1Spatial, the AIM-listed global leader in Location Master Data Management (LMDM) software and solutions, has released a brief trading update ahead of its Annual General Meeting.

The company reports that full-year trading is expected to align with market expectations as the company purses a growth strategy across the Uk and US.

1Spatial shares were 2% higher at the time of writing.

“Trading for the full year is expected to be in line with expectations. We have secured several new contracts in Europe and the US (as previously announced) in recent months, and we continue to make progress with our innovative 1Streetworks SaaS offering,” Andrew Roberts, Non-Executive Chairman, will say in a statement at the AGM today

“Planned targeted headcount increases across the US Enterprise and 1Streetworks businesses are well underway. With the onboarding of an NG9-1-1 (public safety) specialist in May and a highly experienced sales director joining the Company early in H2 to strengthen the 1Streetworks team. This reflects our approach to ensure our sales and delivery teams have a greater sector focus.  

“The Group has a strong order book, a growing recurring revenue stream and substantial sales pipeline underpinning the Board’s confidence in the outturn for FY25.  We believe the investments we continue to make in people and technology have positioned the business well to take advantage of the huge opportunity ahead.”

It is ‘music to my ears’ – especially when this company clearly states that:

“Annual Recurring Revenue, driven by selling our Celebrus software, is a core focus for the business to drive more value for our shareholders.

Our goal, given the nature of our business, is to have ARR comprise roughly 75% of our total revenues in a given year.”

I really like to see a build-up of ARR by any company, so that statement pleases me as I look at this company’s background.

The Business

Previously known as D4T4, the company which changed its name late last year, classes itself as a disruptive data technology platform, Celebrus Technologies (LON:CLBS) is focused on improving the relationships between brands and consumers via better data.

It redefines what ‘digital identity verification’ means to power both next-level marketing and fraud prevention use cases.

With a blue-chip international customer base, the group, which has offices in the UK, USA and in India, works across over 30 countries and markets itself throughout the financial services, healthcare, retail, travel, and telecommunications sectors.

Celebrus automatically captures, contextualises, and activates consumer behavioural data in live-time across all digital channels and empowers brands to detect and prevent fraud before it occurs through the addition of behavioural biometrics and AI.

By selling more software, the group continues to focus on driving ARR growth with higher gross margins, increasing shareholder value, and building upon its high customer retention rates across the business to drive organic growth.

Celebrus Cloud allows the company to gradually shift away from a reliance on third-party hardware and into a hosting model that drives ARR Managed Services Revenue.

The strong management team has a track record of success in growing software businesses.

While the company, which has a strong balance sheet with ample cash to fund investment into revenue growth, is profitable, cash generative, and dividend paying.

Management Comment

In the company’s 19^th March Trading Update, CEO Bill Bruno stated that: 

“We continue to emphasize our focus on the Celebrus software platform, with the primary deployment option being Celebrus Cloud.

As the upcoming financial year approaches, we are pleased with our ARR growth and revenue visibility; we will continue to invest accordingly to ensure we execute our strategy successfully.”

The Equity

There are some 40,047,009 shares in issue.

The larger holders include Canaccord Genuity Wealth (11.91%), Investec Wealth & Investment (10.28%), Ennismore Fund Management (4.81%), Chelverton Asset Management (6.34%), Close Asset Management (5.78%), Rathbones Investment Management (4.78%), Peter Kear (2.73%), Peter Simmonds (0.88%), Octopus Investments (0.38%) and Ash Mehta, CFO (0.20%).

Broker Views

The group believes market consensus for FY24 to be revenue of £32.1m, and adjusted profit before tax of £5.4m.

Analysts Andrew Darley and Kimberley Carstens at Cavendish Capital Markets have concluded that:

“With contracts, confidence, and visibility, here is a very interesting stock at the wrong price.”

They currently have a 450p a share Price Objective on the stock.

Their estimates for the results, that are due next Tuesday morning, are for £32.0m (£21.4m) revenues for the year to end March, with adjusted pre-tax profits having risen to £5.5m (£3.7m), lifting earnings to 10.4p (7.7p) and the dividend to 3.2p (3.0p) per share.

For the current year they look for £35.5m sales, £6.0m profits, 11.8p earnings and 3.4p dividend.

Over at Canaccord Genuity Capital Markets its analysts have a Buy rating on the shares, with 330p as their target.

They have fairly similar 2024 estimates but are more bullish for the 2025 year – £34m sales, £6.6m profits, 13.0p earnings and a 3.5p dividend.

My View

The high price-to earnings ratio is said to be more than acceptable within the Software and Services sector.

The £98m capitalised group’s shares are currently trading at around the 245p level, which is on the year’s High.

The broker’s price estimates hold out that there is more upside to go for – so will next Tuesday’s results underline their feelings?

Aton Resources has reported outstanding results from their Semna project with gold grades of up to 11.69 g/t Au, accompanied by 19.1 g/t Ag and 1.38% Cu over a 5.19m interval in their recent phase 2 diamond drilling programme at the Semna gold mine project.

TSX-listed Aton’s Semna gold mine is situated within the Abu Marawat Concession in Egypt’s Eastern Desert, approximately 27km east-northeast of the Hamama West deposit and 13km north-northeast of the Rodruin deposit.

The latest results are a major boost for the company, which is undertaking a three-part strategy to begin production at Abu Marawat while continuing an aggressive exploration programme. Aton plans to begin production at the Hamama project in 2026, and today’s results suggest Semna could not be far behind, with bumper grades pointing to an economically viable deposit.

Aton Resources counts London-listed Centamin as a neighbour. UK investors may be familiar with Centamin’s Sukari gold mine, which is forecast to produce 500,000 ounces of gold in 2024. Aton’s Abu Marawat Concession is approximately 200km north of Centamin’s mine.

For context, Aton Resources’s market cap is equivalent to £15m, compared to Centamin’s £1.5bn valuation.

Aton’s drilling programme, consisting of 28 diamond drill holes totalling 4,701m, was designed to test the Main Vein zone and its eastern extension. The results have confirmed the continuation of blind, high-grade gold mineralisation in the Main Vein zone eastern extension, which remains open at depth and along the strike.

“I am happy to now announce the final results from the recently completed phase 2 diamond drilling programme at Semna, which has continued to show excellent promise with more very significant drill intersections from the eastern extension of the previously mined Main Vein” said Tonno Vahk, CEO. 

“The drilling has shown that the high grade mineralisation continues over a strike length of at least 500m, with good mineralisation drilled in the easternmost hole. As always a drill programme raises new questions, including an issue with one of the RC holes, and now is a suitable moment to review the data from the first two drill programmes.

“The presence of abundant coarse gold at Semna suggests that it is important to use as large diameter drill holes as possible, and we plan to return to Semna in the coming months, to continue with a combination of RC percussion and PQ size diamond drilling. However the most important thing is that the persistence of the high grade and coarse gold bearing mineralisation to the east of the old underground workings is quite clear. We are now well into the new diamond drilling programme at Abu Marawat and we are liking what we are seeing so far. We are also making progress at Hamama, with the establishment of Abu Marawat Gold Mines.”

The FTSE 100 was in a buoyant mood on Thursday as the UK headed to the polls to vote in the general election.

However, the biggest driver of UK stocks on Thursday was not the prospect of Keir Starmer making a victory speech outside Downing Street tomorrow but the Federal Reserve minutes released last night.

“The FTSE 100 made a strong start on election day but its gains had far more to do with events on the other side of the Atlantic,” said AJ Bell investment director Russ Mould.

The Federal Reserve released minutes last night that suggested US monetary policy makers saw financial conditions easing to a point conducive to reducing borrowing costs.

“Participants highlighted a variety of factors that were likely to help contribute to continued disinflation in the period ahead,” the Federal Reserve wrote in their minutes.

“The factors included continued easing of demand–supply pressures in product and labor markets, lagged effects on wages and prices of past monetary policy tightening, the delayed response of measured shelter prices to rental market developments, or the prospect of additional supply-side improvements. The latter prospect included the possibility of a boost to productivity associated with businesses’ deployment of artificial intelligence–related technology.”

The mention of possible deflation as a result of AI is interesting for the long-term path of monetary policy and what it will do to US AI stocks when they reopen tomorrow.

US markets are closed for Independence Day today, so the true impact of The Fed’s dovishness on global markets may not be felt until tomorrow, by which time we will have received data from June’s Non-Farm Payrolls.

190,000 jobs are thought to have been created last month. Should the headline figure miss estimates, the case for a rate cut becomes much stronger. In such a scenario, one would expect a sharp rally in stocks.

FTSE movers

Gains were broad on Thursday, with 83 of the FTSE 100 constituents trading higher at the time of writing.

UK housebuilders were well bid as traders positioned for a Labour victory and the promise of planning reforms and a boom in housebuilding.

Smith & Nephew was the FTSE 100’s top riser on Thursday after activist investor Cevian Capital took a 5% stake in the firm. The Smith & Nephew share price has had a dismal run, and investors will hope the activist shakes the firm up. Shares were 9% higher at the time of writing.

Next was the biggest faller as the retailer traded ex-dividend.

NewRiver REIT has announced the acquisition of Ellandi Management Limited, a UK-based asset and development management firm specialising in retail and regeneration projects.

NewRiver REIT shares were down 3.5% at the time of writing.

Ellandi brings to the table a portfolio of 16 shopping centre asset management mandates, covering over 6.3 million square feet, with 10 different partners.

In the financial year ending 30 April 2024, Ellandi reported fee income of £5.7 million and EBITDA of £1.1 million.

NewRiver has agreed to an initial cash payment of £5 million for the acquisition, with potential additional payments of up to £4 million tied to EBITDA performance over a three-year period. Given the market reaction, investors aren’t overly enthralled with the terms.

NewRiver’s combined Capital Partnership business will now manage assets worth approximately £1.5 billion, encompassing 21 shopping centres and 18 retail parks across 13 partners.

When including NewRiver’s wholly-owned retail assets, the total Assets Under Management (AUM) rises to about £2.0 billion, spanning 44 shopping centres and 29 retail parks. This expanded portfolio is expected to generate an existing fee income stream of £8.2 million.

In early May this group’s shares were trading at 25p each.

However, since its success in raising £9.3m of fresh funds just three weeks ago, the shares of Angle Plc (LON:AGL) have been continuing to trade below the discounted share issue at 15p each, falling to an after fund-raise low of 13.50p last week.

So, investors must be hoping that the company could be giving out some good news at its midday AGM at the Surrey Technology Centre in Guildford next Thursday (11^th July).

The Business

The company is a world-leading liquid biopsy company with innovative circulating tumour cell solutions for use in research, drug development and clinical oncology using a simple blood sample.

The company’s FDA-cleared and patent protected circulating tumour cell harvesting technology, known as the Parsortix^® PC1 system, enables complete downstream analysis of the sample, including whole cell imaging and proteomic analysis and full genomic and transcriptomic molecular analysis.

The Parsortix technology is a unique CTC harvesting method using patented microfluidics in the form of a single use cassette, housed within an automated system.

It captures and harvests live, intact circulating tumour cells and CTC clusters from whole blood for downstream analysis.

Management Comment

Just over a month ago when ANGLE announced its 2023 results, Chief Executive, Andrew Newland, stated that:

“ANGLE has made considerable commercial progress in 2023 through the ongoing execution of our strategy. Major efforts have been focused on both the products and services commercialisation channels and on the development of “content” to provide applications of the Parsortix system for customers.

This has resulted in the launch of four imaging assays, a strategic partnership with BioView for the development of a quantitative HER2 assay kit, repeat and new business with pharmaceutical customers for services and positive research study results for the Company’s comprehensive solution for dual molecular analysis of CTC-DNA and ctDNA from a single blood sample.

2023 also saw the first product sales from our newly established global distribution network and we are optimistic about the growth in global sales of the Parsortix system, consumables, and assay kits during the current financial year. 

I am delighted that 2024 has started strongly with three new contracts with two large pharma customers and we look forward to continuing this commercial momentum in the year ahead.”

My View

It is stated that the Parsortix technology has the potential to deliver profound improvements in clinical and health economic outcomes in the diagnosis and treatment of cancer – if that is so then the £43m valued company’s own potential could be absolutely massive.

It is still at a very early stage in the development of the company and its shares are only for risk-tolerant investors – even so at around the current 14p they could prove to be a worthwhile gamble.