Claranova — Post-lockdown hangover

Claranova (PAR: CLA)

Last close As at 27/03/2024

EUR2.60

0.07 (2.77%)

Market capitalisation

EUR145m

More on this equity

Research: TMT

Claranova — Post-lockdown hangover

Claranova has announced that it expects to report a 5% y-o-y decline in group revenue in Q122 due to lower than expected volumes in its PlanetArt division. After elevated activity during lockdowns, the division is seeing moderating demand, not helped by new privacy rules introduced by Apple. We have revised our forecasts to reflect lower demand in PlanetArt in FY22; we expect more clarity on both customer demand and the marketing environment when Claranova reports Q122 revenues in November.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Claranova

Post-lockdown hangover

Revenue update

Software & comp services

6 October 2021

Price

€5.7

Market cap

€237m

$1.18:€1

Net cash (€m) at end H121

46.7

Shares in issue

41.6m

Free float

93%

Code

CLA

Primary exchange

Euronext Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(21.3)

(17.0)

(10.2)

Rel (local)

(19.8)

(17.1)

(32.5)

52-week high/low

€8.81

€5.03

Business description

Claranova consists of three businesses focused on mobile and internet technologies: PlanetArt (digital photo printing; personalised gifts), Avanquest (consumer-focused software) and myDevices (internet of things/IoT). Its headquarters are in Paris and it has operations in Europe, the United States and Canada.

Next events

FY21 results

20 October 2021

Analyst

Katherine Thompson

+44 (0)20 3077 5730

Claranova is a research client of Edison Investment Research Limited

Claranova has announced that it expects to report a 5% y-o-y decline in group revenue in Q122 due to lower than expected volumes in its PlanetArt division. After elevated activity during lockdowns, the division is seeing moderating demand, not helped by new privacy rules introduced by Apple. We have revised our forecasts to reflect lower demand in PlanetArt in FY22; we expect more clarity on both customer demand and the marketing environment when Claranova reports Q122 revenues in November.

Year end

Revenue (€m)

EBITDA*
(€m)

PBT**
(€m)

Diluted EPS**
(€)

DPS
(€)

P/E
(x)

06/19

262.3

16.0

12.0

0.25

0.0

23.1

06/20

409.1

17.4

11.3

0.20

0.0

28.4

06/21e

471.9

34.6

27.6

0.44

0.0

12.9

06/22e

505.6

37.9

30.8

0.52

0.0

10.9

Note: *Pre-IFRS 16. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

PlanetArt Q122 revenue expected to decline

Claranova has announced that a combination of factors reduced volumes in the PlanetArt division during Q122: lower internet traffic as consumers took advantage of the lifting of lockdowns to socialise outside the home (a trend the company had started to see in Q421), and the effect of iOS 14.5 app tracking rules which make customer acquisition more difficult. Overall, this is likely to result in a 5% y-o-y decline in group revenue in Q122. PlanetArt is adapting its marketing strategy to the current environment and expects a return to growth from as early as Q222. The company has not seen any effect on its Avanquest or myDevices divisions and is still targeting FY23 group revenue of €700m and an EBITDA margin of 10% from a combination of organic growth and acquisitions.

Reducing PlanetArt growth expectations

The company stated that it does not anticipate that the profitability of its businesses will be significantly affected by the weaker revenue trend. We have revised our forecasts for PlanetArt to reflect the expected outturn in Q122 and lower growth for the remaining quarters of the year. Our FY22 group revenue forecast reduces by 7%, EBITDA (pre-IFRS 16) by 11% and normalised EPS by 13%.

Valuation: Reduction reflects forecast revision

Reflecting the different business models and minority interests for each division, we continue to use a sum-of-the-parts approach to valuation. Using EV/sales multiples that reflect our views on the growth and profitability of each division and are conservative compared to the peer group averages, we calculate a valuation of €10.6 per share (down from €12.9 when we last wrote). In our view, consistent growth in revenues and margins towards the company’s FY23 targets will be key to reducing the discount to peers. Factors that could provide upside to our estimates include a faster recovery in volumes in PlanetArt and successful adoption of the FreePrints Gifts app in the United States and Personal Creations in the UK.

Reducing PlanetArt expectations

The company has announced that PlanetArt has seen lower sales activity in Q122 compared to Q121 (the quarter from 1 July to 30 September). As a result, group revenue is expected to decline c 5% y-o-y for Q122. The company has attributed this slowdown to two factors:

Lifting of lockdowns: during the periods of lockdown last year and earlier this year, demand was strong for online activity, be it shopping, photo printing, playing games or streaming TV. As lockdowns have been lifted, consumers have returned to activities outside of the house and this has affected internet traffic. We note that other internet-focused businesses have seen similar, or worse, declines in volume. In Q221 (June quarter), CEWE’s photofinishing business saw a 20% y-o-y decrease in volumes printed and a 15% decline in revenue. In the same quarter, PlanetArt saw a 7% decline in organic constant currency revenue. Although it recently upgraded its FY22 revenue guidance (year to 30 April), Moonpig still expects to see a c 25% revenue decline for the year. In July, Moonpig commented that customer purchase frequency had started to normalise from elevated levels and it expects this to continue until frequency is c 5% ahead of pre-COVID 19 levels. Desenio (online art prints) noted that it saw a dip in demand from the end of May related to the ending of lockdowns, although from July it had started to improve again. Netflix saw net new subscribers dip to 1.5m in Q221 compared to 10.0m in Q220.

Changes in iOS 14 software: in its iOS 14.5 software update, Apple introduced its App Tracking Transparency feature. This requires apps to ask users if they are willing to be tracked across other companies’ apps and websites. If a user denies this permission, PlanetArt can still track them on any PlanetArt-owned apps and websites but not anywhere else. While this is likely to result in the user receiving less targeted and relevant advertising, the majority of users do not allow tracking. Per Statista, as at 12 September, of those who had installed iOS 14.5, the opt-in rate was c 21%. The result for PlanetArt has been that it is more difficult to personalise marketing campaigns, and this is therefore slowing customer acquisition.

PlanetArt is working closely with partners such as Facebook and other mobile marketing channels to adapt its marketing to the new environment. Like many companies that rely on internet traffic, PlanetArt has for many years had to deal with changes to Google’s algorithms that reduce the effectiveness of marketing campaigns so has experience in adapting its customer acquisition approach to market conditions. The company expects a return to growth for the PlanetArt businesses as early as Q222. We note this is seasonally the strongest quarter for PlanetArt as it encompasses Thanksgiving and Christmas. Despite these short-term fluctuations in demand, we believe that consumers’ propensity to transact online is still higher now than it was before the pandemic.

Changes to forecasts

The company noted that to date, it has not experienced similar problems in its two other divisions, so we have left our Avanquest and myDevices forecasts unchanged. We have reduced our revenue forecasts for all three PlanetArt businesses (photo-printing, Personal Creations, Café Press) for Q122, with divisional revenue reducing from €82.3m (+19.1% y-o-y) to €61.6m (-10.9% y-o-y). Taking a conservative approach, we have reduced our Q222 y-o-y revenue growth assumption from 14% to 5%, Q322 from 14% to 10% and slightly increased Q422 from 14% to 15%. Overall, this results in a 5% divisional revenue growth forecast for FY22, down from 15%. We have reduced our cost forecasts accordingly, reflecting lower product and shipping costs and reduced marketing spend. Our PlanetArt EBITDA forecast reduces from €32.2m (7.4% margin) to €27.5m (6.9% margin).

Exhibit 1: Changes to forecasts

€m

FY21e

FY22e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

471.9

471.9

0.0%

15.3%

540.9

505.6

(6.5%)

7.1%

EBITDA

38.2

38.2

0.0%

85.3%

46.2

41.5

(10.2%)

8.7%

EBITDA margin

8.1%

8.1%

0.0%

3.1%

8.5%

8.2%

(0.3%)

0.1%

EBITDA - pre IFRS 16

34.6

34.6

0.0%

98.2%

42.6

37.9

(11.0%)

9.6%

EBITDA margin - pre IFRS 16

7.3%

7.3%

0.0%

3.1%

7.9%

7.5%

(0.4%)

0.2%

Normalised operating profit

33.3

33.3

0.0%

110.6%

41.3

36.6

(11.4%)

10.0%

Normalised operating profit margin

7.1%

7.1%

0.0%

3.2%

7.6%

7.2%

(0.4%)

0.2%

Reported operating profit

24.7

24.7

0.0%

216.3%

38.0

33.3

(12.4%)

35.0%

Reported operating margin

5.2%

5.2%

0.0%

3.3%

7.0%

6.6%

(0.4%)

1.4%

Normalised PBT

27.6

27.6

0.0%

144.5%

35.5

30.8

(13.2%)

11.6%

Reported PBT

19.0

19.0

0.0%

476.7%

32.2

27.5

(14.6%)

44.6%

Normalised net income

17.6

17.6

0.0%

119.8%

25.2

21.9

(13.2%)

24.6%

Reported net income

10.7

10.7

0.0%

N/A

22.7

19.4

(14.7%)

81.3%

Normalised basic EPS (€)

0.45

0.45

0.0%

119.0%

0.61

0.53

(13.2%)

18.6%

Normalised diluted EPS (€)

0.44

0.44

0.0%

119.8%

0.60

0.52

(13.2%)

19.1%

Reported basic EPS (€)

0.27

0.27

0.0%

N/A

0.55

0.47

(14.7%)

72.5%

Net debt/(cash)

(24.2)

(24.2)

0.0%

74.4%

(2.8)

3.3

(215.8%)

(113.6%)

Divisional revenues

PlanetArt

380.2

380.2

0.0%

21.1%

436.0

400.7

(8.1%)

5.4%

Avanquest

87.9

87.9

0.0%

(2.7%)

100.8

100.8

0.0%

14.7%

myDevices

3.8

3.8

0.0%

(20.4%)

4.0

4.0

0.0%

4.7%

Total revenue

471.9

471.9

0.0%

15.3%

540.9

505.6

(6.5%)

7.1%

Divisional EBITDA

PlanetArt

27.8

27.8

0.0%

96.9%

32.2

27.5

(14.6%)

(1.1%)

Avanquest

10.1

10.1

0.0%

41.1%

13.6

13.6

0.0%

34.7%

myDevices

(3.3)

(3.3)

0.0%

(13.3%)

(3.2)

(3.2)

0.0%

(3.9%)

Total EBITDA - pre IFRS 16

34.6

34.6

0.0%

98.2%

42.6

37.9

(11.0%)

9.6%

Source: Edison Investment Research

Valuation

We have revisited our sum-of-parts valuation. We have reduced the multiple we use for PlanetArt to reflect lower growth prospects in FY22, from 1.3x to 1.0x. This results in a new valuation of €10.55 per share, down from €12.85. We note that this valuation factors in the Avanquest minority buyout, due by the end of October.

Exhibit 2: Sum-of-parts valuation

FY21e

FY22e

EV based on FY21e sales multiple (€m)

Minority interest

Value to shareholders (€m)

EV/Sales multiple

1.2

1.1

548.4

513.1

PlanetArt

1.0

0.9

380.2

7.7%

350.8

Avanquest

1.7

1.5

152.9

0.0%

152.9

myDevices

4.0

3.8

15.3

38.7%

9.4

Implied EV/EBITDA multiple

PlanetArt

13.7

13.8

Avanquest

15.1

11.2

myDevices

N/A

N/A

€m

Upside/(downside)

Net cash at end FY21e

24.2

Equity value (€m)

482.5

Cost of acquisitions

(46.9)

Per share value (€)

10.55

85%

Fund raise

15.0

Promissory notes

(22.9)

Adjusted net debt

(30.6)

No. shares (m)

45.7

Source: Edison Investment Research

Exhibit 3: Financial summary

€'m

2015

2016

2017

2018

2019

2020

2021e

2022e

30-June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

93.1

117.4

130.2

161.5

262.3

409.1

471.9

505.6

EBITDA

 

 

(6.8)

(9.2)

(5.0)

3.9

16.0

20.6

38.2

41.5

Normalised operating profit

 

 

(11.4)

(16.0)

(5.8)

3.4

15.5

15.8

33.3

36.6

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

(1.5)

(2.4)

(3.3)

(3.3)

Exceptionals

15.6

(10.0)

0.4

(2.4)

(2.9)

(5.6)

(5.3)

0.0

Share-based payments

(0.0)

(0.1)

(4.8)

(7.1)

0.3

0.0

0.0

0.0

Reported operating profit

4.2

(26.1)

(10.1)

(6.1)

11.4

7.8

24.7

33.3

Net Interest

1.1

(1.7)

(0.9)

(0.3)

(3.5)

(4.5)

(5.6)

(5.8)

Joint ventures & associates (post tax)

0.0

(0.0)

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

(45.6)

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(10.3)

(17.7)

(6.6)

3.1

12.0

11.3

27.6

30.8

Profit Before Tax (reported)

 

 

5.3

(27.8)

(11.0)

(6.4)

(37.7)

3.3

19.0

27.5

Reported tax

(0.6)

(0.8)

(0.4)

(1.8)

(3.7)

(2.1)

(4.7)

(6.3)

Profit After Tax (norm)

(10.9)

(18.5)

(7.0)

2.4

9.2

8.7

21.3

23.7

Profit After Tax (reported)

4.7

(28.6)

(11.4)

(8.2)

(41.4)

1.2

14.4

21.2

Minority interests

(8.1)

0.0

0.3

0.2

0.6

(0.7)

(3.7)

(1.8)

Discontinued operations

(3.2)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(18.9)

(18.5)

(6.7)

2.6

9.8

8.0

17.6

21.9

Net income (reported)

(6.5)

(28.6)

(11.0)

(7.9)

(40.8)

0.5

10.7

19.4

Basic ave. number of shares outstanding (m)

6

38

38

39

39

39

39

41

EPS - basic normalised (€)

 

 

(3.27)

(0.49)

(0.18)

0.07

0.25

0.20

0.45

0.53

EPS - diluted normalised (€)

 

 

(3.27)

(0.49)

(0.18)

0.06

0.25

0.20

0.44

0.52

EPS - basic reported (€)

 

 

(1.13)

(0.76)

(0.29)

(0.20)

(1.04)

0.01

0.27

0.47

Dividend (€)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

26.1

10.9

24.0

62.4

56.0

15.3

7.1

EBITDA Margin (%)

-7.3

-7.9

-3.8

2.4

6.1

5.0

8.1

8.2

Normalised Operating Margin

-12.3

-13.7

-4.4

2.1

5.9

3.9

7.1

7.2

BALANCE SHEET

Fixed Assets

 

 

15.7

3.0

2.0

1.3

75.1

93.7

97.1

192.1

Intangible Assets

12.0

1.5

0.9

0.5

69.9

70.5

74.1

169.3

Tangible Assets

0.6

0.5

0.3

0.2

1.4

15.7

15.5

15.3

Investments & other

3.1

1.1

0.7

0.6

3.8

7.5

7.5

7.5

Current Assets

 

 

48.0

25.5

28.1

79.1

100.9

116.3

130.4

177.8

Stocks

5.9

5.0

3.7

3.7

4.8

14.4

16.6

17.8

Debtors

4.8

4.7

4.3

4.9

11.6

9.9

11.4

12.2

Cash & cash equivalents

30.5

11.1

17.1

65.7

75.4

82.8

93.1

138.6

Other

6.9

4.7

2.9

4.8

9.1

9.2

9.2

9.2

Current Liabilities

 

 

(32.0)

(25.3)

(28.1)

(37.2)

(60.5)

(74.6)

(76.2)

(80.8)

Creditors

(26.9)

(24.5)

(26.6)

(35.4)

(54.8)

(64.3)

(65.9)

(70.5)

Tax and social security

(0.3)

(0.0)

(0.3)

(1.7)

(3.0)

(1.2)

(1.2)

(1.2)

Short term borrowings

(4.8)

(0.7)

(1.1)

(0.1)

(2.7)

(6.1)

(6.1)

(6.1)

Other

0.0

0.0

0.0

0.0

0.0

(3.0)

(3.0)

(3.0)

Long Term Liabilities

 

 

(2.4)

(1.1)

(0.7)

(29.0)

(52.0)

(73.1)

(73.1)

(146.1)

Long term borrowings

(1.8)

(0.6)

0.0

(28.1)

(49.1)

(62.8)

(62.8)

(135.8)

Other long term liabilities

(0.7)

(0.5)

(0.7)

(0.9)

(2.9)

(10.3)

(10.3)

(10.3)

Net Assets

 

 

29.3

2.1

1.3

14.2

63.6

62.3

78.2

143.1

Minority interests

0.0

0.0

(0.1)

(1.8)

(11.0)

(11.7)

(15.4)

(17.2)

Shareholders' equity

 

 

29.3

2.1

1.2

12.5

52.6

50.6

62.8

125.9

CASH FLOW

Op Cash Flow before WC and tax

(6.8)

(9.2)

(5.0)

3.9

16.0

20.6

38.2

41.5

Working capital

0.4

2.5

6.8

7.9

(4.1)

22.5

(2.1)

2.6

Exceptional & other

(3.8)

(4.3)

(2.2)

(5.7)

(5.2)

(6.3)

(5.3)

0.0

Tax

0.3

(0.3)

(0.0)

(1.2)

(3.8)

(6.8)

(4.7)

(6.3)

Net operating cash flow

 

 

(9.8)

(11.3)

(0.4)

5.0

3.0

30.0

26.1

37.7

Capex

(4.4)

(0.9)

(0.2)

(0.1)

(2.5)

(1.2)

(1.0)

(1.0)

Acquisitions/disposals

10.8

(0.4)

3.6

14.2

(13.3)

(31.9)

(7.0)

(46.9)

Net interest

(0.9)

(0.1)

(0.0)

(0.3)

0.0

(0.5)

(5.6)

(5.8)

Equity financing

33.2

(5.1)

1.9

2.0

(1.4)

0.0

1.5

15.0

Dividends

0.0

2.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

0.1

0.1

0.1

(0.6)

0.0

0.4

(3.6)

(3.6)

Net Cash Flow

29.0

(15.7)

5.0

20.1

(14.2)

(3.2)

10.3

(4.5)

Opening net debt/(cash)

 

 

18.0

(23.9)

(9.8)

(16.0)

(37.5)

(23.6)

(13.9)

(24.2)

FX

0.1

(0.1)

(0.6)

0.4

0.3

(0.8)

0.0

0.0

Other non-cash movements

12.6

1.7

1.8

1.1

0.0

(5.7)

0.0

(23.0)

Closing net debt/(cash)

 

 

(23.9)

(9.8)

(16.0)

(37.5)

(23.6)

(13.9)

(24.2)

3.3

Source: Claranova, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Claranova and prepared and issued by Edison, in consideration of a fee payable by Claranova. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Claranova and prepared and issued by Edison, in consideration of a fee payable by Claranova. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on Claranova

View All

Latest from the TMT sector

View All TMT content

Research: TMT

BluGlass — Transition to direct-to-market components model

During FY21 BluGlass continued the transition from an equipment sales and licensing business to a direct-to-market components operation focused on rapidly expanding opportunities in the laser diode industry. While the launch of its first laser diodes has been delayed by reliability issues relating to third-party processing steps, management notes that the fund-raising activities this June and July should provide a cash runway through to initial customer revenues from laser diode sales.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free