N+1 Singer earnings upgrade7 Feb 2017 11:51
FYI here's Singer's update from last week - they go for historic 11.2p EPS for 2016, with a 3.2p dividend:
"Exceptionally strong trading performance
T Clarke’s year end update highlights an exceptionally strong underlying trading performance. Before exceptional items relating to the previously announced fraud at DGR, full year profits are expected to be £6.0m, materially ahead of our £4.2m forecast. The Group’s year end net cash position was also better than expected at £9.2m (£5.4m forecast). A confident outlook statement, a growing order book (£330m, 10% higher than the prior year end) and the strength of recent trading prompts upgrades to FY17. In our view, the shares have been impacted far too severely by the fraud investigation. Post upgrades, they trade on <6x current year P/E with a 5%+ yield.
Event
T Clarke’s year end update highlights an exceptionally strong underlying trading performance. Before exceptional items relating to the previously announced internal fraud at DGR, full year profits are expected to be £6.0m, materially
ahead of our £4.2m forecast. Exceptional charges and provisions relating to the fraud are expected to be £2.2m including £0.4m of professional costs directly associated with the efforts to recover the misappropriated funds. Legal
proceedings to recover the funds are ongoing. The Group’s year end net cash position was also better than expected at £9.2m (£5.4m prior forecast) reflecting in part the timing of major project completions and stage payments received
in the second half. The cash position was 39% higher than the prior year. Banking facilities have been renewed as planned. The order book closed 2016 up 10% year on year at £330m, which also compares favourably to the £320m reported in November. Notable new project wins include two significant London office fit out projects for a social media client and a major asset manager.
Impact on earnings & valuation
We have upgraded our FY16 adjusted PBT forecast to £6.0m, a 43% uplift. We have also reflected the £2.2m exceptional item and have increased our FY16 cash forecast to over £9m from £5.4m. In FY17, we upgrade PBT by 14% to £5.8m and roll forward the outperformance on cash to give net cash of £11m at the end of FY17 (from £6.8m previously). In our view, the shares have been impacted far too severely by the fraud investigation. After today’s upgrades, the shares are trading on <6x P/E, 5.2x EV/EBITDA and yield 5.3%."
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