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A decent set of Q2 results for Orange with stable revenues yoy in reported terms and EBITDA up by 4.5% yoy (adjusted for the co-financing).
With a forecast of a fairly significant increase in EBITDA less capex, the group should be able to steadily increase its dividend from 2023.
We stick to our Strong Buy on the stock. However, in the short term, the rotation toward quality growth stocks at the expense of telcos is likely to continue.
Companies: Orange SA
The Q1 figures were in line with our expectations but they confirmed the outlook for 2022 of an EBITDA growth of 2.5/3% and a c.5% decrease in capex.
We still expect the group to enter a virtuous circle of vigorous FCF growth in the coming years allowing steady dividend growth. So we stick to our Strong Buy. Orange deserves to return to the best-in-class group in the telecom sector consistent with its 4.5% dividend yield.
Orange and MasMovil announced this morning the combination of their operations in Spain.
The combined entity would become a strong second player in Spain with revenues of €7.5bn (vs €12.5bn for Telefonica), EBITDAaL of €2.2bn. It is expected to generate €450m of synergies from the third year post closing onwards.
So, clearly a nice leaving gift for Orange from its future ex-CEO Stephane Richard.
We maintain our Buy on the stock.
Nothing special to say about the Q4 results which were in line with expectations. For the whole year, revenues were up by 0.8% yoy and lfl, while EBITDA was down by 0.5% yoy.
The key point is indeed the outlook for 2022 which is finally as we hoped. EBITDA should grow by 2.5-3%, while capex should decrease by 5%. The time has arrived to see a regular increase in the FCF in the coming years.
We stick to our Strong Buy.
A correct Q2 for Orange but the poor EBITDA outlook for 2021 has been confirmed and the dividend proposed for 2021 will be stable at €0.7. So nothing to wake up the stock.
The group is not expensive compared to its peers, and it offers an enticing c.7.5% dividend yield. Although not for this year, the group could surprise the market by a higher dividend increase than expected in the coming years. We stick to our Strong Buy.
The EBITDAaL was eventually down by 1% yoy but should have grown by 3.2% excluding the COVID-19 impact.
Despite this solid performance and the return to normal of its dividend, the stock is still languishing 20% below its pre-pandemic levels.
At first investors were also quite circumspect about Orange’s determination to keep its new towers company within the scope of the group. But later, Stephane Richard made it clear that Orange won’t go it alone in the towers space.
A decent Q3 for Orange as the impact of COVID-19 was more limited than in Q2 with only the sharp decline in roaming due to travel restrictions.
The key point of this release is, however, a proposed return to a €0.70 dividend for 2020 (with an interim dividend of €0.40 in December).
We maintain our Strong Buy on the stock with a 7.75% dividend yield for the coming 12 months.
Q2 revenues were down by only 0.4% yoy and the impact of COVID-19 was indeed very limited. This correct Q2 performance reflects a better than expected solid growth in France.
But, more importantly, given an expected stable EBITDA less capex in 2020, Orange will pay a dividend of €0.70 for 2020 (to be confirmed after Q3). So a return to normal which deserves a better price. We maintain our Strong Buy on the stock.
Orange presented yesterday its new strategic plan “Engage 2025”. The stock was, however, down by 4% yesterday while the group refused to commit to increasing its dividends over the period.
We maintain, however, our opinion at Buy on the stock with a significant upside.
Q2 revenues were up by 0.7% yoy and lfl, a satisfactory number and better than the zero growth recorded in Q1. The correct Q2 performance reflects this time a very solid resilience in France (+0.4%) and an acceleration in Africa & Middle East (+5.8%), while Spain was disappointing with revenues down by 1.6% due to a highly promotional market.
EBITDA has grown by 2% yoy and lfl and was slightly above expectations.
We maintain our Buy on the stock.
Q4 revenues grew organically by 1.4%, a satisfactory number in line with the growth recorded in H1 (+1.7%) after a weaker Q3 (+0.6% yoy). The 2.4% growth recorded in Spain is quite good as Orange had seen its impressive growth trend of 2017 slowing in the two previous quarters (+0.5% in Q3 vs. +1.8% in Q2, +4.3% in Q1 and +7.1% for the whole year 2017). In France, Q4 revenues were however only flat yoy and that is a little bit disappointing.
Q4 EBITDA has grown by 1.4% yoy but by 2.6% for the t
A good Q3 performance despite a slowdown in growth in Spain. Quarter after quarter, the group is confirming it has crossed an inflection point in terms of revenue and EBITDA growth.
Orange’s dividend has been raised to €0.65 in 2017 and looks to be €0.7 for 2018. We believe that the prospect of a regular rise in the dividend in the coming years, if it officially committed to this, would be likely to make Orange’s stock break the €15 level.
A good Q2 performance despite a less impressive growth in Spain. Quarter after quarter, the group is confirming it has crossed an inflection point in terms of revenue and EBITDA growth. Full-year EBITDA should grow by 3 to 4% yoy… and with capex which should decrease from 2019, the dividend could be better than expected next year.
Q1 revenues grew organically by 2% yoy, as in the previous quarter (+1.8% yoy): this is a good quarterly performance due partially to a recovery in the Africa & Middle East segment. All in all, it confirms the good trend recorded in the previous quarters. In France, revenues were up by 2.1% yoy (for the fourth time in a row), benefiting from the impact of digital media apps available since October, while the fixed broadband services have continued to grow steadily. The great story in Spain conti
We maintain our Buy on the stock with a significant upside. This release is once again reassuring and we still believe the group does not deserve such a discount in terms of EV/EBITDA (at only 5x vs a little bit more than 6x on average for its peers).
The dividend yield is 4.75% for 2018 and 5.1% for 2019… And Orange is a slight growth story in a no-growth sector with absolutely no risk on the dividend payment.
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Reaching the Inflection Point
Companies: CyanConnode Holdings plc
CyanConnode is a market-leading provider of telecommunications technology in the smart meter industry and is currently geared towards the vast expansion programme of electricity meter set out by the Government of India. In the past year it has built on its prior success, growing revenue by c50% and reducing net losses by c60% bringing it closer to profitability. CyanConnode trades on an FY1 EV/Sales multiple of 2.7x, which is a discount to its peer group trading on 4.1x. This leads us to an impl
Companies: SRT Marine Systems plc
No leavers today.
Leavers: No leavers today.
What’s cooking in the IPO kitchen?**
Milton Capital Plc, a new type of special purpose acquisition company, intends to join the Standard Segment of the Main Market. The directors intend to search initially for acquisition opportunities in the technology sector. The focus for the prospective acquisition is megatrends. This includes sectors such as space, artificial intelligence, machine learning and blockchain technology. Ticker upon admission
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SRT Marine has today issued a trading update for the six months ending 30
September 2022. H1 23 revenue of £18.8m was up considerably (300%) on
the £4.7m reported at H1 22. The principal driver of this growth is the fact
that the Systems division passed a number of key milestones, generating
revenue of c.£13.6m, up from £0.5m the year before. Management
estimates that a minimum profit before tax of £1.5m was generated in the
period, versus a loss of £3.1m at H1 22. The statement confirms
Progressive Equity Research
FY22 results confirm that the year to March was in line with expectations. Systems deployments were delayed by lockdowns so virtually all the sales were from the Transceivers business, itself struggling to meet growing demand while constrained by component shortages. Meanwhile, SRT continued to invest in its product portfolio and capability to deliver multiple large Systems projects around the world, resulting in a significant loss for the year. However, that investment has substantially improve
Friday's market sell off saw some violent downward moves in many stocks with little initial differentiation between sectors or the key drivers of businesses, creating significant share price drops in a number of higher quality or uncorrelated names. We take a look at some stocks we believe have either seen an unwarranted sell-off, have seen weakness go under the radar or where there is now a more attractive opportunity.
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CyanConnode has steadily been making progress in India, where the national smart meter programme has been gathering pace. In July 2022, the company crossed the one million mark for meters connected to its RF network across nine Indian states. This is the aggregate RF device number in India connected since 2014 and represents market share of 22%. The latest update from the company states an order book of 2.6m RF nodes for India. Performance of smart meters is a critical aspect of the Indian progr
Hardman & Co
Significant contract resumed and further cost cuts
CyanConnode released a solid trading update on 12 January which confirmed the Group was trading in line with market forecasts and demonstrated the renewed momentum the Group has seen in the past 12 months as COVID restrictions have eased and deliveries have accelerated. With a cash balance at end of December of £1 million, we believe cash will have been received from customers post period end. We understand debtors are in the region of £5.5m in India alone and with the Indian subsidiary now bein
A bland trading update with Q1 service revenues up by 2.5% yoy and lfl (vs+ 2.5% in Q4).
We maintain our opinion at Buy. The stock is currently around the 130p level. We are still waiting for a catalyst to boost the stock which remains discounted to its peers due to the scepticism and mistrust towards its CEO (under fire after missing opportunities in Italy, Spain and with Vantage).
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