Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Eiffage. We currently have 16 research reports from 1 professional analysts.
Sales met analysts’ estimate thanks to the international operations. The sales trading update highlights a strong recovery in the Contracting activities, supported by the award of two projects linked to the Grand Paris Express project. The second quarter could prove to be less successful as Easter was in Q1 this year. We expect to keep our current Reduce recommendation.
Eiffage released a strong set of FY results, marked by the continued momentum in heavy vehicle traffic on the group’s toll roads, solid orders in Contracting with slightly higher margins fuelled by favourable volume effects while the full-year dividend has been increase by a third, to €2 per share (AV: €1.7).
Eiffage released a solid set of 9M 17 figures, marked by an equally strong performance of both the Contracting activities and Concessions. Key highlights For the nine-month period: Revenue up 7.1%, to €10,776m (+6% lfl) Contracting up 7.1%, to €8,683m (+5.7% lfl) Concessions up 7.2%, to €2,093m (+7.4% lfl) Order book up 8.7%, at €13bn Guidance maintained
Eiffage released a strong set of first half results, marked by robust contracting activities, whose growth outpaced that of Concessions for the first time since 2009. Key highlights Revenue up 7.6%, to €6,993m Operating profit up 7.4%, to €727m Net profit up 30.8%, to €174m Net debt down €367m, to €11,501m Guidance unchanged Order book up 7% Other developments The group announced the acquisition of Saipem’s Maritime construction business, a non-core asset part of its Offshore E&C division. The business is estimated to have generated around €100m worth of revenue in 2016 from works concentrated mainly in Kuwait, Congo and Panama. Completion is expected to occur in late 2017.
Eiffage released a solid set of Q1 results, marked by the confirmation of the previous guidance, stronger-than-expected Contracting and resilient Concessions despite lower traffic on unfavourable calendar effects. Key highlights Total group revenue up 7.6% (+6.2% lfl) Contracting up 8.4% (+6.7% lfl) Concessions up 4.2% Order book up 7.7 yoy, or +5.2% sequentially Unsurprisingly, management confirmed the previous guidance of a slight increase in sales, along with another increase in earnings.
Eiffage released a positive set of full-year results. Results Group revenue came in at €14bn up 0.7% yoy and 1.3% ahead of consensus. Operating profit was up 11.6%, at €1,597m while the EBIT margin was up 110bp, at 11.4%. Excluding an exceptional non-cash profit due to the future change in the French tax rate, net income was 5% above market expectations, at €416m (+33% yoy). By division, the Concession business performed strongly, revenue being up 4.6%, with Q4 slightly below the nine months growth figure. On the other hand, the contracting activities were broadly flat, implying a strong Q4 (+5%), driven by a continued recovery in the construction business in Europe and particularly in France. The Energy and Infrastructure businesses were down but started to rebound in Q4, particularly in the Energy market were revenue rose by 7.5%, compared to -7.1% during the nine months. The order book of the Contracting divisions increased to €12.0bn, up 5.1% yoy, equivalent to 12.6 months of activity. By division, it was down 1.8% for the construction activities while it was up 14.7% and 3.8% for the Infrastructure and Energy businesses, respectively. At 31 December 2016, Concessions’ net debt stood at €8,705m, down from €9,062m in 2015 while the group’s net debt stood at €11,213m down by €378m. The board proposed a dividend of €1.50, stable compared to 2015. Guidance Unsurprisingly, 2017 is expected to benefit from the 5.1% increase in order intake in 2016 and management sees a slight increase in sales along with another increase in earnings.
APRR, Eiffage’s main toll-road subsidiary, released its revenue and traffic update for the fourth quarter and full year 2016. For the full year: Excluding Construction, APRR’s consolidated revenue totalled €2,327.8m, an increase of 5.1% from €2,213.8m a year earlier. Toll revenues were up 5.2% at €2,257.7m, supported by a 3.6% increase in LV traffic and a +4.5% increase in HV traffic. Revenue from retail facilities, telecommunication and other were up 2.7%, at €70.1m. For the fourth quarter: Excluding Construction, APRR’s consolidated revenue totalled €545.9m, an increase of 4.8% from €521.1m a year earlier. Toll revenues were up 4.7% at €527.3m, supported by a 3.3% increase in LV traffic and a +3.4% increase in HV traffic. Revenue from retail facilities, telecommunication and other were up 7.8%.
Eiffage published a mitigated set of Q3 results. Results During the nine-month period, group revenue reached €10.1bn, down 0.8% yoy. The Contracting activities were down by 2.1% (-2.6% lfl), reflecting the relatively good performance of the Construction division, up 2.4% (+1.3% in France and +6.7% abroad), more than offset by the weaker results of the Infrastructure and Energy divisions, down 1.5% and 7.1%, respectively. Finally, the Concession activities generated €1,952m of revenue, up 4.9% yoy. During the third quarter, group revenue reached €3,565m, up 0.7% yoy. The Contracting activities were down by 0.2%. Construction was down 2.4%, Infrastructure was up 2.7% and Energy down 1.9%. Finally, concessions were up 4.3%, at €732m. The order book for the contracting activities reached €11.9bn, up 4.8% yoy (+7.5% excluding the BPL project), representing c.12.7 months of Contracting activity. Guidance The group confirmed its guidance of a slight decline in activity and improved results over 2016 as a whole. Other developments The company also confirmed that AREA, the APRR subsidiary, has signed an acquisition contract regarding the Bouygues Group’s entire 46.1% interest in ADELAC capital, the concessionaire for the A41 North motorway between Annecy and Geneva for €130m. At closing, AREA will sell this 46.1% to Eiffage and Macquarie. Eiffage’s stake will remain accounted for as an equity associate.
APRR released its revenue and traffic update for the 9-month and Q3 periods. For the 9-month period: Excluding Construction, APRR’s consolidated revenue totalled €1,781.9m, an increase of 5.3% from €1,692.7m a year earlier. Toll revenues were up 5.4% at €1,641.8m, supported by a 3.6% increase in LV traffic and a +4.9% increase in HV traffic. Revenue from retail facilities, telecommunication and other were up 1%. For the third quarter: Excluding Construction, APRR’s consolidated revenue totalled €665.4m, an increase of 4.6% from €635.9m a year earlier. Toll revenues were up 4.7% at €617.0m, supported by a 3.6% increase in LV traffic and a +2.7% increase in HV traffic. Revenue from retail facilities, telecommunication and other were up 2%.
- Consolidated revenues €6.5bn, -1.6% (-2% lfl); - EBIT +13.6% with operating margin improvement (+104bp to 10.4%) with the contribution of contracting; - Net profit attributable to holders of the parent +68% to €133m (despite higher restructuring costs mainly at Metallic Construction); - Net debt: -€0.4bn over 12 months and +€0.3bn since 01/01/2016; - Order book: €12.1bn, up 1.6% (+4.7% excluding BPL) since 01/01/2016 (12.8 months activities); - Increase in liquidity to €2.4bn at 30/06/2016 (vs €2.1bn at 30/06/2015). Eiffage reiterated its guidance for a FY 16 increase in net attributable profit. Post-closing event: 3 acquisitions of medium.
H1 16 traffic (number of kms travelled) +4.1% vs H1 15 with: Light vehicles +3.7% Heavy vehicles +6% Excluding Construction, Q2 16 APRR’s consolidated revenue: €575.7m + 4.6% (+€25m) Q2 16 traffic +1.8% with: Light vehicle +0.7% (unfavourable calendar effects) after +6.5% in Q1 15 (favourable weather effect) Heavy vehicles +8% (favourable calendar effects and traffic diversions linked to bad weather) after +3.9% in Q1 15
APRR released yesterday Q1 16 traffic figures after the market close. They are excellent (vs. Q1 15): + 6.5%, of which LV (light vehicles) +3.9% and HV (heavy vehicles) +3.9%. Traffic revenues: €506m, +6.8% (last tariff increase 01/04/2016), of which toll roads +7%. The annual contractual revision of tariffs agreed with the French State has translated from 01/02/2016 into an average increase of 1.23% and 1.27% respectively for light and heavy vehicles.
FY 15 performance is globally in line with expectations and slightly above our FY 15 forecasts (much above for the dividend) with the 2.8% decline of the order book as the only downside (+1.6% for Q4 15). A 25% increase in the dividend will be proposed, to €1.50 (AV forecast €1.25). FY 16 guidance: a small decline in consolidated revenues and a new increase in net profit (new contribution of lower D&A and lower financial expenses).
Eiffage has presented its reorganisation targets (only two head offices) and its management's tools based on digitalisation: - they respond to the most demanding requests in tenders (BIM); - they are the basis for cost control and efficiency; - they should enhance the efforts to improve margins. However, for 2015/16, the hefty costs implied by the restructuring should swallow the benefits. FY 15 guidance is unchanged. The newsflow should be rich in Q4 15 with the expected announcement in c.10 days of the results on the first bids for Grand Paris (Eiffage is the preferred bidder for at least one project, some PPPs and Eole). However, the expected revenues from these offers will not change the size of the group until at least 2017/18. These offers would be won in a price-pressured context but they have no lump sum risks. The recovery in civil works in France is still not here, the Real estate division is maintaining its size and the Energy division is being reorganised to align its EBIT margins on Vinci Energy’s. New progress is expected in financing costs.
- Consolidated revenues €6.6bn, +1.4% - EBIT +3.8% with operating margin improvement (+20bp to 9.0%) - Net profit attributable to holders of the parent +14.5% to €79m (despite higher restructuring costs mainly at Metallic Construction) - Net debt: down €0.4bn over 12 months - Order book: €11.9bn, up 1.1% since 1 January 2015 (12.2 months activities) - Sharp increase in liquidity to €2.1bn at 30/06/2015 (vs €1.5bn at 30/06/2014). Eiffage is guiding for a FY 15 increase in net attributable profit. Post-closing event: the 09/04/2015 protocol between the State and APRR & AREA and incorporating the motorway stimulus package amounting to €720m were published in the Journal Officiel on 23/08/2015.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Eiffage. We currently have 16 research reports from 1 professional analysts.
The company has announced an important order worth £4.3m for the supply of power units for autonomous robots. This is significant as it is with a new customer in a potentially high growth area, plus the size is significant, compared with annual revenues of £47m. No change to existing forecasts, but the contract provides a much greater degree of confidence in expectations for FY 2019 and should provide some upside to the shares, which had previously come under pressure after the last trading update.
Companies: Solid State
Hardman & Co recently welcomed Milan Radia to our roster of established, industry expert analysts. Milan has 25 years of equity market experience at major investment banks and in asset management, and has worked on many high-profile successful IPOs. In 2017, he was ranked the No.1 earnings estimator in the UK for his sector in the Thomson Starmine Awards. Milan has also been techMARK Analyst of the Year and achieved top three Institutional Investor sector rankings for his coverage of the software and telecoms sectors. In our lead article this month he gives an insight into his thinking on some key themes in the sector.
Companies: OPM ABZA AVO AGY APH ARBB AVCT BNO BUR CMH CLIG COS DNL EVG GTLY GDR INL KOOV MCL MUR NSF OXB NIPT PHP RE/ REDX SCLP SCE SIXH TRX TON VAL
Keywords’ acquisition of Blindlight for up to $10m gives the group the ability to apply Hollywood movie production resources to the games industry. Factoring in Blindlight and the May acquisition of Fire without Smoke, EPS is enhanced by 2% and 4% for FY18 and FY19 respectively. With the €75m revolving credit now secured, with scope to extend to €105m, the company has plenty of headroom to continue its consolidation strategy while enhancing earnings.
Companies: Keywords Studios
discoverIE reported strong FY18 results: organic growth of 6% was boosted by acquisitions and currency to generate reported revenue growth of 14.7% and normalised EPS growth of 15.8%. The company is making good progress in its strategy to grow the Design & Manufacturing (D&M) business through a combination of organic growth and recent acquisitions. We expect further accretive acquisitions to move the company towards its target of generating 75% of revenues from the D&M business, and view progress towards this target as the key driver of share price performance.
Companies: Discoverie Group
Legalisation of online sports betting in the US will provide opportunities for AIM online gaming companies. The Supreme Court of the United States has decided to overturn the Federal prohibition of sports betting. The state of New Jersey argued that congress had exceeded its authority and the judges agreed. The US sports betting market, both onsite and online, could be worth $6bn by 2023, but individual states will have to enact legislation to enable online sports betting to commence in their territory.
Companies: AOR TYR SML STR MWE RNWH
With prelims delivered in line with expectations, a strengthened board and momentum in the development of the key AI Mastermind (AIM) partnership, Altitude is doing exactly what is needed in proof of execution of the ChannlPro platform. The build-up of active AIM member distributors on AIMPro, the first iteration of the ChannlPro platform, encourages further suppliers, and further AIM membership utilisation of the platform… leading to interest from further suppliers and so on, in a virtuous circle. On track for our year-end expectations of ChannlPro revenue (a percentage of gross revenue transacted over the platform), we look forward to further proof points of the positive trends. Having raised funds in March, Altitude is expected to be in a comfortable £2.0m net cash position at FY18 after allowing for accelerating investment in the on-boarding of further distributors, and we look forward to the rapid development of scale and profitability: growth in platform participants in FY18 should then lead to a very strong financial performance in FY19. Target 105p reiterated.
Companies: Altitude Group
With growth in Continental Europe and the US exceeding our expectations, underlying gross profit growth of 13% in 2Q18 was materially better than we had hoped. With the outlook for these businesses remaining strong, and signs that the UK may have reached a point of inflection, we believe that the company is well positioned to deliver attractive growth in FY18.
Two former AIM companies could be in the FTSE 100 index in the near future following the successful bids by Melrose Industries for GKN and GVC for Ladbrokes Coral. Melrose has been on the brink of the FTSE 100 for a while and if a constituent company of the FTSE 100 is acquired than it can be replaced by the acquirer when it is eligible. Melrose is already on the reserve list for inclusion in the FTSE 100, following the March 2018 quarterly review.
Companies: PTSG JDG TRCS SRB TAP KETL
We have refreshed our quality style screen for the second time and report on style performance since the last refresh in October. Performance has been very strong, outperforming the small-cap index by c.1600bps (weighted basis) and c.1000bps (unweighted). There has been volatility with the market and this style has yet to be tested in a concerted down market, but in a flat or rising market quality appears to be a successful investment style in small-caps. We have highlighted 11 focus stocks in the new screen and will report back again on performance when we next refresh the screen in about 5-6 months’ time.
Companies: LIO GHT AMO CHH ZYT DOTD GTLY RIV FCRM TAM PAM
Staffline (LON:STAF) is a leading outsourcing organisation, operating mainly in the UK and Eire, through two divisions – Staffline Recruitment and PeoplePlus. The shares have been one of the top growth plays in the staffing services sector in the last 15 years, but are currently trading at a discounted valuation.
Companies: Staffline Group
Full-year results were £0.4m better than our adjusted PBT expectations. Underlying market conditions remain favourable and internal measures continue to drive forward growth, with multinational OEMs assisting growth and accounting for 65% of sales. Significant investments are taking place in both capex and through Project Atlas. This is a £15m multi-year project that should globalise processes and lead to efficiency and commercial improvements. We raise our 2019 forecasts by £0.3m or 1.2% and slightly increase our price target from 295p to 300p, reinforcing our continuing positive view of prospects.
Group revenues increased 12.2% to £133.3m, surpassing our previous forecasts for FY18 (£126.9m) and FY19 (£131.0m). This was largely driven by 13.6% growth within the Group’s Foundry division to £127.0m (FY17: £111.8m). Volumes increased by 4.2% within Foundry, with the remaining growth coming from pricing and a minor FX tailwind. Machining revenue fell 10.2% to £6.3m (FY17: £7.0m) following the exit from projects that were considered non-core.
The company has announced several new exploration and delineation contracts. The contracts are in existing areas of operation and leverage existing capabilities, raising rig utilisation rates. Management comments that there has been an increase in demand for exploration rigs over recent months. Management has raised its guidance and accordingly we increase our revenue by 4.7%, significant drop through results in an increase in our adjusted EPS of 13.7% to 3.6ȼ. The shares have started to see the start of a recovery, having been deeply oversold due to Tanzanian risks. We still see significant upside from current levels towards our 85p target, driven by positive trading.
Companies: Capital Drilling
In Norcros’s first half, the company delivered improved profitability, made significant organic business investment and completed an earnings enhancing UK acquisition. Merlyn is a highly complementary business and a logical addition to the business portfolio. Taken together, we raised our current year EPS by c 4% and by c 7% and c 9% in the following two years, with dividends nudged up also. The share price has performed well on this newsflow but Norcros still represents good value, in our view.
Strix has announced a maiden set of FY results post listing in August 2017. Revenue of £91.3m was broadly in-line with the ZC forecast of £92.6m, reflecting 2.9% YoY growth. A positive mix effect, as regulated markets grew more strongly than expected, meant the gross profit margin increased 120bps YoY to 40.7%, this was 90bps ahead of the ZC 39.8% forecast. As a result, gross profit of £37.2m was marginally ahead of the £36.9m forecast. Net debt of £45.9m is slightly lower than the forecast that was reduced by c.£10.0m to £48.0m at the time of the FY17 trading update (22nd January). Net debt will continue to decline with net debt to adj. EBITDA at year end of 1.3x falling to just 0.8x in FY18. On fully diluted earnings, incorporating a 19% tax rate, the shares trade on 11.2x FY18 earnings and yield a prospective 5.4%. A compelling valuation for a global leader with c.38% market share.
Companies: Strix Group