Edison Investment Research

Morrisons (MRW); Q3 results showing enviable growth

Growth at 5.6%, only slightly of the previous quarters record 6.3%

The wholesale supply deal with McColl’s that boosted Morrison’s wholesale operation in the first half has grown further in Q3 to drive a 4.3% contribution to like-for-like sales growth, up from 3.8% at Q2.

UK shale gas - Cuadrilla reports gas to surface

In our view, first shale gas to surface at Preston New Road is encouraging and supports results from the 2011, Preese-Hall 1 vertical well were gas was successfully flowed to surface from the Bowland shale. To date, Cuadrilla has only hydraulically fractured a small section of shale surrounding the first of two horizontal wells; gas flows on completion of the planned multi-frac are expected in early 2019 and should be significantly higher than those from current flow-back.

As discussed in Edison’s probabilistic analysis of UK shale potential, we believe that based on current knowledge, and assuming a supportive political/regulatory framework, there is a 67% chance of commercial success for UK shale (NPV15>0). We note that forward summer and winter average gas prices have risen materially since publication of our UK shale valuation, driven by declining domestic production, absence of long-term storage, rising oil prices and higher gas transportation costs.

AMUR MINERALS (AMC): 2018 drill programme complete with all objectives achieved

Nickel discovery rate ranged from 27,630 lbs to 37,140 lbs.

Amur reported that its two-stage field programme at the Kun-Manie nickel copper sulphide project is complete with all objectives achieved. Final analytical results are expected to be available in Q1 2019.

Custodian REIT (CREI); acquires a high street unit in The Grove in Stratford for £2.1m

The property earns a passing rent of £150,935 per annum, equivalent to a net initial yield of 6.78%.

Custodian acquired a ground floor retail unit with an upper floor office suite in The Grove in Stratford. Currently let to Foxton’s Estate Agents and The Incorporated Trustees of the Universal Church of the Kingdom of God (“UCKG”) until 30 April 2031 and 2 May 2025, the property earns a passing rent of £150,935 per annum, equivalent to a net initial yield of 6.78%.

WANdisco (WAND); secures a contract worth $1m

Stock flat at 390.00p at 8:00

WANdisco announced it has secured a contract worth $1m with the leading information and communications technology provider in China for its Source Code Management product.

Telford Homes (TEF); acquires part of Greystar site in Greenford for £28.4m

Development site has planning consent for 1,965 homes

Telford Homes announced that it has exchanged contracts for the purchase of part of Greystar’s significant development site in Oldfield Lane North, Greenford, for a total consideration of £28.4m.

Ultra Electronics (ULE): announces sale of Airport Systems business to ADB SAFEGATE for £22m

Airport System Posted an operating profit of £3.2m on a revenue of £18.9m in 2017

Today, Ultra Electronics announced the sale of its business, Airport Systems, to ADB SAFEGATE. The £22m divestment includes a deferred payment of £2m, which will be made post transfer of certain commercial contracts. Ultra will retain the sale proceeds for general corporate purposes. The deal is expected to end by 31 January 2019.

EMIS Group (EMIS); acquires Dovetail Lab for £2.5m

Emis Group also acquires the remaining stake in its subsidiary Rx Systems

EMIS Group announces the acquisition of Dovetail Digital Limited (Dovetail Lab). An initial 90% shareholding in Dovetail Lab will be acquired on a cash and debt-free basis for £2.5m. Of the £2.5m, £1.5m in cash is payable immediately and £1.0m in EMIS Group shares are to be issued on successful product delivery milestones.

Just Eat (JE); maintains breakneck rate of expansion

EBITDA is indicated low in the £165-185m range

Just Eat has maintained its breakneck rate of expansion with 41% revenue growth in Q3 and a nudge up to year-end revenue expectations. That includes 16% UK order growth in September, rebounding from the torpor of July and August. This year’s figures benefit from the inclusion of Hungryhouse, acquired in January.

OnTheMarket (OTMP); reports listing agreements with over 11,500 agent branches

OnTheMarket reached a 96% share in agents with between 13–19 offices in October.

As of 30 October, OnTheMarket (OTMP) signed listing agreements with UK estate and letting agents with more than 11,500 branches. It has added over 6,000 branches since admission to AIM in February.