Daily Stock Market Report (Wed 2 April 2025) - PIER, CAPD, XLM, GATC, DFCH, G4M, HSS, BAKK/GNC, CHG, TPT, AGFX, RPI, IGP

2nd Apr by Graham Neary

35 comments 4793 reads

Good morning! I'm expecting a fairly quiet day for news, according to this week's Week Ahead.

Today's Agenda is complete. The deluge of full-year results has finally ended!

2pm: all done, it's a clean sweep!

Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
Bakkavor (LON:BAKK) (£1.03bn)	Statement re Possible Offer	Agreement in principle with Greencore (LON:GNC) . 85p plus 0.604 GNC shares, ~200p total (last close 177.8p). It’s a 32.5% premium to the undisturbed share price. The previous revised proposal was 85p in cash plus 0.523 shares, which was a 25% premium.	PINK (Graham) [no section below] A 25% premium is rarely enough even with all-cash offers. This new offer is at a 32.5% premium and will see Bakkavor shareholders owning 44% of the combined group. Bakkavor shareholders also receive a special option that triggers if their US subsidiary is sold at a high valuation before June 2026. That option sounds legally complex to me creating scope for a possible dispute. The Icelandic brothers who control Bakkavor must be satisfied with these terms and so I suggest that smaller shareholders should try to get comfortable, too. The result will be a convenience food giant with terrific economies of scale. My main concern is where the cash will come from to make the 85p payment. That is going to cost nearly £500m and both companies are already in net debt
Chemring (LON:CHG) (£1.03bn)	Contract Award	SP +3% MoD multi-year missile defence contract. £251m over six years but "industry partners" will "deliver the significant majority of contract value".	AMBER (Graham) [no section below] This is a nice update that at least quantifies the size of the overall contract and outlines the strategic importance to Chemring (and its Roke subsidiary) of being at the heart of UK missile research and development. I like Chemring but this could have been a much more helpful RNS if they had outlined how much of this contract will convert into their own revenues, and how much of those revenues were already baked into their forecasts . For now I remain neutral as while I do think that prospects are bright, it's highly rated already and performance can be volatile.
Raspberry PI Holdings (LON:RPI) (£911m)	Final Results	Rev -2%, adj. EBITDA -15%, adj. PBT -57%. “Resilient” (?). Expects demand to build up in 2025.	AMBER/RED (Graham) Very popular products with a…

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johnsmith68

2nd Apr

I think flexible ISA refers to taking money out of the tax wrapper for a period of less than a year rather than the scenario described whereby the questioner asked if it's possible to transfer a partial ISA balance into another ISA platform.

af20001

Gear4music (HOLDINGS) (LON:G4M) mention in their trading update today that some competitors have exited the market. To my knowledge, these are GAK in Brighton, and BAX in the Netherlands. BAX were similar to the German giant Thomann, in trying to undercut most European dealers. I believe both have gone into administration.

That could have a read across to Focusrite (LON:TUNE) , if they are owed any significant amounts by either or both operations.

Nothingventured

Might depend on what the provider's admin systems can do. Best give both the receiving provider and ceding provider a call to see if they can facilitate it. I don't think the ISA regs would be a hinderance.

Epitychia

When he (eventually) leaves the White House what will be uncovered will be truely mind boggling. I suspect agent Krasnov is only a small part of it.

Dragon

If it's Halifax iWeb then I have moved cash from iWeb ISA to T212, you just state the amount that you want to move. T212 contact iWeb and a few days later it's in your T212 account. I believe T212 can't transfer shares at the moment.

Agree with Graham that shares with a market cap of less than £10m are generally uninvestable and should not be listed.

Brighton Pier (LON:PIER) has been an interesting company because i view it as a pure discretionary spending barometer. Sales have trended down in recent years, especially compared to inflation, showing that consumers are under pressure.

Islandhome

Chemring (LON:CHG) £251m sounds as if their share is much smaller, although the statement is ambiguous:

'Valued at £251m over six years, and commencing immediately, the STORM framework will see Roke enhance its role as a trusted partner to the UK MDC at the heart of the UK missile defence ecosystem at what is a pivotal moment for national defence and security. As the overall Prime Contractor Roke will self-deliver elements of the contract and will also manage industry partners as they deliver the significant majority of contract value.'

way

Judging by the amount of people in the media and "elites" as well as the population in general around the world who detest him you gotta think there are thousands of people if not more with plenty of money being thrown at it dedicated to uncovering anything and everything on him. If there is anything to find I'd expect them to do so way before he leaves the WH, especially in this day and age.

Thanks everyone for your replies. Sounds doable so that's great. Thanks!

ExpectingValue

Enjoyed the well-reasoned DFCH write-up! Thank you!

Tim Boucher

Sounds like you want to do an in specie transfer, ie retain the stocks, just move them to a different platform? And/or move a cash holding? If so then generally you can do a partial transfer for holdings from previous ISA years, and only a full transfer for holdings added in the current year. You can trigger a partial transfer via the T212 app/website.

Make sure you don't sell/withdraw from Halifax, as that takes them outside the ISA wrapper - transfer is the way to go.

Graham Neary

More to come on this topic, Mr! Had a great chat with them, too.

Cuddlesticks

The seemingly annual 2nd April trading update from cybersecurity firm Intercede (LON:IGP) this morning was comforting with the magical phrase “FY25 revenue will be ahead of the board’s expectations”.

There is a much welcome confirmation of the annual $3.5m US Fed agency renewal. Whilst they seem to have dodged the DOGE the other contract wins listed are tiny.

It’s uplifting to see innovative British companies winning blue ribbon contracts on the world stage but are they good investments? Side by side with one of IGP’s much larger competitors (albeit one that sells more expensive product) Okta (NSQ:OKTA), I think it’s hard to argue IGP offers great value or growth at a reasonable price.

	OKTA	IGP
	A cloud-native security company that focuses on identity and access management	An independent developer and supplier of identity and credential management software.
Market Cap	$18,175m	£84.5m
FY26 Year end	31/3/2026	31/1/2026

PE Current FY26 forecast	32.6x	33.3x
PEG	3.2	NA

Revenue	$2,864m	£17.7m
Revenue growth	+9.7%	+9.9%

PBT	$791m	£3.30m
EPS FY26 forecast	+14%	-10%

Identity and access are not the fastest growing parts of a sector enjoying secular growth, but of the two, given its size, OKTA seems the safer bet to me.

TOPBANANA

HSS Hire (LON:HSS) - Not too sure how to interpret the announcement today. Great news to get such a good price for HSS Ireland.

If you were to put the remaining company (100% of company - £10m EBITA reported for 2024) on the same multiple, less HSS Ireland EBITA and assets, plus the cash it comes to a marked cap of around £52m (18% upside).

However, in the RNS it mentions that the cash will be used to strengthen the balance sheet. Maybe i am reading too much into this, but i am wondering if this could mean a dividend cut coming and therefore keeping the same or similar dividend cover going forwards.

Like i say, maybe reading too much into things.

Brothersinarms

I don't know much about OKTA but I know a fair bit about Intercede (LON:IGP) and using the stocko/cavendish figures at the beginning of the year is probably a bit shortsighted.

Their revenues are made up 3 elements: Recurring revenues (S&M on license sales (20% of the licence cost) and the subscription products - MyID MFA, MyID PSM and the recently launched SecureVault, Professional Services (of which about 50% are generally recurring) and the one-off licence sales.

I estimate this year's recurring revenues to be 9.5-10mm, PS to be 5-6mm and license sales to be approx 2mm with Cavendish forecasting 17.4mm sales in total.

Since 2020/1 when they had limited new licence sales because of COVID and missed their estimates, they have become much more conservative in the forecasts they put in the market. They include the recurring revenues, the recurring element of professional services, and other subscription sales/professional services/licence sales only where they have very good visibility on timing. They then upgrade as the year progresses. So

Forecasts for year ahead after April Trading update and where they ended up:

FY22. 0.5p and achieved 0.7p

FY23 1.0p and achieved 1.8p

FY24 1.3p and achieved 9.3p

FY25. 3.7p and achieved 5.4p (based on today's upgraded forecast)

FY26 4.4p although this does not account for any interest income so best to remove the 31p of cash in calculating the PE which gives a PE of 26.

For FY26, it's possible that DOGE firing a bunch of federal employees may limit top up licences in H1 (although I suspect it will actually lead to more licence sales when they realise they need to hire some people back later in the year), but Europe and Asia are finally getting their act together (they're 5 years behind the US) re more secure identity/credential management and I think you'll find them driving licence/secure vault sales in the years ahead. The advantage of MyID CMS / Secure Vault is that it allows clients to run everything locally and so control their own credentials/PKI keys rather than rely on corporations belonging to an unreliable ally.

However, the thing that most excites me about Intercede (LON:IGP) for the year ahead is a potential DoD rollout. They don't talk about it although Guidehouse raised it in last year's Capital Markets Day (since redacted). AFAIK, the DoD adopted MyID CMS a few years ago but only for the Pentagon and since then, Intercede (LON:IGP) have had 2 staff embedded there assessing and assisting for a further rollout. They've never done that before which gives an indication of the potential size. If the DoD rolls out MyID to the armed forces and all the bases (and base visitors) then it will be a company changer. Of course, the timing is uncertain and it may not happen at all, but it's interesting the CEO recently purchased 50k of shares at 149p when his previous purchase was back in 2023 at 49p.

In any case, I'm happy holding them on an ex-cash PE of 26 given the likely upgrades ahead from Asia/Europe contract wins with the DoD as the potential icing on the cake.

Jon F

Gear4music (HOLDINGS) (LON:G4M), "Until you read the small print:" I'm already looking forward to the Small Caps Live weekly substack summary Mark!! LOL :))

I'm rather hoping Okta (NSQ:OKTA) will buy Intercede (LON:IGP). I hold both.

Regards,
Jon

Monty9

Argentex (LON:AGFX) I hold. I bought recently as they had opened two new territories (Dubai and Australia) and reported their project is in line with the plan. Both factors suggest a decent increase in income is on the cards, possibly for several years. The volatile state of the world generally may also provide a boost to their core business.

As Mark says this type of company requires a good dollop of good faith so I was pleased to see the 10% price rise today - I think the holders believe strategic progress is good and that the system and sales development work (which appear to be fully expensed rather than capitalised) didn't do too much financial damage in a mediocre year for the industry.

I recall Equals falling from well over £1 to about 25p before the market began to believe the story. I held that too and remember seeing the underlying commercial and payments business growing consistently and producing much improved margins - but the market did not react, I think, until the company produced a pre-tax profit.

AGFX appears to be doing much the same thing to expand and reduce reliance on a vanilla FX service. They were challenged at a recent presentation that they were copying Equals and simply replied that copying EQLS' strategy successfully would be a good achievement - hear hear!

Not a no brainer but I can see the possibility of a great upside.

Lincs

In specie can be part of whole - pick which stocks you want moved and ask the receiving provider to request them from the original provider. Just done that with a move from HL to AJB.

Jeremy Rea

3rd Apr

Argentex (LON:AGFX) cancel the dividend but instate a new LTIP. That tells you all you need to know about management priorities.

Each to their own, and I genuinely wish you luck with it, but i wouldn't touch that with a barge pole!

Daily Stock Market Report (Wed 2 April 2025) - PIER, CAPD, XLM, GATC, DFCH, G4M, HSS, BAKK/GNC, CHG, TPT, AGFX, RPI, IGP

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Graham Neary

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