GreenRoc Accelerates their World Class Project to Production as Early as 2028. Watch the full video here.
Driver Group plc (AIM: DRV), the leading global professional services consultancy to the construction and engineering industries, is pleased to announce that their CEO, Mark Wheeler and CFO, Charlotte Parsons, will conduct a live presentation and Q&A covering their Preliminary results for the 12 months period ended 30 September 2022.
The event will take place at 3.00pm on Thursday 23rd February.
The online presentation is open to all existing and potential shareholders - you can sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/driver-group-fyresults-presentation-23feb2023
After robust interims(despite challenging markets)and a confident Management outlook, Equity Development keeps its fundamental valuation at 950p per share (over 50% above current price)
As you can read in detailed new research note + audio summary here (free access):
https://www.equitydevelopment.co.uk/research/solid-h1-interim-dividend-6-implies-confidence
Andy Thomis (Chief Executive) and Simon Walther (Finance Director) conducted a presentation covering Cohort plc’s ambitions and recent interim results, as well as sharing deeply experienced insights into the geopolitical threats currently facing the world. They then addressed a wide variety of questions posed by the live audience.
The full video recording is available below, divided into chapters:
0:00:03 Introduction to Cohort and its business model (CEO)
0:09:00 Growth strategy (CEO)
0:15:18 Financials and Order Book (FD)
0:20:31 Outlook and investment proposition (CEO)
0:28:42 Q&A
0:56:38 Conclusion
Video link: https://www.equitydevelopment.co.uk/research/cohort-plc-investor-presentation-february-2023
As well as the first acquisition by R&Q's new JV with OBRA Capital that shows the significant potential for other similar deals, @RQIH won 7 new programs in December.
Equity Development's fair value is now 155p/share, as you can read in a new research note freely accessible here:
https://www.equitydevelopment.co.uk/research/a-flying-start-to-23-with-new-jv-and-portfolio-wins
In H1 revenues rose by 44% and Equity Dev retains a FY23 estimate of 49% growth, plus a further 17% forecast in FY24. Their fair value still seen at 26p/share.
Full research note and audio summary are freely available here:
https://www.equitydevelopment.co.uk/research/h1-23-results-revenue-44yoy
New research and audio summary here: https://www.equitydevelopment.co.uk/research/headwinds-diminishing
The pre-close trading update for FY22 is evidence of a business determined to deliver. The focus is now on revenue generation and shorter investment payback periods. Two factors proved disruptive to activity levels in FY22; the war in Ukraine and lockdowns across China to prevent the spread of Covid-19. Although the former looks set to continue indefinitely, the re-opening of the Chinese economy represents a positive factor for FY23 onwards.
Cash levels will be boosted as the supply chain relaxes post-lockdowns, enabling the Group to reduce inventory levels, and marketing expenditure is likely to decline. Billi is integrating well into the Group following its acquisition in December, with new products launched and distributors appointed in Asia. We have left estimates unchanged for FY23 and FY24.
We reduced our dividend estimates in early December, reflecting the level of indebtedness but this still suggests a highly attractive yield of 7% for FY22, rising to 7.6% in FY23. We have left those estimates unchanged, as the c.£23m guidance for PAT and consider it too early in the year to revisit FY23 and FY24 estimates. Our net debt estimates are higher than the recent £89m guidance, although c.80% of the difference reflects the payment of deferred consideration to LAICA switching to February ’23.
Although the share price is off the lows recorded in late 2022, there remains a significant gap between the current share price and our fair value - the combination of our DCF & peer group comparison models suggest a fair value / per share of 234p, materially above yesterday's closing price.
New research note & audio summary here:
https://www.equitydevelopment.co.uk/research/commercialisation-partnership-signed
RUA’s global commercialisation partner for its range of large bore vascular grafts has been announced as Corcym SRL. Corcym is the heart valve business bought out from Sorin/Livanova in 2021 and is a specialist cardiovascular medical device company with complementary products – like sutureless/minimally invasive aortic valves, mechanical heart valves, aortic prostheses and mitral valves and repair devices. RUA Vascular’s products for straight and aortic root grafts will fit perfectly into Corcym’s catalogue of products servicing the needs of heart surgeons that are sold in over 100 countries.
This transaction with a proven cardiovascular specialist provides RUA with significant validation and should banish the cloud that hovered over RUA since its regulatory stumble on the 510(k) submission for its large bore vascular graft. We estimate that the cost of establishing a cardiovascular sales network for the US alone would have been in excess of $10 million. The details released on the transaction note the sharing of gross margin on global sales equally between RUA and Corcym. Investors will remember the investments that RUA has made in clean room manufacturing capacity which we had assumed at the time were not just for clinical trial supplies, but eventually for commercialisation. With the deal in place, it appears that RUA’s manufacturing capacity will be matched to Corcym’s global commercialisation network.
For the moment, our valuation remains unchanged at £121.0m or 545p per share but we expect to update this shortly taking into account the new commercialisation agreement.
New research report & audio summary from Equity Development: https://www.equitydevelopment.co.uk/research/sales-and-membership-growth-drives-momentum
Sales revenue for the year ended 31st December 2022 increased by approximately 20% from £18.2m in FY2021 and is expected to be slightly ahead of our £21.6m forecast when the full audited numbers are announced in March 2023. A 12% increase in global membership numbers to around 37,000 drove the business forward. While we leave FY2022 forecasts unchanged at this stage, our confidence in these numbers is enhanced by today’s announcement.
ASC announced that Andrew Dane, previously the company’s Executive Finance Director, will become CEO with immediate effect. He replaces David Ridley who had been Managing Director for six years. In our view, his appointment should be seen as endorsing the group’s growth strategy both for the Scotch Malt Whisky Society and ASC’s ambitions elsewhere in distilled spirits – e.g. J G Thomson & Co. An update regarding the Company’s American whiskey proposition will be made with full-year results.
The Masterton Bond Facility was the standout operational news in FY2022. It will provide production, cask storage, fulfilment and distribution of ASC's whisky and other spirit stock, and is expected to add around 200 basis points to group operating margins, probably as early as in FY2023. It became operational on time and on budget in FY2022 Q4. Other international expansion moves included an inaugural franchise agreement in South Korea and a new partnership with Drinks Alliance in Malaysia.
We base our 150p fair value/share for the Artisanal Spirits Company, which implies a 5.4x EV/sales ratio, largely on a relative valuation when compared with leading listed distilled spirits companies and luxury goods providers. ASC is simultaneously exposed to both these categories given its emphasis on ultra premium and above Scotch malt whiskies. Furthermore, the £455m notional value of the company’s maturing whisky stocks currently stands at around 7 times today’s market capitalisation.
Link here: https://www.equitydevelopment.co.uk/research/customers-56-aua-17-in-turbulent-2022
PensionBee’s trading update covering FY22 (to 31 Dec 22) shows continuing strong growth, despite large market falls during the period, and continuing market share gains. Invested customers grew 56% y-o-y to 183k (31 Dec 21: 117k), while AUA grew 17% to £3.03bn (31 Dec 21: £2.59bn) with net inflows of +£863m and market movements of -£424m. Net inflows were particularly impressive, with PensionBee’s net inflow rate far higher than incumbents, and the absolute size of its net inflows not far off the pension inflows of the largest incumbent platforms. Revenue increased 38% y-o-y to c£18m (FY21: £12.8m).
Adjusted EBITDA has started to ‘turn the corner’ towards profitability. In FY21 it was -£16.4m, in H1-22 -£14.9m and in H2-22 -£5m (FY22 -£19m). Management have reiterated confidence in achieving +ve adj. EBITDA on a full-year basis in FY24, the target set at the time of PensionBee’s IPO (Apr 21). Further evidence of operating leverage has been reported with the number of invested customers per staff member increasing 31% (970 vs. 743).
Our top-line forecasts have been revised downwards in line with FY22 actuals and reduced marketing spend guidance, but this is offset to a degree by reduced cost guidance - our fundamental valuation reduces slightly from 160p to 150p.
Cohort plc (AIM:CHRT) is an independent technology group that comprises six military, electronics and intelligence development operations spread across the UK, Germany, and Portugal. Its senior management will give an Investor Presentation that covers the group’s ambitions and recent interim results, as well as giving experienced insight into the defence threats currently facing the world.
The event will take place at 11.00am on Wednesday 1st February with Andy Thomis (CEO) and Simon Walther (Finance Director) presenting from the company.
The online presentation is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end. You can register at the following link: https://www.equitydevelopment.co.uk/news-and-events/cohort-plc-investor-presentation-1feb2023
Link to note: https://www.equitydevelopment.co.uk/research/trading-update-fy22-in-line-and-fy23-encouraging
In a Trading Update today, Mpac Group reports performance for the year to 31 December 2022 in line with expectations, with a strong FY22 closing order book; the outlook for FY23 is “encouraging”. We have raised our FY22 (adj.) EBITDA outlook by 8% and FY23 by 13%.
Reflecting resilient demand in the core Healthcare and Food & Beverage segments, order intake in the second half of FY22 was significantly above first half levels, leading to a healthy year-end closing order book of £69.0m (H1 22: £62.6m). In addition, Service order intake and contribution to revenue continued to grow. Mpac adds that, inclusive of modified specifications, the development and installation of the clean energy project for FREYR remains on track for completion in Q2 23.
Mpac was required to adjust its operations to meet the impact of the worldwide disruption of supply chains and related macro-economic factors. The response was good management of components sourcing and stock levels, in addition to alternative routes of sourcing. This resulted in the ability to better meet customers’ expectations and, in H2, improve profitability. The exercise required additional working capital – in areas such as inventory build - and adapting to lengthened project build timing, for which we estimate Mpac has ample balance sheet resources. We expect the pressure on working capital to unwind in H1 23, with estimated FY22 year-end net debt of £4.2m reverting towards an estimated 31 December 2023 net cash position of £5.3m.
Our fair value for Mpac remains 485p/share, indicative of a FY24 EV/EBITDA multiple of 7.9x compared to 4.6x at current EV.
Link to new research note: https://www.equitydevelopment.co.uk/research/another-solid-quarter-guidance-confirmed
Brooks Macdonald (BM) continued to build momentum in Q2 of FY23 (to 31 Dec 22), with FUM increasing by 4.5% (+£0.7bn) over the quarter to £16.2bn (end of Q1: £15.5bn). BM chalked up its 7th consecutive quarter of positive net flows of £156m, an annualised rate of 4% of opening FUM. Investment performance contributed £546m to the FUM increase (3.5% of opening FUM, in line with the benchmark MSCI PIMFA Private Investor Balanced Index - capital only).
Management have confirmed that underlying profit and margin are running in line with expectations, and our forecasts remain unchanged, although our fundamental valuation ticks up to 3000p per share, which is 44% above the current share price, with the increase due to a reduction in the UK 10-year gilt yield (the risk-free rate used in our DCF valuation). We also highlight that BM’s PER of 14.0 is significantly below a peer group median of 17.3 which doesn’t look justified. We will revisit our forecasts & valuation when H1 results are released on 2 March 2023.
Our latest research following this morning's update (full link here: https://www.equitydevelopment.co.uk/research/aum-slightly-down-fy23-forecasts-unchanged)
AUM fell 1.6% over Q3 of FY23 (to 31 Dec 22) to £18.47bn. Over the first nine months of the FY the AUM fall totalled 16%, although this was heavily impacted by the significant sell off in technology stocks in Q1 (Apr – Jun 22). Net outflows totalled £304m during the quarter, lower than the £529m recorded in Q2 and the £316m of Q1. Market movements and investment performance contributed +£19m over the quarter (Q2: +£342m; Q1: -£2,393m). The closure of Phaeacian mutual funds in Q1 resulted in a -£469 impact on AUM.
The lower net outflows of the latest quarter and two consecutive quarters of positive investment performance suggests a degree of positivity in some of the major sectors Polar is exposed to, and perhaps some stability in the most significant technology sector. More specifically, Polar has reported:
• continued demand and inflows into the Global Insurance, Healthcare Blue Chip, Smart Energy and Emerging Market Stars funds, with combined net inflows of £190m in the quarter;
• a continuing decline in the rate of outflows from its open-ended Technology funds, with £217m of outflows in Q3 compared to £252m in Q2 and £380m in Q1.
This latest AUM update suggests Polar is on track to meet our previous FY23 forecasts, which remain unchanged (we will revisit forecasts & valuation with the Q4 AUM update in April), as does our fundamental valuation of 600p per share (20% above the closing 11 Jan 2023 share price). We also highlight that Polar’s PER of 9.8 is significantly below the 12.2 median PER of a UK-listed active fund manager peer group.
Supreme PLC reports that trading in the three months up to 31 December 2022 was significantly ahead year-on-year, with revenue and gross profit up 30%YoY. As a result, the Group is “well placed” to meet market expectations - which were raised in November - for the year to 31 March 2023.
Following strong Interim results (ED report 29th November 2022 H1 23 results buoyed by strong performance from Vaping) we raised our FY23 revenue outlook by 7% from £129.5m to £138.3m, and raised our FY23 EBITDA (adj.) outlook by 6% to £18.5m. As the Trading Update indicates, Supreme has maintained the momentum of H1 performance adding confidence to our raised estimates for the current year; for FY24, we maintain the revenue forecast which was raised by 6% from £142.2m to £150.5m at the Interim.
Our Fair Value remains 190p/share.
https://www.equitydevelopment.co.uk/research/positive-trading-update-strong-busiest-quarter
Research report available here: https://www.equitydevelopment.co.uk/research/revenue-growth-accelerates-to-33.4-in-q3
Rapid 33.4% revenue growth, margin expansion relative to the first half, and a record level of delivery volumes were the main features of Marks Electrical’s FY2023 Q3 trading update. Furthermore, the strength of Q3 business lends significant credibility to the company’s view that it is on track to achieve its full year targets, and bolsters confidence in our fair value for Marks Electrical Group of 150p per share based on relative valuation and DCF.
Marks Electrical’s strong 33.4% growth in FY2023 Q3 implies a 22.0% 9-month growth to 31 December 2022 and acceleration from 15.1% growth in the first six months. The company advanced sales in the important Q3 trading period, which in FY2022 was equivalent to 28% of annual sales revenue. The strength of Q3 sales growth should also have increased operating leverage and thus driven margin expansion. We note that with 82% of our FY2023 target already achieved, the company is in a strong position to meet current expectations for sales revenue and profitability.
Cash conversion remains an important part of the Marks Electrical investment case, which should have benefited in Q3 from maintenance of inventory levels during the peak trading period and an implied improvement in the inventory:sales ratio. A strong cash position augurs positively for dividend paying capability. A 0.3p interim dividend was paid to shareholders on 23 December 2022.
Marks Electrical’s in-house delivery vehicle fleet achieved record quarterly sales volumes in Q3. Service levels and customer satisfaction should benefit going forward from the company’s in-house installation service. Over 3,000 installations have been completed since the offering’s launch last August.
Link: https://www.equitydevelopment.co.uk/research/aum-up-6-in-q1-of-fy23-in-line-with-forecasts
Impax has recorded a strong Q1 of FY23, with AUM growing by £2.3bn (+6.4%), from £35.7bn on 30 Sep 22 to £37.9bn on 31 Dec 22. Market movements, FX and investment performance was responsible for £1.5bn of the increase, while the group continued its impressive record of attracting and retaining client assets, recording £797m of net inflows, up from £606m in the prior quarter.
While market conditions remain uncertain, Impax’s recent net inflow trend does look like an encouraging shift back to a higher level, following a drop-off during the sharpest periods of the 2022 market fall. Impressively, Impax has recorded only one quarter of net outflows (Apr-Jun 2022) since 2015.
We are bullish about the prospects of the sustainable investing market generally, and of Impax specifically, which has been a standout performer compared to other asset managers. With AUM growth on track, we maintain our fundamental valuation of 1,000p (37% above closing price on 6 Jan 2023).
Link to note (free & accessible):
https://www.equitydevelopment.co.uk/research/on-track-to-meet-forecasts-positive-outlook
Mattioli Woods (MW) has reported H1-23 revenue (to 30 Nov 22) of £54.9m, 10% up y-o-y (H1-22: £49.9m), with organic revenue growth of over 2%, despite a challenging environment. It remains in a strong financial position, with net cash totalling £38.3m at the end of the period.
Total client assets closed H1 on £14.6bn, a 3.2% y-o-y fall from £15.1bn on 30 Nov 21, but a creditable performance considering the PIMFA Private Investor Balanced Index (net) fell 3.8% over the same period. Gross discretionary AUM totalled £4.9bn, 4% down y-o-y (30 Nov 21: £5.1bn) but pleasingly, positive net inflows of £38.1m was achieved (+0.8% of opening AUM).
MW has highlighted several factors that suggest confidence in the H2 outlook, which remains in line with previous expectations:
- as in previous years, H2 revenue expected to exceed H1 due to end of tax-year advice and second half weighting of client year-ends;
- value of new clients on-boarded in H1 over 10% up y-o-y;
- increased new business pipeline despite market conditions, solid acquisition pipeline;
- all recent acquisitions integrating well, trading in-line or ahead of budget, and have delivered earnings to support full payment of any contingent consideration;
- joint-fundraising between MW and Maven (acquired Jun 21) continued to gain traction with two recent Investor-Partner deals;
- discretionary managed funds performed in line with benchmarks;
- digital client experience enhanced with launch of MWise online investment platform;
- Amati AIM VCT won VCT AIM Quoted Category at Investment Week's Investment Company of the Year Awards 2022.
MW remains on track to meet our forecasts for FY23 and our fundamental valuation of 925p which is 47% above the current share price, remains unchanged. We have updated our peer-comparison valuation which also suggests potential for a re-rerating. MW’s PER of 13.0 is 29% below a wealth management peer group median of 18.2.
Festive cheer from Destiny Pharma as a deal for NTCD-M3 has reached heads of terms and exclusivity stages + the partnering process for XF-73 is underway for a 2023 deal.
Equity Development reatins its Fair Value at 345p/share - as you can hear and read here:
https://www.equitydevelopment.co.uk/research/positive-update-on-partner-deals
For the six months to 31 October 2022, Cohort plc reported a strong performance: revenue was up 29%YoY to £77.5m; an operating profit (adj.) of £5.0m was achieved (H1 22: £1.7m); and EBITDA (adj.) was £7.1m. Order intake of £88.6m resulted in a record closing order book of £304.2m. The interim dividend is raised 10% to 4.25p/share.
Absorption of working capital meant that H1 net debt was £0.6m; however, Cohort reports that as of 9th December net funds were £7.6m. Added to H1 revenue, over £80m of orders deliverable in the second-half equates to 95% coverage of our revised full year revenue outlook of £165.0m.
A strong interim performance, in particular by MCL, supports an increase in our FY23 revenue outlook of 3%, to £165m, growth of 19.9%YoY; while our EBITDA (adj.) outlook remains at £22.0m (up 13.1%YoY).
We maintain our Fair Value of 650p/share.
https://www.equitydevelopment.co.uk/research/record-closing-order-book
Another strong half reflects the benefits of an increasingly diverse base of cyclical and counter-cyclical revenues, built progressively via a series of strategic acquisitions and organic investment. The double-digit revenue and profit growth delivered by both divisions in H1 puts the group on track to achieve full year forecasts. The detail reveals consistent growth derived both organically and from a series of acquisitions which have added to the breadth of professional expertise and BEG’s coverage of its key target markets.
We have held our full year forecasts and plan to review them when BEG reports its Q3 trading update in late February 2023. Our current estimates underpin a retained 175p/share fair value, with upside potential if UK insolvencies, particularly administrations, continue to gather momentum, and the group secures further acquisitions which continue to build expertise and capacity. We have reflected on BEG’s rating vs the broader market and its intrinsic value vs its peers in this note.
https://www.equitydevelopment.co.uk/research/resilient-income-streams-drive-h1-result