Strategy18 Jun 2023 07:39
Interesting news on Friday - a sale would provide the financing to pivot more quickly to the advisory and digital spaces via M&A, avoiding the need for a placing. I sense that this strat review is part of the wider strategy that will form the basis for the next medium term plan, through to when the executive LTIP matures in 2026. Expecting most of the existing targets to have been met when results announced before end of June.
Clearly, if a deal is done for TIC (note the £650m quoted figure includes debt and is based off a multiple that is slightly out of date given the current climate), then the remaining business will be much lower revenue, higher margin, higher growth and should also benefit from a higher multiple. A significant rerate from here would therefore be possible.
All the other points remain: no evidence that shorts have reduced yet (so potential upside if they start to close) and upcoming results should be good (TIC will be shown as a mature division, generating high ROIC - so ideal time to sell).