Research Tree | Equity Research for Investors

27 Jul 21

LIBERUM: Sylvania Platinum* - Hitting guidance, no disruption

Companies: Sylvania Platinum Ltd.

29 Jul 21

Strong trading continues in FY22

Volex has issued a positive AGM trading update highlighting that it expects to deliver underlying operating profits for FY22E slightly ahead of current market expectations. It notes that the levels of customer demand it experienced in H2 FY21 has continued in Q1 FY22E. Cash generation remains robust and management continue to advance acquisition opportunities, which we expect to deliver future accretion. We have upgraded our adjusted operating profit estimates by c.5% and see Volex as well place

Companies: Volex plc

29 Jul 21

Excess capital accumulation

The quarter enjoyed the ongoing recovery in revenue margins and net provision releases further boosted by a portion of the announced tax gains. The question is not at what pace profitability will recover but instead at what pace will it normalise? In the meantime, the group is accumulating excess capital that will be returned to shareholders.

Companies: Lloyds Banking Group plc

27 Jul 21

The Ince Group plc* - Stabilisation Achieved – Now for Growth

Ince has reported resilient results for FY21 considering the COVID pandemic with revenue growth YoY driven by International offices. With the cost base and financial position now stabilised, good earnings growth from FY22 onwards should be achievable. We reinstate forecasts to reflect a robust platform for progress at the Group and set our new target price at 100p which we think appropriately reflects the Group's near-term trough earnings and medium term earnings power based on current assumptio

Companies: Ince Group plc

02 Aug 21

Cenkos: Duke Royalty Ltd -- New royalty partner: Creō-tech

Duke has announced its third new royalty partner since April's placing, with a C$8.3m (£4.8m) agreement with Creō-tech Industrial Group Inc (“Creō-tech”). This scheduled new partner is another buy & build platform, with follow-on deployments expected. It represents Duke's 12th current royalty partner and its first in North America, adding diversity in number and geography. This should further add to the anticipated step-up in quarterly cash revenues from Q2/22, after Q1/22's £2.9m record.

Companies: Duke Royalty Limited

27 Jul 21

Interims: Customer value strategy working

Reach’s interims were strongly ahead of SCM estimates for H1 sales and EBITDA, by 5% and 4% respectively. Digital sales (23%/revs) grew 43% y/y to £69m supported by 150% y/y growth in unique registrations to 6.7m, whilst underlying Print decline decelerated to just -5% y/y (H2’20: -18%; H1’20: 20%) as weaker comparatives were lapped. The Group has posted positive sales growth for the first time in a number of years, rising +3% y/y (like-for-like) to £302.3m, and delivering AOP of £68.9m (Margins

Companies: Reach plc

29 Jul 21

LIBERUM: Vertu Motors - Used car momentum continues

Companies: Vertu Motors PLC

30 Jul 21

Powerhouse Energy - AGM Sets Timetable on Protos

Powerhouse’s AGM statement has set revised timing for the completion of its first project at the Protos site with a 2023 completion now expected. With the company adding key resources the new timetable is being de-risked in our view and the loan from the company to the project has already reduced supply chain risk on key equipment lead times. While we will review our forecasts for the new timing, we think the company is making real progress towards establishing its technology and we see the addi

Companies: Powerhouse Energy Group PLC

29 Jul 21

Underlying business recovers, full-year earnings outlook reiterated

In its first Litmus test after an ‘ambitious’ CMD in June 2021, the British giant has put up a decent show. The group witnessed recovery in the base business, particularly in vaccines which benefited from the sales of COVID-19 vaccine adjuvant. While the near term continues be tricky due to resurfacing COVID-19 concerns, encouraging trends on the COVID-19 vaccine / treatment front and growing HIV and oncology prowess should calm the nerves.

Companies: GlaxoSmithKline plc

02 Aug 21

Powerhouse Energy - Adjusting for New Timings

Following last week’s AGM comments on project timing we have amended our forecasts, shifting early numbers to the right in the timeline. While this impacts FY 21 and FY 22 forecasts the hit further out is minimal. As a result, the impact on valuation is not onerous with our base case valuation dropping 9% to 4.9p from 5.4p. Factoring in early European opportunities would give us a valuation of 7.0p and adding APAC opportunities and fuller European potential would get us to 11.7p.

Companies: Powerhouse Energy Group PLC

28 Jul 21

A year of material profit growth and cash generation

Hargreaves’ FY21 results confirm a period of material profit growth and cash generation. It has been a transformational period, in which all direct coal related activities ceased, HRMS profits surged and net debt was eliminated. As expected, the first 12p additional dividend has been proposed (total FY21 DPS 19.2p) and we expect this to recur for a further three years, at least. As we wrote in our recent detailed note, Hargreaves has been wholly repositioned and now has genuine momentum. The sha

Companies: Hargreaves Services plc

29 Jul 21

Major contract win and Olympic success

Directa announced a significant contract win yesterday, its second major contract with OMV Petrom for waste treatment services using Grafysorber. The four year contract has a total value of €3.2m (c.€0.8m per annum from August 2021). This provides underpinning for current forecasts and builds on recent contract momentum. Meanwhile, there has been further success at the Olympics for cyclists wearing jerseys printed with Directa’s graphene (the Planar Thermal Circuit). The medal haul so far is fiv

Companies: Directa Plus Plc

26 Jul 21

Cenkos: XLMedia Plc -- On track

The financial performance in H1E suggests the Group is firmly on track to meet our FY21E forecasts. The recent acquisitions will have contributed positively to the c15% YoY growth rate. The Sports and Personal Finance verticals are performing well while any relative weakness in Casino is being managed to ameliorate its impact. Buy.

Companies: XLMedia Plc

26 Jul 21

Cenkos: Duke Royalty Ltd -- Exceeding pre-COVID cash revenues

Duke has provided a positive Q1/21 update, confirming a record quarterly cash revenue, exceeding results seen prior to COVID-19. This evidences Duke's successful navigation of the pandemic and the strength of its portfolio, where NAV has remained above 30p p/s. Q2/22 should see cash revenues materially rise to c£3.2m given recent deployments, boding well for future DPS uplifts. Our forecasts remain unchanged, awaiting further deployments, but we see great upside potential via FV gains, as tradin

Companies: Duke Royalty Limited

28 Jul 21

Provision releases and equity adjustments boost

The quarter enjoyed stronger-than-expected provision releases and a partial reversal of the first quarter negative equity adjustments, whereas the DTA remeasurement offset ongoing restructuring charges.

Companies: Barclays PLC

02 Aug 21

Q2 21: on track to achieve guidance

MTU Aero Engines published results in line with consensus and narrowed the range of the guidance for FY21, with a slight improvement in the profitability midpoint. MTU shows more confidence in its commercial and military business, but this is offset by reduced forecasts for commercial maintenance.

Companies: MTU Aero Engines AG

02 Aug 21

Transaction completed in wind services

The acquisition of 8.2 France is complete and Dolfines has signed a financing agreement with an investment company to implement its strategic plan. The transaction (together with funding for working capital) is financed with the issuance of €1.2m of bonds convertible into shares with warrants attached. As we highlighted previously, the strong growth seen at 8.2 France (FY21 sales guided at +35%) is positive as it helps in diversifying Dolfines right from the start of the strategic plan.

Companies: Dolfines SA

02 Aug 21

The NAGA Group - High trading momentum maintained

NAGA Group continues to benefit from retail investor activity and volatility in financial markets, further underpinned by its social trading functionalities (trade copy feature in particular). Consequently, after completing its restructuring in FY19, NAGA posted a positive EBITDA and a small net profit in FY20, with management now guiding to robust FY21 sales of €50–52m (€24.5m was already generated in H121) and EBITDA of €13–15m. Recently, it also secured further funding through convertible bon

Companies: Naga Group AG

02 Aug 21

Q2 21: synergies and operations advancing as planned

Ams OSRAM’s Q2 21 results came in line with consensus in terms of sales and margins. The business is going smoothly, mainly driven by Automotive as the demand for ams OSRAM’s products remains high. The sale of the Digital System activity improves the margin forecasts for the coming quarters.

Companies: ams AG

02 Aug 21

Strong Q2 helps regain ‘some’ lost mojo

Grifols reported a strong quarter with a decent recovery in the base business – the lynchpin Bioscience was the show-stopper, after a transient decline in Q1 21. While the improving plasma supply and sprawling collection base is soothing, the resurfacing pandemic and regulatory concerns in the US do warrant a caution. Also, while GIC’s investment does help to address leverage concerns, the resolution is only ‘partial’ and a full resolution is still awaited due to the (expected) continuation of o

Companies: Grifols (GRF:BME)Grifols, S.A. Class A (GRF:MCE)

02 Aug 21

Contract loss more than in the price

Millennium Services Group Ltd (ASX:MIL) has announced the loss of the QIC cleaning and security contract worth $28m or 10% of FY21 underlying revenue. Management has estimated an annualised $0.5m NPAT impact from the contract loss, which implies a relatively low gross margin contract and the ability to reduce operating costs associated with the contract. We have adjusted our numbers accordingly, resulting in ~10% revenue and NPAT/EPS downgrades over the forecast period. We just recently upgraded

Companies: Millennium Services Group Ltd.

02 Aug 21

SP Angel Morning View: Tin and Rare Earths continue to lead as iron ore and steel prices pull back

Aura Energy* - (AURA LN) – Quarterly report highlights progress with Tiris uranium project Beowulf Mining* (BEM LN) – £100k investment in Vadar Caerus Mineral Resources (CMRS LN) – Option agreement with Bezant Resources Caterpillar – (CAT N) – Cost inflation hits shares despite rise in quarterly earnings CGN Mining (1164 HK) – CGN Mining signs deal to acquire 49% of Ortalyk from Kazatomprom for US$435m Power Metal Resources* (POW LN) – Significant expansion of exploration ground in the KCB

Companies: CAT CAT TSG TSG AEE BEM CMRS 1164 KAV POW RMM SML TYM VUL

02 Aug 21

H1 21: no update on capital allocation

ACS announced a good set of results, backed by a positive contribution from Abertis’ traffic recovery, and the Hochtief and Services businesses’ margin improvements. The group expects the Vinci-ACS deal to close by the end of this year, but has not given any additional information on reinvestment strategies in the short term.

Companies: ACS Actividades de Constrccn y Srvcos (ACS:BME)Actividades de Construccion y Servicios SA (ACS:MCE)

02 Aug 21

Automatic Data Processing - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation

Automatic Data Processing (ADP) reported yet another all-around beat backed by strong new business bookings. The company managed to grow its core Employer Services new business bookings by a staggering 174% and witnessed a solid retention rate of 92.2% in this segment which was up by 170 basis points. The company’s leading Human Capital Management solution, RUN has over 750,000 clients and has witnessed a strong momentum. ADP also reached the threshold of 100,000 clients with respect to its Work

Companies: AUTOMATIC DATA PROCESSING (ADP:NYSE)Automatic Data Processing, Inc. (ADP:NAS)

02 Aug 21

Like peers, DiaSorin also turns cautious with its full-year targets

A better than expected recovery in the ex-COVID business made-up for the rapid decline in COVID-19 sales, therefore DiaSorin reported sales in line in Q2. Akin to peers, the Italian firm has also lowered its FY21 guidance, mainly due to lower demand for COVID-19 antigen tests, but, as hospital business returns to normalcy, management foresees a steady demand for non-COVID products. In the mid-term, new product launches and the recently-integrated Luminex business should drive momentum. More deta

Companies: DiaSorin (DIA:BIT)DiaSorin S.p.A. (DIA:MIL)

02 Aug 21

Ford Motor Co - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation

Like most automakers, Ford had a particularly rough quarter on account of the chip-related production disruptions which held back the company’s revenues despite a strong demand. The semiconductors shortage has hit Ford worse than many of its rivals as its Japanese supplier of chips was hit by a fire in the spring. This led to more than 50% of a cut-down in inventory levels with dealers. The company is also ceasing manufacturing operations in Brazil after more than 100 years which is a bad sign.

Companies: Ford Motor Company (F:NYSE)Ford Motor Company (F:NYS)

02 Aug 21

Keurig Dr Pepper - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation

Keurig Dr Pepper delivered yet another all-around beat backed by a strong in-market performance with a big boost from beverage concentrates and the Latin America beverage segment. The company witnessed a strong growth in categories such as carbonated soft drinks, premium unflavored water, enhanced flavored water, apple juice, apple sauce, and coconut water. Its growth numbers were in green across all key brands including Dr Pepper, Sunkist, A&W, 7UP, CORE Hydration, Evian, Bai, Motts apple juice

Companies: Keurig Dr Pepper Inc (KDP:NYSE)Keurig Dr Pepper Inc. (KDP:NAS)

02 Aug 21

Ongoing net provision releases

The quarter enjoyed further net provision releases whereas the pre-provision performance came in line with our expectations. The group is on track to meet its mid-term financial objectives.

Companies: HSBC Holdings Plc

02 Aug 21

SP Angel Oil & Gas Daily Flow: 02/08/21

Market update - 02/08/2021

Companies: JSE SOU UKOG UJO UOG MSMN

02 Aug 21

Closer to pre-crisis levels

Clariant’s H1 result was quite positive based on a stronger than expected acceleration of business growth in Q2. This led to a consensus beat (top line: +2.0%; profitability: +4.0%). The recovery was driven by Natural Resources, due to the pick-up in automotive. All three divisions contributed to the higher profitability. We positively value the provided guidance.

Companies: Clariant AG (CLN:SWX)Clariant (CLN:VTX)