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Ampere’s CMD was the opportunity for Renault to reassure investors on its near-term EV game plan. Ampere expects a FCF breakeven in 2 years with 300k units and an implied revenue per car of €33k. The BEV-ICE price parity was also on the menu but expected by 2027-28 as costs are slashed by 40%. Renault presented its interpretation of the “<€20k BEV”, thus joining Stellantis in frontrunning Tesla in the people’s car segment. The IPO window for Ampere was maintained.
Companies: Renault (RNO:EPA)Renault SA (RNO:PAR)
AlphaValue
Renault’s Q3 23 results (only revenues) slightly missed consensus expectations on the back of a weaker-than-expected volume effect, stemming from a voluntary destocking at dealerships, despite a pricing effect beating expectations. However, we expect limited changes to the FY23 consensus as Renault confirmed its guidance with profitability seen at the upper end of the range. We confirm our positive rating, believing that this miss on the top line does not reflect the underlying structural improv
The guidance upgrade was not enough. Renault posted H1 23 figures significantly above what it targeted only a month ago, therefore making delivery of the FY23 guidance an easier play. Market conditions in H1 were a clear support for numerous OEMs. However, we believe that Renault’s portfolio turnaround has a huge potential to deliver structural improvements on top. Bear in mind that the bulk of the renewal of the model lineup is coming next year. We keep our Buy rating.
Renault upgraded its FY23 margin and FCF guidance sending a positive message on the margin profile and the welcome of its new product range. This was backed by the strong product mix and lower headwinds on variable costs. Consensus’ prudence is likely to remain for FY24E as the first impacts of the price war have yet to reflect on Renault’s and peers’ P&L. However, it puts 2025 targets within reach. Ampere’s IPO is still on the table but rather for early FY24.
Renault has drawn up the guidelines for the future of its premium brand Alpine. This is a high-risk plan aiming at succeeding where Renault repeatedly failed (expanding in the premium segment, expanding globally, and getting recognition) but targeting the right trends, in our view. Though, we do not expect investors to buy into Renault shares on the back of this Alpine-specific teaching, given the shorter-term worries on the health of demand for autos, and the prospective IPO of Ampère.
Renault organised a tech session to showcase its vision of the SDV (Software-Defined Vehicle). This not-so-futuristic architecture should not only decrease development costs and times but also allow for revenues from services during the lifecycle of the vehicle. In our view, Renault’s approach appears very much consistent and well dimensioned with its overall “horizontal diversification” strategy. While the first SDV will be a van in 2026, its upcoming BEV offer already embarks building blocks o
Renault’s Q1 23 results beat the street’s estimates on the back of welcome outperformance in terms of volumes, product mix and price mix. Unsurprisingly, the guidance was confirmed but concerns over the sustainability of BEV prices remained an overhang for investors as Tesla is becoming increasingly aggressive. While we continue to find the Renault restructuring equity story compelling, we acknowledge that, in the short term, the weakness in the share price could continue until any impact or non
Renault’s FY22 results beat the street expectations on both sales and margin, and were close to our above-consensus forecast. The company symbolically resumed its dividend payment to signal its confidence in future FCF generation, but we like that the investment grade rating remains the top priority. The FY23 outlook matches the long-term plan and includes a cautious margin step-up. The order book remains high and the company refrained from entering roller coaster pricing “à la Tesla”. Our FY23
The reshaping of the Renault-Nissan-Mitsubishi alliance has been officialised. The companies have defined a legal framework to their cooperation that lacked details and let the door open for disappointment by stakeholders. Renault is not in a hurry to divest Nissan shares. The latest announcements support Ampere’s valuation which remains highly tied to Nissan’s say. Other projects announced mainly highlight that the three companies are set to continue their operational partnerships. They still h
The complexity of dealing with the Alliance have been weighing on Renault’s valuation for years but what if Renault leverages its knowhow in managing partnerships BU by BU? The last CMD of the “Renaulution” was all about reaching scale on each of the group’s businesses with an expected settlement of two new (but already well-equipped) entities (AMPERE and HORSE). Despite ambitious but credible financial targets, we wait for Nissan’s decision to get the full picture of this unique sprawling struc
Renault’s Q3 22 sales figures came in bang in line with consensus estimates. Key worries from investors have yet to be addressed/materialised into figures, i.e. the risk of worsening demand for 2023, the risk of pressure on cash flow (sole indication is the confirmed FY22 guidance) and, most importantly, the future of the Alliance (likely to be a key topic at the CMD to be held on 8 November). We plan minor changes to our figures following this release.
Renault faced a very challenging market environment in Q1, with production constraints owing to the semiconductor shortage and the impact of the Ukraine-Russia war given its significant exposure to the Russian market. Despite this, RNO was able to surpass (gloomy) expectations, demonstrating pricing discipline and the results of its product portfolio renewal. Even if the industry headwinds do not subside, the group is standing by its OP margin and cash flow guidance as it pursues its value-focus
Companies: Renault SA (RNO:PAR)Renault SA (0NQF:LON)
Renault released excellent FY21 results, beating consensus and our own estimates. The profitability of the automotive business saw a significant improvement over H2, driving the FY operating margin ahead of the Renaulution’s (rather conservative) target, two years in advance. Even if the cautious 2022 outlook remains subject to the chip shortage and raw material price concerns, the execution of the new value-focused strategy appears to be right on track.
Renault’s Q3 results showed the extent of the production disruption caused by the semiconductor crisis, which has proved more severe than anticipated. Despite the dire scenario, there were still silver linings, with RNO continuing to fulfil its cost savings plan, to be completed 1 year ahead of schedule, as well as positive developments in mix and pricing. The reiteration of the FY operating margin guidance should bring some reassurance to investors heading into a still chip-constrained 2022.
Renault’s H1 results release gave encouraging signs that the company is well ahead of the strategic objectives set during the Renaulution CMD and the previous cost savings programme. While volumes and revenues are not close to the pre-pandemic levels, a quicker return to profitability for the auto division support a brighter FY21 scenario, even if semiconductor supply issues will extend into H2.
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Watkin Jones’s guidance for FY24E is unchanged in its trading update for the first half to 31 March. We maintain our forecasts for the full year and introduce half-year estimates, in line with reiterated guidance that performance will be significantly H2 weighted. The group confirms a continuing gradual recovery in appetite among institutional investors to forward fund its build-to-rent (BTR) and student developments. We believe this should gather pace as the direction of interest rates becomes
Companies: Watkin Jones Plc
Progressive Equity Research
Ceres Power Holdings’ innovative technology uses electrolysis to produce green hydrogen and solid oxide fuel cells to generate power. In a year where it moved to the Main Market of the London Stock Exchange, it recorded revenue growth of 13% and gross margin expansion to 61% (the highest in the sector, according to management), but is yet to record an operating profit (FY23 operating loss of £59.4m versus £54.0m in FY22). Ceres continued its strategy to drive innovation and technology across sol
Companies: Ceres Power Holdings plc
Edison
Surface Transforms has issued new revenue guidance for FY24, with the company now expecting revenues in the range £17.5-22m. We are withdrawing our previous forecasts for FY24 and withdrawing our price target while we review the impact of the new guidance.
Companies: Surface Transforms PLC
Cavendish
Solid State’s trading update affirms the sustained strength in demand throughout H224, resulting in record FY24 revenue and adjusted PBT ahead of prior consensus of £155m and £12.5m, respectively. This is attributable to the earlier-than-expected delivery of a NATO contract. As a result, consensus FY24 revenue and adjusted PBT estimates have been raised by c 6% and c 20%, with respective FY25 estimates declining commensurately.
Companies: Solid State plc
Banquet Buffet*** Abingdon Health 9.25p £11.3m (ABDX.L) The lateral flow contract development and manufacturing organisation announces its unaudited interim results for the six months ended 31 December 2023. Revenue increased 117% to £2.4m (H1 2023: £1.1m). The Adjusted EBITDA loss decreased 47% to £1.2m (H1 2023: £2.2m). Furthermore, reduction in operating loss of 50% to £1.2m (H1 2023: £2.4m). The Board therefore expects that H2 2024 revenue will be significantly improved compared with H1 2024
Companies: CPX SLP FA/ FIPP ECR ETP ORCA
Hybridan
AFC has unveiled a groundbreaking modular ammonia cracker system demonstrating viable and scaleable production of hydrogen in the UK using this method. The cracker system is designed to deliver 140 tonnes of fuel cell grade hydrogen each year. Hydrogen from the plant will initially be targeted for sale into AFC’s UK H-Power Generator deployments, including those with Speedy Hydrogen Solutions. Along with the recent purchase of the mobile storage and distribution assets of Octopus Hydrogen, AFC c
Companies: AFC Energy plc
Zeus Capital
Gooch has issued a positive update for H1. Trading has started to recover with stocking levels normalising at industrial and medical devices customers. The outlook is positive with growth returning, and management has confirmed our full year estimates (adjusted for the disposal of EM4). The order book and order flow appear healthy, and net debt is comfortable. Gooch clearly still has plenty to do to lift operating margins from a lacklustre 8.1%, but the transformation plan appears to be back on
Companies: Gooch & Housego PLC
Sanderson Design Group (SDG) continues to deliver on its key strategic initiatives and growth drivers despite a challenging global backdrop. The group’s FY23 performance showed flat revenue, with adjusted underlying PBT rising £0.1m to £12.6m. Net cash dropped back to £15.4m, with the total dividend maintained at 3.5p. The star performers were Licensing (reported revenue +25%), the Morris & Co brand (+16%) and the US market (+20%). Our forecast revisions assume more modest sales progression, wit
Companies: Sanderson Design Group PLC
17th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi
Companies: ARS TIDE SCE SNX ECK CNS TST SPEC SSTY
AFC has made strong progress with products and its manufacturing strategy. Despite heavy investment, the cash position, at £27.4m, was slightly better than our estimate for £26.9m, demonstrating good discipline. The monthly cash burn rate (at c. £1.3m) is tracking in-line with our expectations. Generally, we maintain our estimates for significantly increased sales in FY24e and FY25e, with the cash position unchanged. Recent news on commercial progress has been positive. The 30kW H-Power Generato
We note the regulatory announcement this morning from Surface Transforms and withdraw our estimates and valuation, pending conversations with management.
SCE is raising £16m through a placing (and up to a further £3m through open offer) to fund substantial expansion and additional working capital. This will enable the Group to grow to £75m revenue capacity in the near term, commence the build and equipping of a new factory and then (with internally generated free cash flow) scale to £150m revenue capacity and beyond. With a contracted order book of £190m and a prospective pipeline of £400m, this is clearly the time to seize the opportunity. The e
On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div
Companies: PTAL GHH IGP MSLH PINE NXQ EQLS NXR AXL
Sanderson Design Group (SDG) has reported an 8% increase in interim adjusted PBT, to £6.8m. This was achieved despite a weak backdrop in the home UK market and a 2% decrease in overall group revenue. Increased profitability was driven by strong performances in two of its key and higher-margin strategic growth pillars – Licensing and North America – which grew by 82% and 10%, respectively, on a reported basis. New product launches, including Disney Home x Sanderson, have seen sampling running at
Sanderson Design Group has delivered its full-year trading update to 31 January 2024. Group revenue has eased back 3.1% to £108.5m on a reported basis, following the 2% decline in H1. The strongest performances were delivered by the strategic growth cornerstones of Licensing and North America, offset by challenging market conditions in the UK, Europe and the Rest of the World. A strong balance sheet saw year-end cash rise to £16.2m, compared with £15.4m at year-end FY23. Having traded in line wi
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