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.
Frequency of research reports
Research reports on
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.
13 Jan 16
Actual Experience (ACT LN) Positioning for global growth | Connect Group (CNCT LN) In line trading update, ASOS sign up to Click & Collect trial | easyHotel (EZH LN) Positive site pipeline news - European Expansion | Fenner (FENR LN) US restructuring; trading still tough | Instem (INS LN) In line FY trading update | John Menzies (MNZS LN) Chief Exec to leave | Xaar (XAR LN) 2015 profitability ahead of expectations
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).
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Small-cap quantitative research - New quality style screen + 11 quality focus stocks
09 Feb 17
We introduce our fourth and final style screen representing “quality”. This screens for stocks with the best combination of high returns on capital/equity, EBIT margins and operating cash-flow conversion rates. These criteria should help us monitor how strong underlying returns translate into share price performance over time and under varying market conditions. The screen selects the “best” 25 stocks from our universe of just over 500 stocks and, as usual, we focus on a shorter list of stocks we cover or otherwise know and believe to be particularly interesting. We provide brief investment summaries on these focus stocks on pages 4 – 9. We will monitor performance and refresh the screen in approximately 3-4 months time.
Emerging from the clouds
16 Feb 17
Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.
15 Feb 17
At the current market capitalisation of £29m, we believe the shares are significantly undervalued. We estimate that the highly profitable Maritime business is alone worth at least £40m. With net cash of £9m at end-2016, this implies that the market is currently ascribing a combined negative value of £17m to the rest of the group, which together account for c.54% of group revenues. This is very harsh given the management actions to transform TP Group to a profit-driven Tier 2 specialist services and engineering company are bearing fruits across the divisions. TPG Managed Solutions is expected to more than double its profits in 2017, while TPG Engineering and Design & Technology are on course to deliver sustainable profits from 2019. Even if we ascribe zero value to Engineering, Design & Technology and Managed Solutions, the shares are worth 9.5p a share, a 38% upside from the current share price. BUY.
Small Cap Breakfast
16 Feb 17
Saffron Energy—Schedule One update. Raising £2.5m, expected Mkt Cap £7.7m. Admission due 24 Feb. Italian Oil & Gas Play Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb. Arix Bioscience — Intention to float on the main market from the global healthcare and life science Company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management