Edison Investment Research

Deutsche Beteiligungs – reduced earnings guidance for FY18

Lower market valuation multiples have materially affected H118 net income

Deutsche Beteiligungs (DBAG) has announced that it expects to report net income for the year to 30 September 2018 that is moderately (10% to 20%) lower than the €43.0m average of the last five financial years (the reference for previous guidance), equating to net income of between €34m and €39m for FY18. Previous guidance, first given at the time of the FY17 results and confirmed with Q118 results, was for a significant (more than 20%) increase in net income. The revised forecast is based on DBAG’s c €20m expected net income for H118, which reflects lower market valuation multiples being applied in the valuation of portfolio companies at 31 March 2018. DBAG’s guidance assumes constant market valuation multiples and so is subject to upward or downward revisions following significant market moves.

PowerHouse Energy Group (PHE); signs first international agreement for deploying DMG® process

Stock up 10.34% to 0.64p 08:05

PHE has announced its first international distribution agreement to deploy DMG, its proprietary hydrogen from waste (HfW) process, in hydrogen bus projects in Bulgaria and Romania.

Carclo (CAR); Sarah Matthews-DeMers appointed as Group Finance Director

Stock flat at 94.0p at 8:12

Sarah will take over from Richard Ottaway, Group Financial Controller and Company Secretary, who was appointed the acting Chief Financial Officer on 31 March 2018. She will join the company’s board on 18 July 2018

Findel (FDL); trading update: strong FY 2018 performance

Stock up 3.59% to 260.0p at 08.02

The group’s PBT is expected to be at the upper end of market expectations of £26.0m to £26.5m.

Globalworth Real Estate Investments (GWL); loan agreement of up to €400m with Globalworth Pola

GWL has announced the execution of a second loan agreement with its subsidiary, Globalworth Poland (GPRE). The agreement is for a maximum loan amount of €400m at an interest of 5% pa and an arrangement fee of 1%. The principal, interest and fee are repayable at the end of the maturity period of seven years.

Egdon Resources (EDR); interim results: operating loss widens amid lower-than-expected production

Stock down 1.69% to 5.80p 8:00

Oil and gas revenues remained flat at £0.51m for the six months ended 31 January 2018. Loss for the period rose to £0.85m from £0.73m last year.

appScatter Group (APPS); partners with ironSource

Stock up 2.58% to 79.5p at 8:03

APPS, a B2B software as a service (SaaS) platform, has agreed a partnership to introduce its platform to ironSource’s significant app developer customer base

2018 Earnings forecasts: Still robust, for now

Corporate sector soldiers on despite increasing geopolitical tensions

Geopolitics will in our view continue to present headline risk for the rest of the year. The US/China trade détente has broken apart as the US administration addresses the prospect of China challenging for dominance in the world economy. This weekend’s military response to the use of chemical weapons in both Salisbury, UK and Syria may for now be described as “mission accomplished” but it remains to be seen what the response would be to any further provocation. At the same time, there has been a run of disappointing economic data in the eurozone. Nevertheless, earnings estimates remain relatively stable for now in aggregate as the recent strength of the oil price leads to upgrades in energy, offset by modest downgrades in other sectors.

G3E Exploration (G3E); annual reserve update; 2P reserves of 377.1 Bcf valued at $2.42bn

G3E reported 1P (P90) reserves of 96.7 Bcf valued at $474m (2016: 184.4 Bcf), 3P reserves of 2044.4 Bcf valued at $12.75bn (2016: 2386.3 Bcf) and 2C resources of 762.2 Bcf and best net prospective resources of 1542.8 Bcf.

Avacta Group (AVCT); interim results: underlying operating loss rises with increase in R&D expense

Half-year revenues for the period ended 31 January 2018 increased 16% to £1.5m. However, underlying operating loss rose to £4.5m from £3.9m last year due to increase in R&D expense and operational costs