Extending the PayTech DNA to FinTech

Adyen’s capital markets day was much anticipated. In fact, while the broader industry accumulates news of potential disruption stemming from BigTech, the CMD was a timely reminder of what Adyen is about and the future roadmap. Developing in embedded finance is hardly ground-breaking in our view and much will depend on execution where we expect Adyen to deliver.

Consistently outstanding

Results come and go and all look similar. Adyen is once again beating consensus expectations as management shows a sassy control over its business. Despite our recommendation, we believe that, with the visibility over cash flows and the maintained super-efficient business model, the firm is well on its way to recover its previous valuation levels, unless there is a new Central Banks’ coup.

An American

As we previously anticipated, Adyen is now more exposed to North America than any other continent, in terms of gross revenues, highlighting the high tension in the market when comparing net revenues. This implies a lot however, as according to its H1 release, nothing seems to be a drag on its outstanding growth while the world seems very much bonded with its online-shopping habits.

It looks like a vain hope

Adyen has announced on Tuesday that the US Federal Reserve had approved its banking license application. While the obtaining the Office of the Comptroller of the Currency’s approval (OCC) remains outstanding, a “formality” as per our industry discussions, the announcement reveals a wrong assumption on our part. We had overstated the BIN-sponsor cost effect, which turns out to reassert -more than ever- our opinion regarding the company’s valuation.

Adyen has to raise more equity, urgently

Adyen is piling up money in its balance sheet with no plans to spend it. This is questionable behaviour for which we believe the answer may be that the company is building up some capital to reach the requirement for a US banking licence. However, time is ticking and Adyen needs to keep up with the pace of its American peers. Raising further equity would be the key.

High growth in the US and outstanding EBITDA margins

Adyen is releasing FY top-line growth (+28%) which is consistent with the market’s expectations (+1%), sustained by high growth in the US now almost equally weighing with Europe’s gross revenues. The company also disclosed a much higher than expected FY EBITDA margin (61.5% vs 55.5%) and has set its long-term target to more than 65%... 1,000bp higher than the previous 55% target.

Earth to market: hello?

Adyen has developed a best-in-class payment software for merchants with unique growth prospects. It’s out of this world valuation has benefitted from the Covid-19 wave(s), Central Banks’ liquidity plans and a self-feeding buy loop (ETF, indices). Even heroic growth assumptions cannot match the recent valuations.

Cenkos: Healthcare Sector - Ward Round

Weekly round-up of AIM-listed healthcare news. Venture Life Group, GENinCode, Kromek, Alliance Pharma, Polarean Imaging, Benchmark Holdings, Ondine Biomedical, Verici Dx, Faron Pharmaceuticals, Avacta Group, Abingdon Health, Open Orphan, Belluscura, Hutchmed (China), Oxford Biodynamics

LIBERUM: Bango* - Agreement signed with global player

Guidance cut on a continuing higher return rate

Asos has cut its FY22 guidance as shoppers return more clothes amid inflationary pressure. The group also continues to work actively against the ongoing global supply chain challenges. The FY22 top-line is expected to grow between 4%-7% vs .10%-15% previously Adj. PBT will be in a range of £20m-£60m vs. £110m-£140m.

Capital Markets Day feedback

Cambridge Cognition held a very impressive CMD yesterday which showcased the group's Science and Technology capabilities.

Hybridan Small Cap Feast 28/06/2022

Joiners: No Joiners Today. Leavers: Raven Property Group has left the Main Market. What’s cooking in the IPO kitchen? Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Company is proposing to change its name to Fiinu Group plc. Fiinu intends to be a provider of a consumer banking product, the Plugin Overdraft ®, which is designed to provide customers with an overdraft facility without having to change their current account or req

Hybridan Small Cap Feast 16/06/2022

*A corporate client of Hybridan LLP Dish of the day Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? LifeSafe Holdings, a fire safety technology business with innovative fire safety products, intends to join AIM. LifeSafe has developed what the Directors believe to be market disrupting, eco-friendly fire safety protection products to both protect (via fire extinguishers) and detect (via carbon monoxide, smoke and heat alarms) fires. At the cent

Hybridan Small Cap Feast 22/06/2022

Dish of the day Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Visum Technologies seeking admission to The AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June. LifeSafe Holdings, a fire safety technology business with innovative fire safety p

Contract Cancellation

Actual Experience has been notified by a Channel Partner that one of its customers, a leading energy supplier, will terminate its contract as of 18th August 2022. The contract was valued at £1m over 3 years, with £0.2m recognised in FY Sep21. ACT says that its continuing viability “will depend on securing more sales, the timing of which cannot be forecast with any certainty”. It continues to access the impact on the company and will make a further announcement when appropriate.

Hybridan Small Cap Feast 21/06/2022

Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Visum Technologies seeking admission to The AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June. LifeSafe Holdings, a fire safety technology business with innovative fire safety products, intends

SysGroup (SYS LN) - Initiation of coverage

SysGroup is an award-winning provider of managed IT services, cyber security, cloud hosting and IT consultancy. The Group offers investors an attractive business model with high recurring revenue and a diversified customer base. SysGroup is competitively well positioned to benefit from sector trends and is investing in sales capacity to take advantage of cross-selling opportunities and a recovering market. In addition, the company has opportunities to make highly accretive acquisitions and its s

SHORE CAPITAL - OnTheMarket Plc (OTMP) - House Stock at 87p - Time to shine

Upgrading estimates following material contract win

Morning Note – 23 June 2022

Hybridan Small Cap Feast 27/06/22

Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Company is proposing to change its name to Fiinu Group plc. Fiinu intends to be a provider of a consumer banking product, the Plugin Overdraft ®, which is designed to provide customers with an overdraft facility without having to change their current account or request an overdraft from their

Contract wins and trading update

Tribal has today announced multiple contract wins (both with new and existing customers) and as well, a positive interim update for FY22, highlighting that - driven by this sales momentum and stronger than expected implementations – revenue now expected to be “marginally ahead”. EBITDA meanwhile has been temporarily held back by a customer specific factor, though this is set to recover in H2 and hence management are guiding to unchanged EBITDA expectations for the full-year. We therefore upgrade