Allenby Capital TMT Update - 30.03.20 (BIRD.L, ECSC.L, TERN.L, STAR.L)
 

Blackbird plc* (BIRD.L, 10.25p/£34.4m) 
A+E Network to double video edited through Blackbird (25.03.20)

  • A+E Networks, the JV between Hearst and Disney, is to double the volume of content edited through the Blackbird cloud-based video editing platform. A+E, that has a portfolio of global brands including A&E, History, Lifetime, LMN, fyi and Viceland, first incorporated Blackbird into its infrastructure in June 2019.
  • The expansion doubles the volume of file-based content available to A+E's production teams and the visibility, immediacy and management of its video archive will be significantly accelerated for the repurposing of content. Production teams will use Blackbird to rapidly ingest, view, edit and publish content using a choice of hybrid workflows - on-premise through the Blackbird cloud as well as on the Amazon Web Services public cloud. A+E's production team can work remotely and collaborate offsite using Blackbird's browser-based editing tools.

Allenby Capital comment: The significant expansion of the deployment at A+E Networks is testament to the strengths of the Blackbird cloud-based video editing platform, particularly give the shift to remote working and the need to repurpose archive content to fill the significant gaps created by Covid-19 around live sports events and new content creation.

* Allenby Capital acts as Nomad and Broker to Blackbirdplc.

ECSC Group Plc* (ECSC.L, 72.5p/£6.6m) 
Finals: Return to profit; good Q1 performance (25.03.20)
Note published

Allenby Capital comment: Finals from ECSC Group, the UK’s longest running full service cyber security provider, were in line with expectation and January’s pre-close update. FY19 revenue of c. £5.9m (+10%) indicates record H2 revenue of £3.3m, up 20% on H2 FY18 and 24% on H1 FY19. Managed Services revenue increased 48% to £2.6m and its higher gross margin benefited group GM (+600bps to 57%). ECSC secured 118 new Consulting Service clients (+24%) both directly and via its new partner programme that has significantly expanded ECSC’s sales reach. Consulting clients also represent a core source for Managed Services prospects. FY20 had started well with Managed Service and Consulting contract wins and Q1 revenue +9%. The emergence of COVID-19 has increased the need to cyber security as more organisations move to remote and cloud-based working but it will impact on-site Consulting activity. ECSC can continue to provide its full range of services but we believe it is prudent to suspend forecasts until the situation becomes clearer.

* Allenby Capital acts as Nomad and Broker to ECSC Group plc.

Tern plc* (TERN.L, 4.75p/£12.8m) 
Portfolio update (26.03.20)

  • FundamentalVR (26.9% holding): recently secured an additional contract with a leading pharmaceutical company to provide a training platform for a newapplication of their leading drug product.
  • Device Authority (56.8% holding): announced the launch of KeyScaler as a Service hosted in Microsoft Azure Cloud and four essential connectors to Azure's IoT Edge, IoT Central, Azure Key Vault and Active Directory Certificate Services products. Recently secured a contract to provide security services to a leading international automotive design and manufacturing company. The maturity date for all convertible loans ($3.6m) has been extended to 30 September 2020.
  • Wyld Networks (100% holding): cooperation agreement signed with one of the largest global satellite operators to co-design, develop, test and market Low Power Wide Area Network (LPWAN) connectivity solutions for satellite communications enabled IoT. Wyld will develop a terrestrial LPWAN satellite terminal to connect to low earth orbiting (LEO) satellite constellations.
  • InVMA (50% holding): AssetMinder continues to gain traction following the £0.8m global partnership deal announced in January.
  • Seal Software (<1% holding): sale of Seal to DocuSign for $188m in cash, announced in March, continues to progress. Tern had invested £50k in Seal and its investment was valued at £115k. The proceeds are expected to be broadly in line with the Company's valuation.
  • Balance sheet strengthened by March's £0.8m fundraise.

* Allenby Capital acts as Nomad and Broker to Tern plc.
 

Starcom plc*  (STAR.L, 0.925p/£3.2m) 

Director and employee loans and grant of warrants (25.03.20)

  • Loan agreements with certain directors and an employee for the provision of loans totalling c. £243k. Under the agreement, the lenders have also been issued warrants to subscribe for shares. The loans carry an interest rate of 8% p.a. and are convertible at 1.25p/share - a 25% premium. 4m warrants have been granted, exercisable at 1.5p/share - a 50% premium.
  • Proceeds will be used to fund the growth in inventory as needed to meet anticipated sales orders, continued development of Starcom's sales and distribution infrastructure, general working capital and pay an outstanding debt with a NED for past fees. 

* Allenby Capital acts as Nomad and Joint Broker toStarcom plc.

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