Edison Investment Research

Metals Exploration (MTL); ties up $6.6m in short-term working capital funding

The facility carries an interest rate of 20% p.a. accruing daily from drawdown

MTL has agreed an unsecured standby loan facility of $6.6m with two of its major shareholders, MTL (Luxembourg) Sarl Limited and Runruno Holdings Limited (the lenders). The facility also carries an arrangement fee of 2% payable in cash on signature.

Marston (MARS); reveal steady if unexciting pre-tax profits

EPS close to consensus expectations at -2%

While exposed to the underlying weakness in consumer demand, pub companies have the investment advantage of being totally UK-centric in their customer base, although input costs are to some extent affected by currency-led inflation. Marston’s is not expensively valued: at 99p the shares stand at a substantial 33% discount to NAV of 1.51p per share. The dividend yield of 7.7% is higher than the FY September 2019 P/E of 6.9 times, with a modest EV/EBITDA multiple of 9.2 times for the same period.

Stride Gaming (STR); delivers solid organic growth during FY 2018

Solid organic growth in UK Real Money Gaming

Stride Gaming announced its audited results for the year ended 31 August 2018. The group’s Net Gaming Revenues (NGR) grew 8.7% to £89m (FY 2017: £81.8m) against an evolving and challenging UK market. Underlying adjusted EBITDA increased by 1.5% on an like-for-like basis, adjusting for the effect of the UK’s point of consumption tax (POCT).

MOD Resources (MOD); makes yet another discovery

The description of the Kalahari Copper Belt core appears positive

MOD Resources (MOD.L) appears to have made its sixth discovery at it’s the Kalahari Copper Belt project, located in Botswana, though no assay results have yet been announced. The discovery is based on visual observations of the core from holes MO-T23-001D and MO-T23-002D, where malachite and chrysocolla were found in fractures and narrow veins in the near-surface and disseminated chalcocite, chalcopyrite and bornite were discovered closer to the D’Kar and Nagwako Pan Formation.

Sound Energy well result highlights reservoir variability in Morocco

Sound Energy’s TE-9 well in the Tendrara Basin in Morocco has encountered poor reservoir in the primary Triassic TAGI target and the well will be plugged and abandoned. The well was the first in a three well exploration campaign and was testing the A1 structure around 25km to the north west of the company’s Tendrara production concession, with a mid-case pre-drill estimate 0.7TCF gas in place. Since 2016, Sound has successfully drilled and tested the TE-6 and TE-7 wells in the core Tendrara area around the TE-5 discovery well, however results from the larger step out wells such as 2017’s TE-8 (which encountered tight TAGI sands to the west)  and exploration further afield in TE-9 have not been as encouraging.

Entertainment One (ETO); reports group adjusted PBT up 7% to £42m

Adjusted diluted EPS increased 20% at 6.1p per share

Entertainment One announced half-year results for the six months ending 30 September 2018. The group’s reported underlying EBITDA grew 10% to £60m, driven by revenue growth in Family & Brands. However, this was partly offset by lower performance in Film & Television. Reported revenue was broadly stable at £405m (2017: £413m).

MOD Resources (MOD.L); files prospectus for the London Stock Exchange

The company expects to list in London on the 26th November 2018

MOD Resources’ (MOD.L) highly anticipated listing on the London Stock Exchange’s Main Market is expected on 26 November 2018, following the publication of its prospectus today. MOD Resources is already listed on the Australian Stock Exchange but is coming to London to attract institutional investors.

Bonmarchè (BON); struggles following six month like-for-like sales declines of -4.0%

Online sales growth was robust at 28.9% over the six month period

It seems that even at the value end of the market the impact of weaker high street demand is taking its toll. Bonmarchè, the value fashion retailer, has reported a store like-for-like sales decline of -4.0% for the six months to 29 September 2018, with a significant deterioration to -7.7% in Q2 versus -1.1% in Q1.

Focusrite (TUNE); posts outstanding results with revenue growth of 13.7% year-on-year

Adjusted earnings per share grew 18.9% to 17.6p and the dividend for the year increased by 22% to 3.3p

Focusrite, the global music and audio products group, has delivered outstanding results. Revenue of £75.1m grew by 13.7% year-on-year. It also posted stronger margins so that pre-tax profit of £11.3m grew 19.2%, beating estimates by 5%.

SolGold (SOLG); announces eye watering resource upgrade

SolGold’s Alpala project towers above its peer group

SolGold (SOLG.L) announced this morning an eye watering resource upgrade at its Alpala Porphyry Copper-Gold Deposit, located in Northern Ecuador. The project now has a Total JORC 2012-Complaint Mineral Resource Estimate of 3bt at a copper equivalent grade of c. 0.5% Cu eq. This is a massive increase from the previous estimate of 1bt at a copper equivalent grade of c. 0.7% Cu eq.