YB new stock pitches (Mon, Sep 28)

Vincorion is a roughly €1B German defense supplier whose qualification history underpins sole-source positions across about 85% of revenue and a recurring maintenance-and-spares base representing roughly 55% of sales. Its crown jewel is the electrical power plant for Patriot systems, supplied to the large majority of non-U.S. operators, with the U.S. Army also buying spares; the role was not dual-sourced after Vincorion qualified following a competitor generator failure during the first Gulf War. Revenue grew 18% in 2025 at an 18% EBITDA margin, while the €1.21B order book at June 2026 was up 12% from year-end. Street forecasts call for roughly 30% revenue growth in 2026 and 25% EBITDA margins by 2030, which may exclude meaningful upside from the next-generation rescue hoist for the Airbus H145. On Street estimates, free-cash-flow yields reach 6.4% in 2027 and 7.8% in 2028 despite capitalized hoist investment. The main drawback is an illiquid stock; aviation upside also depends on a clean H145 launch, with first flight due in October 2026.

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Elixirr’s 20% post-results decline creates a compelling entry if 1H26’s 5% organic growth was a temporary net outcome rather than the end of compounding. Revenue rose 25% to £89.0m, adjusted EBITDA increased 29% to £27.6m, and margin reached a record 31%. Crucially, gross organic additions were £15.6m — 26% above the prior six-half average and the second-highest in the series — but were offset by a record £12.1m of programmes ending. Commercial indicators remained strong: cross-sell rose 27% to a record £19m, AI revenue increased 185% to £8.1m, and clients generating over £2m grew 50% to 24. At roughly 500–520p, the shares trade near 7–8x estimated sustainable adjusted earnings; three-year scenario work indicates a probability-weighted return around 19% annually without requiring the former premium multiple. The risks are that acquisitions supplied £15.7m of the £17.6m revenue increase and reported free cash flow fell to £1.8m. Another period of gross wins falling toward £10–12m while £10m-plus keeps rolling off each half would strengthen Peel Hunt’s ex-growth assessment.

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West Wits has begun production at Qala Shallows yet remains valued like a pre-production explorer. It owns 74% of a 7.24Moz gold resource, but only 384,000 ounces are currently reserves; Qala alone is estimated at US$0.79 per share, over 2.5x the US$0.30 price, while the risk-adjusted valuation implies 3x base-case value, or 200% upside, and 5.7x bull-case value, or 470% upside, with the bear case near today’s price. A US$69m Absa/Nedbank package funds the planned ramp toward 70,000 ounces annually by Q1 2029, when estimated attributable free cash flow is about US$71m and the enterprise value equates to 1.3-1.8x steady-state cash flow. Project 200 could eventually lift output to roughly 200,000 ounces, while Bird Reef Central’s uranium Exploration Target receives no valuation. The thesis hinges on execution: only 227 ounces had been produced by June 2026, the ramp is roughly a year behind the original feasibility-study shape, funding coverage is only 1.0-1.2x, and Project 200 still requires drilling, a publishable study and US$300-400m of financing.

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