Edison Investment Research

SCISYS Group (SSY); record order book at £98.6m for FY 2018

Final dividend up 10% at 1.73p per share subject to AGM approval

The company announced unaudited preliminary results for the year ended 31 December 2018. Revenues grew 10% to £58.4m and adjusted operating profit rose 16% to £5.1m.

Regional REIT (RGL); net profit increases 149% to £67.4m for FY18

Net LTV reduced below target of around 40.0% to 38.3%

Regional REIT announced its FY18 results, posting a 9% increase in EPRA NAV per share at 115.5p. EPRA adjusted EPS stood at 7.5p and total dividend increased about 3% to 8.05p. The company witnessed strong performance in transactional activity with £73.3m invested in new acquisitions and £149.3m received from strategic disposals. EPRA occupancy rates improved 89.4%.

Secure Trust Bank (STB); reports group PBT was up 38.8% to £34.7m for FY 2018

Cost of risk were significantly reduced, aided by higher quality book

Secure Trust Bank announced results for the year ended 31 December 2018. Operating income increased 17.1% to £151.6m. Basic EPS and adjusted EPS grew 42.2% and 39.0% to 153.2p and 161.8p, respectively. Total dividend stood at 83p per share (FY 2017: 79p).

7digital Group (7DIG); agrees an initial one-year deal with Dubset

The commercial terms of the deal are confidential

7digital has signed an initial one-year deal with Dubset Media for access to the company’s music platform to improve Dubset’s proprietary MixSCAN recognition technologies. The commercial terms of the deal are confidential, while the company will receive significant set-up fee as part of the deal.

Goals Soccer Centres (GOAL); identifies a misdeclaration of VAT spanning several years

A potential payment of £12m to HMRC – in addition to potential interest and penalties – adds a radically negative dimension to its negotiations with lenders

Following the announcement of investigations into historical accounting errors and policies, Goals today specifically identifies a misdeclaration of VAT spanning several years, currently quantified at about £12m. Goals had a complex VAT profile in the past, with partial status meaning that it was able to claim back tax from HMRC. It isn’t clear from today’s announcement whether this problem has anything to do with that issue. But the company says it expects VAT accounting policies it will now adopt may have an impact on profitability going forward, which suggests similarities, adding further questions to the reality of the business model.

PJSC TransContainer (TRCN); capex tripled to RUB 7,032m in 2018

In the reporting year, the Russian rail container market grew 14.4% year-on-year

PJSC TransContainer, Russia’s largest container operator with operation in Europe and Asia, revealed that its capex tripled and operating profits surged by 48.6% for the year to December 2018. A majority of the capex is likely to be invested in the acquisition of new flatcars and containers. On a year-on-year basis, adjusted revenue grew 12.6%.

Powerhouse Energy (PHE); issue ordinary shares for the settlement of fees

he number of total ordinary shares issued by the company will stand at 1,885,570,506.

The group will issue 21,838,750 new ordinary shares at 0.5p each and 4,306,802 new ordinary shares at 0.5015p each to various service providers for the settlement of fees.

Destiny Pharma (DEST); appoints MedPharm to develop XF-platform drug formulations

The XF-platform has already delivered XF-73 nasal gel for the prevention of post-surgical infections

Destiny Pharma has appointed MedPharm to develop new formulations of its XF-platform compounds as treatments for dermal and ocular infections. MedPharm will develop compounds for the treatment of several topically treated infections, including diabetic foot ulcers and ophthalmic infections. The XF-platform has already delivered XF-73 nasal gel for the prevention of post-surgical infections. The phase 2b testing trial will begin in 2019.

Yield curve a US recession signal? Maybe not this time

Alastair George, Chief Investment Strategist

Recent declines in US government bond yields have led to a flood of articles discussing the likelihood of a US recession over the next 12-18 months. This is understandable, first given the relatively strong correlation between yield curve inversions and US recessions in the past and second, the extraordinary length of the current US economic expansion. However, we believe recent correlation-focused commentary misses a key point in terms of causation. There are in our view good reasons to believe that the recession signal from the flat US yield curve is a false positive.

Pilbara Minerals (PLS); completes Stage 3 Scoping Study at its Pilgangoora Lithium Project

Is bigger better?

Pilbara Minerals has completed a scoping study for a Stage 3 expansion at its Pilgangoora Lithium Project, located in Australia. The scoping study reflects changes in metrics from increasing production levels to 1.2Mtpa of spodumene concentrate from around 0.8Mtpa for Stage 1 & 2. Potentially creating the world’s largest hard rock lithium producer. But does this make for a better investment?