Check out what's trending in the world of equity research this week...
Companies: ALO, AVON, BDEV, CRE, DTG, GNS, HZD, KAPE, KRS, NG/, RTHM, SVT, TILS, VLG, WJG
Emphasis moves on to growth and profit | Rhythmone Plc | RTHM
N+1 Singer, 18 November
"With the technology platform improvement completed RTHM can aggressively push its highly efficient offering to advertisers, who want quality media that delivers good ROI, and to publishers who want to maximise revenue. The international exploitation of the platform has surprised on the upside through being switched on and offered to existing US clients to use overseas. RTHM will be launching in additional markets in EMEA and APAC adding to the growth potential. Faster change in business mix was another highlight of the first..."
FY17 outlook on track despite mixed market conditions | Genus | GNS
Liberum, 17 November
"Genus released a trading update together with its AGM covering the first 4 months to Nov of its FY17. Revenues grew modestly yoy in l.c. on continued growth in China porcine, solid demand in EU PIC and volume growth in IVB."
Productive FY16 with strong visibility on FY17 forecasts | Watkin Jones Plc | WJG
Zeus Capital, 17 November
"Today’s trading statement confirms that FY16 results will be in line with expectations. This brings into focus the valuation of a business that has strong earnings visibility, a clean balance sheet with net cash forecast at period end and good prospects based on structural growth in both its existing Student business and the developing PRS market. In the core Purpose Built Student Accommodation (PBSA) sector the investment market remains strong and yields stable, supported by structural under supply. At last night’s closing price..."
Milking the Recovery | Avon Rubber | AVON
Panmure Gordon, 17 November
"We understand that the recovery in milk prices has already begun to improve demand in the Dairy division and we have raised our organic growth forecast for the division to 6% compared with 4% previously. The risk is on the upside as further sales synergies are realised from the integration of Milkrite and InterPuls distribution channels. We expect the 6% organic growth to increase Diary EBITDA margins by 1.3% to 24.6% in FY17. Consequently, we have upgraded our FY07 PBT and EPS forecasts by 11% to £25.6m and 66.2p, respectively. With the peer group trading on 10.6x 2017 EBITDA, we have upgraded our target price to 1,200p (1,150p)..."
Interims – Further strong growth delivered | Dart Group Plc | DTG
Arden Partners, 17 November
"Overview. Interim results show that the Group had a very successful summer 2016 trading season, with revenues up 21% to £1,240.8m and operating profit up 14% to £167.5m. Adjusted PBT (excluding a £4.6m FX revaluation loss) was up 14.6% to £168.3m. Cash generation was also strong, with net cash up £144.6m since the year end, to £465.7m. The interim dividend was increased 53% to 1.375p..."
| Creston Plc | CRE
Edison, 17 November
"Creston has published its interim results to end September, which show flat revenues with a like-for-like 4% decline. There was, however, a step up in PBIT margin from 10.3% to 11.6%, reflecting operational efficiencies from the Unlimited initiative and other planned overhead reductions, along with some benefit from currency. The company has this morning received a cash bid of 125p per share from DBAY Advisors, which controls 28.0% of the equity, recommended by the independent directors. Our forecasts for Creston are therefore withdrawn."
Record Revenue Year | Venture Life Group Plc | VLG
Equity Development, 15 November
"VLG manages a growing portfolio of its own healthcare brands focused on ageing consumers, supported by its integrated product development and manufacturing model. Sold without prescription, these brands address common ailments of ageing, cater for a population with raised expectations of quality of life and longevity, and travel well across international markets. A low risk high growth investment story..."
Interim results - making stately progress | National Grid | NG/
Edison, 14 November
"National Grid (NG) reported interim (H117) results on Thursday showing performance in line with guidance and maintaining its outlook. As expected, the UK Gas Distribution disposal is on track to complete early next year. Operationally, management continues to focus its energy on filing rate cases in the US with good progress achieved in Massachusetts Electric and KEDNY/KEDLI. In the UK, the company continues to negotiate with the regulator in the future of its role as system operator. RAV growth, capex and interim numbers were all in line with guidance. We reaffirm our fair value range of $55-69/ADR."
Breakfast Today | ALO | KRS | TILS | BDEV | HZA | SVT
Beaufort Securities, 17 November
"The Fed's Patrick Harker yesterday spelt out just how complex policy on interest rates has now become. Janet Yellen's own testimony this afternoon, which is seen as key to December's FOMC decision, will have to grapple with all the new uncertainties injected by the President-elect, ranging from regressive tax cuts, booming infrastructure spending, financial deregulation and cuts in federal spending. No easy task, even if the markets appear more convinced than ever that the first hike since 2006 will be delivered next month and that this will be the first of a series of such moves over the subsequent 18 or so months as inflation climbs. The recent phase of asset repricing, nevertheless, took a breather yesterday, with all principal markets making only fractional movements. The Dow Jones broke its record run to drift into the red as financials retrenched, while momentum in technology stocks meant the NASDAQ still managed to close modestly up. Asia also put in just marginal movements across the board, as oil prices went lower on weekly data detailing a large rise in inventories, while the Bank of Japan surprised traders with its plans to buy unlimited JGBs at fixed rates in its latest daily market operation. The latter, of course, being seen as it effort to ensure domestic rates do not find themselves shackled to the US T-bill's upward movements. Today, the UK is due to release retail sales figures while the CML provides mortgage lending data; Eurozone inflation numbers are also expected this morning. Clearly the principal event of the day, however, will be Janet Yellen's Testimony on Capitol Hill which is due to commence at 10:00hrs EST and likely overshadow speeches also due from the Fed's William Dudley and Lael Brainard; the US is due to release inflation, weekly jobless claims and export statistics this afternoon as well. Another busy day for UK corporates, with earnings or trading updates scheduled from the likes of CRH (CRH.L), Great Portland Estates (GPOR.L), Johnson Matthey (JMAT.L), Kier Group (KIER.L), Premier Oil (PMO.L), Royal Mail (RMG.L), Shanks (SKS.L), Ted Baker (TED.L), TT Electronics (TTG.L) and Watkin Jones (WJG.L). The FTSE-100 is expected to open virtually unchanged."
Strategy credible; delivery ahead of track | Crossrider Ltd | CROS
Progressive Equity Research, 18 November
"We initiate coverage on Crossrider following a period of significant change for the Group which has brought new management and a new strategy. The Group remains well-funded with cash of U$70.2 million as at the end of June 2016. We suggest that investors take time to view the considerable changes at Crossrider and its focused strategy for organic and acquisitive growth. Recently, Crossrider announced the purchase of DriverAgent for U$1 million – a product already successfully promoted on Crossrider’s app distribution platform. This bolt-on acquisition is the first under the new management team with more such deals likely. Crossrider’s management have suggested that any subsequent large acquisitions will be of businesses which are generating profits. This, along with the recent H1 results, points the way to a clearly-defined, wellarticulated strategy that is already being delivered at a rapid pace..."