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Codemasters has announced that it has signed a licence agreement for the exclusive rights to develop and publish the FIA World Rally Championship videogames and Esports tournaments. The initial 5 year annual series will be out from 2023, with the agreement ensuring a step-up in the release cycle of Codemasters’ off-road games to three games over two years rather than the current one per year. The major success of F1 highlights the potential of combining another global racing license with the company’s gaming expertise. This news, following the F1 contract extension with Liberty Media, the deal with NetEase in mobile, and the acquisition of SMS, adds to the visible growth profile of the business and increasingly underlines Codemasters’ position as the leading car racing platform in the gaming sector.
New franchise win: World Rally Championship
Much has been written about the effects of the virus on the world and on the stock market. Here is one analyst’s take on some of the likely impacts on the way we should look at companies. This article was originally produced as a blog, “10 Changes Post Virus”, which was published a few weeks ago.
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The phased reopening of Walker Greenbank’s two manufacturing facilities (both in the UK) is underway with Standfast & Barracks already operational and Anstey restarting this week. The company’s business model is such that near-term activity levels can be rebuilt gradually. It may also support new business development in the UK in due course compared to overseas supply sources. No new financial information was provided ahead of the company’s scheduled FY20 results announcement on 30 June, at which point activity levels during FY21 to date should also be disclosed. Our estimates remain suspended at this time.
Companies: Walker Greenbank
Warpaint has announced another exciting new contract win with a large national retailer. The new agreement is with Wilko which, from mid-September, will stock about 100 exclusive Body Collection branded products which will be stocked in 355 UK stores, and over 115 Technic branded products which will be stocked in 189 UK stores. Warpaint’s brands will be merchandised on bespoke display stands in prime locations in the stores, and will also be sold online through Wilko’s website. In addition, it is envisaged that a range of Technic and Body Collection gift sets will also be stocked in stores for the Christmas shopping period. This is excellent news and should be well received by the market.
Companies: Warpaint London
Fast & Furious launch date shifted to Summer
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Companies: AVAP SHI GFRD
Delivery on the transformation plan has been swift and the £78.75m sale and leaseback of TED's head office represents further decisive action. Combined with cost savings and cash conservation measures, we estimate it could improve the group's cash position by over £100m.
Companies: Ted Baker
Walker Greenbank is a higher-end interior furnishings business with well-established global brand names and manufacturing facilities in the UK. This morning, the group has provided a further update on the business in relation to COVID-19 following its previous announcement on 25 March. In addition, and in line with recent FCA/FRC guidance, full year results to 31 January 2020 have been rescheduled to 30 June (previously expected 23 April).
With cash ahead of expectation in a year of transformation, PTY has reported inline results for the year to December 2019, with revenues standing at £80.4m and £0.1m adj. PBT. Net cash at £0.9m is ahead of our expectation prior to the company's pre-close update by some £1.9m, a significant beat.
Dillistone's update this morning is, on the whole, reassuring. Although the economic implications of COVID-19 will likely materially affect FY2020E results, as with many businesses seeing a significant reduction in demand for products and services, it is too early to determine the quantum. As such, we remove our FY2020 estimates that previously looked for an EBITDA contribution of £1.6m and adjusted PBT to £0.1m.
Companies: WGB DSG PTY
Walker Greenbank’s FY20 results date has been reset to 30 June (and complies with updated FCA policy guidance). Its latest update provides no new financial information though orders continue to be received despite lockdown conditions. Operational steps already taken appear to be appropriate, retaining sufficient infrastructure to service prevailing sales demand levels while additional actions aimed at preserving business liquidity are referenced, consistent with those seen elsewhere in the quoted sector. Taken together, the company appears to have quickly adjusted its business model to meet current market challenges in FY21.
Disappointing H1 driven by NGP. Reducing investments in this category was the company’s choice, but we believe it is a bad mid-term strategy. The dividend cut has finally shown increasing weaknesses vs. peers during the crisis.
Companies: Imperial Brands
Codemasters has announced that Fast & Furious Crossroads will be launched in Q2 FY21, despite a twelve-month delay in the film’s release to April next year. This leaves FY21 forecasts unchanged but adds to the strong release line-up through this year and provides holiday season and movie release windows to further monetise the game. The shares continue to trade at a c.40% discount to peers; however, further news flow around the success of games as well as business development opportunities can continue to drive a re-rating back up towards the sector average in the coming months.
Due to a change in Analyst role, Cenkos Securities plc has suspended coverage of the following stocks (see table 1). Our previous recommendation and forecasts can no longer be relied upon.
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Much of the UK’s privatisation programme took place between the early 1980s and the mid-1990s: subsequent sales have been few. Undoubtedly, privatisation attracted many private investors to the market, many for the first time.
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Character Group has issued a trading update stating that while its supply side operations in the Far East have now been broadly restored following temporary disruption from COVID-19 issues, the demand side of the business is being deeply impacted by the closure of stores, shops and warehousing & distribution centres. The board is now anticipating a significant drop in H2 FY2020 revenues compared to expectations. However, given the lack of visibility on both trading activity and the eventual impact of COVID-19 on the business, which is second half weighted, we are temporarily suspending forecasts until further clarity is given – probably with the interim results scheduled for end May 2020.
Companies: Character Group