Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on CONNECT GROUP. We currently have 9 research reports from 3 professional analysts.
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24 Feb 16
This quarter’s topic: Is the model good enough? Growth in the current low-growth environment is hard fought but the Support Services sector contains a range of innovative business models that are enabling strong progress against a continued difficult backdrop. Having looked at the level of value-add (and ability to raise margins) in the last quarterly, we now look at EPS forecast trends. Innovative models that separate a company from the competition, support market share gains and drive growth are evidenced by forecast upgrades that are likely to repeat as the model continues to deliver.
In line trading update, ASOS sign up to Click & Collect trial
13 Jan 16
A positive update from Connect this morning confirms that trading for the 19 week period to 9th January has been in line with expectations. Group revenue increased by 6.4% including the benefit of a full period's contribution from the Parcel Freight (Tuffnells) division. Group like for like revenues declined by 2.3%, the main driver of which was Connect News & Media, where like for likes declined by 3.7%, a solid performance from the mature and still dominant part of the Group. Connect has also announced that ASOS has signed up, on an initial trial basis, as the second customer (after Amazon) for Pass My Parcel, the Group's Click & Collect service. Pass My Parcel is said to have delivered an excellent operational performance over Christmas and this is another promising development. No changes to forecasts and we remain at Buy, noting the 6% yield and undemanding rating.
New growth areas and a 6% dividend yield
04 Nov 15
Connect is investing in new growth areas funded by a rights issue and debt. This has held back EPS in the short term and resulted in a range-bound share price. However, with the structural decline in newspapers being offset by cost cutting and with the new growth areas of specialist parcel delivery and a click-and-collect service showing encouraging early signs, we see an attractive investment opportunity. The shares are valued at only 8.7x August 2016E EPS, with a 5.7% dividend yield. We initiate coverage with a Buy recommendation and a 201p target price.
Encouraging update, strong performance from Parcel Freight
07 Jul 15
Connect has released an encouraging update for the 44 week period to 7th July. The highlights for us are a solid performance at Connect News & Media and continued strong growth (revenue +20.6%) at recently acquired Connect Parcel Freight. Parcel Freight/ Tuffnells looks to us to be an excellent addition to the Group. It is a specialist business with good margins (high single digit) and an impressive track record of revenue and profit growth. After the disappointments of previous acquisitions (Bertrams books and The Consortium education supplies), we think this could be the acquisition that succeeds in bringing a leg of growth to the Connect investment case. The shares have drifted recently and we upgrade to BUY this morning, noting the 6% dividend yield and undemanding rating (<8x P/E).
19 Jan 17
Aggregated Micro Power* (AMPH): Funding for first peaking power plant project (CORP) | The Mission Marketing Group* (TMMG): Positive trading update (CORP) | Cello (CLL): Increasingly backed by, and leveraging, technology (BUY) | 4imprint (FOUR): Growth backed by strong cash flow continues (BUY) | Allergy Therapeutics (AGY): Positive trading update and market share gains drive upgrades (BUY) | Shanta Gold (SHG): Q4 operating results (BUY) | Sound Energy (SOU): Tendrara extended well test result (BUY) | Revolution Bars (RBG): Price target increase (BUY)
FY16 trading update; 4% earnings upgrade
24 Jan 17
The trading update confirms another year of double digit earnings growth for Empresaria. We anticipate acceleration in growth rates in FY17 reflecting organic growth, acquisition contribution and FX tailwinds; Arden forecast FY17 earnings growth of 24%. We believe this is not reflected in a FY17 valuation of 8.4x, with the relationship to growth expressed in a Price Earnings Growth ratio of 0.35x. The valuation is inconsistent with current trading, geographical alignment and delivery of the strategy to acquire niche growth businesses such as Rishworth and ConSol, which are fundamentally improving the quality of earnings at Empresaria. The shares represent a conviction Buy.
N+1 Singer - St Ives - Downgrade
19 Jan 17
Marketing activation has been impacted by further decline in grocery retail impacting profit by c£5m. Strategic The Company is also taking this opportunity to revise its guidance for Strategic Marketing as its recovery pace is not running at the planned target rate. PBT falls from N1Se £31.9m to £25m. The Company expects dividend to be held based upon lowered guidance and the implied cash flow performance. There do not appear to be any covenant issues. Forecasts and TP under review and downgrade to Hold. We expect the shares to test the 100p level.
Trading conditions difficult but acquisitions underpin growth
23 Jan 17
FY16 revenue will be £53.7m (FY15: £44.8m), in line with ZC estimate of £53.9m, showing growth of c. 20% yoy underpinned by the three acquisitions undertaken in the year. However, due to higher costs relating to the acquisitions and, to a lesser extent, gross margin pressure, PBT will be in the region of £7.0 to £7.2m equating to growth of between 5.5% and 8.0%. As a result, FY16 ZC profit forecast is reduced by 8.0% to £7.0m. The impact in FY18 and FY19 is muted by the announcement of a further acquisition leading to an increase in revenue estimates of 8.7% whilst profit estimates fall c.4.5% in each year, respectively. Despite the decrease in forecasts the PER multiple on FY17 earnings remains single digit at just 9.1x, against a distributor average of 15.8x. With commitment to the forecast dividend increase reiterated, Flowtech offers an above average yield of 4.1%
N+1 Singer - Morning Song 19-01-2017
19 Jan 17
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16 Jan 17
We take a look at the rankings of the various countries in Africa that have a significant exposure to mining. We take the Transparency International corruption rankings as our starting point and modify these for exceptional geology and for current UK government travel warnings. Ghana, Botswana and Namibia come out as our top three, with Eritrea, Kenya and Zimbabwe at the bottom of our rankings.