27 August 2014

Brokers' view: Canaccord Genuity

10/08/2011

Analysts Gareth Evans and Bob Liao highlight the potential of Ubisense (a client of Canaccord), which joined AIM this year in a £6 million float. The Cambridge-based location-tracking specialist provides a variety of technology that can track the location of items, already in use by companies such as BMW and Airbus. Liao and Evans value the business at £59 million, which they base on 3.7 times 2012’s EV/sales.

A loss before tax of £400,000 on sales of £20.9 million is forecast for the year to December 2011. In 2012, maiden profits of £1.3 million are pencilled in on turnover of £26 million. Rating the shares as a buy, a target price of 269p is identified.

Brotherly love
The financials team at Canaccord is keen on investment bank Close Brothers (also a Canaccord client.) The team of Ian Poulter, Catherine Heath and Biraj Borkhataria comment that, following a recent update, the business ‘looked solid and continued themes seen earlier in the year’ with its Winterflood market-making operation described in particular as a ‘resilient performer’.

Identifying a target price of 925p, adjusted pre-tax profits of £127.8 million on income of £556.2 million is forecast for the year to July 2011. In 2012, profits of £155.1 million on income of £610.7 million are pencilled in. Dividends of 41p and 43p are forecast for 2011 and 2012 respectively.

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