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Link to report here: https://www.equitydevelopment.co.uk/research/on-track-to-deliver-further-progress-in-fy24

Commentary and financial metrics in Hunting’s AGM/Q1 update confirm that the company has progressed in line with its FY24 targets thus far in year-to-date trading. Q124 EBITDA was well ahead year-on-year. This represents a good step towards the flagged US$125m-135m range for the year, with ongoing momentum in the strongest market segments.

Group revenue has continued to grow well, being up c.16% year-on-year in Q1 and c.7% ahead compared to Q423, a strong quarterly close to FY23. Shipments against previously disclosed large contracts in the OCTG and Subsea product groups and broad business development in Advanced Manufacturing have been the primary drivers in generally firm underlying markets.

While the group order book has nudged c. US$21m lower than the year end position as larger orders are worked through, US$544m on hand at the end of March still represents a strong position in a historic context. We are also aligned with management expectations for inventory positions unwinding over the remainder of the year.

Updating our P/E and DCF methodology for market movements (including £/US$1.25) now yields a blended fair value for Hunting of 436p / share: up from 407p and over 20% above the current share price.

The results for the six-months to January are robust against a backdrop of declining confidence in both clients and candidates generally. With an improvement in the contract book during early Q3 we think this highlights that the tide is starting to turn and likely to feed through to demand for permanent hires ahead of the CY24 end. With net cash accounting for over 70% of the current market capitalisation, the operating business appears undervalued.

H1 results were broadly in line with expectations, as declining economic confidence reduced NFI by 12.8% yoy, with the UK down 10%. The decline in perm activity was largely responsible for the shortfall, with contract activity remaining robust during the period. Adjusted PBT improved modestly and adj. EPS was unchanged yoy at 1.6p.

Costs have reduced further, although Management continues to add headcount in its core areas of focus and strength. Also several new contracts/renewals were awarded during the period: these are likely to benefit H2 onwards and reflect a resurgent Business Development team.

We have taken a more conservative view of the outlook, reducing FY24 estimates in line with new guidance, albeit still anticipating meaningful growth in activity levels. The operating business excluding the net cash is valued at just £10.5m which seems too low given our EBIT forecasts. As such, we set a fair value of 140p / share.

Link to research report: https://www.equitydevelopment.co.uk/research/trading-report-in-line-with-sector-peers

Vp’s full year update highlights sector-leading results, once again benefiting from the diversity of its end markets and the quality of its specialist businesses.

With results expected to be broadly in line with expectations, we trim our FY24 PBT forecast by c.5% to £39.0m, a shade below the FY23 outturn (£40.2m). We consider this an impressively resilient performance set against a mixed market backdrop.

Under new leadership, a strategic refresh is underway and management is confident in long term prospects. In our view, the valuation is compelling (FY25E P/E of c7x). We reiterate our Fair Value estimate of 1090p per share.

Link to research report: https://www.equitydevelopment.co.uk/research/resilient-fy24-confident-long-term-outlook

AUM jumped £3.8bn or +30% in FY24, reaching £16.6bn on 31 Mar 24, 12% above our previous forecast of £14.7bn. Including 50%-owned 8AM Global, Assets Under Influence hit £17.6bn. Investment performance provided a tailwind, adding £1.5bn to AUM. But our key takeaway from Tatton’s hugely impressive last few years, is that it has designed and implemented a superior offering in platform-MPS with net flows consistently far higher than peers. That leadership looks even more pronounced in H2-24 with net flows of £1.4bn v £0.9bn in H1.

Forecasts increase on the jump in AUM, although Tatton has flagged that flows were elevated in H2 and unlikely to continue at quite the same level. Our fundamental value rises to 620p per share (prev. 580p). We will re-visit forecasts in June with final results and when Tatton presents an updated strategic growth target. We also flag growing trading volumes/interest in TAM shares.

New research report: https://www.equitydevelopment.co.uk/research/aum-up-30-in-fy24-record-flows-forecasts-raised

Management of Ultimate Products conducted a live Investor Presentation following Interim Results (for the period to 31 Jan 2024).

Andrew Gossage (CEO) & Chris Dent (CFO) ran viewers through the financial and operational highlights of the period, which included stable profits (EBITDA) and a marked reduction in bank debt. The company also discussed trading in line with market expectations, its intention to buy back up to 10% of its shares, and the ongoing productivity drive through focus on continuous improvement, including the automation of hundreds of tasks across the business. The team also answered investor questions in a wide-ranging Q&A session.

The full video has been dividend into chapters as below:

0:00:03 Beginning

0:00:35 Introduction to Ultimate Products

0:03:00 Highlights of the period (Financial & Operational)

0:05:35 Strategy

0:17:01 Financial review

0:28:00 Summary & Outlook

0:31:42 Questions & Answers

Link to full video: https://www.equitydevelopment.co.uk/research/ultimate-products-investor-presentation-interim-results-april-2024

Norcros has again demonstrated great business resilience in the face of challenges in both of its primary markets, and reduced net debt. We retain our 233p/share fair value in new research note. Free access to it here:

https://www.equitydevelopment.co.uk/research/fy24-matching-up-to-our-expectations

Against a tough trading background in FY24, Speedy Hire has taken steps to build a platform for long term sustainable growth through the launch of its Velocity strategy. While progress has been more strategic than financial in the year – although we note positive underlying cash flow was achieved - new business wins, the acquisition of Green Power Hire and a transitioned B&Q model all suggest that profitability is likely to move ahead again from FY25 onwards.

Speedy’s FY24 pre close statement echoed January’s trading update, pointing to successful new business wins with National customers but also some mobilisation and adverse seasonal effects. Stated group revenue of c.£420m infers that H2 was slightly ahead of H124’s reported £208.5m. While closing year earnings expectations are likely to nudge down further, the prospect of year-on-year progress from FY25 onwards appears to be intact.

The launch of Speedy’s Velocity strategy in FY24 laid out clear group financial (FY28 revenue of £650m, EBITDA margin 28% with conservative gearing metrics) and operational ambitions (to deliver sustainable growth from an efficient digital and data-driven platform). The primary enabling actions are expected to be in place by the end of FY26, though there is clear capacity to accommodate an earnings recovery and growth beginning in FY25.

Notwithstanding market conditions, the company has taken clear strides in FY24 towards achieving its five-year targets, investing accordingly.

Link to research note: https://www.equitydevelopment.co.uk/research/building-a-robust-platform-for-growth-fy24-pre-close-statement

AUM jumped £2.3bn (+12%) over Q4 of FY24 to £21.9bn on 31 Mar 24, which is 12% above our previous forecast of £19.5bn, and +14% y-o-y growth (AUM 31 Mar 23: £19.2bn). In turn, our FY24 revenue forecast increases from £188.4m to £191.6m (+5% y-o-y, FY23: £182.9m).

PBT rose from £50.1m to £52.1m (+15% y-o-y, FY23: £45.2m) and basic EPS from 38.3p to 39.8p (+8% y-o-y, FY23: 36.8p). The EPS revision translates to a forward PER of just 11.5x

Investment performance was the booster for AUM in Q4, adding +£2.3bn or +12%, but for us probably most pleasing update was a return to positive, albeit modest, net flows in the quarter of +£56m. Moreover, Polar reported strong net flows in March (+£228m).

For the sector, there are signs of an improving outlook for UK and European equity and active management fund flows. For Polar Capital we think that its PER has clear potential for a re-rating and our fundamental valuation increases to 650p/share (42% above the current share price).

New research report: https://www.equitydevelopment.co.uk/research/aum-and-forecasts-up-stellar-returns-positive-flows

Driven by very strong investment performance AUM rose nicely by £2.2bn or 6% over H1, reaching £39.6bn

New research out from Equity Dev with fair value/share still seen at 800p, well above current levels, as you can read here with free access:

https://www.equitydevelopment.co.uk/research/investment-performance-drives-6-h1-aum-growth

Stable profits (EBITDA) and a marked reduction in bank debt were key features of Ultimate Products’ (‘UP’) interim results, released today. The company also announced its intention to buy back up to 10% of its shares. FY2024 full year results are expected to match current market expectations.

With revenue expansion likely to resume in H2 2024, and continue into FY2025, we argue that UP is more than capable of generating sales growth and free cash flow simultaneously.

Underlying 6% sales growth, a robust portfolio of six Premier Brands, the ability consistently to convert profits into cash and the prospect of a buyback programme support our view that UP’s shares merit a valuation significantly in excess of current levels. With a keen eye on relative valuation, we base our unchanged 250p fair value on 1.3x EV/sales, 10.3x EV/EBITDA and 14.7x P/E ratio. At this share price the dividend yield would still be 3.4% - i.e. in line with peers.

New research report here: https://www.equitydevelopment.co.uk/research/balancing-sales-growth-with-cash-flow-generation-interim-results

Eco Animal Health has announced the disposal of its treatment for equine parasitic infections, ECOmectin® Horsepaste, to its long-term Italian manufacturing partner, ACME Drugs S.r.l. ACME will acquire all ECOmectin® Horsepaste intellectual property, manufacturing and inventory, distribution and marketing.

Our Fair Value range remains 137p-146p which contrasts with the current share price, suggesting that the potential contribution to earnings from the product development pipeline deserves far closer attention.

https://www.equitydevelopment.co.uk/research/disposal-of-non-core-equine-treatment-operation-for-1.3m

Mark Bartlett, CEO, and Clare Foster, CFO, of Strix Group plc (AIM: KETL) held an Investor Presentation covering their Full Year results. Management discussed the pace of recovery within Kettle Controls, the rationalisation that is ongoing within Consumer Goods, and the strong growth at Billi and Laica. They also examined their progress in paying down debt and the temporary pause in the dividend. Questions from investors were answered at the end.

Link to video:

https://www.equitydevelopment.co.uk/research/investor-presentation-qa-video-with-management-team-fy23-results

New research note out from Equity Dev reviewing the potential for BEG to push top line revenues towards c £200m pa in next 3-5 years and reaffirming their 175p/share fair value.

Free access to read note / hear summary at:

https://www.equitydevelopment.co.uk/research/strategic-growth-targeting-200m-revenues-by-fy27

Ultimate Products, the owner of a number of leading homeware brands including Salter (the UK's oldest houseware brand, est.1760) and Beldray (est.1872), will be conducting a live investor presentation following the release of their Interim Results for the period to 31st January 2024.

The event will take place at 9.45am on Friday 12th April.

The online presentation will be hosting by Andrew Gossage (CEO) & Chris Dent (CFO) and is open to all existing & potential shareholders. Questions can be submitted during the presentation and will be addressed at the end.

Link to register: https://www.equitydevelopment.co.uk/news-and-events/ultimateproducts-investor-presentation-12april2024

Mark Bartlett, CEO, and Clare Foster, CFO, of Strix Group plc answered a series of questions following publication of FY23 results for the 12 months ended 31st December 2023. Subjects ranged from growth in kettle controls to the dividend and Billi, as well as the outlook for the company. The interview is available to see below.

In a separate video, the team conducted an Investor Presentation where they discussed highlights of the period, provided a Financial review, and went into detail on performance and prospects for each of the Group's business categories.

Both videos have been divided into chapters for ease of viewing: https://www.equitydevelopment.co.uk/research/investor-presentation-video-/-qa-with-management-team-fy23-results

Carl Herberger, CEO, and Phil Richards, CFO, of Corero Network Security plc (AIM: CNS) held an Investor Presentation covering their Full Year results.

Management ran viewers through highlights of the period and progress made in 2023, with a detailed look at the investment case including the significant addressable market and Corero's competitive advantage. The team provided a financial overview, discussed strategy and outlook, and answered a range of questions from investors.

The full investor presentation has been divided into chapters, as below:

0:00:10 About Corero

0:01:32 FY23 – a year of ongoing progress

0:03:59 Investment case

0:12:23 Financial summary

0:15:44 Strategy & Outlook

0:19:49 Questions & Answers

Link: https://www.equitydevelopment.co.uk/research/corero-network-security-investor-presentation-fy23-results-march-2024

Loungers is an award winning, uniquely positioned all day café-bar group that has grown revenues an impressive 22.5% CAGR FY16-FY23. Comprising of Lounges, Cosy Club and Brightside, the 257-site group still has huge scope to grow towards its conservative ambition of over 650 sites.

Loungers is profitable with improving margins and we forecast will generate over £100m free cashflow (pre-expansion capex) FY24E-FY26E. This, we estimate, will fully fund c.100 new site openings over the next three years driving 16% CAGR in Revenues, 18% CAGR in Adj. EBITDA and 20% CAGR in Adj. EPS FY23-FY26E.

This high growth is not reflected in the group’s valuation, in our view. We initiate coverage with a Fair Value of 360p, based on 8.0x cal 2025 EV/Adj. EBITDA.

Link to research note: https://www.equitydevelopment.co.uk/research/delivering-self-funded-growth-all-day-long

Positives emerged, particularly in H2, as the recovery commenced within the kettle controls market.

Billi was the architect of the revenue improvement, with LAICA also delivering a double-digit increase in the top line. Margins improved, notwithstanding a change in the mix.

Encouragingly, investor concerns on debt were allayed with the careful management of cash, and latterly as bankers raised the net debt/EBITDA covenant to 2.75x. With further emphasis on costs and cash conservation and a likelihood that its markets will begin to deliver more meaningful recovery in H2, none of this good news looks factored into the current valuation.

The focus is shifting from survival to recovery and as such, we increase our fair value / share to 173p (149p).

Link to research report: https://www.equitydevelopment.co.uk/research/billi-drives-top-line-growth

For FY23, Corero delivered double digit annualised recurring revenue (‘ARR’) growth; we see this momentum continuing into FY24E and have upgraded our forecasts accordingly.

The retirement of all debt, including an inter-company loan, leaves the balance sheet ungeared and clean of FX movements which made reported margins historically volatile.

We see normalised EBITDA margins of 10%+ going forward and potentially rising further. The growth in revenues leaves the stock trading on a forward rating of only 1.8x EV/Sales. This stock has both defensive and growth qualities which should support a higher rating going forward and we reiterate our fair value of 14p price/share.

Link to new research report: https://www.equitydevelopment.co.uk/research/debt-free-with-growing-margins-we-upgrade

Adam Holland (CEO) and Will Wilkins (Group Finance Director) of Mpac Group conducted an Investor Presentation covering their FY Results for the period ended 31 Dec 2023.

After a short video ("Innovation Unleashed"), management ran viewers through highlights of the period including strong financial performance, returning the Group to revenue and profit growth, and positive net cash. The team updated investors on progress towards strategic objectives and discussed the Group's ambitions, as well as providing a detailed financial review and answering questions in a wide-ranging Q&A session.

The full video is available below, divided into chapters:

0:00:03 Mpac corporate video ("Innovation Unleased")

0:06:49 About Mpac, including case studies (Adam Holland, CEO)

0:21:22 Financials (Will Wilkins, Group FD)

0:30:53 Ambition & Strategy

0:39:38 Summary & Outlook

0:40:35 Questions & Answers

Full video here: https://www.equitydevelopment.co.uk/research/mpac-group-investor-presentation-fy-results-march-2024