Reviewing trading updates of AIM listed CBOX & YGEN; The acquisition of SOPH by Thoma Bravo

  • Oct 14, 2019 BST
  • Team Kalkine
Reviewing trading updates of AIM listed CBOX & YGEN; The acquisition of SOPH by Thoma Bravo
Cake Box Holdings PLC

Cake Box Holdings PLC (CBOX) is a United Kingdom based baker and confectioner which exclusively bakes egg free cakes. The company markets its products through its retail outlets using the brand logo Egg Free Cake Box. The company bakes and retails personalized fresh cream cakes as well as egg free cakes. The company has in its offerings a range of cakes including cupcakes, photo cakes, numerical cakes, fruit cakes, mendhi designed cakes, wedding themed cakes, kid’s cakes, platter cakes, and round cakes. The company also provides customized baked cakes which can be purchased on demand or can be ordered in advance at its outlets or online.

The Shares of the company are listed on the AIM (Alternative Investment Management) segment of the London Stock Exchange, where they trade with the ticker name CBOX.

Trading Update

The company on 14 October 2019 came out with a trading update for the six-month period ending on 30 September 2019.

  • The company expects to report its revenues for the six-month period to be up c.6 per cent to stand at c.£8.8 million, which for the corresponding six-month period last year of 2018 stood at £8.3 million. Within these figures, the like-for-like sales in its existing franchise stores have grown by 6.9 per cent.
  • During the six-month period the company added Nine new franchise stores to its portfolio of outlets, bringing the total number of stores up to 122.
  • The Group is of the hope that it will be able to release its interim results for the six months ended 30 September 2019 on 25 November 2019.
Stock performance at the London Stock Exchange

Price Chart as on 14 October 2019, before the market close (Source: Thomson Reuters)

On 14 October 2019, at the time of writing the report (before the market close, GMT 1.41 PM), CBOX shares were trading on the London Stock Exchange at GBX 163.40.

The stock has a 52-week High of GBX 192.00 and a 52-week low of GBX 150.00. The total market capitalization of the company was £68.00 million.

Outlook

The company has continued with its new store roll-out programme by opening nine stores during this six-month period ended 30th September 2019. This number is, however, slightly lower than the comparative figures of the corresponding period of last year. This figure is however, understated as the company already has a further three stores fitted-out and awaiting the final legal approval; Once all formalities are completed these stores will be open for business and so will be recognized open during the second half of the year. The company is on a very sound footing to reach the milestone of its store opening target for the year.

Given the pace of growth of its outlets the company remains confident of its prospects for the current financial year and in periods ahead.

Yourgene Health Plc

Yourgene Health Plc (YGEN) is a United Kingdom domiciled multinational developer of molecular diagnostics products. The company develops and commercializes diagnostic products and services in genetic disorders category. The company has working relationships with global leaders in DNA technology and advanced diagnostic technologies.

The company develops and commercializes simple and accurate molecular diagnostic products, targeting the reproductive health market. The company’s products include non-invasive prenatal tests (NIPT) for Down's Syndrome and other similar genetic disorders, screening tests for Cystic Fibrosis, invasive rapid aneuploidy tests, tests for male infertility and tests for genetic disease. The company has already established its geographical foothold in the United Kingdom, Continental Europe, the Middle East, Africa and in Asia.

The company’s product development, research services and commercial capabilities have a reach across the genetic diagnostic test development lifecycle including regulatory submissions. The company through its inhouse technical expertise and collaborations, is now also extending its genetic testing offerings onto the field of oncology.

The company is headquartered in Manchester, in the United Kingdom, with offices also located in Taipei and Singapore. The shares of the company are listed on the AIM (Alternative Investment Management) segment of the London Stock Exchange where they trade with the ticker name YGEN.

Trading Update 

The company on 14 October 2019 released a trading update for the six-month period completed on 30 September 2019.

  • The revenues of the company for the six months to 30 September 2019 stood at £7.8 million, which is up by 98 per cent, in comparison to the equivalent prior year six months period to 30 September 2018 when the revenues for the company were £3.9 million.
  • The Elucigene Diagnostics business of the company which was acquired on 26 April 2019, contributed primarily towards the United Kingdom and continental Europe sales growth. The Organic growth of the company excluding contributions from the Elucigene acquisition, was at 56 per cent.
  • The revenues of the company from non-invasive prenatal testing (NIPT) products and services grew globally by 34 per cent. This new product will be rolled out in European markets during 2020 financial period.
Stock performance at the London Stock Exchange

Price Chart as on 14 October 2019, before the market close (Source: Thomson Reuters)

On 14 October 2019, at the time of writing the report (before the market close, GMT 3.09 PM), YGEN shares were trading on the London Stock Exchange at GBX 12.090.

The stock has a 52-week High of GBX 14.45 and a 52-week low of GBX 6.42. The total market capitalization of the company was £68.88 million.

Outlook

The company’s performance during the first half of 2020, in terms of contribution made from the Elucigene acquisition, the organic growth delivered and also from the launch of its American business was exemplary. The company is strongly moving ahead in its path to widen its product portfolio and to drive growth across international markets. The company remains on track to meet growth targets for the enlarged Group and to satisfy requirements of the investors for the full year 2020.

Thoma Bravo, LLC to acquire Sophos Group Plc through subsidiary Surf Buyer Limited

Thoma Bravo, LLC the California based private equity group on 14 October 2019 announced that it has reached an agreement with the management of Sophos Group Plc (SOPH) of the United Kingdom for the full acquisition of its shares outstanding in an all cash deal through its newly formed Subsidiary  Surf Buyer Limited.

The Acquisition of Sophos Group Plc by Thoma Bravo, LLC puts the valuation of the entire issued and to be issued share capital of Sophos Group Plc at nearly US $3,820 million on a fully diluted basis which translates into an enterprise value of approximately US $3,948 million (which is equivalent to £3,012 million and £3,113 million respectively based on the Announcement Exchange Rate). This translates into a multiple of approximately 32 times the British software company’s unlevered free cash flow of US $124 million generated by it for the year ended 31 March 2019.

Thoma Bravo, LLC believes that the acquisition of Sophos Group Plc represents a very attractive investment opportunity to increase its presence in the large and growing cybersecurity market space. The British Software group is an international leader in the next-generation cybersecurity solutions spanning endpoint, next-generation firewall, managed threat response, cloud security, server security, and many more such solutions. Sophos Group Plc’s software products and solutions are designed to be highly innovative and effective, while at the same time they are simple and intuitive for organizations of all shapes and sizes.  Sophos Central, the cloud-native management platform of the company, integrates the company’s entire portfolio offering of next-generation products into a single "synchronized security" system accessible through APIs (Application Programming Interface) available to resellers, MSP partners, customers, and other distribution vendors. The company in its offerings is differentiated from its competitors in the innovation and effectiveness of its next-generation security products and services, with its ability to manage all those products using a single cloud-based management platform, with its  deep interoperability, coordination within platforms, and automation of its products, and with the  global reach of its "channel first" distribution strategy.

Sophos Group Plc is a United Kingdom Domiciled Software services company.  It is a provider of cloud-enabled end-user and network security solutions. Its geographic segments include Europe, Middle East and Africa (EMEA), the Americas, and Asia Pacific and Japan (APJ). The company’s products include Sophos Mobile Control 6, Sophos Server Protection Advanced, Sophos XG Firewall and the Sophos Web Gateway.

The shares of the company are listed on the Main Market Segment of the London Stock Exchange where they trade with the ticker name SOPH. The shares of the company also form part of the FTSE 250 Index.

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