Maritime Awareness, Bricks, Codes And Sensing

Windward (LON:WNWD) – Slightly Ahead Of Expectations

Ahead of its Interim Results being announced later next month, the leading Maritime AI company issued a confident Trading Update on Tuesday morning.

Windward’s AI-powered decision support and exception management platform offers a 360° view of the maritime ecosystem and enables stakeholders to make real time, predictive intelligence-driven decisions to achieve business and operational readiness.

In a Trading Update for the six months to end June it showed revenues up 37% at $17.6m, while it expects its EBITDA loss to be no more than $1.6m (2023 H1 $3.8m).

Now with a 35% increase in annual contract value to $37.2m, trading is slightly ahead of market expectations on revenue for FY24, and the company is confident of achieving an EBITDA break-even run rate during FY24.

CEO Ami Daniel stated that:

“I am delighted to report sustained momentum of 35% year over year ACV growth, consistent with FY2023 ACV growth.

We continue to grow the base of global organisations subscribing to our AI-powered insights to better navigate the challenges of global trade.

Investment in our data platform is delivering significant benefits, which has allowed us to quickly roll out Generative AI capabilities with the launch of our first Generative AI agent, MAI Expert, in collaboration with AWS.

This is the first step in a journey that significantly expands both our target market and the breadth of our differentiated offering for existing customers.

Our high renewal rates provide us with solid revenue visibility and confidence in continued positive trading, and with the new products launched in 2024 providing significant expansion opportunities, we are increasingly confident in the prospects for Windward.”

Analysts at Canaccord Genuity Capital Markets rate the group’s shares as a Buy, looking for 137p.

With estimates of $36.2m ($28.3m) sales this year and an adjusted pre-tax loss more than halved to $2.5m ($6.6m loss).

For next year they see $43.4m revenues and just a minute loss of $0.2m.

The brokers envisage $52.1m turnover in 2026 and an adjusted pre-tax profit of $1.6m, worth 1.9c per share in earnings.

The group’s shares, after having hit 125p in February this year, put on a useful 8% price gain on the Trading Update and are currently around 106p.

(Profile 03.04.23 @ 37.5p set a Target Price of 47p*)

(Profile 13.12.23 @ 80p set a Target Price of 100p*)

Brickability (LON:BRCK) – A Good Imminent Building Boom Bet

The year to end March, for this leading distributor and provider of specialist products and services to the UK construction industry, was somewhat disappointing.

It reported revenues down 12.8% at £594.1m while adjusted pre-tax profits were 20.9% lower at £35.3m.

Adjusted earnings per share came out at 8.66p, off 27.4%, while the dividend for the year, which displayed a certain strength of the balance sheet and the group confidence in the future performance, was pegged 6.0% higher at 3.35p.

Chairman John Richards stated that:

“Over the past year there have been a number of well-documented challenges impacting the housebuilding and RMI markets.

Against this macro backdrop, the Group has continued to demonstrate resilience and deliver a robust financial performance.

It is particularly pleasing to see the Group’s strategic focus on diversification of products and end markets yielding benefits.

This, coupled with our capital-efficient business model and continued focus on disciplined capital allocation and cost control, has been a key driver of our resilience.”

Now at 72p, down from its 78p recent High, this group’s shares look to be a fair medium-term punt on Labour really stoking up more housebuilding in the UK.

(Profile 16.04.20 @ 39p set a Target Price of 55p*)

Northcoders Group (LON:CODE) – It Is A Slow Game

This £22m capitalised company is a market leader in technology training in the UK.

It operates a hybrid structure with a flagship site in Manchester and other sites in Leeds, Birmingham and Newcastle supported by a proven digital offering to support its students across the UK.

In a positive Trading Update, for its first half-year to end June, the group reported record demand, delivering a 26% increase in revenues during the period of £4.4m.

The growth was driven by further brand expansion across the UK as well as continued robust underlying demand for Northcoders’ technology training services. 

The group has a good balance sheet position with a £1.3m cash balance at 30 June 2024.

The second half has started well and the roll-out of the central nCore learning platform and its associated efficiencies, as well as Northcoders’ largest ever £10m Department for Education contract, continue to drive profitability.  

What is now believed to be showing through are the benefits of previous strategic decisions to optimise growth of both the Training Bootcamp and Corporate Solutions divisions, which are now bearing fruit and continue to propel topline expansion.

The company is confident in delivering further growth this year and, for the first time at this stage in the year, it has 100% access to revenue and contracted visibility of the market expectations for its 2024 revenue, compared to just 70% at this time last year.  

The company states that this demonstrates the increased quality of its growth as it continues to build a profitable platform that is well positioned for future success.

CEO Chris Hill stated that:

“We are really pleased with our performance in the first half of 2024 and achieving this is testament to our strategic initiatives and the hard work of our ambitious team.  

The entrepreneurial culture runs top to bottom at Northcoders and the proactivity within our teams is driving future success.  

The successful rebranding of our Corporate Solutions division to COUNTER is an important step forward for our challenger brand, and we are confident that the growing reputation of Northcoders’ quality technology training across the UK will support future growth for the division.

As we mature as a business, I am excited for the future and confident in our ability to create life-changing opportunities for individuals from all walks of life as we leave our mark on the technology industry, whilst simultaneously delivering value for our shareholders.”

Analysts Nick Spoliar and Charlie Cullen at Zeus Capital consider that this group is well placed to deliver over this year and next.

They estimate that the revenue for this year to end December will rise to £8.5m (£7.1m), with adjusted pre-tax profit of £0.5m (loss £0.5m) taking earnings up to 6.0p (loss 3.0p) per share.

For the coming year they go for £9.5m in sales with a £0.8m profit, worth 11.2p per share in earnings.

The shares are currently trading at around 280p, Hold.

(Profile 28.01.22 @ 296p set a Target Price of 370p*)

Transense Technologies (LON:TRT) – Outlook Looks Encouraging

With its finals to be announced late in September, the provider of specialist sensor technology and measurement systems, sounds positive in its Year End Trading Update.

Total revenue for the year to end June 2024 increased by 18% to £4.2m (£3.5m) and adjusted EBITDA is expected to increase by 21% to £1.7m (£1.4m), both of which are slightly above market expectations. 

The company is now clearly stating that FY24 has been a pivotal year in readying the two operational business segments to become the main income generators. 

It enters FY25 at a revenue run rate consistent with management expectations for the upcoming year and is well positioned to deliver its ambitious growth plan over the mid-to-long-term.

The Oxfordshire-based company has two active business divisions: Translogik – which is a range of smart, connected tyre inspection and management equipment, used by leading tyre manufacturers, dealers and fleet operators to reduce costs and improve safety; and SAWsense – which is developing Surface Acoustic Wave sensor technology, to improve performance, reliability and efficiency in focus markets of aerospace, automotive, robotics and industrial machinery.

Analyst Ian Jermin at Allenby Capital is particularly encouraged by the increasing momentum within Translogik and the longer term prospects for SAWsense which, together with the growing iTrack royalty stream, positions the Group for further profitable growth.

He anticipates further growth in revenue, profits and cash flow looking forward to FY25 and beyond and he believes that the shares remain attractive on short-, medium- and longer-term horizons as the Board continues to deliver on its strategy.

His estimates for the year to end June 2025 suggest revenues increasing to £5.15m, with EBITDA of £2.05m, while the adjusted pre-tax profit could show through at £1.61m (est £1.30m), lifting earnings to 10.7p (est 8.9p) per share.

Having touched 140pin late May, the group’s shares are currently holding steady at around the 135p level.

Hold steady.

(Profile 17.09.21 @ 102p set a Target Price of 127.5p*)

(Asterisks * denote that Target Prices have been achieved since Profile publication)

Mark Watson-Mitchell: