Headwinds are still there

Zodiac continues to suffer in the Aircraft Interiors activity in both subdivisions (Seats and Cabin). The company has been hurt not only from a poor reputation following previous deliveries, but also from VIP and jet customers delaying their orders. Sales are expected to decrease over FY17/18 but FCF generation should improve thanks to better WC management.

Zodiac on the right track

Zodiac reported higher than expected FY results supported by, as expected, a much better performance in H2 than in H1. FY revenues came in at €5.1bn (-1.6%), supported by the Aerosystems activity which reported 3% organic growth. Conversely, the Aircraft Interiors activity remained impacted by the Seats division (-9.6%), while the Cabin division’s situation continues to improve.

Time to hand over to Safran

Zodiac has reported its Q4 results and, while its Aerosystems division still shows good organic growth (+6.7% org. in Q4), we have to say that it is now time to hand over the operations to Safran as the Seat activity (-13.3% org. in Q4 and -10.3% for FY) shows continuing operating difficulties and weakness in demand.

Operational problems contained

Zodiac reported a rather mixed set of Q3 revenues, with total group revenue decreasing by 3.2% yoy organically to €1.34bn, whereas €1.38bn was expected. This underperformance is mainly linked to the Seat activity which still suffers in the Welsh plant of Cwmbran. The resolution of the issue is going to plan according to management but, beyond the operating efficiency improvement, a recovery in commercial confidence will be key for the group. Indeed, delays have strongly affected some programmes

A half year to forget; new CEO announces an independent brighter future?

Zodiac reported quite weak H1 results, with an operating loss of €11.5m but still better than consensus’ estimates of a €20m loss, but much weaker than last year’s operating income of €80m. This bad performance is mainly due to the Aircraft Interiors activity which registered a strong loss while Aerosystems displayed an operating profit. What is important to note is the change in governance, with Yann Delabrière assisting Olivier Zarrouati on the operating side and the latter focusing on the dea

Manufacturing challenges coming back, price offered still intact?

Zodiac Aerospace released yesterday weaker than expected H1 revenues, mostly due to the manufacturing issues faced by the Seats division in the UK, but also by a weaker demand in some segments and by the postponement of some programmes.

Reorganising and waiting for end-market growth

Zodiac released rather weak Q1 sales figures because of end-market weaknesses and the consequences of past difficulties on business. The company remains confident of reaching its FY target thanks to an expected better second half year which should be due to stronger demand thanks to increasing oil prices.

Take a seat for the (too) slow recovery

Showing a really mixed performance by division, Zodiac has held its Aircraft Interiors Activities’ operating result loss at a reasonable level. Moreover, the strong increase in Aircraft Systems’ operating result slightly compensated for the headwinds encountered by the company. FY revenues came in at €5.21bn, representing a 5.6% increase versus last year, and the recurring operating result decreased by 14.2% to €269.5m, now representing a 5.2% operating margin versus 6.4% last year. Also, the o

Q3 progress undeniable

Solid +4.4% organic growth in Q3 15/16 resulting in sales for 9M up +5.9% to €3,841.8m, with organic growth of +0.4% and a forex benefit of 5.5%. During the quarter, System activities saw a continuing weakness from its Aerosafety business (-7.7% organic decline in Q3 and -6.5% for 9M 2015/16) as the contract from US airports’ arresting systems came to an end, but a recovery is expected in Q4. On the other hand, the Aircraft systems business benefited from strong traffic growth in commercial a

Zodiac turning the corner in H2?

Zodiac announced its H1 results with no surprises on the revenue front given that sales were released a month ago, H1 15/2016 revenues are up +7.1% to €2,489.1m; but down 1.7% on a lfl basis. The key information related to its current operating income over H1 15/16 which came in at €80.4m. Looking at the various segments: Together Aerosafety and Aircraft Systems (now called just Aircraft Systems) generated a current operating income of €153m, up from €142m in the previous year, whilst the Ai

A collapsing House of Cards?

Top-line evolution: H1 revenues at Zodiac are a mixed bag with ramp-ups of large commercial aircraft still very much the growth driver. On the Regional aircraft front, sales are stable meaning that growth at Zodiac is flat. The Business Jets segment, however, is on a downward trajectory given the softness in the market and especially the delays in entry into service of multiple platforms. The demand from the helicopter market continues to fall with the Oil & Gas segment particularly challenging

Total loss of credibility

Zodiac is implementing its Focus transformation plan, a complete revision of the production systems within the whole group. Zodiac has updated the market on its delivery status and suggested that, in its Seats business, no progress has be made since mid-January in terms of delivery delays and that the “transformation and industrial recovery" may take longer than initially planned. Zodiac confirms that this will result in "excess costs remaining at a high level". As a result, the guidance

No return to a normative 14-15% margin over the next two years

We will not refer to the sales progression in this article as we tackled the subject in our Latest on 16/09/2015. Over the course of the full year 2014/15, Zodiac’s current operating income (COI) fell by 44.6% to €314m. As a result, the group's COI margin fell to 6.4% for FY 14/15 from 13.6% in 2013/14 and 14.5% in 2012/13. Aero Safety saw its COI improve by €6.3m to €118.3m, despite an organic decline of €16.9m. Aircraft Systems saw its COI increase by €29m, mainly thanks to foreign excha

Growth crisis continues with a governance review now required

Zodiac announced its full-year 2014/15 sales, tainted by a somewhat weaker Q4, resulting in a weaker than average organic growth of 2.6% for the group, with organic growth in its exclusively aerospace products falling to 3.2% (normally 4-6%). Revenue growth stood at 18.1% so that revenues reached €4.93bn (2.6% organic, 3.8% scope and 11.7% from forex). From a divisional standpoint: Aircraft interiors saw revenues grow by 23.2% to €2.83bn (4.4% organic, 5.9% scope and 12.9% from forex).

2014/15 a bad but necessary experience

Zodiac announced positive Q3 sales figures. These are very much in line with the trend with solid organic growth in the Aircraft interior business and the overall group sales boosted by the strengthening dollar. The focus was once again on the delays in the seats business. The company announced that in order to ensure that the delays were limited to the 2014/15 financial year it is doing everything it can to deal with the issue. As a result, the guidance for a flat EBIT in 2014/15 vs. 2013/1

Renold - Strong end to FY24: EPS up 11%. Robust FY25: EPS up 27.6%

The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as manageme

Billington Holdings - Record result boosts dividend; forecasts upgraded

FY23 results show very strong growth over FY22, driven by strong Structural Steel activity, with results slightly ahead of upgraded profit expectations, while stronger than expected cash flow resulted in an unexpectedly generous dividend of 33p (offering a FY23 yield of 7.0%). The group now has net cash of £22.1m and is debt free and is therefore in a strong position for potential M&A activity. Following the recent £90m of new orders to increase the order book to record levels we conservatively

Morning Note – 16 April 2024

Morning Note – 15 April 2024

Warns on brine supply costs

PROGRESSIVE: Severfield: Targeted acquisition strategy aids growth path

Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.

Invinity Energy Systems - Update on Strategic Investment

Invinity’s update on discussions with strategic investors reveals interest from multiple parties. While this has slightly delayed finalising an agreement it increases the potential for a better outcome. Although details are unknown at this stage, we think there is enough in the statement to be comfortable that any agreements will be consistent with the company’s strategy of growing market share in core markets and using a licencing and royalty model in other markets.

SP Angel . Morning View . Copper prices hold higher as China processing fees fall below $0/t amid low feedstock availability

FY results: strong cash flow

Clean and competitive fertiliser

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Windar Photonics - Major order, successful net £4m fund-raise, target fair value price raised

WPHO's announcement last week of a major new contract award with a North American customer represented an encouraging step forward in building the group's presence in this crucial market for wind power; and has been followed by news of the over-subscribed fund-raise which has strengthened the company's balance sheet to the tune of £4m net (£4.4m gross). The company is a pioneer in the field of wind turbine optimisation and continues to grow through innovation based on its unique IP. Following th

LIBERUM: Gattaca: Resilient contract performance, perm tough

Norcros - FY24 trading in line with expectations

FY24 trading underpins Norcros’s compelling investment case, where its new product development initiatives, market positioning and self-help initiatives allow it to take market share in both the UK and South Africa. We believe that Norcros’s key strengths are underappreciated and that legacy issues have been resolved. Its rating is low at 5.6x FY24e P/E, which is attractive, especially when compared to its yield of 5.7% on its well-covered dividend. We retain our estimates and value the shares a

Trading report in-line with sector peers

The results for the six-months to January are robust against a backdrop of declining confidence in both clients and candidates generally. With an improvement in the contract book during early Q3 we think this highlights that the tide is starting to turn and likely to feed through to demand for permanent hires ahead of the CY24 end. With net cash accounting for over 70% of the current market capitalisation, the operating business appears undervalued. H1 results were broadly in line with expectat