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Northland Capital Partners View on the City: mino Technologies, 3Legs Resources and Flybe Group

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Amino Technologies (LON:AMO) – BUY: Contract win

Market Cap: £58.4m; Current Price: 108p; Target Price: 115p (from 100p)

Contract for Live Advanced Media Platform

  • New contract with Turkcell Superonline, a wholly owned Turkcell subsidiary, to provide Amino’s Live Advanced Media Platform for the roll out of IPTV services. Turkcell has recently started rolling out its Turkcell TV+ service as part of an enhanced ‘triple play’ multiscreen offering.
  • Features of the service includes the ability to rewind the programme guide by up to 12 hours and simultaneous recording in the ‘Cloud’ enabling easy access from any device, anytime, anywhere. No financial data included.
  • No change to forecasts, BUY rating but we increase our price target to 115p.

NORTHLAND CAPITAL PARTNERS VIEW: Further positive contract newsflow from an existing customer. Shares have rallied considerably over the past month (+35%) but the rating is still not demanding when factoring in the strong cash underpinnings (36.7p/share) and the expectation of a return to top line growth in FY15. We maintain our BUY rating and forecasts and move our price target to 115p.

 

3Legs Resources (LON:3LEG) – HOLD*:  Circular  

Market Cap: £16.3m; Current Price: 19.1p

  • From Friday: Posting of circular for EGM and distribution update 
  • The EGM to approve the distribution will be held at the Claremont Hotel, Isle of Man, at 11am on the 25th of November. If the distribution is approved, 3Leg’s will be deemed an investment company according to AIM rule 15.
  • The company had a cash balance of £17.5m as at the 5th of November. Management estimates that winding up/disposal costs are approximately £600k. 
  • Management is recommending the return of £15.9m in cash to shareholders (previous estimate at least £15.5m), subject to the board being satisfied with the company’s solvency position immediately following the EGM. This is equivalent to 18.5p per share. Distributions will be made to for shareholders on the register at 6pm on the 25th of November 2014, with payments expected to be made on the 2nd of December 2014.
  • 3Legs continues to press its claim for the return of $1.6m in cash (c. 1.2p per share) relating to the working capital surpluses accumulated in the JV vehicle since 2012.
  • Barring an alternative course of action, the company plans to put itself in voluntary liquidation by 31st March 2015 at the latest with a final cash distribution to be made on the completion of this process.

NORTHLAND CAPITAL PARTNERS VIEW: The increase in the proposed return to shareholders is evidence of management’s determination to return maximum value to shareholders. It is now on course return £15.9m in cash to shareholders following the disposal of its Eastern Baltic concessions. Further returns will partly rely on the outcome of its claim of $1.6m of funds accumulated in the Polish JV. All things being equal, the best case (if it recovers those funds) looks to be in the region of 20p to 20.7p per share total ultimate return, dependent on ongoing legal/winding up costs. If it does not secure those funds, ultimate shareholder distributions could be in the region of 19p-19.6p if it is fully wound up.

 

Flybe Group (LON:FLYB): Update

Market Cap: £269m; Current Price: 124p

  • New codeshare with Aer Lingus
  • Regional airline Flybe (FLYB.L) this morning announced it has secured another codeshare agreement on this occasion with Aer Lingus. This enables FLYB customers travelling from regional airports such as Exeter, Southampton, Inverness, Southend etc to travel to wider destinations abroad through a connecting flight in Dublin. Aer Lingus has 10 flights a day into major cities across the Atlantic.
  • The new agreement builds on the five existing agreements with Air France, BA, Etihad, Finnair and KLM. FLYB reports 1H15 results on Wednesday where investors will be keen to assess further progress since the FY results to March 2014 published in June.

NORTHLAND CAPITAL PARTNERS VIEW: This is positive news for Flybe as it extends the regional airline’s ability to connect its customers into larger airports for international flights. The news should be well received as the market awaits updates on the 1H15 results, due on Wednesday. 

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