Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

March 30, 2023

Nuclear in, biomass out?

Macro & Overnight

The UK government is setting out some green credentials today, and among them, it is to allow investors to count nuclear energy as a “green” investment. However, it rejected the Drax carbon capture project for government backing, arguably significantly undermining the UK’s green credentials for biomass subsidy.  

Who would have thought burning imported trees from N America wasn’t green, but building nuclear reactors was? Combined, these announcements signal that in future, the UK will have a greater dependency on nuclear for baseload energy requirements when it is not sunny or windy enough for renewables.  

UK Company News

Exchange services company Aquis Exchange FY results showed revenue up 24%, and it reported that YTD trading is in line with expectations. Its MTF membership grew from 38 to 41, and revenue increased by 15%. Technology licensing revenue grew by 51% and data revenues by 29%. AQSE delivered 22 IPOs during the year, the most of any growth company exchange in the UK (well, let’s say it, more than AIM). It sees a pipeline of 50-60 companies looking to IPO and expects the growth of the Exchange to continue at pace throughout 2023.

Aquis is broadening out into an attractively diversified spread of growing revenue streams. It is at an interesting inflection point. (Listen to the ITCOM episode 3 with Aquis CEO). 

Ascential, the B2B media business, reported revenue growth of 30%. It said it intends to separate its Digital Commerce division into an independent, publicly-traded company listed in the US (Likely to attract a few headlines). It recorded solid cash flows with an operating cash flow conversion of 104%. 2023 has started well and is in line with our plans

Keyword Studios, the gaming outsourcing provider, has acquired Digital Media Management, a leading US-based social media agency. DMM is currently majority founder-owned and has grown rapidly in recent years, and in 2022, it delivered revenues of approximately $34m and EBITDA of about $8.5m. It is paying initial consideration of $67.5m and a maximum deferred contingent consideration of $32.5m, depending on future performance over the next two years.

Microlise, the technology solutions provider for the road transport and logistics sector, reported a 5% increase in revenue, with recurring revenue up 10%. It added over 250 new customers in the 12 months, and its recurring revenue run rate provides good visibility on sustainable, profitable growth. Gross profit was up 9%, and cash increased by 27% due to a 120% cash conversion. (Hear more, ITCOM episode 8 with Microlise founder and CEO). 

QinetiQ has won an order from the US army for Digital Night Vision Technology (DNVT) in a contract worth up to $92.6M over four years.

Sanderson Design has announced collaborations with Sainsbury’s Habitat and clothing brand Tu. (See note here). 

Prognosticator 

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