnings, includingaccrued rents that are yet to be collected. Unrealised valuation losses weighed on NAV pershare, down by 5.9p to 95.7p, and including DPS paid the Q121 NAV total return was-4.2%. Rent collection is robust and we expect the easing of the lockdown to support afurther improvement in H221. The portfolio is diversified and gearing is moderate with goodliquidity, no short-term refinancing risk and borrowing headroom.

INDUSTRY OUTLOOK



2019 37.6 32.7 28.5 7.26 12.4 9.8

2020 38.1 33.4 28.7 7.00 12.8 11.9

2021e 35.5 29.3 24.3 5.79 15.5 12.8

2022e 35.4 30.7 25.7 6.12 14.7 12.4


Sector: Financials

Price: €1.17Market cap: €311mMarket Borsa Italiana


Company descriptionDeA Capital, a De Agostini groupcompany, is Italy’s leading alternativeasset manager of real estate, privateequity and NPLs, with combined AUMof more than €22bn at 31 March 2020.The portfolio, including co-investmentin funds managed, investment in theasset management platform and directinvestment, amounted to c €380m.Price performance% 1m 3m 12mActual (3.3) (9.0) (8.0)Relative* 1.2 (21.0) (2.8)* % Relative to local indexAnalystMartyn King

DeA Capital (DEA)

INVESTMENT SUMMARY

During the past year DeA Capital has exploited its financial strength and leading Italianposition in alternative asset management (AAM) to grow its AAM platform, extend itscustomer reach and enhance its product capability. Significantly this included the Quaestiotransactions which saw DeA directly acquire the Quaestio NPL asset management businessand a c 39% stake in Quaestio Asset Management (via its holding co), becoming its singlelargest shareholder and cementing a product and marketing partnership between the twocompanies. Q120 performance was robust despite challenging markets with combined AUMdown modestly to c €22.1bn (end-FY19: €22.6bn). This included €7.5bn of investmentsolutions AUM retained by Quaestio Asset Management. Group NAV per share was €1.73(end-FY19: 1.76) and the holding company net financial position was €63.3m or c €0.24 pershare. A €0.12 per share distribution has since been paid.

INDUSTRY OUTLOOK

COVID-19 has increased economic uncertainty and weakened investor confidence, despitea strong recovery in markets, and this may affect DeA’s ability to enhance portfolio valuesand raise funds. On a longer view, the increasing breadth and strength of the AAM platformand balance sheet should leave it well placed to benefit once recovery takes hold.


2018 102.9 N/A 47.1 4.4 26.6 N/A

2019 72.7 N/A 16.1 4.7 24.9 N/A



Sector: Electronics & elec eqpt



Company descriptiondiscoverIE is a leading internationaldesigner and manufacturer ofcustomised electronics to industry,supplying customer-specific electronicproducts and solutions to 25,000industrial manufacturers.

Price performance% 1m 3m 12mActual (0.7) 13.9 37.7Relative* 2.8 12.5 62.1* % Relative to local indexAnalystKatherine Thompson

discoverIE Group (DSCV)

INVESTMENT SUMMARY

discoverIE’s trading update for the first four months of FY21 confirms that orders are movingin the right direction, with month-on-month increases in June and July. Revenues are down8% y-o-y on a reported basis, in line with expectations. While COVID-19 is likely to presentongoing challenges in the short term, the company is confident it has the resources tomanage the business through this and is well positioned to take advantage of growthopportunities post COVID-19, highlighting its intention to resume acquisitions in H2 asmarket conditions improve. We maintain our forecasts.

INDUSTRY OUTLOOK

discoverIE Group is a designer, manufacturer and supplier of customised electronics toindustry with operations throughout Europe and increasingly outside Europe. The companyis focused on growing the percentage of higher-margin specialist product through organicgrowth and acquisition. Its key markets (more than two-thirds of sales) are medical,renewables, transportation and industrial connectivity, all of which are good growth markets.


2019 438.9 37.0 28.4 28.4 20.8 N/A

2020 466.4 50.9 34.6 31.8 18.6 N/A

2021e 460.5 46.0 28.8 23.7 25.0 N/A

2022e 494.8 53.6 36.2 29.9 19.8 N/A


Sector: Oil & gas



Company descriptionDiversified Gas & Oil is a conventionalnatural gas and oil producer with amain focus on the US onshore. Thecompany possesses long-life, lowoperational cost, mature producingassets with slow decline profiles in theAppalachian region.

Price performance% 1m 3m 12mActual 9.4 7.0 11.9Relative* 13.2 5.7 31.7* % Relative to local indexAnalystCarlos Gomes

Diversified Gas & Oil (DGOC)

INVESTMENT SUMMARY

Diversified Gas & Oil (DGO) is a natural gas and oil producer with all its production in theUS onshore. It possesses long-life, low operational cost, mature producing assets and is thelargest conventional gas producer in Appalachia. Despite the current challengingenvironment, normal operations continue, with little-to-no impact from COVID-19. This hasallowed DGO to maintain stable production, low operating costs and robust hedging, thusmitigating the impact of low commodity prices and underpinning steady cash flows andprofitability. The company recently increased its quarterly dividend by c 7% on the back ofH120 results. DGO also announced it is entering the second half of 2020 with c $220m ofliquidity and a healthy balance sheet as the company recently surpassed the 100kboedproduction milestone. Our valuation stands at 125.4p/share.

INDUSTRY OUTLOOK

DGO’s ability to maximise shareholder returns will be driven by its proficiency in maximisingproduction, increasing cost efficiencies and extending the economic life of the assets.


2018 289.8 146.2 71.0 2.7 52.9 6.3

2019 462.3 273.3 126.1 14.6 9.8 3.3

2020e 416.3 289.7 138.6 14.3 10.0 3.6

2021e 658.0 304.9 148.2 15.3 9.3 4.1

Sector: Media



Company descriptionEbiquity is a leading independentmarketing and media consultancy,working for 70 of the world’s 100leading brands to optimise their mediainvestments.

Price performance% 1m 3m 12mActual (6.9) (6.9) (51.8)Relative* (3.7) (8.0) (43.2)* % Relative to local indexAnalystFiona Orford-Williams

Ebiquity (EBQ)

INVESTMENT SUMMARY

The impact of the pandemic on the advertising sector is heavy, but far from uniform, withsome verticals notably more resilient than others. Ebiquity’s leading market position equipsit with the data to benchmark and advise, particularly important when budgets areconstrained and ROI is paramount. Careful cost management should mitigate some of theCOVID-19 related trading impact, with the balance sheet remaining sound. Managementguidance remains withdrawn. New CEO, Nick Waters, joined from Dentsu Aegis on 1 July.His experience there, and previously at Mindshare, should be a good fit, bringing theagency and holding company insight.

INDUSTRY OUTLOOK

Accenture has acknowledged the inherent dilemma of both pitching for marketing contractsand simultaneously auditing their efficacy by announcing the intended closure of its mediaauditing practice from August. This increases the potential addressable market for EBQ forboth regional and global consultancy accounts and accentuates the advantage of itsindependence. The group is increasingly focused on forward-looking advice and on thoseareas where its expertise can most effectively be leveraged, such as in analytics and digital.


2018 69.4 7.8 5.2 3.7 7.3 N/A

2019 68.7 9.2 5.3 3.6 7.5 5.0

2020e 59.5 5.2 3.3 2.5 10.8 14.1



Sector: Oil & gas



Company descriptionEgdon Resources is an AIM-listedonshore oil and gas explorationcompany. The group has conventionaland unconventional assets in the UK.

Price performance% 1m 3m 12mActual (2.3) 23.5 (58.8)Relative* 1.1 22.0 (51.5)* % Relative to local indexAnalystCarlos Gomes

Egdon Resources (EDR)

INVESTMENT SUMMARY

Egdon Resources retains several value catalysts that encompass both its conventional andunconventional assets and include exploration and appraisal. 2020 started with twoimportant developments: the positive result of Egdon's appeal against the refusal ofplanning consent at Wressle, which will allow it to proceed with project development; andthe farm-in agreement for the P1929 and P2304 licences with Shell. The cash position at 31January 2020 was £0.78m and Egdon recently raised £500,000 in equity, before expenses,to be used to progress near-term cash-generative projects such as Wressle, where sitereconfiguration works have commenced, and general working capital. The companyrecently announced the completion of the farm-in agreement with Shell, and that the 3Dseismic activity in the area is expected during Q121. Egdon also announced the proceedsfrom the confidential settlement with Humber Oil & Gas were received and the disputeunder the PEDL235 JOA has been resolved.

INDUSTRY OUTLOOK

The UK government's stance towards shale varies by party. Current central governmentbelieves natural gas will play an important role in providing energy to the UK in the future.

Y/E Jul Revenue EBITDA PBT EPS (fd) P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 1.2 (2.2) (2.0) (0.8) N/A N/A

2019 2.2 (0.6) (1.7) (0.2) N/A N/A

2020e 1.9 (0.6) (0.9) (0.8) N/A N/A

2021e 4.1 1.5 (1.5) (0.8) N/A 3.2

Sector: Technology



Company descriptionEMIS is a software supplier with twodivisions. EMIS Health suppliesintegrated care technology to the NHS,including primary, community, acuteand social care. EMIS Enterprise is aB2B software provider to the UKhealthcare market, including medicinesmanagement, partner businesses,patient-facing services and blockchain.Price performance% 1m 3m 12mActual (2.3) (4.3) (8.4)Relative* 1.1 (5.5) 7.9* % Relative to local indexAnalystKatherine Thompson

EMIS Group (EMIS)

INVESTMENT SUMMARY

EMIS confirmed that H120 trading was in line with expectations. As previously flagged, thenew business the company is managing to sign in the EMIS Health division is tendingtowards lower margin product, but it is managing to offset the impact of this by reducingoperating costs. The EMIS Enterprise division has seen growth in recurring revenues;non-recurring revenues have been harder to sign, although the business is starting to seesigns of recovery in the market. As long as new business gradually improves through H2,EMIS anticipates meeting FY20 expectations. With a strong net cash position and access todebt funding, EMIS is well funded to manage through the current disruption. We maintainour forecasts.

INDUSTRY OUTLOOK

EMIS is the leading software supplier to the UK GP market, with a greater than 50% marketshare. It has a strong position in community pharmacies, community health, A&E andhospital pharmacies. The EMIS-X platform is being developed to promote greaterinteroperability between NHS departments, in line with the NHS Long Term Strategy.

Y/E Dec Revenue EBITDA PBT EPS (fd) P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 149.7 48.9 33.4 40.4 25.4 13.0

2019 159.5 55.6 41.0 53.5 19.2 12.9

2020e 159.8 53.3 39.9 51.2 20.0 12.3

2021e 169.8 56.8 43.7 56.0 18.3 11.3


Sector: Mining

Price: C$35.82Market cap: C$5841mMarket Toronto


Company descriptionFollowing its acquisition of SEMAFO,Endeavour joins the ranks of the majorgold producers, with two mines in Côted’Ivoire and four in Burkina Faso plusthree major development projects, allin the West African Birimiangreenstone belt.

Price performance% 1m 3m 12mActual 1.6 12.0 36.6Relative* (0.6) 0.9 34.8* % Relative to local indexAnalystCharles Gibson

Endeavour Mining (EDV)

INVESTMENT SUMMARY

EDV's acquisition of SEMAFO has now closed (including the injection of US$100m into thecombined company by shareholder, La Mancha), creating a top 15 gold producer withoutput of c 995-1,095koz at an AISC of US$865-915/oz (FY20 pro forma guidance) and therealistic possibility of being net debt free and able to make dividend distributions from earlyin FY21. So far in FY20, both Q1 and Q2 adjusted EPS have been materially ahead of bothour and consensus expectations with an even stronger performance anticipated in H2.

INDUSTRY OUTLOOK

To date, Endeavour’s exploration programme has yielded 83% of its target of 10–15Moz Auover a five-year period at a cost of c US$45m pa, which is intended to extend and maintainnear-term production rates at EDV's mines into the foreseeable future indefinitely.Discounting three years of forecast cash flows to shareholders and then applying anex-growth multiple to terminal cash flows consistent with a 10% discount rate results in anupdated valuation of US$43.34/share.


2018 1048.6 378.9 75.8 (10.4) N/A 10.6

2019 1362.1 618.4 220.4 57.0 47.2 6.7

2020e 1816.0 1002.4 639.8 236.0 11.4 4.6

2021e 2034.0 1027.0 668.3 251.0 10.7 4.4

Sector: Construction & blding mat



Company descriptionEpwin supplies functionallow-maintenance exterior buildingproducts (including windows, doors,roofline and rainwater goods) into anumber of UK market segments and isa modest exporter.

Price performance% 1m 3m 12mActual 0.0 0.1 (4.1)Relative* 3.5 (1.1) 12.9* % Relative to local indexAnalystToby Thorrington

Epwin Group (EPWN)

INVESTMENT SUMMARY

A good start and end to Epwin’s H120 punctuated by major COVID-19 related operationaltrading disruption (from the end of March into mid-May) led to revenue in the first six monthsof the year being 34% below H119. The company has confirmed that it has seen demandlevels rebuilding following COVID-19 disruption during H1 and sales in the replacementmarket in particular have exceeded their prior year equivalents in the latest two tradingmonths. H120 ended with net debt of c £21m; this was a c £5m increase from Decemberbut a noted decline from the c £30m levels previously reported (end March, April and earlyJune). Available liquidity headroom is now stated as being over £55m.

INDUSTRY OUTLOOK

Epwin is exposed to both RMI (c 70% revenue) and newbuild (c 30%) in the UK housingmarket. Newbuild activity growth slowed at the end of 2019, while RMI demand has beenmore patchy. The Brexit debate weakened consumer confidence which appeared to recoverfollowing the general election result before the coronavirus lockdown occurred.


2018 281.1 26.7 16.5 9.8 7.1 3.9

2019 282.1 26.4 15.0 8.5 8.2 2.9




Sector: Technology

Price: €110.00Market cap: €158mMarket Scale


Company descriptionEQS is a leading international providerof regulatory technology in the fields ofcorporate compliance and investorrelations. Its products enable corporateclients to fulfil complex national andinternational disclosure obligations,minimise risks and communicatetransparently with stakeholders.

Price performance% 1m 3m 12mActual 14.6 12.8 66.7Relative* 18.2 (2.2) 54.1* % Relative to local indexAnalystFiona Orford-Williams

EQS Group (EQS)

INVESTMENT SUMMARY

EQS delivered a good first half performance, boosted by companies’ needs to adapt theircommunications strategies to the impact of the COVID-19 pandemic. Revenue guidance forthe year has been tilted to the higher end of the previous range and EBITDA guidance liftedby €0.5m to €4.0–5.0m. We have lifted our forecast from €3.5m to €4.1m, rising to €8.5m forFY21e as the scalability of the platform helps improve margins. With the group now over thepeak investment in its cloud-based COCKPIT software, free cash flow is on a clearimproving trend. The share price has recovered well from the market setback in March butremains on a discount to peers.

INDUSTRY OUTLOOK

Virtual general meetings are now permitted across the DACH area, where voting is normallyat the meeting, with questions also submitted ahead of time. Against this, the number ofIPOs (which have been a useful source of group revenue historically) lined up for Europeanmarkets has unsurprisingly dwindled. The length and severity of the economic impact willalso affect the numbers of companies going out of business entirely, but this is not yetquantifiable. Gartner estimates the governance, risk and compliance segment at overUS$5bn, growing at a CAGR of over 13%.


2018 36.2 0.2 0.7 30.62 359.2 N/A

2019 35.4 2.5 (0.3) (31.32) N/A N/A

2020e 37.2 4.1 0.6 54.81 200.7 N/A

2021 43.5 8.5 4.7 215.26 51.1 N/A

Sector: Technology

Price: €142.80Market cap: €828mMarket Euronext Growth


Company descriptionEsker provides end-to-end documentautomation solutions, offeringon-premise and on-demand deliverymodels. In FY19, the businessgenerated 57% of revenues fromEurope, 38% from the US and theremainder from Asia and Australia.

Price performance% 1m 3m 12mActual 5.3 28.0 76.3Relative* 9.2 15.9 95.3* % Relative to local indexAnalystKatherine Thompson

Esker (ALESK)

INVESTMENT SUMMARY

Esker’s Q2 revenue update confirmed that transaction-based SaaS revenues were hit bylower levels of customer activity in April and May but from June have started to rebound.The company continued to win new business, launch new functionality and expand itschannel partnerships during H1. With the FY20 outlook maintained, we leave our revenueand EPS forecasts unchanged. The strong balance sheet, continued positive new businessmomentum and high level of recurring revenues make this an attractive stock to be investedin during the pandemic.

INDUSTRY OUTLOOK

Esker's DPA software operates across five areas: document delivery, accounts payable,accounts receivable, procurement and sales order processing. Competitors are different foreach business process and consist of business process outsourcers and specialist DPAsoftware companies. Customers move to using DPA software to reduce paper-related costsand errors in processing, to speed up the cash conversion cycle, to improve processvisibility within the enterprise and to improve customer service.


2018 86.9 18.2 12.2 164.0 87.1 42.1

2019 104.2 20.0 13.6 176.0 81.1 38.7

2020e 114.8 22.0 14.7 173.0 82.5 37.4

2021e 132.9 25.9 17.9 207.0 69.0 34.5


Sector: Food & drink



Company descriptionEvolva is a Swiss biotech companyfocused on the research, developmentand commercialisation of productsbased on nature. The company hasleading businesses in Flavors andFragrances, Health Ingredients andHealth.

Price performance% 1m 3m 12mActual (4.1) 20.1 49.8Relative* (2.0) 15.1 44.4* % Relative to local indexAnalystSara Welford

Evolva (EVE)

INVESTMENT SUMMARY

In November 2019, commercial scale production of EverSweet commenced. Nootkatonehas finally been registered for use in pest control. Evolva's overall geographical and productfootprint continues to expand and the pipeline remains robust. The company's aim is toreach cash break-even by FY23. Beat In-Albon took over as chairman at the recent AGMand the board of directors has changed materially in order to fully concentrate on Evolva'soperational execution. It is too early to assess the ultimate impact of the COVID-19pandemic, but early indications from China are that Evolva will witness a temporarysoftening in demand for some of its flavour and fragrance products. H1 results are due on26 August.

INDUSTRY OUTLOOK

Food and health ingredients continue to be in the sweet spot as consumers demandhealthier products with cleaner labels without compromising on taste or convenience.Evolva's fermentation platform aims to deliver these benefits while reducing productioncosts.

Y/E Dec Revenue EBITDA PBT EPS P/E P/CF(CHFm) (CHFm) (CHFm) (CHFc) (x) (x)

2018 8.9 (23.4) (25.4) (3.0) N/A N/A

2019 11.5 (12.3) (15.6) (2.0) N/A N/A

2020e 10.7 (12.1) (13.2) (1.6) N/A N/A

2021e 18.8 (7.0) (8.1) (1.0) N/A N/A

Sector: Technology



Company descriptionExpert System has developed andpatented an AI-based technologyplatform that extracts usefulinformation from unstructured textusing a unique mix of natural languageunderstanding and machine learningalgorithms and applies it to verticalssuch as enterprise search, customerexperience management and big dataanalytics.Price performance% 1m 3m 12mActual (5.1) (6.3) (6.0)Relative* (0.6) (18.6) (0.7)* % Relative to local indexAnalystKatherine Thompson

Expert System (EXSY)

INVESTMENT SUMMARY

Expert System has met two key milestones in the execution of its new five-year growth plan,raising €25m from the issue of 9.26m shares at €2.7 per share and launching expert.ai, itsNL API (natural language application programming interface). The first supports theinvestment required to execute the plan and the second is the first stage in the developmentof the cloud platform. Since the funds were raised, the company has hired a chief revenueofficer (Colin Matthews) and chief marketing officer (Keith C Lincoln) to help drive the USsales and marketing effort.

INDUSTRY OUTLOOK

Ever-increasing amounts of data are being produced, 80% of which are estimated to beunstructured. The need to derive useful insights from this growing body of data is driving thedemand for cognitive computing and smarter artificial intelligence solutions, such as thoseoffered by Expert System. ResearchAndMarkets estimates that the global text analyticsmarket was worth $4bn in 2018 and is forecast to grow at a CAGR of 17.3% to 2023.


2018 30.5 4.6 (0.6) (1.4) N/A 37.7

2019 33.7 5.5 (0.5) (1.6) N/A 42.4

2020e 33.2 2.0 (5.2) (10.6) N/A 67.3

2021e 34.4 (5.0) (12.7) (22.7) N/A N/A


Sector: Property

Price: €11.40Market cap: €104mMarket Scale


Company descriptionFCR Immobilien is a German realestate investor primarily focused onsmall and mid-sized properties in tiertwo domestic locations. It looks forspecial situations translating intobargain purchases. Subsequentmeasures are aimed at improvingrental income generation.

Price performance% 1m 3m 12mActual 1.8 15.7 12.9Relative* 5.0 0.3 4.4* % Relative to local indexAnalystMilosz Papst

FCR Immobilien (FC9)

INVESTMENT SUMMARY

FCR invests mainly in retail property, targeting total returns from recurring rental incomeand capital gains. It seeks to acquire properties at attractive prices and actively managesthe assets to improve income by reducing voids and increasing rent levels and capitalvalues with minimal or no capex. A key part of its strategy is to sell properties where assetmanagement plans are mature, with capital recycled into new opportunities. High initial loanto value at property level and high loan amortisation rates are part of the strategy, withECB’s monetary easing providing relatively cheap debt funding. FCR’s portfolio valuereached c €309m at end-June 2020.

INDUSTRY OUTLOOK

The strength of the German property investment market was interrupted by COVID-19 astransaction volumes declined by over 47% q-o-q in Q220. This was reflected in FCR’stransaction activity, with only three disposals of relatively small properties in H120. WhileFCR is still focusing on portfolio expansion in FY20 (it acquired 10 properties in H120), ithas not explicitly reiterated its earlier portfolio value target of €400–450m. The initialCOVID-19 impact on rental income was relatively limited so far, as FCR waived rentsamounting to €200k in the case of its existing tenants.


2018 37.3 7.6 2.8 35.1 32.5 N/A

2019 50.1 18.5 11.9 145.9 7.8 N/A

2020e 52.4 18.5 10.6 94.6 12.1 N/A

2021e 72.4 24.2 14.9 123.8 9.2 N/A

Sector: Consumer support services



Company descriptionGames Workshop is a leadinginternational specialist designer,manufacturer and multi-channelretailer of miniatures, scenery, artworkand fiction for tabletop miniaturegames set in its fantasy Warhammerworlds.

Price performance% 1m 3m 12mActual 4.7 33.0 102.5Relative* 8.4 31.4 138.4* % Relative to local indexAnalystRussell Pointon

Games Workshop Group (GAW)

INVESTMENT SUMMARY

FY20 results with revenue growth of 5.1% and PBT growth of 10% indicated that thecompany performed very well during the COVID-19 lockdown. With a focus on customerengagement and digital marketing, leveraging online sales and managing the businessrecovery, management aims to grow revenue and maintain the operating margin in FY21.Our new forecasts for FY21 reflect revenue and operating profit growth, but a decline inroyalty income, which is lumpy and more difficult to predict.

INDUSTRY OUTLOOK

Games Workshop is the global leader for tabletop miniature gaming, a market it created.Tabletop miniature gaming is the fastest-growing segment of the global non-digital gamesmarket, which is expected to grow at a CAGR of 9% between 2017 and 2023 and reach avalue exceeding $12bn.

Y/E May Revenue EBITDA PBT EPS (fd) P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2019 256.6 97.1 81.3 200.8 44.0 39.8

2020 269.7 115.6 89.4 217.8 40.5 27.7

2021e 275.3 112.6 84.9 206.9 42.7 34.0

2022e 293.1 120.6 91.5 222.8 39.6 28.5





Company descriptionGamesys is a leading online gamingoperator, with two-thirds of revenuesfrom the UK. The group was formedafter JPJ Group acquired Gamesys for£490m in September 2019.


Gamesys Group (GYS)

INVESTMENT SUMMARY

Gamesys Group’s H120 pro forma revenue growth of 27% and adjusted EBITDA growth of17% exceeded consensus expectations, demonstrating the strength of its strategy ofgrowing the player base responsibly, while aiming for a high player retention rate. Theimproved financial position (net debt/adjusted EBITDA 2.27x) resulted in the introduction ofa new dividend (company commentary implies 36p/share for FY20) earlier than anticipatedby us and consensus. We increased our FY20 EBITDA forecast by 7.8%. Gamesys is notexposed to sports and therefore the business should be relatively unaffected by thecoronavirus outbreak.

INDUSTRY OUTLOOK

Retail gambling and sports are currently faced with the impact of COVID-19, but we notethat Gamesys is not exposed to either sector. Gaming companies have been subject toongoing regulatory intervention in the UK, including a ban on the use of credit cards togamble online from April 2020, and recent new guidance to protect consumers during theCOVID-19 lockdown. Gaming companies must comply with a number of social responsibilitymeasures, including ID checking, source of funds and AML checks. Sweden introduced agaming tax of 18% from FY19.


2018 319.6 112.7 92.7 118.5 9.6 7.9

2019 565.3 158.9 119.5 100.4 11.3 12.2

2020e 680.7 189.5 147.5 122.0 9.3 7.5

2021e 725.0 208.7 169.7 140.2 8.1 6.7

Sector: Technology



Company descriptionGBG specialises in identity dataintelligence. Its products/servicesenable customers to understand andverify clients and employees in fraud,risk management, compliance andcustomer on-boarding services. Withheadquarters in the UK, it operatesacross 16 countries.


GB Group (GBG)

INVESTMENT SUMMARY

At its recent AGM, GBG confirmed that the company had traded better than expected inQ121, with revenue growth y-o-y helped by a one-off project in the US. Underlyingperformance has been as expected. Certain figures in Q1 are still at pre-COVID-19 levels:customer churn, solvency and bad debt. GBG has also continued to win business from newcustomers, albeit at a slower pace. The company remains focused on effective cashmanagement, with a recent $3m minority investment in a Singaporean bank-grade digitalscorecard company, CredoLab, being undertaken via equity.

INDUSTRY OUTLOOK

Globalisation and the growth in internet trading have also resulted in the need for highercompliance standards in light of the rising scope and financial impact of cybercrime. This, inturn, is driving the demand for more complex and comprehensive solutions for theverification of personal data.


2019 143.5 34.1 31.3 15.4 46.6 40.9

2020 199.1 51.7 45.7 17.9 40.1 28.7

2021e 176.5 34.8 28.7 11.1 64.7 39.5

2022e 189.3 43.0 37.0 14.3 50.2 34.3


Sector: Mining

Price: ZAR1.20Market cap: ZAR1405mMarket JSE

Share price graph (ZAR)

Company descriptionGemfields is a world-leading supplierof responsibly sourced colouredgemstones. It owns 75% of MontepuezRuby Mining in Mozambique, 75% ofthe Kagem emerald mine in Zambia,the Fabergé jewellery business and aninvestment in Sedibelo Platinum.

Price performance% 1m 3m 12mActual (21.1) (25.0) (21.1)Relative* (20.4) (31.6) (22.9)* % Relative to local indexAnalystAlison Turner

Gemfields Group (GML)

INVESTMENT SUMMARY

The key impact of COVID-19 is the inability to hold emerald and ruby auctions whilecustomers are unable to travel internationally so Gemfields intends to hold its next auctionsin December. Mining operations were suspended at Kagem in March and at MRM in Apriland will not resume before the end of September at MRM and October at Kagem.Gemfields ended June with cash of US$53.6m and net cash of US$9.3m providing a strongbalance sheet to support the company until the auctions. However, if the auctions can’t beheld in December, Gemfields may need to look at options to secure further funding.

INDUSTRY OUTLOOK

Gemfields generates more than 90% of its revenues from emerald and ruby auctionsusually comprising two high-quality emerald auctions (May and November in Singapore),two commercial-quality emerald auctions (February and August in Lusaka) and twomixed-quality ruby auctions (June and December in Singapore). Auctions rely on customerstravelling from multiple countries to inspect the stones and determine the value of their bids.For Gemfields to hold auctions thus requires the lifting of worldwide travel restrictions toallow movement of both stones and customers between countries. Gemfields currentlyintends to hold its next auctions in December in Singapore.


2018 206.1 58.9 (22.5) (2.6) N/A N/A

2019 216.2 80.9 55.9 1.3 5.4 N/A

2020e 62.1 (10.2) (38.0) (2.7) N/A N/A

2021e 212.4 54.8 27.4 0.0 N/A N/A




Company descriptionWith 2,025 shops, eight manufacturingand distribution centres and 23,000employees, Greggs is the leading‘food-on-the-go’ retailer. It uses verticalintegration to offer differentiatedproducts at competitive prices.

Price performance% 1m 3m 12mActual (8.3) (18.1) (29.5)Relative* (5.1) (19.1) (17.0)* % Relative to local indexAnalystRussell Pointon

Greggs (GRG)

INVESTMENT SUMMARY

The H120 results were heavily affected by COVID-19 closures with a 45% decline inrevenue and a first-ever loss before tax of £65m. After a few weeks of resumed trading,sales across the estate were at 72% of the level achieved in the prior year and the companyis seeing weekly progress. Our forecasts reflect a gradual recovery in revenue throughFY20 and FY21, albeit below the FY19 level. Greggs has many opportunities to accelerategrowth in the medium term: more and larger stores; the shift from a single channel tomultichannel; further product innovation; and more investment in its supply chain.

INDUSTRY OUTLOOK

Greggs enjoys an expanding market. The Project Café2017UK report (Allegra World Coffeeportal) valued the UK coffee shop market in 2016 at £8.9bn, +12% y-o-y, with brandedoutlets accounting for £3.7bn. Allegra estimates it could reach £16bn by 2025. Thesqueezed consumer is a potential concern, although Greggs is well placed for the valueswitch after widespread refurbishments and extended customer options as it moves towiden its market.


2018 1029.3 145.7 89.8 70.3 20.1 9.3

2019 1167.9 231.9 114.2 89.7 15.7 5.8

2020e 765.4 50.9 (77.9) (63.4) N/A 34.0

2021e 1040.1 192.4 60.8 48.0 29.4 6.9


Sector: Oil & gas



Company descriptionHellenic Petroleum (ELPE) operatesthree refineries in Greece with a totalcapacity of 341kbd, and has sizeablemarketing (domestic and international)and petrochemicals divisions.


Hellenic Petroleum (ELPE)

INVESTMENT SUMMARY

Hellenic Petroleum (ELPE) reported that Q120 production was 8% higher than Q119 whileadjusted EBITDA increased 4% to €128m. Lower oil prices in the quarter led to improvingmargins; however, as the COVID-19 pandemic started to affect global demand for oilproducts, margins began to come under pressure. We expect this pressure will continue forthe next three to six months as economies around the world slowly recover and lockdownmeasures begin to ease. Hellenic’s high complexity index and large storage capacity allowfor flexibility in times of uncertainty and given the company’s healthy balance sheet, weexpect it to weather this period. The company paid a dividend of €0.25/share in June 2020giving a total dividend of €0.50 per/share for 2019. Our valuation stands at €7.00/share.

INDUSTRY OUTLOOK

European refining will likely face continued challenges in the coming years as demand fallsand refinery systems elsewhere (Asia/US) hold structural advantages. To offset this,changing regulations should put complex, middle distillate-orientated refineries such asELPE's in a strong position.


2018 9769.0 730.0 388.0 95.2 5.5 3.2

2019 8857.0 570.0 205.0 54.8 9.6 3.3

2020e 8318.0 484.0 181.0 44.4 11.8 14.7

2021e 8393.0 608.0 275.0 67.4 7.8 2.6

Sector: Oil & gas



Company descriptionHurricane Energy is an E&P focusedon fractured basement exploration anddevelopment in the West of Shetlandregion. The company’s 100%-ownedLancaster oil discovery achieved firstoil on target in H119.


Hurricane Energy (HUR)

INVESTMENT SUMMARY

Hurricane’s technical committee has concluded that there is a reasonable probability thatthe oil water contact (OWC) in the Lancaster field is shallower than the range of OWCsestimated in the 2017 competent person’s report (CPR) by RPS Energy. As a result, thecompany believes there is a risk that the estimated reserves for the Lancaster earlyproduction system (EPS) and the contingent resources across the West of Shetlandportfolio will be materially downgraded. In early August, Lancaster was producing at c17,000bod, and Edison estimates this is likely to decline without technical intervention. Thecompany is evaluating a range of production enhancement options, which could mitigateEdison's production decline scenario, and expects to complete the technical review by itsinterim results, due on 11 September 2020. Our valuation has been suspended until we canreview our forecasts and valuation after the company provides its updated reserves andresources and/or conclusions from the ongoing technical review. We expect that our coreNAV could be significantly reduced from our previous estimate of 13.6p/share.

INDUSTRY OUTLOOK

Hurricane’s ability to enhance its near-term production from Lancaster will depend on theoutcome of the ongoing technical review.


2018 0.0 (12.6) (18.5) (2.2) N/A N/A

2019 170.3 (11.7) 30.0 (2.5) N/A 1.1




Sector: Property



Company descriptionImpact Healthcare REIT invests in adiversified portfolio of UK healthcareassets, particularly residential andnursing care homes, let on long leasesto high-quality operators. It aims toprovide shareholders with attractiveand sustainable returns, primarily inthe form of dividends, underpinned bystructural growth in demand for care. Price performance% 1m 3m 12mActual (0.5) 2.6 (9.5)Relative* 3.0 1.3 6.6* % Relative to local indexAnalystMartyn King

Impact Healthcare REIT (IHR)

INVESTMENT SUMMARY

H120 performance was strong despite COVID-19. EPRA earnings grew c 47% y-o-y, drivenby acquisitions, RPI-linked rental growth and operational gearing. 100% of rents due werereceived, with no changes to agreed lease terms, supporting continuing quarterly DPSpayments in line with the full year target DPS of 6.29p (+1.9%), well covered in H120 byEPRA EPS of 3.62p. EPRA NAV/share rose slightly to 107.12p and including DPS paid theH120 EPRA NAV total return was 3.3%. Impact’s tenants performed robustly with averagerent cover at 1.7x in the period as fee growth mitigated cost and near-term occupancypressures which they are now seeking to address by restarting admissions. With lowgearing (18.2% H120 LTV), good liquidity and significant access to undrawn debt, Impactanticipates a cautious return to acquisition-led portfolio growth.

INDUSTRY OUTLOOK

Care home demand is driven by demographics and care needs with a shortage of qualitycare homes suggesting strong investment demand in years to come. The pandemicpresents a significant near-term challenge to the sector but does not change the underlyingdemographic-driven fundamentals while highlighting its critical role in supporting the NHSand the importance of long-term investment.


2018 17.3 N/A 12.4 6.5 15.5 N/A

2019 24.0 N/A 17.6 6.9 14.6 N/A

2020e 30.4 N/A 22.6 7.1 14.2 N/A

2021e 35.3 N/A 26.5 8.3 12.1 N/A

Sector: Technology



Company descriptionIQE is the leading supplier of epitaxialcompound semiconductor wafersglobally. The principal applicationsinclude radio frequencysemiconductors, devices for opticalnetworks, vertical cavity lasers,infrared semiconductors and powerelectronics.

Price performance% 1m 3m 12mActual 13.0 55.6 (2.6)Relative* 16.9 53.8 14.7* % Relative to local indexAnalystAnne Margaret Crow

IQE (IQE)

INVESTMENT SUMMARY

In June IQE announced that it expected H120 revenues to be at least £85m. This is 27%higher than H119, and a record first half performance, and is expected to take the group toa low single-digit million adjusted operating profit in H120 compared with the £1.9m loss inH119. Despite this encouraging start to the year, we have left our estimates unchangedgiven the prevailing uncertainty regarding the impact of the coronavirus pandemic on globalhandset demand.

INDUSTRY OUTLOOK

During H120 IQE’s long-standing wireless customers benefited from major design wins andinvestment in 5G infrastructure. IQE is also taking share in the Asian wireless market.Production for IQE’s major vertical cavity surface emitting laser (VCSEL) customer wasconsistently strong throughout the period.


2018 156.3 26.4 14.0 1.38 40.6 25.1

2019 140.0 16.2 (7.0) (2.46) N/A 49.3

2020e 143.7 19.4 (6.2) (0.83) N/A 34.0

2021e 164.9 38.7 11.6 1.13 49.6 12.4





Company descriptionJersey Electricity is the monopolysupplier of electricity to the island ofJersey. It also operates businesses inretail, property and business serviceson the island.

Price performance% 1m 3m 12mActual (1.5) 0.9 7.9Relative* 1.9 (0.4) 27.1* % Relative to local indexAnalystGraeme Moyse

Jersey Electricity (JEL)

INVESTMENT SUMMARY

JEL posted strong H120 results, with PBT +7.5% to £10.0m (H119 £9.3m) and operatingprofit +8.1% to £10.8m (H119 £10.0m). The principal driver of the increase in operatingprofits was the Energy business, helped by higher tariffs (+3.5% in April 2019) and volumeincreases +4%. EPS, of 25.95p, was +8.9% versus H119. The interim DPS was increasedby 5.4% to 6.80p. With positive cash flow in H1, net debt fell to £2.9m (£5.1m in FY19). Theoutlook for H2 is likely to be tougher and JEL expects there to be a reduction in revenue asthe result of rescheduled rental payments (property business), lower sales in the retaildivision and lower volumes of electricity sold. Despite the expectation of a more challengingsecond half, JEL remains a highly defensive company with a strong financial position. Ourforecasts remain under review.

INDUSTRY OUTLOOK

Supplying secure, affordable and sustainable electricity, JEL is well positioned to withstandany changes to its regulatory regime.

Y/E Sep Revenue EBITDA PBT EPS (fd) P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 105.9 27.9 15.3 39.5 11.7 5.3

2019 110.3 27.7 14.8 38.4 12.1 5.1

2020e 109.2 26.8 14.0 35.9 12.9 5.7


Sector: Investment companies



Company descriptionJohn Laing is an internationaloriginator, active investor and managerof infrastructure projects.

Price performance% 1m 3m 12mActual (3.8) (16.1) (23.0)Relative* (0.5) (17.1) (9.3)* % Relative to local indexAnalystGraeme Moyse

John Laing Group (JLG)

INVESTMENT SUMMARY

JLG's pre-close update (six months ending 30 June 2020) stated that it retains significantfinancial resources (£320m), pointed to a resilient operational performance and highlighteddivestments of £90m. However, COVID-19 resulted in delays to bids relating to publicprocurement processes and new investment commitments totalled £2m. The impact of thepandemic also led to changes to macro and power price assumptions, which are expectedto have a negative impact of c 20p/share on the NAV. JLG has also taken the decision toincrease discount rates and this is expected to have an additional negative impact of12p/share. Partially offsetting these negative factors was a favourable move in the fx rate(+12p/share) and the realisation of embedded value. Overall, JLG expects a 'single-digitdecline' in the NAV per share in H1 before deducting dividends.

INDUSTRY OUTLOOK

Population growth, urbanisation, climate change and the increasing role of data in societiescreate a favourable outlook for investment in infrastructure.


2018 397.0 331.0 296.0 63.1 4.6 N/A

2019 179.0 111.0 100.0 20.4 14.4 N/A

2020e 235.1 163.1 149.0 30.0 9.8 N/A

2021e 316.3 242.8 232.1 46.6 6.3 N/A


Sector: Technology

Price: US$5.85Market cap: US$1170mMarket LSE


Company descriptionKcell Joint Stock Company (Kcell) is amobile operator in Kazakhstan and alisted subsidiary of Kazakhtelecom(KT), a state-owned incumbent with a70% share of the market.Consolidation is delivering dramaticimprovements in the market and as asubsidiary of the dominant operator,Kcell is well positioned to benefit.Price performance% 1m 3m 12mActual (4.9) 2.6 24.5Relative* N/A N/A N/A* % Relative to local indexAnalystDan Gardiner

Kcell Joint Stock Company (KCEL)

INVESTMENT SUMMARY

Kcell delivered both revenue and profit growth in Q2, despite the disruption caused byCOVID-19. Impressive handset sales (up 62% y-o-y) offset the impact of a consumerspending slowdown and an exit from off-net bulk SMS. With Kazakhstan entering a newlockdown, the outlook remains uncertain. Yet Q2 clearly shows Kcell’s resilience and longerterm the scope for group synergies in a consolidated market should drive healthy profitgrowth.

INDUSTRY OUTLOOK

Kcell’s prospects have been transformed following KT taking a 75% stake in the business.Consolidation is helping to sustain a recovery in the Kazakhstan mobile market, newmanagement successfully introduced a strategy targeting higher margin segments andKcell’s major shareholder is now the dominant national telecom player. 2019 saw thecompany deliver its first growth in service revenues in five years. With little near-term risk ofregulatory intervention or a resurgence in aggressive competition, the current marketstructure appears sustainable.

Y/E Dec Revenue EBITDA PBT EPS (fd) P/E P/CF(KZTbn) (KZTbn) (KZTbn) (KZT) (x) (x)

2018 149.7 50.9 15.6 59.0 42.2 0.1

2019 156.7 63.5 23.3 103.0 24.2 0.1

2020e 155.1 64.8 26.2 98.0 25.4 0.1

2021e 159.8 68.4 30.3 121.0 20.6 0.1

Sector: Mining



Company descriptionKEFI Minerals is an exploration anddevelopment company focused ongold and copper deposits in the highlyprospective Arabian-Nubian Shield –principally the Tulu Kapi project inEthiopia and, to a lesser extent, theJibal Qutman project in Saudi Arabia.

Price performance% 1m 3m 12mActual 16.8 133.5 119.3Relative* 20.8 130.7 158.2* % Relative to local indexAnalystCharles Gibson

KEFI Minerals (KEFI)

INVESTMENT SUMMARY

Following completion of its 2020 plan, KEFI is currently in the process of finalising thespecifics of the remaining funding sources for Tulu Kapi. Community resettlement wasauthorised in mid-January, ahead of the start of the first phase of project development.Notwithstanding COVID-19, the Ethiopian central bank has approved the project's debtfinancing and KEFI is still targeting (unchanged) full financial closure ahead of major minesite works in October and full production in 2022.

INDUSTRY OUTLOOK

In executing its mine plan, we calculate that KEFI is capable of generating free cash flow ofc £49m pa, which we valued (prior to a small £3.7m interim financing) at 3.54p/share. In themeantime, it has also released a maiden resource of 19.3Mt (close to the top end of therange of expectations) at 0.9% Cu, 0.8% Zn, 0.6g/t Au and 10.3g/t Ag at Hawiah in SaudiArabia (34% owned), which is equivalent to a deposit of 371kt CuE at 1.92% CuE or 1.2MozAuE at 1.97g/t AuE (at prevailing metals' prices).


2018 0.0 (4.1) (4.6) (1.0) N/A N/A

2019 0.0 (2.4) (3.5) (0.6) N/A N/A

2020e 0.0 (1.0) (0.3) 0.0 N/A N/A



Sector: Technology



Company descriptionKeywords Studios is the largest andmost diverse supplier of outsourcedservices to the games industry.Through regular acquisitions, it isbuilding its scale, geographic footprintand delivery capability. Its ambition isto become the ‘go to’ supplier acrossthe industry.


Keywords Studios (KWS)

INVESTMENT SUMMARY

In its August trading update, management expected H120 revenues of c €173.5m, organicgrowth of 8% and a rise of 13% over H119 (€153.2m). Adjusted EBITDA is expected to be€30.8m (17.8% margin), a 19% increase on H119 (€25.8m), with adjusted PBT of €21.7m,18% higher than H119 (€18.4m). Given the impact of COVID-19, this represents a strongperformance, helping to demonstrate the benefits of a diversified services business, with aglobal footprint. Following its £100m placing in May, Keywords has c €200m of dry powderto convert a ‘strong and attractive’ M&A pipeline.

INDUSTRY OUTLOOK

KWS operates in the global games sector, a net beneficiary from COVID-19-relatedlockdowns. Although Keywords experienced some short-term business disruption(particularly Audio and QA), as lockdowns ease, management sees potential catch-up witha surplus of demand given next-gen console launches are round the corner. Thereafter, weexpect the industry to return to its long-term growth trends (Newzoo: 8.3% CAGR2019–2023e).


2018 250.8 43.7 37.9 43.7 55.3 45.7

2019 326.5 57.6 40.9 47.2 51.2 34.1

2020e 352.9 55.0 37.3 41.9 57.7 31.4

2021e 405.8 70.5 51.6 55.1 43.8 29.4




Company descriptionLa Doria is the leading manufacturer ofprivate-label preserved vegetables andfruit for the Italian (20% revenues) andinternational (80%) market. It enjoysleading market share positions acrossits product ranges in the UK, Italy,Germany and Australia.

Price performance% 1m 3m 12mActual (0.9) 13.8 37.1Relative* 3.7 (1.1) 44.8* % Relative to local indexAnalystSara Welford

La Doria (LD)

INVESTMENT SUMMARY

The consumer environment remains challenging, but the ongoing COVID-19 pandemic hasboosted demand as consumers eat more meals at home. The ongoing industrial plan isboosting capacity in the higher-margin products and structurally reducing costs in the longerterm. We expect consumption to remain elevated throughout FY20 as more meals areconsumed at home, though this should slowly return to more normal levels as lockdownsare eased in La Doria's major markets. The Q120 results benefitted significantly fromincreased home consumption and we expect Q2 to be similar. As ever, the upcomingseasonal campaigns will determine the raw material costs that will mainly affect FY21. H1results are due on 10 September.

INDUSTRY OUTLOOK

La Doria's strategic objectives, published as part of its three-year plan, are broadlyunchanged: the priority is to expand the higher margin and less volatile parts of thebusiness to reduce the dependence on the more unpredictable ‘red line’. The economicbackdrop remains challenging.


2018 687.9 52.8 33.1 88.2 12.4 7.1

2019 717.7 56.0 32.7 64.0 17.2 8.8

2020e 789.4 64.0 45.0 111.7 9.8 13.5

2021e 765.7 64.4 43.4 107.7 10.2 5.4


Sector: Alternative energy



Company descriptionLeclanché is a fully vertically integratedenergy storage solution provider. Itdelivers a wide range of energystorage solutions for homes, smalloffices, large industries and electricitygrids as well as hybridisation for masstransport systems such as bus fleetsand ferries.

Price performance% 1m 3m 12mActual (4.3) 20.3 (62.3)Relative* (2.2) 15.3 (63.7)* % Relative to local indexAnalystAnne Margaret Crow

Leclanché (LECN)

INVESTMENT SUMMARY

Leclanché is participating in an industrial scale energy storage project in Aigle, Switzerlandwhich aims to demonstrate the feasibility of wider integration of decentralised, intermittentenergy sources such as wind and solar into the electricity network. The project will alsoinclude a rapid recharging station for electric vehicles.

INDUSTRY OUTLOOK

Leclanché will supply an industrial size battery, 12 metres long, with a capacity of2.5MW-hours and a power output of 2MW. The experiment will focus on the power gridmanagement and monitoring system, enhancing its functionality and checking on theinteraction between the grid and the individual generation facilities.

Y/E Dec Revenue EBITDA PBT EPS (fd) P/E P/CF(CHFm) (CHFm) (CHFm) (CHFc) (x) (x)

2018 48.7 (36.9) (47.8) (61.5) N/A N/A

2019 16.3 (57.5) (71.5) (52.6) N/A N/A



Sector: Mining

Price: A$0.01Market cap: A$41mMarket ASX

Share price graph (A$)

Company descriptionVia its Karibib project in Namibia andunique IP, Lepidico is a verticallyintegrated lithium developmentbusiness that has produced bothlithium carbonate and lithium hydroxidefrom non-traditional hard rocklithium-bearing minerals using itsregistered L-Max and LOH-Maxprocesses.Price performance% 1m 3m 12mActual 14.3 23.1 (63.2)Relative* 14.3 11.1 (61.4)* % Relative to local indexAnalystCharles Gibson

Lepidico (LPD)

INVESTMENT SUMMARY

Lepidico's patented technologies produce lithium hydroxide plus a range of alkali (Group 1)metal by-products from less contested minerals such as lepidolite. The Karibib mine andconcentrator in Namibia are fully permitted and permitting of the Abu Dhabi chemicalconversion plant is in progress. Technically the project has been de-risked by a pilot plantthat confirmed process viability and product qualities. In May, LPD announced the results ofa definitive feasibility study (DFS) to produce c 4,900tpa of battery grade lithium hydroxidemonohydrate (7,800tpa equivalent) over 14 years.

INDUSTRY OUTLOOK

The DFS calculated a project NPV of US$221m (US$0.043/share) at an 8% discount rateand a 31% IRR after initial capex of US$139m. Unit costs after by-product credits wereclose to the bottom of the cost curve. According to Edison, these results imply an immediatevaluation of Lepidico of 1.8c/share (potentially ranging up to 8.2c/share). If it then raisesequity at this price, we value the shares at 4.15c, or 4.82c if it raises equity at 2.9c/share(our 'base case').

Y/E Jun Revenue EBITDA PBT EPS (fd) P/E P/CF(A$m) (A$m) (A$m) (c) (x) (x)

2018 0.2 (5.1) (7.2) 0.0 N/A N/A

2019 0.0 (4.0) (5.1) 0.0 N/A N/A

2020e 0.0 (7.0) (8.4) 0.0 N/A N/A

2021e 0.0 (3.1) (3.7) 0.0 N/A N/A


Sector: Financials



Company descriptionLSE is Europe’s leading exchangegroup in cash equities. MTS isEurope’s largest electronic governmentbond market, LCH and CC&G offerpost-trade services and FTSE Russellprovides benchmark indices andrelated data services.

Price performance% 1m 3m 12mActual 4.4 6.1 28.3Relative* 8.1 4.9 51.0* % Relative to local indexAnalystAndrew Mitchell

London Stock Exchange Group (LSE)

INVESTMENT SUMMARY

LSE announced its H120 results at the end of July. Total income was up 8% y-o-y includingrevenue for Information Services up 5%, Post Trade +9%, Capital Markets -4% (distorted byone-off IFRS 15 benefit H119) and Technology flat. CCP net treasury income increased by47%. Adjusted EBITDA was up 9% but amortisation, impairment and non-underlying itemsleft reported PBT little changed at £362m. Adjusted EPS rose 11% to 112p (basic EPS -9%to 64.6p). Reflecting a good financial and operational performance with a strong financialposition (leverage 1.4x net debt to pro forma EBITDA), the dividend was increased by 16%to 23.3p.

INDUSTRY OUTLOOK

Looking ahead, LSE reports good progress on the transformational acquisition of Refinitivwhich is now expected to complete by end 2020 or early 2021. To facilitate regulatoryclearance of the transaction, LSE has confirmed negotiations that might lead to the sale ofthe MTS bond trading platform or potentially the whole of Borsa Italiana. The group notesthat despite the challenges posed by COVID-19 it is well-placed to make progress on itsstrategic plans, including the Refinitiv transaction.


2018 2135.0 1066.0 865.0 173.8 50.9 N/A

2019 2314.0 1265.0 994.0 200.3 44.2 N/A



Sector: General retailers



Company descriptionLookers is vying to be the largest UKmotor vehicle retailer, with its new caroperations supported by the strengthof used and aftersales activities. Itoperates 155 franchises, representing32 marques from 100 sites around theUK.

Price performance% 1m 3m 12mActual 0.0 21.3 (56.8)Relative* 3.5 19.8 (49.1)* % Relative to local indexAnalystAndy Chambers

Lookers (LOOK)

INVESTMENT SUMMARY

Lookers is the second largest UK new car retailer. The uncovering of fraud compoundedtrading issues even before COVID-19 disruption. FY19 results are again delayed beyondthe end of August and the shares remain suspended until the release (suspended at 21.0pon 1 July 2020). Positive underlying FY19 PBT is expected after the initial £4m non-cashfraud charge together with any additional charges. No final dividend will be paid.Showrooms shut on 24 March but reopened in June and markets are improving. The focuson preserving cash and reducing overhead was apparent in the encouraging H120 updatewith adjusted net debt at 30 June of c £13m.

INDUSTRY OUTLOOK

Market dynamics favour larger motor dealership groups against smaller independentgroups, which still command c 60% of the franchise market. Global manufacturingovercapacity still points to OEM support. However, the sector is normally rated forrecessions economic shocks like these and survived a dramatic crisis for the sector in2008/9. Lookers' problems are evident but the financial footing looks relatively soundcompared to that period.


2017 4696.3 105.4 62.1 12.61 1.7 1.3

2018 4879.5 114.8 50.0 9.95 2.1 0.9







Company descriptionMarshall Motor is the seventh largestUK motor retailer, operating 117franchises across 24 brands. It is oneof six UK dealership groups thatrepresent each of the top five volumeand premium brands and has a strongpresence in eastern and southernEngland.

Price performance% 1m 3m 12mActual 4.1 23.2 (10.5)Relative* 7.7 21.7 5.3* % Relative to local indexAnalystAndy Chambers

Marshall Motor Holdings (MMH)

INVESTMENT SUMMARY

Marshall Motor Holdings has grown to rank seventh amongst UK automotive retailers.Strong brand coverage, excellent relationships with major car brands and a strong balancesheet support continued strategic development. The 10-week COVID-19-related shutdownof all showrooms led to an underlying £8.9m loss before tax in H120 that would have beenworse but for support from government and brand partners adding to its own mitigationefforts. The FY19 final dividend was cancelled and no interim was paid. H120 adjusted netcash of £27.4m provides a solid base from which to navigate recovery. In the near term pentup demand appears supportive, but the outlook through 2021 is very uncertain.

INDUSTRY OUTLOOK

Market dynamics favour larger motor dealership groups against smaller independentgroups, which still command c 60% of the franchise market. The large rating discount to theGeneral Retailers Index is generally a reflection of concerns about economic recession.Shocks like the current COVID-19 pandemic are more challenging, but may throw upopportunities in the future.


2018 2186.9 52.3 24.7 26.3 4.8 2.5

2019 2276.1 52.0 22.1 22.9 5.6 2.3

2020e 2022.8 34.0 (0.3) (0.4) N/A 2.9

2021e 2240.3 45.1 13.9 13.9 9.2 2.3




Company descriptionMercia Asset Management is aregionally focused specialist assetmanager. Its stated intent is to becomethe leading regional provider ofsupportive balance sheet, venture,private equity and debt capital intransaction sizes typically below £10m.

Price performance% 1m 3m 12mActual 10.3 (3.2) (28.6)Relative* 14.1 (4.3) (15.9)* % Relative to local indexAnalystRichard Williamson

Mercia Asset Management (MERC)

INVESTMENT SUMMARY

Management continues to deliver on its three-year strategy. In FY20 AUM climbed 58% to£800m, while FUM rose 73% to £658m. Following integration of the NVM VCT fundmanagement business, the company is operationally profitable, with annual revenuesexceeding operating costs in FY20. Net assets rose 12% to £141.5m – NAV of 32.1p pershare. The group remains well-placed with £30m of unrestricted balance sheet cash and£320m of group cash. Mercia’s shares continue to trade at a material discount to NAV,before considering the embedded value of the third-party fund management business (c4.5p at 3% of FUM).

INDUSTRY OUTLOOK

Mercia's management has set out a clear vision for the company, with the acquisition ofNVM’s VCT business accelerating Mercia's transition towards becoming a regionallyfocused specialist asset manager, managing fee-paying third-party funds and reducing itsreliance on its own balance sheet. Investors have been seeing real value in the wideneddiscounts to NAV in the sector as COVID-19 fears abate.


2019 10.7 (1.4) 3.0 1.00 21.5 N/A

2020 12.7 0.2 (15.5) (4.55) N/A N/A




Sector: Consumer support services

Price: €1.82Market cap: €63mMarket Milan Stock Exchange


Company descriptionMondo TV is a global media groupfocused on the production, acquisitionand exploitation of animated children’stelevision series. It owns the rights to>1,600 TV episodes and films, which itdistributes across 75 markets.

Price performance% 1m 3m 12mActual (5.6) (0.3) 68.5Relative* (1.2) (13.4) 78.0* % Relative to local indexAnalystFiona Orford-Williams

Mondo TV (MTVI)

INVESTMENT SUMMARY

Mondo’s H1 indicated results show production value in line with H119, with a slight uplift inEBITDA and larger gains in net profit achieved through lower operating costs. Prospects arebuoyed by the Toon2Tango relationship, new products and reinvigoration of classicproperties. Mondo has struck important multi-year revenue-share deals in H1, includingthose with Genius Brands and Huawei. Its content is also to be bundled onto Samsungdevices in Italy on an ad-revenue share agreement. Mondo is investing in an enhancedCanary Islands studio for 3D CGI production (under a favourable tax regime for animationcompanies), reducing dependence on third parties and giving greater quality control, at anupfront capital cost of €300k.

INDUSTRY OUTLOOK

Global appetite for children’s TV content remains good - if anything strengthened by theimpact of COVID-19. With additional launches such as Disney+, the appetite for qualitycontent remains high. Children’s content is valued to attract household subscriptions -particularly valued when schools are shut. Licensing and merchandising markets are likelyto be more difficult with trade events postponed, household spending under pressure andlower advertising budgets.


2018 18.9 11.2 (30.1) (56.3) N/A 3.5

2019 23.1 16.4 6.2 11.3 16.1 12.5

2020e 28.6 20.0 8.6 14.3 12.7 4.0

2021e 32.0 23.2 9.7 15.6 11.7 3.6




Company descriptionMytilineos operates three mainbusinesses: metallurgy, power & gasand EPC and infrastructure. It operatesin 29 countries across Europe, theMiddle East and Africa and has 2,700employees.

Price performance% 1m 3m 12mActual 3.2 11.1 (22.7)Relative* 4.0 6.8 1.7* % Relative to local indexAnalystGraeme Moyse

Mytilineos (MYTI)

INVESTMENT SUMMARY

Q120 EBITDA fell by 12.4% (vs Q119, the strongest quarter in 2019), to €80.6m (however itrose 23.7% vs Q419). The standout performance was power & gas, which increased profits(vs Q119) thanks to an expansion of the supply and the renewable businesses and anincrease in spark spreads (+55%). FY20 will be challenging, but the current share buyoperation underlines management's confidence in the business and the emphasis on costcontrol, the sourcing of competitively priced gas (recent agreement with Gazprom) and thegrowing renewable business should help mitigate the impact of COVID-19. Beyond FY20,the further growth of the renewable and supply businesses, additional cost reductions andthe commissioning of a new CCGT plant (Q421) should provide a boost to profits.

INDUSTRY OUTLOOK

Mytilineos possesses a portfolio of assets that enjoy low costs. CCGTs benefit from accessto cheap natural gas and low production costs for both alumina/aluminium allow themetallurgy business to be strongly cash flow generative.


2018 1527.0 204.0 167.0 101.0 7.7 6.9

2019 2256.0 219.0 180.0 103.0 7.6 4.6

2020e 2124.0 192.0 161.0 93.0 8.4 6.7

2021e 2644.0 247.0 204.0 119.0 6.5 5.5


Sector: Technology



Company descriptionNanoco is a global leader in thedevelopment and manufacture ofcadmium-free quantum dots and othernanomaterials. Its platform includes c750 patents and specialistmanufacturing lines. Focusapplications are advanced electronics,displays, lighting and bio-imaging.

Price performance% 1m 3m 12mActual (6.2) 57.6 38.9Relative* (3.0) 55.7 63.6* % Relative to local indexAnalystAnne Margaret Crow

Nanoco (NANO1)

INVESTMENT SUMMARY

In May Nanoco announced it had taken actions to extend the cash runway from July thisyear to calendar year Q221. It has recently raised £3.4m at 17.5p/share, extending the cashrunway to at least the end of calendar year 2022. While our estimates remain under review,we hope to see fresh guidance from management in the new financial year.

INDUSTRY OUTLOOK

Securing third-party funding for the patent infringement lawsuit means the proceeds fromthe fundraising can be focused on development work for customers and companyoperations. In our May update we calculated that the lost revenue in the US attributable tothe patent infringement to date could be US$200–250m. Any damages awarded could alsomake an additional allowance for sales in other territories and for future sales of SamsungTVs using quantum dots. With a fully funded lawsuit and the underlying business operationsnow funded to the end of calendar year 2022, the risk of a reduction in value throughdelaying tactics in the litigation is now significantly reduced.


2018 3.3 (6.2) (7.1) (2.63) N/A N/A

2019 7.1 (3.8) (5.0) (1.75) N/A N/A






Company descriptionNorcros is a leading supplier ofshowers, enclosures and trays, tiles,taps and related fittings andaccessories for bathrooms, kitchens,washrooms and other commercialenvironments. It has operations in theUK and South Africa, with some exportactivity from both countries.

Price performance% 1m 3m 12mActual (6.7) 8.1 (32.2)Relative* (3.4) 6.8 (20.2)* % Relative to local indexAnalystToby Thorrington

Norcros (NXR)

INVESTMENT SUMMARY

Norcros's AGM comments quantified the initial impact COVID-19 has had on FY21 tradingand the subsequent recovery trajectory to date. UK sales ytd were down 27% vs the prioryear’s 16-week equivalent, including a 50%+ dip in the first nine weeks followed by a sharprebound in June; July was tracking ahead y-o-y. Sales channels with robust onlinecustomer-facing platforms have typically traded better than traditional retail and merchantoutlets. In local currency, South Africa saw a sharper initial lockdown-related dip (c 70%down) but has recovered well in the last two months. A small profit was generated in Q1trading overall and net debt has reduced slightly since March to c £35m at the end of June.

INDUSTRY OUTLOOK

New starts slowed at the end of 2019 although the UK residential new-build sector hasgenerally performed well and there is impetus for this to continue. RMI spending has notprogressed at the same rate. The South African economy has faced a number ofchallenges; wider distribution of wealth and an emerging middle class should benefitconsumer spending over time. Management's new (pre-COVID-19) 2023 financial targetsare to attain £600m revenue with a balanced UK/overseas split and to sustain a ROCE of15%+.


2019 331.0 42.2 30.9 29.6 4.9 3.3

2020 342.0 38.8 27.1 26.1 5.6 3.4




Sector: Financials



Company descriptionNumis Corporation is one of the UK'sleading independent investmentbanking groups, offering a full range ofresearch, execution, equity capitalmarkets, corporate broking andadvisory services. It employs c 280staff in offices in London and NewYork.

Price performance% 1m 3m 12mActual (2.1) 1.9 30.8Relative* 1.3 0.6 54.0* % Relative to local indexAnalystAndrew Mitchell

Numis Corporation (NUM)

INVESTMENT SUMMARY

In its update for the 3 months to end June (Q320) Numis reported that revenues werematerially ahead of both Q120 and Q220. Within Investment Banking the driver has been anincreased number of capital markets transactions as companies strengthen balance sheetswith more than 100 transactions completed in the period. On the Equities side of thebusiness trading volumes subsided from the peak seen with the onset of Covid-19 but thiswas more than offset by a continuation of the strong trading gains from the first half.

INDUSTRY OUTLOOK

Numis has adapted well to the rapid change in operating requirements, substantial marketvolatility and changes in the nature of its transaction pipeline, which remains strong. Subjectto the market background in the final quarter, Numis looks for second half revenues andprofits to be ahead of the first half. Following the update we put in place an FY20 estimateassuming revenues of £135m, noting the outcome could be higher if the pace oftransactions is maintained. The outlook beyond this is less clear but the strength of thefranchise and balance sheet is encouraging for the longer term.

Y/E Sep Revenue EBITDA PBT EPS P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 136.0 30.9 31.6 23.0 13.0 N/A

2019 111.6 15.3 12.4 8.1 37.0 N/A

2020e 135.0 29.4 24.6 17.5 17.1 N/A





Company descriptionOcean Wilsons Holdings is aninvestment company based inBermuda. It has a controllingshareholding in Wilson Sons, a quotedmaritime services company in Brazil,and holds a portfolio of internationalinvestments.

Price performance% 1m 3m 12mActual (1.5) (1.5) (29.1)Relative* 2.0 (2.7) (16.5)* % Relative to local indexAnalystPedro Fonseca

Ocean Wilsons Holdings (OCN)

INVESTMENT SUMMARY

Ocean Wilsons Holdings (OCN) reported FY19 earnings of $46.9m (our forecast $37.9m),up 252% y-o-y, driven by strong investment returns from its investment portfolio. WilsonsSons’ (WSON) EBITDA fell by 5% y-o-y and was in line with expectations. FY19 was not aneasy year for WSON due to a sluggish Brazilian economy, competition and a slow Brazilianoil and gas sector. WSON still delivered a ROE of 6%. The firming up of prices in theunder-pressure towage business was a key positive. The current 45% discount to alook-through valuation is above its long-term average in the mid-20s.

INDUSTRY OUTLOOK

The current oil price slump means a postponement of the recovery of Brazil’s deepwaterpre-salt industry to 2021. This will affect businesses such as the offshore supportcompanies as well as towage. The coronavirus crisis initially hurt China and Asian shipping,but the impact broadened as it became a pandemic. We have suspended our FY20 andFY21 forecasts until we get more clarity on the impact of COVID-19. OCN cut its finaldividend (paid in June 2020) from $0.70 to $0.30.


2018 460.2 156.0 60.2 37.6 23.3 2.0

2019 406.1 147.9 82.5 132.6 6.6 2.0







Company descriptionOPAP was founded in 1958 as theGreek national lottery and it is theexclusive licensed operator of allnumerical lotteries, sports betting andhorse racing. OPAP listed in 2001 andwas fully privatised in 2013. SazkaGroup has a 41.7% stake andsignificant board representation.

Price performance% 1m 3m 12mActual (9.5) (2.4) (18.1)Relative* (8.8) (6.2) 7.6* % Relative to local indexAnalystRussell Pointon

OPAP (OPAP)

INVESTMENT SUMMARY

OPAP is Europe’s only listed gaming operator with 100% pre-paid exclusive retail licences,providing substantial barriers to entry. Margin expansion and high cash flow have beenachieved through product enhancements and successful cost controls, while maintainingstrong CSR credentials. We retained our existing underlying forecasts after Q120 results,with Q220 likely to be the period most affected by COVID-19. Despite the weaker outlookfor retail spending, OPAP has a robust balance sheet and net debt/EBITDA should fallbelow 1.0x in FY21. The announcement of a dividend for FY19 was a positive surprisefollowing the special dividend paid in February 2020.

INDUSTRY OUTLOOK

The Hellenic Gaming Commission estimates that the total legal Greek gaming marketamounted to €2.2bn gross gaming revenue (GGR) in 2019, of which OPAP gamescomprised €1.36bn GGR. OPAP's other activities (lottery games and horse racing betting)took its total Greek GGR to €1.54bn. Revenue from land-based casinos comprised anestimated €247m and total legal online amounted to €437m for the overall market.Regulation of the online gaming market is currently underway.


2018 1547.0 353.6 235.0 51.90 15.0 N/A

2019 1619.9 411.2 278.0 64.92 12.0 N/A

2020e 1367.1 302.2 141.0 31.01 25.1 N/A

2021e 1748.1 439.1 269.2 56.47 13.8 N/A

Sector: Technology



Company descriptionUK-based Osirium Technologiesdesigns and suppliessubscription-based cybersecuritysoftware. Its PAM platform includesprivileged access, task, session andbehaviour management. It recentlylaunched a secure process automationsolution (PPA) and a privilegedendpoint management (PEM) solution.Price performance% 1m 3m 12mActual 26.8 4.0 (54.0)Relative* 31.2 2.7 (45.8)* % Relative to local indexAnalystKatherine Thompson

Osirium Technologies (OSI)

INVESTMENT SUMMARY

Osirium’s FY19 results were broadly in line with forecasts. The company saw strongbookings growth in FY19 from a combination of new customers, renewals and expansion ofexisting contracts. The product suite was expanded to include privileged processautomation and privileged endpoint management solutions. While COVID-19 disruption hasnot yet had a noticeable impact on demand, we are taking a more cautious approach to ourbookings and revenue forecasts for FY20 before factoring in a reacceleration of growth inFY21.

INDUSTRY OUTLOOK

The market for privileged account management (PAM) software was worth US$690m in2015 and is forecast to grow to US$2.27bn by 2020 (source: Gartner), with demand drivenby regulation, the shift to the cloud and adoption spreading to smaller organisations. Thecomplexity of established solutions means fewer mid-market businesses use PAM softwarethan enterprises, so this is a market ripe for development.

Y/E Oct / Dec Revenue EBITDA PBT EPS (fd) P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 1.0 (1.8) (2.7) (18.14) N/A N/A

2019 1.2 (2.2) (3.5) (19.45) N/A N/A

2020e 1.5 (2.2) (4.0) (17.35) N/A N/A

2021e 2.1 (1.8) (3.7) (16.33) N/A N/A


Sector: Financials

Price: US$30.80Market cap: US$358mMarket OTC QX


Company descriptionOTC Markets Group operates theOTCQX, OTCQB and Pink financialmarkets for over 10,000 US and globalsecurities. OTC Link LLC, a member ofFINRA, operates OTC Link ATS andOTC Link ECN, both SEC-registeredAlternative Trading Systems. Over80% of revenues are of asubscription-based recurring nature.Price performance% 1m 3m 12mActual 5.3 4.9 (6.6)Relative* 1.0 (8.9) (19.6)* % Relative to local indexAnalystAndrew Mitchell

OTC Markets Group (OTCM)

INVESTMENT SUMMARY

OTCM had a good second quarter delivering gross revenue growth of 9%, ahead of ourexpectation. This largely reflected continued high levels of transactions for the OTC Linkbusiness which reported revenue up 26% versus Q219 as equity market volatility remainedhigh. Market Data Licensing revenue increased by 13% while Corporate Services revenuewas down 2% as a result of lower numbers of OTCQB corporate clients. Operating costswere up 5% leaving PBT up by 8%. The tax rate was unexpectedly low at 12% as there wasa reversal of earlier provisions. This meant diluted EPS (of $0.36) increased by 20% . Amaintained $0.15 quarterly dividend was announced. Following the results we raised ourEPS estimates by 9% and 2% for FY20 and FY21 respectively.

INDUSTRY OUTLOOK

So far COVID-19 has not had a material impact on OTCM’s revenues but the group remainswary of the potential for its macroeconomic effects to impact results in future. Positively,corporate client signings are showing tentative signs of improved momentum, while tradingmay benefit longer term from the increased number of ECN subscribers. Over 80% ofrevenues are of a subscription-based nature. On a longer view, the group keeps its focus ondelivering better informed and more efficient markets.


2018 59.3 20.7 19.8 140.8 21.9 14.6

2019 62.8 19.4 18.0 128.4 24.0 15.6

2020e 66.9 20.2 18.6 134.2 23.0 18.2

2021e 67.2 20.0 18.4 128.2 24.0 15.9

Sector: Property



Company descriptionPalace Capital is a UK propertyinvestment company. It is notsector-specific and looks foropportunities where it can enhancelong-term income and capital valuethrough asset management andstrategic capital development inlocations outside London.

Price performance% 1m 3m 12mActual (3.0) 4.1 (32.7)Relative* 0.4 2.9 (20.7)* % Relative to local indexAnalystMartyn King

Palace Capital (PCA)

INVESTMENT SUMMARY

FY20 adjusted PBT of £8.0m was in line with expectations while COVID-19 contributed toend-year negative unrealised valuation movements and EPRA NAV per share fell to 364p.Underlying the performance was a positive property level total return of 1.1%, ahead of theMSCI UK Quarterly benchmark (-0.5%) for a third year running. With robust rent collectionto date, DPS payments have been reinstated, and the company says the Q420 DPS of 2.5pis the minimum quarterly payout that it expects during FY21. While market conditions arechallenging, PCA benefits from refurbished properties that are available to let and continuedprogress at Hudson Quarter where 25% of apartments have been pre-sold ahead of theexpected March 2021 completion.

INDUSTRY OUTLOOK



2019 18.8 12.4 8.9 17.3 10.9 N/A

2020 21.1 14.6 8.0 17.5 10.8 N/A

2021e 16.8 9.9 6.6 14.4 13.1 N/A



Sector: Mining



Company descriptionPan African Resources has threemajor producing precious metalsassets in South Africa: Barberton(target output 95koz Au pa), BarbertonTailings Retreatment Project (20koz)and Elikhulu (55koz), nowincorporating Evander TailingsRetreatment Project (10koz).

Price performance% 1m 3m 12mActual (6.2) 39.1 69.2Relative* (3.0) 37.4 99.2* % Relative to local indexAnalystCharles Gibson

Pan African Resources (PAF)

INVESTMENT SUMMARY

On 10 July, Pan African announced FY20 production of 179,575oz gold, which was 4.1%higher than in FY19, 2.0% higher than guidance and 2.1% higher than Edison’s forecast,despite the South African lockdown. At least as importantly, PAF announced that net debthad declined from US$123.7m in December 2019 to US$62.5m in June 2020 – a reductionof US$61.2m or 49.5% within the space of just six months. In the wake of itsannouncement, we valued PAF at US$0.4214/share plus the value of c 19.2m undergroundWitwatersrand oz (estimated at 0.22–5.24c/share). At the same time, its historical averageprice to normalised EPS ratio of 9.6x implies a share price as high as 48.7p in FY21.

INDUSTRY OUTLOOK

Near-term opportunities for PAF include the Fairview sub-vertical shaft (adding 7–10koz toproduction pa), the Royal Sheba project (c 30koz pa), Egoli (updated ZAR2.01bn NPV and50.1% IRR), the extraction of the Prince Consort shaft pillar and the Evander 8 Shaft pillarproject, which achieved steady-state in June.

Y/E Jun Revenue EBITDA PBT EPS P/E P/CF(US$m) (US$m) (US$m) (c) (x) (x)

2018 145.8 38.1 29.3 1.31 22.5 99.9

2019 218.8 65.5 37.1 1.64 18.0 9.5

2020e 274.2 105.3 68.4 2.98 9.9 4.5

2021e 325.0 161.6 137.8 6.47 4.6 4.9


Price: €11.20Market cap: €51mMarket Xetra


Company descriptionparagon designs and suppliesautomotive electronics and solutions,selling directly to OEMs, includingsensors, interior, digital assistance andbody kinematics. Production facilitiesare in Germany, the US and China. Itretains 60% of Voltabox, whichsupplies battery power systems.

Price performance% 1m 3m 12mActual 5.7 9.6 (19.8)Relative* 9.0 (5.0) (25.8)* % Relative to local indexAnalystAndy Chambers

paragon (PGN)

INVESTMENT SUMMARY

The market disruptions developed rapidly due to COVID-19 and management focused onmitigating its impact. paragon's sale process for all or part of its 60% stake in Voltabox isexpected to conclude soon. FY19 results for the Automotive division being retained showeda 16% rise in sales to record levels of €139.5m with a €3.3m adjusted EBIT loss. In Q120on sales down just 3% at €29.5m as the closures and mitigation measures started, paragonAutomotive reported an EBIT loss of €2.4m. Guidance for Automotive for FY20 is sales of€105–115m with an EBITDA margin of 8–12%.

INDUSTRY OUTLOOK

We believe paragon's identification of, and investment in, solutions to address megatrendsin global automotive and electromobility markets is understood by the capital markets. It isgrowing substantially faster than its markets due to innovative products that are drivingchanges in customer perceptions, creating new growth engines for the group. These shouldreassert themselves when the COVID-19 pandemic wanes.


2017 124.8 18.3 5.9 (8.52) N/A 63.0

2018 187.4 30.3 14.8 144.58 7.7 N/A

2019e 200.1 13.6 (5.3) (43.14) N/A N/A



Sector: Financials



Company descriptionPicton Property Income is an internallymanaged UK REIT that invests in adiversified portfolio of commercialproperty across the UK. It is totalreturn driven with a strong incomefocus and aims to generate attractivereturns through proactive managementof the portfolio.


Picton Property Income (PCTN)

INVESTMENT SUMMARY

At the reduced quarterly dividend rate of 0.625p per share, Q121 dividends were were118% covered by EPRA earnings while on a like-for-like basis the portfolio valuationdecreased by a relatively modest 0.8% (the MSCI Monthly Digest shows a negative 3.5%capital return over the same period), benefiting from an overweight stance in the industrialand office sectors (more than 80% of the total). Combined with modest c 22% gearing theNAV performance was robust at 92.2p. Rent collection continues to be encouraging and theeasing of the lockdown should support a further improvement in H221. We have tentativelyreinstated forecasts including an increase in the quarterly DPS run-rate in H221 to 0.75p perquarter in Q321 and Q421.

INDUSTRY OUTLOOK



2019 38.3 32.5 31.4 4.25 16.7 11.1

2020 33.6 28.1 22.4 3.66 19.4 18.2

2021e 30.5 25.4 (15.2) 3.22 22.0 16.8

2022e 33.4 27.8 19.9 3.65 19.5 14.9


Price: €52.00Market cap: €1172mMarket Swiss Stock Exchange


Company descriptionPIERER Mobility (previously KTMIndustries) is a leading manufacturer ofpowered two wheelers, focusing onpremium motorcycles and two-wheeledelectric vehicles. With its well-knownbrands – KTM, HUSQVARNA andGASGAS – it is the largest sportsmotorcycle manufacturer in Europe.

Price performance% 1m 3m 12mActual (3.0) 30.2 (3.5)Relative* (0.8) 24.7 (7.0)* % Relative to local indexAnalystAndy Chambers

PIERER Mobility (PMAG)

INVESTMENT SUMMARY

PIERER Mobility is a leading manufacturer of powered two wheelers (PTWs) focused onpremium markets through the KTM, HUSQVARNA and GASGAS motorcycle brands. It hasadded e-bikes as a new organic growth stream as urban e-mobility markets continue todevelop. Disruption from COVID-19 led to pre-emptive production stoppages in March, butPIERER returned to full production in May. Strong demand for motorcycles and e-bikes aslockdowns were lifted in various markets was confirmed in the recent period closing tradingupdate. H120 results are due at the end of August.

INDUSTRY OUTLOOK

PIERER Mobility’s historic target PTW market has been for motorcycles greater than 120ccthat retail for over €2,500. The segment represents 6m units or around 11% of the globalPTW market. PIERER had a market share of around 9.5% of this market in 2019 with arecord 280.9k registrations, up 10% on 2018; 66.2k were through the Indian jv partner,Bajaj. The market for e-bikes and scooters has grown strongly in Europe, supported bystructural long-term trends especially cleaner transport solutions.


2018 1462.0 211.0 112.0 182.0 28.6 13.8

2019 1520.0 241.0 118.0 242.0 21.5 4.5

2020e 1441.0 200.0 57.0 101.0 51.5 6.4

2021e 1710.0 272.0 121.0 211.0 24.6 5.9


Sector: Technology



Company descriptionPiteco is Italy’s leading company in thedesign, development andimplementation of software fortreasury, finance and financial planningmanagement.

Price performance% 1m 3m 12mActual 25.5 34.4 57.7Relative* 31.3 16.8 66.6* % Relative to local indexAnalystSara Welford

Piteco (PITE)

INVESTMENT SUMMARY

Piteco Spa generated solid organic revenue and EBITDA growth in FY19 of 7% and 9%respectively and continued to benefit strongly from recent acquisitions. At group level,revenues grew by 19% during FY19 and EBITDA was up 24%. FY20 started very well,although the COVID-19 pandemic is likely to affect growth. It is still early days and Piteco isnot directly affected. Indeed, its products can help steer financial and treasurydecision-making at times of crisis. A potential global recession would be likely to cause asoftening in the demand for Piteco’s products. The stock continues to trade at a discount toItalian and international software peers. H1 results are due on 29 September.

INDUSTRY OUTLOOK

Piteco is the leading player in the Italian treasury management systems (TMS) market. TMSare software solutions used by corporate treasuries and finance departments to managetransactions and support decision-making. The software and ICT solutions market in Italy isvalued at €6.3bn (Assinform 2016). A small slice of this (Piteco suggests c 5%) representsthe treasury and financial planning software market. IDC forecasts the worldwide treasuryand risk management applications market to grow by 4.9% to reach $2.7bn in 2022.


2018 20.2 8.3 6.1 31.5 26.3 20.6

2019 24.0 10.2 6.6 31.6 26.2 20.7

2020e 25.5 10.5 7.9 36.1 22.9 14.5

2021e 27.5 11.7 9.3 40.2 20.6 13.3




Company descriptionPolypipe is a leading supplier of largelyplastic building products and systems.Operations in the UK (c 90% ofrevenue) address a broad range ofsectors including residential,commercial and civil building demandand a number of subsectors withinthem.

Price performance% 1m 3m 12mActual (0.9) (0.7) 11.6Relative* 2.5 (1.9) 31.4* % Relative to local indexAnalystToby Thorrington

Polypipe (PLP)

INVESTMENT SUMMARY

Polypipe’s end H120 trading update reconfirmed the sharp reduction seen in activity levelsaround the beginning of Q2 and quantified the subsequent recovery. For H120 as a whole,revenues were down 24% y-o-y; this included a June run rate of -30% compared to -66% inApril and all main factories are operational again. The company’s broad sector exposure inCommercial & Infrastructure has been beneficial, while the Residential performance hasbeen more affected. Prospective headcount reductions will partly reflect current run ratesand uncertainties regarding the shape of further recovery as reflected in recent industryprojections.

INDUSTRY OUTLOOK

The Construction Products Association’s Spring outlook update was unsurprisingly morebearish than previously and included a number of different scenarios all of which involvedsharp contractions in total construction activity in 2020 and material rebounds in 2021.


2018 433.2 90.6 67.1 28.1 15.1 9.4

2019 447.6 99.1 70.6 29.1 14.6 9.5




Sector: Property



Company descriptionPrimary Health Properties is along-term investor in primaryhealthcare property in the UK and theRepublic of Ireland. Assets are mainlylong-let to GPs and the NHS or theHSE, organisations backed by the UKand Irish governments, respectively.

Price performance% 1m 3m 12mActual 2.1 (2.9) 14.7Relative* 5.7 (4.1) 35.0* % Relative to local indexAnalystMartyn King

Primary Health Properties (PHP)

INVESTMENT SUMMARY

Portfolio and rent growth, a full period contribution from MedicX, and operational andfinancial efficiencies drove a strong H120. Adjusted EPA earnings increased 29% y-o-y andadjusted EPRA EPS of 3.0p was up 7.1%. With continuing strong rent collection, fullycovered aggregate DPS of 2.95p (+5.4%) was paid in H120 and a Q320 DPS of 1.475pdeclared. Adjusted EPRA NAV per share increased by 1.1% to 109.1p and including DPSpaid the H120 total return was 3.8%. Including the proceeds of the £140m (gross) equityplacing in early July the pro forma H120 undrawn loan facilities and cash on deposit(£201m) totalled £403.6m, providing significant resources to pursue a strong pipeline ofacquisition and asset management opportunities.

INDUSTRY OUTLOOK

The sector enjoys strong income visibility, with long leases and upwards-only rents, 90%backed directly or indirectly by government bodies, with little exposure to the economiccycle, or fluctuations in occupancy. Healthcare planning, with broad political support,already suggests strong underlying demand for modern healthcare properties in both theUK and the Republic of Ireland while the pandemic highlights existing pressures and maywell lead to increased healthcare spending over the longer term.


2018 76.4 66.5 36.8 5.2 29.5 15.9

2019 115.7 103.4 59.7 5.4 28.4 17.8

2020e 131.7 118.6 73.2 5.7 26.9 16.3

2021e 138.6 124.8 77.5 5.8 26.4 16.4

Sector: Financials

Price: €5.85Market cap: €345mMarket FRA


Company descriptionProCredit Holding is a Germany-basedgroup operating regional banks acrossSoutheastern and Eastern Europe, aswell as in Ecuador. The banks focuson Small and mid-size enterprises(SMEs) and private middle-income andhigh earners. At end-June 2020, thegroup’s total assets stood at €6.8bn.

Price performance% 1m 3m 12mActual (7.9) 17.0 (14.6)Relative* (4.9) 1.4 (21.0)* % Relative to local indexAnalystMilosz Papst

ProCredit (PCZ)

INVESTMENT SUMMARY

ProCredit (PCB) has extensive experience in supporting SMEs in emerging economies(coupled with a strong ESG profile), with a focus on Southeastern (SEE) and EasternEurope (EE) and banking operations in Ecuador. It has recently streamlined its business,involving a digital direct bank strategy for private clients and a reduced branch network andheadcount. While lately PCB’s return on equity has been below peers, we underline itsrelative stability throughout the cycle and believe that its mid-term ROE and CIR targets of10% and below 60%, respectively, are achievable (close to our FY24 forecasts).

INDUSTRY OUTLOOK

While the SEE and EE region has benefited from secular GDP growth of 3–5% pa in the lastfive years, COVID-19 is expected to trigger a recession in 2020, as IMF forecasts a declineof 5.8% in Emerging and Developing Europe, with a rebound of c 4.3% forecast in 2021.PCB’s in-depth, impact-oriented relationships with SME borrowers (94% of loan book atend-Q220), prudent credit risk management and solid capital base (CET-1 ratio of 14.1% atend-Q220) should help reduce the impact of macro headwinds. Longer term, PCB’sbusiness should be assisted by the low banking sector penetration in the region (with a loanbook to GDP of 40–45% on average vs over 70% in Western Europe).


2018 245.4 N/A 77.5 90.0 6.5 N/A

2019 252.6 N/A 76.9 89.0 6.6 N/A

2020e 205.8 N/A 38.5 53.5 10.9 N/A

2021e 222.1 N/A 50.0 67.5 8.7 N/A



Price: US$7.25Market cap: US$315mMarket NASDAQ


Company descriptionRADA Electronic Industries develops,manufactures, markets and sellsdefence electronics to various armedforces and companies worldwide. Itoffers land-based tactical radars fordefence forces, critical infrastructureprotection solutions and militaryavionics systems.

Price performance% 1m 3m 12mActual 25.4 42.7 49.8Relative* 20.3 23.9 28.9* % Relative to local indexAnalystWill Manuel

RADA Electronic Industries (RADA)

INVESTMENT SUMMARY

As the threats from drones, unmanned aircrafts and Anti-Tank Guided Missiles (ATGMs)proliferate, so does the need to defend against them. Israel’s RADA Electronic Industries(RADA) was the first mover in mini tactical radars that form part of defense systems trackingand neutralizing incoming threats. With combat experience, a successful track record and apresence in the US, RADA is well placed to transition from supplying the US and othermilitaries under urgent operational need programs, to longer-term and more sizeableproduction programs. RADA’s PEG ratio of 0.88x is at a 44% discount to peers despitesignificantly higher growth expectations. In our view a PEG of 1.2x or $10 per share wouldbetter reflect the 32.1% CAGR in EPS from 2020–24e.

INDUSTRY OUTLOOK

The combination of a less hawkish administration in the US following the November electionand COVID-19-related pressures could pressure defence spending in the US. RADA’smarkets are deemed priorities and as such are likely to remain broadly unaffected. Indeed, ifdefence budgets shrink there could be more of a focus on modernisation programs.


2018 28.0 1.8 1.1 1.08 671.3 N/A

2019 44.3 0.3 (1.1) (1.08) N/A N/A

2020e 71.6 7.4 5.4 5.40 134.3 N/A

2021e 107.4 13.4 11.2 11.16 65.0 38.0

Sector: Property



Company descriptionRaven Property Group (formerlyRaven Russia) invests mainly in ClassA warehouses in Russia. It also ownsthree office buildings in St Petersburg,a third-party logistics company inRussia and a residential developmentcompany in the UK.

Price performance% 1m 3m 12mActual (6.4) (10.3) (19.5)Relative* (3.2) (11.4) (5.3)* % Relative to local indexAnalystMartyn King

Raven Property Group (RAV)

INVESTMENT SUMMARY

Shareholders have approved the capital restructuring, re-designating convertible preferenceshares into new ordinary and preference shares, that will take effect at the end ofSeptember. In FY19 the company benefitted from a growing economy and favourablesupply-demand conditions in the warehouse market, and H120 results are expected soon.In July the company reported that despite the lockdown introduced to slow the spread ofCOVID-19, its warehouse properties had continued to operate and that occupancy hadimproved to 93% (end-FY19: 90%). Rent collection had also been strong, averaging 96%each month since March, with 3% deferred by agreement and 1% outstanding. The propertyvaluation at 31 May was not materially different to end-2019 in rouble terms.

INDUSTRY OUTLOOK

It is too early to assess the impact of the COVID-19 pandemic and subsequent lockdown.Entering the crisis, Russian economic growth was continuing, with inflation moderating.Interest rates continue to fall. Agents indicate a continuing healthy positive demand-supplybalance in the warehouse sector, with speculative development being deferred.


2018 118.0 N/A 26.0 3.1 9.8 2.0

2019 127.0 N/A 54.0 6.4 4.8 1.8




Sector: Financials



Company descriptionRecord is a specialist independentcurrency manager that provides anumber of products and services,including passive and dynamichedging, and a range of currency forreturn strategies, including funds andcustomised segregated accounts.

Price performance% 1m 3m 12mActual (3.5) (7.8) 10.3Relative* (0.2) (8.9) 29.8* % Relative to local indexAnalystAndrew Mitchell

Record (REC)

INVESTMENT SUMMARY

At the end of June (Q121) Record’s AUME stood at $63.3bn, an increase of 8% in bothdollar and sterling terms compared with the March year-end levels. Net flows were slightlynegative($0.5bn). FX and mandate volatility targeting moves added $1.6bn while marketmoves were the main positive driver at $3.6bn. Fee rates were flat in the quarter and noperformance fees were crystallised. Downward pressure on passive hedging remains afeature and, from the start of Q221, one large passive hedging client has switched from amanagement fee only to a lower management fee with the potential for performance fees.Taking all these factors into account our estimates were unchanged.

INDUSTRY OUTLOOK

Record is progressing with its initiatives to focus on growth. It has launched a newmulti-asset product based on its dynamic macro strategy run by John Floyd and is alsoworking on an Impact/ESG bond offering though the timing of this launch has yet to bedetermined. Work is also underway on IT enhancement projects as highlighted at the timeof the full year results. A new, experienced, third party distributor has been appointed in theUS (KPG Capital Partners) to extend the reach of Record’s marketing efforts in this market.The Q221 trading update is due 19 October.


2019 25.0 8.2 8.0 3.25 10.6 9.7

2020 25.6 8.5 7.7 3.26 10.6 10.4

2021e 23.7 6.5 5.7 2.37 14.5 10.8

2022e 24.0 6.4 5.6 2.33 14.8 12.7

Sector: Property



Company descriptionRegional REIT owns a highlydiversified commercial propertyportfolio of predominantly offices andlight industrial units located in theregional centres of the UK. It is activelymanaged and targets a totalshareholder return of at least 10% witha strong focus on income.


Regional REIT (RGL)

INVESTMENT SUMMARY

Ahead of the release of interim results for the six months to 30 June 2020 (H120) on 17September, a Q220 DPS of 1.5p has been declared, a level that the board aims to at leastmaintain for the rest of the year and which it expects to be fully covered by EPRA earnings.The Q220 DPS is lower than Q120 (1.9p) despite continuing robust collection of rents fromthe group’s predominantly regional office portfolio, with the board deciding to hold morecash than normal due to the challenging market environment. RGL benefits from a highlydiversified portfolio and secure borrowings with no near-term maturities and good liquidity.LTV at 30 June was 39.7%, slightly below the stated target of 40%.

INDUSTRY OUTLOOK



2018 54.4 36.8 67.9 7.5 10.2 N/A

2019 55.0 44.1 26.3 7.8 9.8 N/A




Sector: Oil & gas

Price: ZAR12.97Market cap: ZAR1523mMarket JSE

Share price graph (ZAR)

Company descriptionRenergen is an emerging producer ofhelium and liquefied natural gas(LNG), with existing production andsales of compressed natural gas.

Price performance% 1m 3m 12mActual (12.4) (13.5) 52.6Relative* (11.6) (21.2) 49.0* % Relative to local indexAnalystCarlos Gomes

Renergen (RENJ)

INVESTMENT SUMMARY

Renergen is progressing Phase I of its Virginia LNG/helium project, major equipment ordershave been placed and first liquid production is expected to start in H221, reflecting someminor delays due to COVID-19 restrictions in South Africa. The company has commencedthe drilling of its production wells for Phase I with the first well spud in early August. Thesewells will be inclined, which is a different approach to previous wells Renergen has drilled,and as such the current well is an important milestone. In July, Renergen announced thepreliminary results of a study to assess helium prospective resources which have beenupdated to 106bcf. This is an exceptional volume given global helium demand is c 6bcf/aand we are awaiting more details of the study when the full resource report is madeavailable to the market. Our risked NAV currently stands at ZAR23.9/share but this couldchange once we learn more about the current well and the full resource assessment.

INDUSTRY OUTLOOK

Renergen is targeting the heavy-duty LNG truck market which is a rapidly evolving marketglobally. Meanwhile helium prices are likely to remain buoyant following the shutdown of theUS strategic reserve in 2018.

Y/E Feb Revenue EBITDA PBT EPS (fd) P/E P/CF(ZARm) (ZARm) (ZARm) (c) (x) (x)

2018 2.9 (26.9) (27.1) (0.3) N/A N/A

2019 3.0 (43.2) (46.9) (0.5) N/A N/A

2020e 4.8 (50.6) (49.9) (0.5) N/A N/A

2021e 8.6 (30.4) (30.9) (0.3) N/A N/A




Company descriptionRenewi is a waste-to-product companywith operations primarily in theNetherlands, Belgium and the UK. Itsactivities span the collection,processing and resale of industrial,hazardous and municipal waste.

Price performance% 1m 3m 12mActual (11.7) 21.6 (26.6)Relative* (8.7) 20.1 (13.5)* % Relative to local indexAnalystToby Thorrington

Renewi (RWI)

INVESTMENT SUMMARY

The developing COVID-19 pandemic had a small effect on reported profitability at the end ofFY20 and the Q1 update provided more detail on how this has played out in FY21 to date.Management assesses the EBIT impact to have been c €12m thus far, which is below theexpected €20m previously flagged. (The high-level divisional updates are similar to thosestated in May; implicitly volumes in Commercial Netherlands in particular have probablybeen stronger than expected.) Moreover, net debt adjusted for timing benefits fromgovernment support schemes was effectively unchanged from the year end – indicating aneutral underlying net cash flow performance.

INDUSTRY OUTLOOK

The Dutch waste market, accounting for the largest single business within Renewi, wasgrowing as the economy recovered from cyclical lows ahead of the coronavirus outbreak.

Y/E Mar Revenue EBITDA PBT EPS (fd) P/E P/CF(€m) (€m) (€m) (c) (x) (x)

2019 1780.7 179.7 63.1 6.0 4.2 2.3

2020 1775.4 167.1 54.3 5.4 4.7 1.2

2021e 1532.9 122.5 6.6 0.6 42.3 1.7

2022e 1691.3 159.1 42.2 3.9 6.5 1.3


Sector: Technology



Company descriptionRiber designs and produces molecularbeam epitaxy (MBE) systems andevaporator sources and cells for thesemiconductor industry. Thisequipment is essential for themanufacturing of compoundsemiconductor materials that are usedin numerous high-growth applications.

Price performance% 1m 3m 12mActual 0.6 21.9 30.0Relative* 4.3 10.4 44.0* % Relative to local indexAnalystAnne Margaret Crow

Riber (RIB)

INVESTMENT SUMMARY

Riber’s order book at the end of June shows that potential customers are taking their time toplace orders. While management is confident that customers will place orders for MBEsystems during the second half, it is not clear that these will close in time for delivery duringFY20. We have therefore cut our FY20 revenue estimate by 16% to €29.6m and our PBTestimate by 88% to €0.3m. We have left our FY21 estimates unchanged.

INDUSTRY OUTLOOK

Riber’s manufacturing facility has remained operational throughout the COVID-19pandemic. Because Riber’s MBE systems are used in research on new materials and forthe production of electronic and optoelectronic devices used in communications networks,enquiry levels remain high. However the companywide order book at end Q220 (€18.2m)was 36% down compared with end Q219 because the coronavirus pandemic is makingpotential customers more cautious and because Riber was obliged to cancel orders forthree R&D systems that it was not permitted to export to China. While the sales pipelinegives management confidence that order intake will pick up in Q420, this does not givemuch time for any additional orders for MBE systems to be fulfilled by the year end.


2018 31.3 3.3 2.0 7.0 22.3 N/A

2019 33.5 2.5 1.8 6.0 26.0 N/A

2020e 29.6 1.8 0.3 1.0 156.0 N/A

2021e 36.4 4.0 2.8 10.0 15.6 N/A

Sector: Financials



Company descriptionS&U’s Advantage motor financebusiness lends on a simple HP basisto lower- and middle-income groupsthat may have impaired credit recordsrestricting access to mainstreamproducts. It has over 64,000customers. The Aspen propertybridging business has been developingsince its launch in 2017.Price performance% 1m 3m 12mActual (8.6) (7.5) (26.0)Relative* (5.5) (8.6) (12.9)* % Relative to local indexAnalystAndrew Mitchell

S&U (SUS)

INVESTMENT SUMMARY

In its H121 update, S&U reported that Advantage motor finance had experienced recordapplication levels, but tightened credit criteria moderated the recovery in sales, which wererunning at 80% of normal levels. FCA-mandated customer repayment holidays haveinvolved 26% of Advantage customers resulting in collections at a level of just over 75% (vsnormal 94%). With further repayment holidays proposed and the unwinding of the furloughscheme underway, the pace and degree to which repayments will resume is uncertain. S&Usays early indications are encouraging. Also encouraging are the early repayment data fromnew customers pointing to potential medium-term benefits as the portfolio mix graduallychanges. At Aspen (property bridging) there has also been an increase in both newtransactions and loan redemptions leaving net receivables at £19m versus £15.5m in June.

INDUSTRY OUTLOOK

The unpredictable course of the pandemic means that S&U does not believe it isappropriate to provide specific guidance but current year results will be significantly affectedby lower sales and higher arrears. Management indicates the group is still profitable, ismaintaining its high customer service levels and has liquidity headroom to respond once it issensible to target stronger growth.

Y/E Jan Revenue EBITDA PBT EPS P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2019 83.0 39.5 34.6 232.0 6.4 17.0

2020 89.9 40.4 35.1 239.4 6.2 36.2




Sector: Oil & gas

Price: 17.3pMarket cap: £35mMarket AIM, TSX-V


Company descriptionSDX Energy is a North African E&Plisted in Toronto and London. It has oiland gas production in Egypt and gasproduction in Morocco.

Price performance% 1m 3m 12mActual (8.0) (4.2) (9.2)Relative* (4.8) (5.3) 6.9* % Relative to local indexAnalystCarlos Gomes

SDX Energy (SDX)

INVESTMENT SUMMARY

SDX Energy announced that despite the challenging environment the oil and gas industry isfacing, its Q120 results were positive with production above expectations at 8,061boed andnet cash generated from operating activities at $6.3m. With c 90% of the company’s cashflow resulting from fixed-price gas contracts management is confident it can meet its 2020expectations. In Morocco, testing of the LMS-2 well is expected in late Q3/early Q4 with aview to de-risking 10.9bcf of prospective resources. In Egypt, SDX disposed its 50% WI inthe late-life North West Gemsa licence in July 2020 for $3m, of which $1.4m has been usedto discharge the company’s liabilities on the licence, with the net $1.6m providing additionalcash to strengthen the balance sheet. Our valuation stands at a core NAV of 33.8p/shareand a RENAV of 40.7p/share, on inclusion of exploration potential upside.

INDUSTRY OUTLOOK

SDX remains open to adding to its portfolio and sees Egypt as a natural market forconsolidation, given the large number of small players. Its acquisition of Circle Oil'sEgyptian and Moroccan assets in early 2017 show that it is able to negotiate and completetransactions efficiently.


2018 53.7 35.5 7.1 3.8 5.9 1.1

2019 53.2 34.4 (12.3) (1.5) N/A 0.7

2020e 40.7 23.3 2.6 1.2 18.8 0.7

2021e 42.0 28.0 8.2 3.6 6.3 0.7

Sector: Financials



Company descriptionSecure Trust Bank is awell-established specialist bankaddressing niche markets withinconsumer and commercial banking. Itis launching a non-standard mortgagebusiness. Former parent ArbuthnotBanking Group’s shareholding is nowless than 20%.

Price performance% 1m 3m 12mActual 6.8 (20.9) (46.2)Relative* 10.5 (21.9) (36.7)* % Relative to local indexAnalystPedro Fonseca

Secure Trust Bank (STB)

INVESTMENT SUMMARY

Secure Trust Bank’s (STB) FY19 figures were good, as already flagged in its tradingupdate. Underlying ROE was 14.0% (FY18: 12.8%), EPS was up 10% y-o-y and capitalremained comfortable (CET1 12.7%). However, the COVID-19 pandemic has led to asignificant drop in business activity and impairments are expected to increase. STB hassuspended forward guidance since March due to uncertainty. Its relatively short durationloan book, already cautious lending stance and good capital position should help. Financialmarkets turmoil has the bank trading on a 2019 P/BV of 0.6x despite a track record ofdelivering value creating ROE above its COE.

INDUSTRY OUTLOOK

STB’s relatively short loan book duration allows it to de-risk quicker and protect capital andmaintain liquidity. But impairments will inevitably rise and loan book shrinkage alsoadversely affects results. The bank now is focused on managing the risks and supportingclients. Management believes merger and acquisition opportunities may exist as theeconomy emerges from the crisis. Operationally speaking, the bank can increase lendingfairly quickly as the economy improves. The key challenge will be assessing the newlending conditions and risk parameters in the recovery phase.


2018 151.6 N/A 36.7 161.0 4.4 N/A

2019 165.5 N/A 41.1 177.3 4.0 N/A

2020e 168.1 N/A 6.5 26.9 26.4 N/A

2021e 176.0 N/A 31.4 133.7 5.3 N/A


Sector: Engineering



Company descriptionSeverfield is a leading UK structuralsteelwork fabricator operating across abroad range of market sectors. AnIndian facility undertakes structuralsteelwork projects for the local marketand is currently being expanded.

Price performance% 1m 3m 12mActual (10.2) (23.6) (16.7)Relative* (7.0) (24.6) (1.9)* % Relative to local indexAnalystToby Thorrington

Severfield (SFR)

INVESTMENT SUMMARY

Company-reported FY20 underlying PBT was £1.0m better than anticipated at £28.6m,comfortably above the 2016 strategic target of £26m. UK operations made good EBITprogress with a slightly softer margin (at 8.2%, within the 8–10% target range). The £271morder book is c 90% for delivery in the next 12 months. Indian JV profitability was asanticipated at £2.2m (share of PAT), a good y-o-y step up, including an 8.5% EBIT margin+210bp. The order book has reduced but the mix of commercial work is more favourable.Year-end net cash of c £16m was as previously flagged. The group's UK factories and liveconstruction sites are all open after some reduced activity in April/May, though COVID-19has disrupted the local Indian market to a greater extent. On 30 July a FY20 final dividendwas declared in line with the prior year (1.8p, to 2.9p for FY20). Our estimates remainsuspended.

INDUSTRY OUTLOOK

The primary strategic aim is to maintain Severfield’s position as the leading UK structuralsteelwork supplier. The Indian JV targets similar sectors to those served in the UK;management has valued the Indian construction market at c £100bn pa, with a very lowpenetration of steel structures currently and the JV has recently expanded capacity.

Y/E Dec / Mar Revenue EBITDA PBT EPS P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2019 274.9 29.0 24.7 6.66 8.0 8.9

2020 327.4 33.2 28.6 7.75 6.8 5.8






Company descriptionStudio Retail Group is a multi-channelretailer operating across thebusiness-to-consumer andbusiness-to-business market places. Itis a market-leading online valueretailer and educational resourcesupplier in the UK.


Studio Retail Group (STU)

INVESTMENT SUMMARY

Studio's online and value-based offer produced strong trading during lockdown, with 55%y-o-y product sales growth in the first 11 weeks of FY21, comparing very favourably with itsonline peers. Demand was driven by growth in active customers and spend per customer. Itlooks well placed, with tight stock management, as the high street re-commences trading,which is likely to be very competitive. The Phase 2 review of the proposed sale of Educationwill likely delay the process to 2021, adding to the uncertainty from COVID-19, making theprovision of FY21 guidance difficult.

INDUSTRY OUTLOOK

The investment case is primarily centred on Studio, the main customer-facing business,which is making excellent progress in its digital transition. Against a challengingmacroeconomic backdrop, Studio is outperforming much of the retail market through itsunique digital-first value proposition, combined with the backing of flexible, and increasinglytailored, responsible consumer credit solutions.


2018 479.6 46.6 26.8 25.9 9.7 18.9

2019 506.8 50.9 28.8 26.5 9.4 9.7

2020e 534.5 54.8 30.7 29.6 8.4 11.2






Company descriptionSureserve Group is engaged in theprovision of Compliance and EnergyServices through two divisions,focused on customers in theoutsourced public and regulatedservices sectors in the UK. It is themarket leader in social housing gascompliance.

Price performance% 1m 3m 12mActual 5.8 18.0 58.6Relative* 9.4 16.5 86.8* % Relative to local indexAnalystNeil Shah

Sureserve Group (SUR)

INVESTMENT SUMMARY

A mid August trading update confirmed that the business was trading well and is expectedto meet expectations for the year to 30 September 2020. Since the interims announcementof 27 May 2020, a further 21 new contracts have been won with an annualised value of£16m adding a further £40m to the order book. The group has also paid down its net debtand maintains its access to a £25m revolving credit facility. Much of this performance islikely to have come from the compliance side of the business. The market is paying highervaluations for growth and the stock rallied on the back of the trading announcement, movingfrom c 40p to c 47p. Given the robust performance, there will also be focus on the dividend,the likelihood now is that it will at least be maintained for the year and potentially has scopeto be increased.

INDUSTRY OUTLOOK

Growing corporate and government awareness around safety and energy efficiency createsan attractive backdrop to Sureserve’s compliance and energy services business, wherestrong regulatory drivers have the potential to deliver substantial medium-term EBITAgrowth. The management team appointed in July 2016 to reverse the decline inperformance is taking bold decisions.


2018 190.8 9.2 6.6 3.4 13.5 8.1

2019 212.1 10.5 8.3 4.5 10.2 7.1

2020e 209.8 15.2 9.1 4.6 10.0 4.8

2021e 229.5 15.6 9.8 5.0 9.2 4.7

Sector: Property



Company descriptionTarget Healthcare REIT invests inmodern, purpose-built residential carehomes in the UK let on long leases tohigh-quality care providers. It selectsassets according to localdemographics and intends to payincreasing dividends underpinned bystructural growth in demand for care.

Price performance% 1m 3m 12mActual 4.4 17.5 (6.0)Relative* 8.0 16.1 10.7* % Relative to local indexAnalystMartyn King

Target Healthcare REIT (THRL)

INVESTMENT SUMMARY

Target’s portfolio of high-quality, purpose-built care homes continued to generate positivereturns during Q420, driven by RPI-linked rental uplifts, with quarterly dividend paymentsmaintained at 1.67p, the main driver of a 1.5% NAV total return in the period. Rent collectionremains robust with 96% of rent that has recently become payable received, after allowancefor a limited number of agreed advance monthly rental payments. The number of confirmedor suspected COVID-19 cases reported by tenants has continued to fall and tenants arereporting an improvement in new resident enquiries while exploring ways to facilitate safevisiting practices. Against this improved backdrop the group has acquired a high qualitynew-build home in Oxfordshire for £15m (including costs), funded from existing cashresources. The LTV remains low at 20.6% with remaining uncommitted capital of £26m.

INDUSTRY OUTLOOK

Care home demand is driven by demographics and care needs with a shortage of qualitycare homes suggesting a strong investment demand in years to come. The pandemic haspresented a significant near-term challenge to the sector but does not change theunderlying demographic-driven fundamentals while highlighting its critical role in supportingthe NHS and the importance of long-term investment.

Y/E Jun Revenue EBITDA PBT EPS P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 28.4 N/A 14.8 5.54 19.9 N/A

2019 34.3 N/A 18.1 5.45 20.2 N/A

2020e 43.8 N/A 22.3 5.65 19.5 N/A

2021e 47.6 N/A 27.9 6.25 17.6 N/A


Sector: Technology



Company descriptionTechnicolor is a worldwide technologyleader operating in the media andentertainment industry. Its activities areorganised in three business segments,Production Services, DVD Servicesand Connected Home.

Price performance% 1m 3m 12mActual (1.2) (31.3) (89.0)Relative* 2.4 (37.8) (87.9)* % Relative to local indexAnalystFiona Orford-Williams

Technicolor (TCH)

INVESTMENT SUMMARY

Technicolor’s H120 results were consistent with management’s base level guidance givenahead of the EGM to approve the refinancing. Our model reflects this scenario. The rightsissue is now in progress, with subscription terms of 43 new shares for every six existingshares, at a price of €2.98. The subscription period closes on 11 September. Debt holderswill pay €3.58/share in the debt-to-equity swap. With firm steps now taken along the route toa much-strengthened balance sheet, the focus can shift towards rebuilding profitability;leveraging Technicolor’s leading market positions across its three businesses.

INDUSTRY OUTLOOK

COVID-19 has highlighted the importance of reliable domestic broadband and high-qualitywi-fi as homes increasingly act as devolved workplaces alongside greater contentconsumption. This is unlikely to change as the global economy reopens. In ProductionServices, the group is utilising government furlough schemes wherever it can to preserve itsskill base for the live content industry, which is slowly re-emerging. Animation demand is stillstrong. Fresh, high-quality content will be crucial to reinforce the attractiveness of thoseplatforms to subscribers and advertisers.


2018 3988.0 266.0 7.0 (306.94) N/A N/A

2019 3800.0 325.0 (73.0) (492.18) N/A N/A

2020e 3100.0 169.0 (142.0) (138.61) N/A N/A

2021e 3460.0 338.0 37.0 7.61 34.3 N/A

Sector: Media



Company descriptionThe MISSION Group is a collective ofintegrated and specialist creativeagencies, employing 1,150 people inthe UK, Europe, Asia and the US.

Price performance% 1m 3m 12mActual 0.8 3.5 (19.5)Relative* 4.4 2.2 (5.2)* % Relative to local indexAnalystFiona Orford-Williams

The MISSION Group (TMG)

INVESTMENT SUMMARY

MISSION’s wide-ranging activities, efficient ability to work remotely and close, long-standingclient relationships has enabled it to weather the pandemic in relatively good shape,continuing to win new business and run assignments throughout. Lower revenues as clientspulled or postponed campaigns led to a c £2.2m H120 loss, which we expect to be morethan recouped in H220. In July, MISSION bought a psychological and behavioural insightconsultancy, Innovationbubble (price undisclosed), with a strong client roster across multipleverticals, which should also offer good cross-selling opportunities. The entrepreneurialismand collaboration mix makes the group's post-COVID-19 outlook attractive - not fullyreflected in the share price. Interims are due on 23 September.

INDUSTRY OUTLOOK

The IPA Bellwether report for Q220 was the worst in its 20-year history while the AdvertisingAssociation estimates UK advertising spend for FY20 will be down 16.7% vs 5.2% growthpreviously followed by a 13.6% bounce back in FY21. Q220 is anticipated to be down39.1% with Q320 down 24.3%. However, the impact varies widely by advertising medium,sector and client. For some agencies and clients, the spur to creativity has boosted theimpact of campaigns in a less crowded market.


2018 77.6 11.3 9.2 8.5 7.1 4.3

2019 81.0 12.2 10.2 9.0 6.7 4.8

2020e 62.7 2.0 0.6 0.7 85.7 16.0

2021e 76.1 10.5 9.1 7.7 7.8 6.0





Company descriptionThrace Plastics is an establishedinternational producer of TechnicalFabrics (FY19: 72% of net revenues)and Packaging (28%). Each divisionuses a number of manufacturingprocesses and produces a wide rangeof products from polymer materials,serving a diverse range ofend-markets.Price performance% 1m 3m 12mActual 7.7 17.5 (6.8)Relative* 8.5 12.8 22.5* % Relative to local indexAnalystToby Thorrington

Thrace Plastics (PLAT)

INVESTMENT SUMMARY

Thrace’s Q1 headline revenue reduction (-6.2%) and EBIT increase (+12.7%) reflectedfurther progress from the Packaging operations and the exit from the unprofitable TechnicalFabrics business. These trends were very much in evidence in H219. Thrace continues toinvest in its growth sub-sectors and net bank debt was stable at c €74m at the period end.While the full implications of the COVID-19 pandemic on current trading are not yet visible,investment in the medical sector indicates that growth opportunities are present.

INDUSTRY OUTLOOK

Thrace manufactures a wide range of products that are used in a variety of sectors, rangingfrom construction/infrastructure to horticulture and food packaging primarily in Europe andthe US. Management’s high-level financial objective is to pursue profitable growth using twoprimary levers: increased capacity and value capture.


2018 322.7 29.0 11.5 21.0 9.2 3.7

2019 327.8 30.6 10.2 12.8 15.2 3.2



Sector: Media

Price: €17.46Market cap: €824mMarket Borsa Italiana STAR


Company descriptionTinexta has three business divisions:Digital Trust – solutions to improvedigital security; Credit Information &Management – information services tohelp manage corporate credit; andInnovation & Marketing Services –consulting services to help clientsdevelop and/or grow their businesses.


Tinexta (TNXT)

INVESTMENT SUMMARY

Tinexta’s Q220 results were much better than consensus expectations, as all business unitsproduced improved organic growth trends versus Q120, in the face of the COVID-19lockdown, and cost control helped improve profitability. Our FY20 revenue forecastincreased by 6.3% to €266.6m and EBITDA increased by 7.6% to €76.7m, includingupgrades for all business units. The upgrade places our forecasts 6.6% above managementguidance of revenue above €250m and EBITDA of €72m.

INDUSTRY OUTLOOK

Tinexta is exposed to favourable growth trends including the transition to a digital world andthe requirement for enhanced online security. Starting from a purely domestic Italian focus,the company is exploiting these trends internationally. In particular, given recent regulatorychanges, in Digital Trust the group is leveraging its Italian expertise to expand on anEU-wide basis with a unified legal base across the region. At the same time, Tinexta is likelyto make acquisitions in Italy and Europe that will further expand its addressable marketsand seek cross-selling opportunities between the business units.


2018 238.7 66.0 52.3 77.36 22.6 18.7

2019 258.7 71.3 55.0 79.71 21.9 14.9

2020e 266.6 76.7 53.3 80.48 21.7 15.0

2021e 277.5 80.5 56.6 85.58 20.4 14.2


Sector: Financials



Company descriptionTown Centre Securities is a UK REITfocused primarily on Leeds,Manchester, Scotland and (mainlysuburban) London. It also has a carparking operation (CitiPark). Theinvestment portfolio is intensivelymanaged for income and capitalgrowth.

Price performance% 1m 3m 12mActual (5.9) 1.6 (48.1)Relative* (2.7) 0.4 (38.9)* % Relative to local indexAnalystMartyn King

Town Centre Securities (TOWN)

INVESTMENT SUMMARY

Since reporting a resilient H120 performance attention has turned to managing the impactsof the COVID-19 pandemic. A further trading update (9 July) indicated that property rentcollections had continued to remain robust despite continuing challenging conditions, whileall car parking branches have reopened and income is beginning to gradually improve.Given the uncertainty, TCS is not yet providing forward guidance on performance and isfocused on the preservation of cash and cost containment. It previously reported cash andborrowing headroom of £23.9m at 31 March 2020 based on the 31 December 2019 assetvalues. The previously declared interim DPS of 3.25p (£1.7m) will be paid but TCS says thatany final DPS is expected to be substantially lower than previously.

INDUSTRY OUTLOOK


Y/E Jun Revenue EBITDA PBT EPS P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 19.3 N/A 6.9 13.0 7.3 3.6

2019 19.6 N/A 6.4 12.0 7.9 4.6






Company descriptionTreatt provides innovative ingredientsolutions from its manufacturing basesin Europe and North America,principally for the flavours andfragrance industries and multinationalconsumer goods companies,particularly in the beverage sector.

Price performance% 1m 3m 12mActual 16.8 6.6 34.6Relative* 20.9 5.3 58.4* % Relative to local indexAnalystSara Welford

Treatt (TET)

INVESTMENT SUMMARY

Treatt has transformed itself from a commodity-based ingredients trading house into asupplier of value-added ingredients and ingredient solutions. The business hasdemonstrated its resilience with a strong H1 despite the COVID-19 pandemic. Citrus pricingis starting to recover and in H2 will start to cycle weaker comparatives, so we expect citrusrevenue growth to return. The UK relocation is likely to be delayed by three to six months asthe COVID-19 pandemic slows down the building of the new site.

INDUSTRY OUTLOOK

Treatt is migrating its business from that of a pure supplier to the food and beverageindustries to being a valued partner in the development of new ingredients. Citrus, tea, fruitand vegetable flavours and sugar reduction are core areas of focus, with the latterundergoing a structural growth trend.


2018 112.2 16.6 13.8 20.3 28.8 92.7

2019 112.7 15.8 14.0 19.2 30.4 16.8

2020e 115.0 16.9 14.7 18.9 30.9 21.8

2021e 119.6 20.6 15.8 20.2 28.9 18.8


Sector: Financials



Company descriptionTungsten Corporation operates atransaction platform with servicesincluding e-invoicing, e-billing andpurchase order handling. Spendinganalysis, invoice data capture and,through a partnership, supply chainfinance are also offered, providingadditional benefits to customers.

Price performance% 1m 3m 12mActual (12.2) 6.1 (22.0)Relative* (9.1) 4.8 (8.2)* % Relative to local indexAnalystAndrew Mitchell

Tungsten Corporation (TUNG)

INVESTMENT SUMMARY

Tungsten’s FY20 trading update signalled that the group is broadly on track in terms ofnumbers and strategy implementation. Revenue of £36.8m was up 2% on the prior year.Adjusted EBITDA was in line with guidance (implying c £2.7m or £3.7m ex-TNF). Net cashat £3.2m was up from £1m at end H120. New sales billings were flat y-o-y but acceleratedbetween H1 & H2, helped by sales of new products. A partnership with Orbian for supplychain financing is in place and another with a major US bank could lead to the addition of upto 28 accounts payable customers while technical integration with Coupa Software’splatform has also been completed opening up the potential for a further partnership.

INDUSTRY OUTLOOK

Over 90% of Tungsten revenues are recurring and repeatable providing resilience. There isnevertheless some uncertainty over prospective transaction-related revenue which droppedpost lockdown but had improved. Tungsten indicated that, if there were a return topre-COVID-19 volumes by the end of H121, consensus FY21 expectations could still be met(revenue c £39m, adj. EBITDA c £5m). We look to resume publication of estimates once thesituation becomes clearer. The pandemic has underlined the benefits of e-invoicing andTungsten remains committed to delivering the growth opportunity this provides.

Y/E Apr Revenue EBITDA PBT EPS P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2018 33.7 (4.6) (12.7) (9.5) N/A N/A

2019 36.0 0.6 (5.3) (2.7) N/A N/A



Sector: Technology

Price: €7.96Market cap: €104mMarket Borsa Italiana STAR


Company descriptionTXT e-solutions provides IT, consultingand R&D services to aerospace,aviation, automotive, banking andfinance customers.

Price performance% 1m 3m 12mActual 1.7 1.7 (4.2)Relative* 6.4 (11.7) 1.2* % Relative to local indexAnalystKatherine Thompson

TXT e-solutions (TXT)

INVESTMENT SUMMARY

TXT reported flat organic revenues in Q220 and 6% organic growth for H120, despite thedisruption caused by COVID-19. Normalised EBIT was 44% higher y-o-y in Q220 and 51%higher for H120. The company took its first step to internationalise its fintech business withthe €5m acquisition of a Swiss IT services business in July. We have revised our forecaststo reflect the acquisition and lower underlying operating costs, resulting in upgrades to ournormalised EPS forecasts (+29% FY20, +6% FY21).

INDUSTRY OUTLOOK

TXT is a beneficiary of the trend to outsource elements of IT and engineering, which givesthe customer greater flexibility on cost and better access to specialist skills. Its main focus ison the aerospace and aviation market, where the rapid pace of innovation, combined withincreasing regulation, drives growth in R&D. It also serves the Italian banking market, wherethe emergence of fintech companies is driving innovation and regulation is increasing theneed for software quality assurance.


2018 40.0 4.1 1.5 10.2 78.0 45.7

2019 59.1 7.0 7.6 45.6 17.5 N/A

2020e 66.8 7.8 5.9 33.8 23.6 18.0

2021e 73.0 8.5 6.8 39.1 20.4 13.1


Sector: Construction & blding mat



Company descriptionTyman’s product portfolio substantiallyaddresses the residential RMI andbuilding markets with increasingcommercial sector exposure followingacquisitions. It manufactures andsources window and door hardwareand seals, reporting in three divisions.

Price performance% 1m 3m 12mActual 16.9 19.6 (3.8)Relative* 20.9 18.2 13.2* % Relative to local indexAnalystToby Thorrington

Tyman (TYMN)

INVESTMENT SUMMARY

H120 results – affected by COVID-19 from the end of Q1 – showed LFL revenue and EBITreductions of 17% and 26% respectively; good cost control through self-help measures andgovernment support schemes helped to mitigate the profit impact from the exogenous salesvolume shock. AmesburyTruth (Tyman’s largest division) navigated market conditionsrelatively well and successfully flexed production across its facilities. Lower seasonal stockbuild aided cash generation and, despite adverse FX translation, core net debt ended H1below the end FY19 level. The company retains significant liquidity headroom with no majorchanges to banking facilities (save for a small increase in leverage covenant). No interimdividend was declared. All production facilities are now operational and are being aligned tocurrent demand and order levels, with improving recent trends. Our estimates remainsuspended.

INDUSTRY OUTLOOK

Prior to the COVID-19 outbreak, leading North American and European markets wereexpected to grow modestly and the new-build sector has generally been firmer than RMIspend which has been more patchy.


2018 591.5 98.5 72.7 27.5 7.3 4.5

2019 613.7 100.8 71.0 27.4 7.3 3.5



Sector: Oil & gas



Company descriptionVermilion Energy is an internationalE&P with assets in Europe, NorthAmerica and Australia. Managementexpects FY20 production to average94–98kboed.


Vermilion Energy (VET)

INVESTMENT SUMMARY

Following the departure of Anthony Marino as president and CEO of Vermilion (VET), thenewly established executive committee announced its intent to maintain a strong balancesheet with low financial leverage, manage the total payout ratio at less than 100% andprotect equity. The committee’s near-term priorities include continuing to navigate thecompany through the COVID-19 pandemic with a primary focus on HSE (health, safety andenvironment) and business continuity; continuing to find additional operational efficienciesand cost reductions; pay down debt, target a debt-to-cash flow ratio of less than 1.5x;review projects to determine appropriate pace of development and capex allocation;strengthen the leadership role in ESG; and review the shareholders' return policy anddetermine the appropriate time to reinstate the dividend and/or share buyback. Our currentvaluation stands at C$8.8/share.

INDUSTRY OUTLOOK

Vermilion’s operations are in OECD countries and predominantly onshore; political,operational and subsurface risk is well spread. Vermilion benefits from realisations based ona number of regional commodity prices including Brent, WTI crude and Henry Hub, TTF,NBP and AECO gas.

Y/E Dec Revenue EBITDA PBT EPS P/E P/CF(C$m) (C$m) (C$m) (c) (x) (x)

2018 1526.0 1037.0 355.0 226.0 2.4 0.9

2019 1747.0 898.0 141.0 (31.0) N/A 1.0

2020e 1115.0 532.0 (192.0) 106.0 5.0 1.5

2021e 1164.0 607.0 (81.0) (47.0) N/A 1.6


Sector: Pcare & household prd



Company descriptionWalker Greenbank is a luxury interiorfurnishings group combining specialistdesign skills with high-quality upstreammanufacturing facilities. Leadingbrands include Harlequin, Sanderson,Morris & Co, Scion, Anthology, Zoffanyand Clarke & Clarke.

Price performance% 1m 3m 12mActual 15.3 59.2 (32.7)Relative* 19.3 57.2 (20.8)* % Relative to local indexAnalystToby Thorrington

Walker Greenbank (WGB)

INVESTMENT SUMMARY

Having emerged from UK COVID-19 lockdown conditions and restarted manufacturingoperations in May, Walker Greenbank’s rolling four-weekly performance has improved andmarkedly so at the period end. For H120 as a whole, Brands product sales were down 28%y-o-y (having been -35% for the first five months); northern Europe was the best of themajor sales regions. Despite lower headline sales, the company has sustained good cashcontrol throughout the trading period, with accelerating inflows as the rate of recovery hasimproved. Specifically, inferred net cash was c £4.5m at the end of July versus c £2.8m amonth earlier and £1.3m at the beginning of the year. As a result, the company retainedalmost £20m liquidity headroom at the period end.

INDUSTRY OUTLOOK

The UK interior furnishings industry has experienced uncertainty for many years. Manybrands have failed to grow, while manufacture for the volume segment has largely movedoverseas. Success continues to be delivered by businesses able to differentiate themselvesfrom competition by consistently offering innovative and high-quality design and products.

Y/E Jan Revenue EBITDA PBT EPS (fd) P/E P/CF(£m) (£m) (£m) (p) (x) (x)

2019 113.3 12.9 9.0 10.1 5.6 3.2

2020 111.5 11.0 6.6 7.9 7.2 4.2



Sector: Technology



Company descriptionWANdisco’s proprietary replicationtechnology enables its customers tosolve critical data managementchallenges created by the shift to cloudcomputing. It has established partnerrelationships with leading players inthe cloud ecosystem including Amazonand Microsoft.

Price performance% 1m 3m 12mActual 13.0 4.4 17.1Relative* 16.9 3.1 37.9* % Relative to local indexAnalystDan Gardiner

WANdisco (WAND)

INVESTMENT SUMMARY

Proceeds from WANdisco’s recent placing will cover the investment needed to embedLiveData with other cloud vendors while sales from Microsoft Azure build. Theaccompanying publication of FY19 results enabled us to update forecasts.COVID-19-related delays to the Azure revenue ramp led us to lower FY20 revenues from$28m to $20m; EBITDA losses widen from $5m to $11m. WANdisco still expects to signmore than 50 new customers on this platform over the next 12 months and we will introduceFY21 forecasts as visibility on the growth trajectory emerges.

INDUSTRY OUTLOOK

WANdisco has set out its ambition to generate annual revenue of at least $100m in the nextthree to five years from a combination of 1) data migration; 2) hybrid cloud; and 3)multi-cloud. Ahead of a shift to recurring revenue visibility is limited but our updated analysissuggests that the Microsoft relationship alone could generate more than $80m in annualrevenues by 2023 and highlighted that the data migration element alone could present a$1.4bn opportunity in total.


2018 17.0 (9.4) (16.3) (37.5) N/A N/A

2019 16.2 (11.7) (18.4) (37.5) N/A N/A

2020e 20.0 (10.6) (17.6) (35.3) N/A 26.9



Sector: Mining



Company descriptionWheaton Precious Metals is thepre-eminent ostensibly precious metalsstreaming company, with 29high-quality precious metals streamingand early deposit agreements relatingto assets in Mexico, Peru, Canada,Brazil, Chile, Argentina, Sweden,Greece, Portugal and the US.

Price performance% 1m 3m 12mActual (0.8) 9.9 89.2Relative* (2.9) (1.0) 86.8* % Relative to local indexAnalystCharles Gibson

Wheaton Precious Metals (WPM)

INVESTMENT SUMMARY

Production and sales of gold at WPM both reached record levels in FY19 and sales of goldequivalent ounces remained at record levels in H120. The six of WPM's partners' mines thathad been on furlough in South America (accounting for c 36% of WPM's gold equivalentoutput) have now returned to production. In the meantime, WPM's streaming agreementwith Caldas regarding Marmato shows that it is still able to conclude new businesseffectively in a COVID-19 world.

INDUSTRY OUTLOOK

Under normal circumstances, in the wake of Q220 results, we would have valued WPM atUS$52.05/share, or C$68.71/share. In the current environment however, we believe that avaluation of US$74.10, or C$97.81, in FY21 is more appropriate. On a relative basismeanwhile, we estimate that WPM is cheaper than its peers on 70% of common valuationmeasures. This follows the settlement reached between WPM and the Canada RevenueAgency in December 2018 whereby income from WPM’s international subsidiaries willremain exempt from Canadian tax.


2018 794.0 496.6 203.1 48.0 107.0 43.9

2019 861.3 548.3 242.7 56.0 91.7 41.8

2020e 1161.8 822.5 549.6 120.0 42.8 26.0

2021e 1478.6 1111.3 793.4 177.0 29.0 20.7

Sector: Technology



Company descriptionXP Power is a developer and designerof power control solutions withproduction facilities in China, Vietnamand the US, and design, service andsales teams across Europe, the USand Asia.


XP Power (XPP)

INVESTMENT SUMMARY

XP Power reported a strong performance in H1 considering the challenges presented byCOVID-19 and a material uplift in orders provides a record backlog at the start of H2. Withits diversified production capacity, a focus on higher complexity product targeted at growthmarkets and the ability to provide customer support globally, XP believes it will be in astronger position post-COVID-19 than before. We have revised our forecasts to reflect thestrong order intake, higher operating costs and higher share count.

INDUSTRY OUTLOOK

XP supplies four end-markets: healthcare, industrial electronics, semiconductors andtechnology, across Europe, North America and Asia. The industrial electronics segment isrelatively fragmented, but the company sees demand across various applications. Thehealthcare business continues to gain market share, with corporate approvals from themajor suppliers in place. The semiconductor segment is the most cyclical, tracking thecapex requirements of semiconductor manufacturers.


2018 195.1 49.2 41.2 172.8 25.8 N/A

2019 199.9 45.4 33.2 145.5 30.6 N/A

2020e 220.0 51.1 37.7 150.9 29.5 N/A

2021e 227.9 55.5 41.7 167.0 26.6 N/A


Sector: Media



Company descriptionYouGov is a global research data andanalytics group, with over 9.5m onlinepanellists across 42 countries. It offersa complementary data-led suite ofproducts and services includingYouGov BrandIndex, YouGov Profiles,YouGov Omnibus and customresearch.

Price performance% 1m 3m 12mActual 12.5 20.6 58.5Relative* 16.4 19.2 86.6* % Relative to local indexAnalystFiona Orford-Williams

YouGov (YOU)

INVESTMENT SUMMARY

YouGov’s year-end update indicated that performance had been in line with expectationsand it had yet to see any material impact from COVID-19. Our estimates were unchangedahead of results on 6 October. Data Products remains the main driver, notably in the moreestablished UK and US markets, as brands keep close track of their standing withcustomers. The group’s wide spread of sector verticals will have been helpful, with strongtech and e-commerce offsetting weaker retail performance. YouGov’s share price hasrecovered from the initial pandemic mark-down, with the rating now reflecting its premiumgrowth and strong market positioning.

INDUSTRY OUTLOOK

The pandemic is offering some additional opportunities, both in COVID-19 andhealth-related work for governments and commercial entities, and in the competitivelandscape, where others have been operating with legacy business models less suited tothe circumstances. Advertising-related spend is under pressure, but news media andgovernments globally are closely monitoring the effects of the slow release from lockdown.The US presidential election campaigns should provide further opportunities for increasedvisibility, driving commercial opportunities.


2018 116.6 20.9 16.3 10.8 83.3 40.2

2019 136.5 31.7 20.4 13.8 65.2 26.9

2020e 147.0 32.0 23.1 15.4 58.4 34.6

2021e 159.0 36.1 26.9 17.2 52.3 30.5



Edison dividend list Company name FY0 period end Currency DPS FY0 DPS FY1 DPS FY2

4imprint Group 2019/12 USD 84.00 10.00 37.50 Appreciate Group 2019/03 GBP 3.20 1.00 1.00 Avon Rubber 2019/09 GBP 20.80 27.10 35.20 bet-at-home 2019/12 EUR 200.00 240.00 288.00 Cenkos Securities 2019/12 GBP 3.00 China Water Affairs Group 2020/03 HKD 30.00 32.00 36.00 Circle Property 2019/03 GBP 6.30 Cohort 2020/04 GBP 10.10 11.10 12.20 CREALOGIX Group 2019/06 CHF 0.00 0.00 25.00 DeA Capital 2019/12 EUR 0.12 discoverIE Group 2020/03 GBP 3.00 10.40 10.70 Ebiquity 2019/12 GBP 0.00 0.71 Epwin Group 2019/12 GBP 1.80 Esker 2019/12 EUR 45.00 50.00 55.00 FCR Immobilien 2019/12 EUR 29.91 33.10 43.35 Gamesys Group 2019/12 GBP 0.00 36.00 37.80 GB Group 2020/03 GBP 0.00 2.00 2.60 Greggs 2019/12 GBP 46.90 0.00 15.00 Hellenic Petroleum 2019/12 EUR 50.00 50.00 50.00 John Laing Group 2019/12 GBP 10.98 11.98 12.98 Kcell Joint Stock Company Corp 2019/12 KZT 30.00 45.00 126.00 La Doria 2019/12 EUR 18.00 18.00 19.00 Lookers 2018/12 GBP 4.08 Marshall Motor Holdings 2019/12 GBP 2.85 0.00 6.00 Medserv 2018/12 EUR 0.00 0.00 2.00 Norcros 2020/03 GBP 3.10 Numis Corporation 2019/09 GBP 12.00 12.00 Ocean Wilsons Holdings 2019/12 USD 70.00 OTC Markets Group 2019/12 USD 125.00 125.00 125.00 Pan African Resources 2019/06 USD 0.15 1.52 1.75 Piteco 2019/12 EUR 15.00 17.50 20.00 Polypipe 2019/12 GBP 4.00 Primary Health Properties 2019/12 GBP 5.60 5.90 6.10 Record 2020/03 GBP 2.30 2.30 2.30 Regional REIT 2019/12 GBP 8.25 S&U 2020/01 GBP 120.00 Secure Trust Bank 2019/12 GBP 87.20 Severfield 2020/03 GBP 1.10 Sureserve Group 2019/09 GBP 0.50 0.50 0.75 Target Healthcare REIT 2019/06 GBP 6.58 6.68 6.68 The MISSION Group 2019/12 GBP 0.80 0.00 1.80 Thrace Plastics 2019/12 EUR 4.00 Treatt 2019/09 GBP 5.50 5.80 6.20 Tyman 2019/12 GBP 3.90 Vermilion Energy 2019/12 CAD 2.80 0.60 0.00 Walker Greenbank 2020/01 GBP 0.50 Wheaton Precious Metals 2019/12 USD 36.00 45.00 70.00 YouGov 2019/07 GBP 4.00 4.00 5.00


Company Sector Most recent note Date published

1Spatial Software & comp services Flash 28/07/20 4iG IT services Flash 18/08/20 4imprint Group Media Update 22/06/20 AAC Clyde Space Aerospace & defence Update 18/05/20 Aberdeen Asian Income Fund Investment companies Investment company review 12/03/20 Aberdeen Diversified Inc & Growth Trust Investment companies Investment company review 17/03/20 Aberdeen Latin American Income Fund Investment companies Investment company review 27/02/20 Aberdeen New Thai Investment Trust Investment companies Investment company review 13/05/20 Aberdeen Standard Equity Income Trust Investment companies Investment company review 07/02/19 Accsys Technologies General industrials Update 14/10/19 Acorn Income Fund Investment companies Investment company review 24/01/20 Alkane Resources Metals & mining Update 23/04/20 Allied Minds Investment companies Update 09/06/20 Appreciate Group Financial services Update 12/05/20 ArborGen Basic materials Update 16/04/20 Atlantis Japan Growth Fund Investment companies Investment company review 17/07/20 Attica Bank Banks Update 18/06/20 Augean Industrial support services Update 28/02/20 Auriant Mining Metals & mining Update 29/05/20 Avon Rubber Aerospace & defence Flash 19/08/20 Baker Steel Resources Trust Investment companies Investment company review 10/08/20 BB Biotech Investment companies Investment company review 16/04/20 bet-at-home Travel & leisure Update 04/08/20 BioPharma Credit Investment companies Investment company review 17/02/20 Biotech Growth Trust (The) Investment companies Investment company review 10/08/20 BlackRock Greater Europe Inv. Trust Investment companies Investment company review 04/05/20 BlackRock Latin American Inv. Trust Investment companies Investment company review 26/02/20 Boku Software & comp services Update 22/07/20 Borussia Dortmund Travel & leisure Update 26/05/20 Bragg Gaming Group Technology Update 06/07/20 Brooge Energy Oil & gas Initiation 17/08/20 Brunner Investment Trust (The) Investment companies Investment company review 28/07/20 Canacol Energy Oil & gas Flash 17/08/20 Canadian General Investments Investment companies Investment company review 06/05/20 Carbios Alternative energy Update 27/03/20 Carclo Technology Flash 21/01/20 Carr’s Group Food & drink Update 15/07/20 Cenkos Securities Financial services Update 14/05/20 CentralNic Group Software & comp services Flash 10/08/20 China Water Affairs Group Utilities Outlook 23/07/20 Circle Property Real estate Outlook 12/11/19 Civitas Social Housing Real estate Update 20/05/20 Claranova Software & comp services Update 13/08/20 Codere Travel & leisure Update 18/11/19 Cohort Aerospace & Defence Update 28/07/20 Coro Energy Oil & gas Flash 03/04/20 CREALOGIX Group Software & comp services Flash 22/07/20 Custodian REIT Property Update 25/08/20 CVC Credit Partners European Opps Investment companies Investment company review 10/03/20 DeA Capital Investment companies Update 10/12/19 Deutsche Beteiligungs Investment companies Investment company review 20/08/20 discoverIE Group Electronics & electrical equipment Update 03/08/20 Diverse Income Trust (The) Investment companies Investment company review 21/05/20 Diversified Gas & Oil Oil & gas Outlook 15/06/20 Ebiquity Media Update 29/05/20 Egdon Resources Oil & gas Flash 31/03/20



EJF Investments Investment companies Flash 27/04/20 EMIS Group Software & comp services Flash 14/07/20 Endeavour Mining Metals & mining Update 21/08/20 Epwin Group Industrials Update 07/08/20 EQS Group Media Update 17/08/20 Esker Technology Update 20/07/20 European Assets Trust Investment companies Investment company review 24/01/20 European Investment Trust (The) Investment companies Investment company review 19/06/19 Evolva Food & beverages Update 11/08/20 Expert System Technology Update 06/08/20 FCR Immobilien Real estate Update 18/08/20 Fidelity Asian Values Investment trusts Investment company review 21/07/20 Fidelity China Special Situations Investment companies Investment company review 21/07/20 Fidelity European Values Investment companies Investment company review 19/05/20 Fidelity Japan Trust Investment companies Investment company review 26/08/20 Fidelity Special Values Investment companies Investment company review 21/04/20 FinLab Investment companies Initiation 27/08/19 Finsbury Growth & Income Trust Investment companies Investment company review 09/06/20 Games Workshop Group Consumer goods Update 15/01/20 Gamesys Group Travel & leisure Update 11/08/20 GB Group Technology Update 02/07/20 GCP Student Living Real estate investment trusts Update 05/02/20 Gemfields Group Metals & mining Update 03/08/20 Genesis Emerging Markets Fund Investment companies Investment company review 01/04/20 Greggs Food & drink Update 04/08/20 Gresham House Strategic Investment companies Initiation 24/02/20 Hansa Investment Company Investment companies Investment company review 12/07/19 HarbourVest Global Private Equity Investment companies Investment company review 19/06/20 HBM Healthcare Investments Investment companies Investment company review 25/03/20 Hellenic Petroleum Oil & gas Update 12/06/20 Henderson Far East Income Investment companies Investment company review 13/01/20 Henderson International Income Trust Investment trusts Investment company review 20/01/20 Henderson Opportunities Trust Investment trusts Initiation 07/02/20 HgCapital Trust Investment companies Investment company review 08/07/20 Hurricane Energy Oil & gas Update 18/08/20 ICG-Longbow SSUP Investment companies Investment company review 08/01/20 Impact Healthcare REIT Real estate Update 13/07/20 Invesco Asia Trust Investment companies Investment company review 16/03/20 IQE Tech hardware & equipment Flash 15/06/20 Jersey Electricity Industrials Outlook 14/03/19 John Laing Group Investment companies Update 26/08/20 JPMorgan Global Growth & Income Investment companies Investment company review 13/03/20 Jupiter UK Growth Investment Trust Investment trusts Investment company review 13/05/19 Kcell Joint Stock Company Telecoms Update 05/08/20 KEFI Minerals Mining Update 04/03/20 Keywords Studios Software & comp services Flash 04/08/20 La Doria Food & drink Outlook 22/05/20 Leclanché Alternative energy Update 02/06/20 Lepidico Metals & mining Update 20/07/20 Lookers General retailers Update 24/08/20 Lowland Investment Company Investment companies Investment company review 24/07/20 Marble Point Loan Financing Investment companies Flash 15/04/20 Marshall Motor Holdings Automotive retailers Update 19/08/20 Martin Currie Global Portfolio Trust Investment companies Investment company review 29/06/20 Media and Games Invest Software & comp services Update 20/08/20 Medserv Industrial support services Update 10/12/19



Merchants Trust (The) Investment companies Investment company review 26/05/20 Mercia Asset Management Investment companies Update 20/07/20 Mirriad Advertising Media Initiation 14/07/20 Mondo TV Media Outlook 20/05/20 Murray Income Trust Investment companies Investment company review 07/05/20 Murray International Trust Investment companies Investment company review 16/04/20 Mytilineos General industrials Update 01/06/20 Nanoco Group Tech hardware & equipment Flash 16/07/20 Norcros Construction & materials Update 03/08/20 Numis Corporation Financial services Update 07/07/20 Ocean Wilsons Holdings Investment companies Outlook 11/09/19 OPAP Travel & leisure Update 18/06/20 Osirium Technologies Software & comp services Update 19/05/20 OTC Markets Group Financial services Update 19/08/20 Palace Capital Real estate Update 16/07/20 Pan African Resources Metals & mining Update 28/07/20 paragon General industrials Update 27/11/19 Picton Property Income Property Update 04/08/20 PIERER Mobility Automobiles & parts Update 23/07/20 Piteco Software & comp services Update 26/03/20 Polypipe Construction & materials Update 17/07/20 PowerHouse Energy Group Alternative energy Flash 15/07/20 Primary Health Properties Property Update 11/08/20 Princess Private Equity Holding Investment companies Investment company review 11/03/20 ProCredit Banks Update 21/08/20 Quadrise Fuels International Alternative energy Flash 18/08/20 RADA Electronic Industries Industrials Initiation 20/08/20 Raven Property Group Property Update 28/08/19 Record Financials Update 01/07/20 Regional REIT Real estate Update 24/04/20 Renergen Oil & gas Update 30/01/20 Renewi Industrial support services Update 23/07/20 Riber Tech hardware & equipment Update 05/08/20 Rock Tech Lithium Metals & mining Update 12/06/20 S&U Financials Update 12/08/20 S Immo Real estate Initiation 06/05/20 SDX Energy Oil & gas Update 04/05/20 Secure Trust Bank Financials Update 25/08/20 Securities Trust of Scotland Investment companies Investment company review 18/02/20 Seneca Global Income & Growth Trust Investment companies Investment company review 28/05/20 Severfield Construction & materials Update 13/07/20 Standard Life Private Equity Trust Investment companies Investment company review 28/01/20 Standard Life UK Smaller Cos Trust Investment companies Investment company review 01/05/20 Studio Retail Group Retail Flash 24/06/20 Supermarket Income REIT Property Update 24/02/20 Sureserve Group Industrial support services Update 27/05/20 Target Healthcare REIT Property Update 14/08/20 Technicolor Media Update 05/08/20 Templeton Emerging Markets Inv Trust Investment companies Investment company review 18/06/20 Tetragon Financial Group Investment companies Investment company review 01/06/20 The Bankers Investment Trust Investment trusts Investment company review 31/07/20 The Law Debenture Corporation Investment trusts Investment company review 05/08/20 The MISSION Group Media Initiation 16/07/20 The Scottish Investment Trust Investment trusts Investment company review 23/04/20 Thin Film Electronics Technology Flash 31/05/19 Thrace Plastics General industrials Initiation 14/06/19



Tinexta Professional services Update 07/08/20 Town Centre Securities Real estate Update 27/01/20 TR European Growth Trust Investment trusts Investment company review 18/05/20 Treatt Basic industries Outlook 26/05/20 Tungsten Corporation e-invoicer & invoice financier Update 20/07/20 TXT e-solutions Technology Update 11/08/20 Tyman Construction & materials Update 06/08/20 Utilico Emerging Markets Trust Investment companies Investment company review 10/02/20 Vermilion Energy Oil & gas Update 05/05/20 Vietnam Enterprise Investments Investment companies Investment company review 29/04/20 VietNam Holding Investment companies Investment company review 16/03/20 VinaCapital Vietnam Opportunity Fund Investment companies Investment company review 19/12/19 Volta Finance Investment companies Update 04/12/19 Walker Greenbank General industrials Update 12/08/20 WANdisco Technology Update 15/06/20 Wheaton Precious Metals Metals & mining Update 18/08/20 Witan Investment Trust Investment companies Investment company review 16/04/20 Witan Pacific Investment Trust Investment companies Investment company review 16/12/19 Worldwide Healthcare Trust Investment companies Investment company review 30/07/20 XP Power Electronic & electrical equipment Update 03/08/20 YouGov Media Update 31/07/20

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