Most popular equity research this week | 9 - 13 Apr

NEXT (NXT)

Hard Work | Whitman Howard, 10 Apr

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"We look at Directory/Online relative under-performance in the UK online clothing market and consider the implications for future recruitment behaviour. Next continues to run this business to maximise returns from existing customers. With its Retail business going backwards rapidly and an already-high EBIT margin in ND/NO Next needs to change its behaviour in terms of growing its sales base more rapidly online in our opinion. We are not sure this will happen. We retain our sell rating..."

Omega Diagnostics Group (ODX)

Trading update and strategic review | finnCap, 10 Apr

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"A trading update for the year ending 31 March 2018 indicates revenues to be c.£1m lower than expected at £13.6m, resulting in an adjusted pre-tax loss of c.£0.7m versus our pre-tax profit forecast of £0.5m. A strategic review of the business by the new CEO has led to the decision to withdraw from its German Allergy business and manufacturing facility in Pune India, which had a combined LBITDA of c.£0.8m in FY 2018. .."

Tribal Group (TRB)

Confirmation of positive start to 2018 | N+1 Singer, 13 Apr

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"Tribal issued a business update yesterday which highlighted a successful first quarter and an extensive list of new customer wins across all three operating segments. This latest update provides further confirmation that the year has started well and that there is good underlying revenue momentum across the group. We believe the shares are highly attractive given this momentum and an undemanding valuation (FY 2018 EV/EBITDA of 11.0x, falling to 9.5x in FY 2019)..."

Solid State (SOLI)

Year-end trading update | finnCap, 12 Apr

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"Solid State’s trading update signals that the group has traded in line with market expectations in the year just ended, with better than expected growth in distribution and power. However, the outlook in Communications, its highest margin generating business, has seen order flow more difficult to achieve in America. We reduce our adj. PBT by £0.9m to £2.5m, with a 25% reduction in EPS to 25.1p. Our price target also reduces by a similar amount from 535p to 400p..."

XP Power (XPP)

Strong Q1 drives forecast upgrades | Edison, 13 Apr

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"XP Power’s Q1 trading update confirmed continuing positive momentum in order intake. Orders received were 9% higher on a year-on-year and quarter-on-quarter basis. With Q1 revenue growth of 18% y-o-y, book-to-bill remained strong at 1.1x. We have revised our revenue forecasts to take account of the higher than expected performance in Q1, resulting in an upgrade to forecast normalised EPS of 7.7% in FY18 and 7.6% in FY19..."

Dunelm Group (DNLM)

Robust Q3 trading should restore sentiment vs valuation anomaly | N+1 Singer, 12 Apr

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"Dunelm has reported positive Q3 trading today. LFL growth of 4.6% included 1.2% in-store and 35.7% online. While this included a small Easter timing gain (of c0.5%), this performance is considerably better than the market had feared/been pricing in. The group’s store/service strategy and step-change in online capability means strong share gains are being made as it further distances itself from the discounters and independents in what remains a highly fragmented market..."

Safestyle UK (SFE)

HSE Court Case Update | Zeus Capital, 11 Apr

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"As previously reported at Final Results (22nd March) Safestyle has faced investigation by the Health & Safety Executive (HSE) regarding two incidents involving injuries sustained whilst working at height. An update released yesterday confirmed Safestyle has received a fine of £850k in relation to one of these accidents in which a contractor sustained a knee injury. The fine imposed falls at the lower end of the previously indicated range of £550k to £2.9m and reflects Safestyle’s full co-operation with the investigation and the guilty plea entered by the Group..."

Playtech (PTEC)

Going vertical | Whitman Howard, 12 Apr

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"PTEC announces the proposed acquisition of Snaitech S.p.A a leading gaming and betting operator in the Italian market for a consideration of €846m funded by existing cash and debt. The deal appears profit enhancing on first take at 6.2x EBITDA (c. 5.8x post €10m synergies), PTEC on c. 7x FY18 EBITDA. Two stage deal: initial acquisition (70.6%) expected to complete in the 3Q18 and final transaction (29.4%) to complete in the 4Q18..."

Tricorn Group (TCN)

Further positive trading update | Stockdale, 10 Apr

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"Tricorn’s pre-close trading update to end March 2018 states that it expects adj. PBT to be ahead of market expectations on sales around 20% ahead of FY2017. We have increased our FY2018 adj. PBT to £0.83m (from £0.79m) on sales of £22.2m (£22.1m) giving adj. EPS of 2.0p (1.9p). Both divisions and the China JV have contributed to this significant uplift in profits YoY. Ahead of the final results being reported (scheduled for 6 June 2018) we have maintained our FY2019 and FY2020 forecasts and our 35p target price and Buy rating..."

GVC (GVC)

Under-promise and over-deliver | Whitman Howard, 11 Apr

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"New enlarged GVC is a business with substantial depth and breadth by product, channel and geography, with its own proprietary technology to boot. We estimate the new business will generate c. £3.5bn of revenue and c. £900m of EBITDA in FY19E. Our forecasts include guidance from management on staged synergies (£7m, £33m, £56m and £100m year four). We think this is a case of under-promise and over-deliver as management has a track record of integrating businesses (Sportingbet & Bwin.Party), firstly ahead of schedule and secondly with enhanced synergies..."