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another attractive add-on deal for BEG as it buys surveyors/property auction firm Mark Jenkinson for £0.4m cash. Bolsters the Group in S Yorks.
This week's research note covers both BEG's organic and deal strengths, after a positive Q3 report:
https://www.equitydevelopment.co.uk/research/positive-q3-forecasts-on-track

Link to research note: https://www.equitydevelopment.co.uk/research/positive-q3-forecasts-on-track

BEG’s positive third quarter update (to end January 2023) was another confirmation of the inherent resilience of a broad services offering which includes business recovery, financial advisory, and property services consultancy. The detail included continuing good levels of new insolvency work, particularly administrations, and market share appears to be building.

The overview is encouraging. Business recovery & financial advisory trade in line with expectations as this division works through a good pipeline of engagements. Property advisory & transactional services division is also performing well and in line with expectations. It is supported by resilient income streams and a continuing flow of new instructions.

Recent UK Insolvency Services data tracks growth in the market overall and we note that numbers flattened out somewhat over the last couple of months and administrations remain below historic levels. That broadly matches our view and the assumptions for our forecasts, which anticipated a long haul rather than a rapid recovery.

BEG’s Q3 financial performance was in line with the first half and the outlook is unchanged. The statement expressed confidence regarding delivery of full year market expectations and on that basis we have maintained our full year forecasts. Our existing 175p/share fair value is fully underpinned by the outlook for organic growth.

Equity Development have just releasd a new note on last week's deal and its implications for future partnerships re M3 outside of N America, and for XF-73.
Free access to this note and others here:
https://www.equitydevelopment.co.uk/research/validation-well-worth-waiting-for

Full video recording now available *** Results investor presentation (Feb 2023)

The management of Driver Group plc (AIM: DRV), the leading global professional services consultancy to the construction and engineering industries, conducted a live presentation and Q&A session covering their Preliminary results for the 12 months period ended 30 September 2022.

Mark Wheeler (CEO) and Charlotte Parsons (CFO) took investors through operational highlights with financial and regional updates, which included the 'reset' of the Middle East region, a strong start in Q1, ambitions to hit 80% utilisation rate, and an ongoing net cash position. Management also answered investor questions on a wide range of topics.

The full video has been divided into chapters as below:

0:00:03 Introduction & Agenda
0:01:17 Service Offerings
0:08:03 Operational Highlights
0:10:57 Financial and Regional Updates
0:16:24 Cash flow and Profit Bridges
0:17:22 Summary and Outlook
0:20:33 Questions & Answers

Link to full video: https://www.equitydevelopment.co.uk/research/driver-group-fy-results-investor-presentation-feb-2023

Shares in R&Q understandably up today as it reports a record year for Program in FY22 - GWP of $1.8bn +80% and Fee Income $80m +78%. Plus the partnership pipeline remains strong.

It also agrees to sell its 40% stake in Tradesman to majority partner for c. $47m - a healthy ROI on an investment no longer seen as strategic.

Link: https://www.equitydevelopment.co.uk/research/a-profitable-start-to-the-new-year

The new financial year has started strongly with a strong pipeline of opportunities and a lower cost base following an expanded rationalisation programme that resulted in most regions delivering a profit YTD in FY23. The results for FY22 were broadly in line with revised expectations, although the lack of forward visibility results in a continued suspension of estimates. That said, we expect FY23 to prove to be a turning point in the Group’s fortunes as utilisation levels improve now that projects are serviced globally.

We are still suspending estimates reflecting a lack of visibility and ongoing uncertainty. While this makes the construction of forward-looking valuation models difficult, we highlight the NAV and within this the level of net cash at the FY22 year end. A historic FY22 price/book ratio amounts to 1.0x, on a book value of £16.4m, which equates to 29.8p/share. Furthermore, £4.9m or 9.1p/share of this is in cash, representing 30.7% of the Group’s NAV.

Comparing DRV to a wider consultancy peer group that trades on an average historic P/B ratio of 4.7x, suggests that DRV (on 1x NAV) remains significantly undervalued. We retain our fair value/share of 49p.

Sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/mpac-fypresentation-24march2023

Mpac, the specialist international business providing high speed packaging machines and complimentary services, will be conducting an Investor Presentation covering their Full Year Results for the period ending 31st December 2022.

The online presentation will be hosted by Tony Steels, CEO, and Will Wilkins, Group Finance Director.

This event will take place at 11.00am on Friday 24th March.

The webinar is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end.

Sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/pensionbee-fypresentation-17march2023

PensionBee Group plc, a leading online pension provider, will be conducting an investor presentation covering the company's Full Year results for the period to 31st December 2022.

The online presentation will be hosted by Romi Savova, founder & CEO, and Christoph Martin, CFO.

This event will take place at 11.00am on Friday 17th March.

The webinar is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end.

A solid trading update from GATC with H1’23 LFL NFI growth of 5.1% to £22.7m and encouragingly cashflow was strong too.
Equity Development trims PBT forecasts but see a Fair Value of 130p/share vs 90p last close.
New research note is freely available here:
https://www.equitydevelopment.co.uk/research/strong-cashflow-coupled-with-solid-top-line-growth

New research note and audio summary here:
https://www.equitydevelopment.co.uk/research/online-drives-first-half-growth

Online channels were the main driver of growth for UPGS in the first half of FY2023 with a 2% sales revenue gain - areas of product strength included energy efficient and money saving items, which were cited as being buoyant across all distribution channels. At the same time key indicators of financial strength also improved. The trading backdrop also showed signs of improvement in the first half. Commenting on outlook, the company anticipates that the market’s current expectations for FY2023 will be met. UPGS continues to highlight the positive impact that the company’s automation programme is having on the business.

Despite recent share price strength, we still believe that the current valuation fails to fairly reflect UPGS’s three salient growth drivers - brands, online & supermarkets distribution and international. With external headwinds easing, a second half acceleration is in prospect, plus a robust financial position, the near-term outlook appears positive. We reiterate our 250p fair value per share (based on an FY2023 EV/sales ratio of 1.5x and 12x EV/EBITDA).

Benchmark Holdings plc, the aquaculture biotechnology company, will be conducting an investor presentation following publication of their Q1 results for the three month period ended 31 December 2022.

The online event will be hosted by Trond Williksen, CEO, and Septima Maguire, CFO, and will take place at 12.00pm on Wednesday 1st March.

The webinar is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end.

Register here: https://www.equitydevelopment.co.uk/news-and-events/benchmark-q1results-presentation-1march2023

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.