Impact: Modestly positive, as receipt of this permit brings AltaGas one step closer to making a final investment decision (FID) on the ~$200 mm North Pine Liquids Separation Facility. AltaGas expects to make an FID on the facility in 4Q16 as it looks to develop its northeast B.C. strategy to serve Montney production. The facility is expected to link with existing AltaGas infrastructure, including the proposed ~$450 mm Ridley Island propane export terminal.
Companies: AltaGas Ltd.
On the morning of August 16, 2016, AltaGas announced that it had won a 20 MW contract to store power on the same site as its 44.5 MW gas-fired Pomona facility in greater Los Angeles. The contract was signed with Southern California Edison (a subsidiary of Edison International, EIX-N). Under the contract, AltaGas has committed to store up to 80 MWh of dispatchable power on site (4 hours' worth of full power). AltaGas has contracted Greensmith Energy Systems to install the lithium-ion batteries and control systems. The Company expects the project to cost from US$40-$45 mm and be online by YE2016.
AltaGas reported positive results for 2Q16, beating consensus estimates, and raised its dividend payable September 15 by 6%. We expect that this will be AltaGas’s last dividend increase of 2016. By YE2016, AltaGas could reach final investment decisions on over $500 mm of new natural gas and NGL processing facilities. We have made only minimal changes to our 2016e EBITDA (-1%) and FFO/share (-6%). AltaGas has long been a solid ‘collector of assets’, finding or building good infrastructure projects, but now appears to becoming a ‘builder of systems’, creating assets that may help provide business for other new AltaGas assets.
AltaGas's second quarter results beat consensus estimates.
Oil and gas producer Painted Pony Petroleum Ltd. (PPY) announced on Tuesday, July 19, 2016, that AltaGas's Townsend gas plant was up and running more than 30 days ahead of schedule, processing Painted Pony's Montney gas.
AltaGas announced on May 24th that it had signed an agreement with Astomos Energy for 600 kT/y or more of LPG gas deliveries from its proposed Ridley Island terminal.
Impact: Positive. With an export deal, this proposed $500 mm propane shipping terminal now appears very likely to proceed.
AltaGas’ 1Q16 results were in line with expectations: EBITDA $178 mm (FCC: $182 mm); FFO/share: $0.90 (FCC: $0.91), normalized EPS $0.26 (FCC: $0.25).
AltaGas's 1Q16 results were in line with expectations: EBITDA $178 mm (FCC: $182 mm); FFO/share: $0.90 (FCC: $0.91), normalized EPS $0.26 (FCC: $0.25).
After 21 years, AltaGas' Founder and Chairman of the Board, David Cornhill, has retired as CEO as of April 15, 2016; David Harris, the 25-year energy infrastructure veteran, has assumed the role of President and CEO. Mr. Cornhill will retain his position on AltaGas' Board of Directors and will continue his involvement in strategy development, capital allocation and stakeholder relations.
On Monday April 4, 2016, after market close, AltaGas announced its intention to issue $350 mm senior unsecured medium-term notes with a coupon rate of 4.12% that mature on April 7, 2016. The offering will be used to refinance current debt and general corporate purposes.
In a beleaguered industry, AltaGas is in the relatively fortunate position of having secure growth in its 2016e EBITDA (+20%), FFO (+20%) and FFO/share (+10%) versus 2015 numbers. The Company expects that ~77% of its 2016 EBITDA will come from either contracted power or regulated utilities, with half the remainder coming from take-or-pay arrangements in gas midstream that have no exposure to commodity prices or producer volumes; this is a very different company than the AltaGas of 2010 that earned half its EBITDA from Alberta merchant power and NGL extraction or “frac spreads”. We maintain our 12MTP of $36.00/share and our Outperform ranking.
AltaGas announced 4Q15 results on February 25, 2016: EBITDA $173 mm (FCC $166 mm) Normalized EPS $0.38 (FCC $0.28) AltaGas noted that worsening world market conditions had caused it to end all further work on the Douglas Channel LNG project. AltaGas's net exposure to the project was ~17%. AltaGas expects it is fully funded for its capital expenditures in 2016 as it had $293 mm in cash at YE2015 and close to $1 billion in available room on its credit facilities.
On February 2, 2016, after market close, AltaGas announced that its wholly owned subsidiaries, AltaGas Processing Partnership and AltaGas Holdings Inc., have entered an agreement with Tidewater Midstream and Infrastructure Ltd. (TWM) to divest AltaGas Northcentral Processing Limited Partnership, a limited partnership containing gas gathering and processing assets, for $30 mm and 43.7 million Tidewater common shares. The deal is expected to close within 1Q16, dependent on satisfaction of regular conditions.
We expect that the terminal will contribute $60 mm in annual EBITDA beginning in 2019 and that this terminal increases AltaGas’s DCF-NAV (8%, Atax) by 3%. Risks to our estimates include possible delays in permitting, a potential capital cost increase, as well as commercial risk, that is, the terminal does not get enough business to pay its return of capital and return on capital.
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The group’s year-end update points to stronger than expected Q4 trading, boosted by robust sales in North America that translated efficiently to upside on profitability expectations. Cash performance has once again been stellar, resulting in net cash of $35m, considerably higher than forecast, partly profit drop-through and partly from tight working capital management. We are therefore upgrading our FY 2020 EPS by 25% to 33.2ȼ. The strong cash position also results in a boost to the total dividend, giving a dividend yield of 6.7%. We raise our price target from 285p to 435p, based on a target P/E of 17.0x offering upside to the current P/E of 13.8x.
Companies: Somero Enterprises, Inc.
Inspiration Healthcare has announced it expects revenues and profits for the year ending January 2021 to be ahead of market expectations. Revenues are expected to be at least £36.5m and adjusted EBITDA at least £4.9m. We have moved our FY21E forecasts into line with these expectations, which are c3% and c11% ahead of our previous forecasts for sales and adjusted EBITDA, respectively. We note the key driver of the upgrade was performance at S.L.E., which Inspiration Healthcare acquired in July 2020. We reiterate our Buy recommendation on Inspiration Healthcare.
Companies: Inspiration Healthcare Group PLC
Although 2020 will probably go down in history as one of the most challenging years experienced during our lifetime, it will also likely be chronicled as one of the best years for the recognition and appreciation of science. As we entered 2020, the COVID-19 pandemic was in its infancy. However, it rapidly evolved through the exponential rise in infections and mortality globally. Much has been achieved during the past 12 months in the fight against COVID-19, but, as we enter 2021, there are considerable concerns about the emergence of a mutant version of the virus and the second wave that we are now facing.
Companies: AVO ARBB ARIX BBGI CLIG DNL FLTA ICGT OCI PCA PIN PHP RECI STX SCE TRX SHED VTA YEW
TP Group experienced a material improvement in trading in H2/20, with the period accounting for nearly two thirds of the group's £3.8m FY20 Adj EBITDA, mainly due to the timing of some larger contracts. The order book remains robust at c£69m (up c20% YoY); however, the pandemic continues to create uncertainty around the timing of contract deliveries, and consequently, our forecasts remain withdrawn and our rating Under Review. Notwithstanding, we believe the significant operational changes made over the past year help to accelerate the business' software and consulting services, and leave the group well positioned for future growth.
Companies: TP Group Plc
Filta's FY20 trading update confirms a much stronger performance for the group in H2 versus that in H1, boosted by an increasing number of customers opening up during the summer period. Despite Covid-19 significantly affecting the restaurant and leisure sector, a strong focus on cash management meant that Filta reduced its net debt (excluding leases) by £0.4m YoY to £0.5m. With a healthy sales pipeline, solid balance sheet cash position (£4.2m), and vaccine roll-out progress, management has more certainty in the business' outlook than at any time over the past 12 months. Notwithstanding, the speed at which trading conditions will return to normal remains unclear (eg potential impact from new strains of the virus emerging, unexpected delays in vaccine production etc). As such, we refrain from reinstating forecasts, and maintain our Hold rating.
Companies: Filta Group Holdings PLC
XPD is a well-established pan-European freight management and logistics operator. We have selected the Group as one of our Top Picks for 20211. The Group is based in the UK and focused primarily on providing integrated supply chain solutions for customers operating in the UK and Central & Eastern Europe (“CEE”). Trading has been resilient through the Covid crisis, and the benefits of acquisition integration and recent cost reductions are now coming through. Management has guided to an 18% y-o-y improvement in profit for 2020e. The balance sheet is strong with £4.3m of net cash reported at H1.
Companies: Xpediator Plc
Foresight Group , the award-winning infrastructure and private equity investment manager to IPO on the Main Market (premium). The Offer will primarily comprise a sale of shares by existing shareholders (c.80% of the Offer) with a smaller offering of new shares (c.20% of the Offer) to be issued by the Company. Details TBA. Cornish Metals (TSX-V: CUSN) intends to list on AIM. The Company is proposing to raise £5 million by way of private placement of new Common Shares (the "Fundraising") to advance the United Downs copper-tin project. The Company expects that Admission will become effective in February 2021. The Company's Common Shares will continue to be listed and trade on the TSX-V in Canada. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange. Due by Early Feb.
Companies: TYM W7L BEG CRPR EUZ IRR CMCL FARN KETL AUG
Today’s update confirms a strong recovery in H2 FY2020E as expected and a full year adjusted PBT at least in line with FY2019, despite a material impact from Covid and the depressed oil price resulting in a decline in Augean’s North Sea Services business. The FY2020E outturn demonstrates the resilience of the Group and the strong attractions of its growing EfW activities that now account for c.70% of Group profit. Augean is very well positioned in the EfW residue market and with c.40% of the UK’s hazardous landfill capacity. We forecast Group earnings growth of 15% and 21% for FY2021E and FY2022E, and expect further strong cash generation. EV/EBITDAs for FY2021E and FY2022E are 5.7x and 4.5x respectively, substantially below sector constituents and transaction multiples.
Companies: Augean PLC
The group has announced an extremely positive trading update as it completes its first half. Following a positive Q1, Q2 has maintained momentum resulting in a record profit for the half year, significantly more than we had forecast for H1 and almost achieving the full-year expectation. Restructuring cost savings have also assisted gaining double-digit RoS. It also signalled a return to the group’s previous dividend policy. As a result, we upgrade our FY21 forecast with a 39% in in EPS to 19.9p. We also raise our PT from 130p to 178p, in line with the uplift in EPS, which remains a conservative target P/E of 9.0x. ALU is currently one of the lowest rated in the sector, offering a currently very attractive 4.4% dividend yield.
Companies: Alumasc Group plc
Directa Plus has had its contract with OMV Petrom extended and increased. The contract, initially awarded in July 2019, was for the provision of decontamination and oil recovery services using the Company's proprietary Grafysorber® technology. The initial value of the contract was €150k (of which €75k was delivered and invoiced in 2020) and this has now been increased to €410k, the balance of which is expected to be fulfilled by June 2021.
Companies: Directa Plus Plc
The Group made strategic progress in FY20A despite the onset of COVID-19. Management acted swiftly implementing a strict cost reduction programme, ensuring robust cash management. This combined with strengthening the Board and management teams, exploring new revenue streams and investing in technology to drive efficiency gains has positioned the Group to overcome short-term demand fluctuation. We are confident the Group will capitalise on the operational gearing within the business as demand levels revert to pre-pandemic levels. Corollary to this we expect financial performance to materially improve in H2/21 and beyond.
Companies: Velocity Composites Plc
Itaconix has confirmed a positive conclusion to FY20, with revenue, EBITDA and net cash all slightly ahead of expectations. This builds on the positive trends reported in October’s interims, driven by successful customer product launches. Itaconix enters FY21 with good momentum and strong sustainability credentials. We plan to introduce FY21 forecasts alongside full year results.
Companies: Itaconix plc
Journeo is a specialist provider of information systems and technical services to the transportation sector. This morning, the group has announced that under its existing Transforming Cities Fund framework contracts, it has received further orders for its advanced public transport information systems.
Companies: Journeo plc
Initiating with a Buy rating. We initiate our coverage of Proton Motor Power Systems (“Proton Motor”) with a BUY rating and a target price of 201p. Our valuation equates to a market capitalisation of £1.47bn, compared to a current share price of 65.5p and a market cap of £479m.
Companies: Proton Motor Power Systems Plc
Capital Limited has released its Q4 and FY2020 trading statement this morning. Overall it shows 2020 was a strong year for the company with revenue growing 18% and most other operating metrics growing positively with it – see Fig 1. We have adjusted our forecasts accordingly and also to take into account the mining services contract for the Sukari Mine which the company won late last year. The latter is a game changer for Capital and its investment case in our view; turbo charging revenue growth, enhancing margins and diversifying cashflow all of which should lead to materially higher valuation multiples. We raise our PT to 127p.
Companies: Capital Limited