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Hardman & Co

Research from Hardman & Co

Investment research on quoted companies and funds

Hardman & Co is a multi-disciplinary financial consultancy and investment research firm, employing highly experienced analysts and professionals with a broad range of capital markets expertise. Our clients are public and private businesses as well as fund managers, ranging from start-ups to £1 billion+ market capitalisations. Hardman & Co offers corporate research & consultancy, serving the needs of both public and private companies. We produce gold-standard research with a global reach for trading and investment companies, as well as providing market commentary and analysis. In addition, we carry out a number of bespoke investment-related assignments, including due diligence on bond listings, assessments of private company valuations and other corporate advisory services. We engage with the market through traditional and digital media, offering illuminating video content on corporate management strategy, results communication, interviews and in-house sector discussion.

Equity Bottom-Up

Shield Therapeutics plc, a specialty pharmaceutical company, focuses on the development and commercialization of secondary care-focused pharmaceuticals. Its lead product is Feraccru, a novel therapy for the treatment of iron deficiency anaemia (IDA) in patients with inflammatory bowel disease. Its products pipeline includes PT20, a novel iron-based phosphate binder for the treatment of hyperphosphatemia related to chronic kidney disease (CKD); PT30 and PT40 that are intravenous iron formulations; and Feraccru to treat patients with IDA related to CKD and other indications. The company was founded in 2008 and is based in Gateshead Quays, the United Kingdom.

<ul><li>Shield is a commercial-stage pharma company delivering specialty products that address the needs of patients with iron deficiency (ID).</li><li>Since its July 2021 US launch, Shield and Viatris have increased physician awareness of the differentiating characteristics of ACCRUFeR® as an oral ID drug, in order to generate sales traction.</li><li>The 3Q’24 trading update reiterated the interim statement dialog: sales continue to progress, while costs are being actively managed.</li></ul>

Shield is a commercial-stage pharma company delivering specialty products that address the needs of patients with iron deficiency (ID).Since its July 2021 US launch, Shield and Viatris have increased physician awareness of the differentiating characteristics of ACCRUFeR® as an oral ID drug, in order to generate sales traction.The 3Q’24 trading update reiterated the interim statement dialog: sales continue to progress, while costs are being actively managed.

Hardman & Co Investor Forum Research on Shield Therapeutics (STX): Proactive cash management to cashflow-breakeven

Custodian REIT plc is a real estate investment trust. The Company invests in commercial properties, including industrial, retail and office properties throughout the United Kingdom.

<ul><li>The structure and investment remit of the real estate investment trust (REIT) have been proven to be resilient and position it strongly for the short- and medium-term future.</li><li>The investment return emphasis is on income, which is generated from a diverse portfolio with modest capital gearing.</li><li>Because Custodian Property Income REIT (CREI) is designed to focus on smaller, individual property lot sizes, it acquires at higher asset yields than the market in general.</li></ul>

The structure and investment remit of the real estate investment trust (REIT) have been proven to be resilient and position it strongly for the short- and medium-term future.The investment return emphasis is on income, which is generated from a diverse portfolio with modest capital gearing.Because Custodian Property Income REIT (CREI) is designed to focus on smaller, individual property lot sizes, it acquires at higher asset yields than the market in general.

Hardman & Co Investor Forum Research on Custodian Property Income REIT (CREI): Good momentum

Duke Capital Ltd is a private credit investment company. The Company provides hybrid capital solutions for management buy-outs, buy and build strategies, shareholder restructuring, and debt re-financing. Duke Capital serves customers worldwide.

<ul><li>In our April 2024 initiation, we highlighted that DUKE, by optimising the best of equity and debt, aimed to achieve equity-type returns with debt levels of risk.</li><li>We highlighted four pillars of returns, namely: i) term credit; ii) participating preference shares, which support DUKE’s high, covered and growing dividend yield (2025E 10.0%, 2026E 10.7%, 2027E 11.4%); iii) early exit fees; and iv) equity stakes.</li><li>Here, we update investors on how management will take DUKE to the next level, noting i) a £20.2m+ equity issue to fund short-term growth, and ii) the progress made towards a third-party capital model, negating the need for further raises.</li></ul>

In our April 2024 initiation, we highlighted that DUKE, by optimising the best of equity and debt, aimed to achieve equity-type returns with debt levels of risk.We highlighted four pillars of returns, namely: i) term credit; ii) participating preference shares, which support DUKE’s high, covered and growing dividend yield (2025E 10.0%, 2026E 10.7%, 2027E 11.4%); iii) early exit fees; and iv) equity stakes.Here, we update investors on how management will take DUKE to the next level, noting i) a £20.2m+ equity issue to fund short-term growth, and ii) the progress made towards a third-party capital model, negating the need for further raises.

Duke Capital (DUKE): Taking Duke Capital to the next level

NB Private Equity Partners / Equity Bottom-Up

NB Private Equity Partners is a closed end investment fund incorporated in Guernsey. The fund invests in a diversified portfolio of direct yielding investments, co-investments and fund investments selected by the NB Alternatives group of Neuberger Berman, diversified across private equity asset class, geography, industry, vintage year, and sponsor.

<ul>
<li>The key takeaways from NBPE’s 6 November CM day, in our view, were i) positive market indications, including exits and an increase in the correlation between operating company EBITDA growth and NAV growth</li>
<li>ii) NB’s platform brings unique benefits: accessing deals, analysing investment opportunities, and GP relationships, (which have generated a big increase in opportunities presented to them, even when the overall market slowed) and</li>
<li>iii) multiple levers for value creation mean that bottom-line return expectations are unchanged.</li>
</ul>


The key takeaways from NBPE’s 6 November CM day, in our view, were i) positive market indications, including exits and an increase in the correlation between operating company EBITDA growth and NAV growth
ii) NB’s platform brings unique benefits: accessing deals, analysing investment opportunities, and GP relationships, (which have generated a big increase in opportunities presented to them, even when the overall market slowed) and
iii) multiple levers for value creation mean that bottom-line return expectations are unchanged.


NB Private Equity Partners - CM Day: 6 November Fireworks

Thematic (Sector/Industry)

<ul>
<li>Feature article: “ROOM” (Running Out of Money) risk, How managing liquidity risk can sustain corporate value and maintain shareholder confidence</li>
<li>As we come close to the end of a very challenging year for many UK entrepreneurs, as well as a frustrating period for shareholders, it is time to address one elephant in the ROOM! ROOM stands for “Running Out of Money”.</li>
<li>The risk of doing so, or the perception that it could occur, can destroy corporate values and prematurely paralyse a business. </li>
</ul>


Feature article: “ROOM” (Running Out of Money) risk, How managing liquidity risk can sustain corporate value and maintain shareholder confidence
As we come close to the end of a very challenging year for many UK entrepreneurs, as well as a frustrating period for shareholders, it is time to address one elephant in the ROOM! ROOM stands for “Running Out of Money”.
The risk of doing so, or the perception that it could occur, can destroy corporate values and prematurely paralyse a business. 


Hardman & Co has a long established reputation for high quality and independent research on small and mid cap quoted companies. Our industry analysts are all highly experienced, with an average of 23 years researching companies for investors. In addition to providing in-depth company coverage, we work closely with our clients in an advisory capacity, providing market intelligence, advice on corporate transactions and in constructing marketing programmes targeted at both retail and institutional investors. 
 
The research we produce is published in both hard and soft copy through a variety of channels, including our bespoke global distribution list, Bloomberg, Thomson Reuters, RNS-Reach and FactSet. 

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