Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Eiffage. We currently have 14 research reports from 1 professional analysts.
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.
APRR released after the 20/07/15 market close, H1 15 traffic figures. They are good (vs H1 14): +2.2%, of which LV (light vehicles) +2.3% and HV (heavy vehicles) +2%. Traffic revenues +2.7% (last tariff increase on 01/04/2014). Q1 15 traffic figures were +1.8%, of which LV (light vehicles) +1.8% and HV (heavy vehicles) +1.9% with traffic revenues +2.4% (last tariff increase on 01/04/2014).
Research Tree provides access to ongoing research coverage, media content and regulatory news on Eiffage. We currently have 14 research reports from 1 professional analysts.
The final results were in line with expectations and ongoing strong cash generation led to a 32% increase in the full year dividend to 19.0p, 14% ahead of forecast. We retain our FY18 forecasts, other than cash and dividend expectations which are both increased. Net cash is now up to £14.1m and we expect this to drive ongoing strong growth in dividends, with the prospective yield now a healthy 4.4%.
At our 3D Printing and Advanced Manufacturing lunch on Monday three companies updated us on the developments and significant opportunities for their business in this exciting new area. We were pleased to welcome speakers from Xaar, Victrex and unlisted group Metalysis. Each company gave a 15-20 minute overview of their existing activities in 3D printing and how they are continuing to develop their offer to capitalise on the strong growth and value creation opportunities ahead. Brief summaries are listed below, with more details inside, along with the slides presented by each company. All three of the groups have strong prospects and we are happy to arrange further contact.
Companies: Xaar Victrex
Strong H118 results and positive order book development cause us to raise estimates, especially for the current year with better dividend prospects also. UK economic uncertainty will provide challenges but we believe that Severfield’s sector diversity and some pipeline project opportunities should allow the company to continue to grow. Further order book gains and the application of surplus cash balances (via investment or distribution) can be catalysts for further share price recovery.
Since April, our growth style screen has performed very strongly, outperforming the main small-cap index by 20pp and 24pp on an unweighted and weighted basis respectively, also comfortably outpacing microcap. In this note we provide more detail on the constituent and basket performance in the period and present the new screen constituents. As usual we focus on 10 of the current constituents, providing brief summaries and financials for clients to consider. We will refresh again in 5-6 months time and report back on performance.
Companies: SUN DOTD ERGO TEF AVG SOG COR FEN LOOP YU/
We believe that the share price weakness in recent weeks has brought the shares firmly into buying territory. Currency movements will provide a favourable tailwind with sterling strengthening vs the dollar and remaining relatively subdued vs the euro. Last month’s site visit confirmed that plans are well advanced for Flex to start supplying when the manufacturing and distribution agreements with Newell terminate on 31 March 2018. Investors can currently receive a 5% dividend yield and strong forecast profit growth.
Companies: Sprue Aegis
The 2H17 progress update reveals increased focus on the AiM partnership (a distributors’ buying group) with a clear path to increased monetisation of the opportunity. The combination of Channl with Altitude’s existing business management tools (to create AiMPro) delivers revenue related to total transaction spend on the platform, a potentially significant improvement compared with the former model, which was wholly reliant on online transactions. We look forward to continuing positive newsflow surrounding AiM and the other potential distribution and supplier partners, in addition to the launch of AndEverything.com – an online market place, claimed to be a world first for promotional products.
Companies: Altitude Group
Topic of the quarter: It’s alive! Infrastructure and assets in general have traditionally been built to provide a fixed service and are maintained and renovated to a fixed schedule – dead and dumb. Technology will completely change this. Sensors and wireless networks have the potential to allow assets to ‘talk’ to us. These living, smart assets will be able to tell us when they need maintenance, how efficient they are being and provide the data that will directly influence their construction, availability and use. The implications for construction costs through to operating costs and the ability to service changing user needs are very significant. The Support Services, Construction and Technology sectors need to work together to maximise this potential, recognise and harness the power of data, and invest in and embrace change. These are daunting challenges in highly competitive markets where politics play a role, different skill sets (that are currently in short supply) are needed and shareholders are looking over management's shoulders. However, the prize for those companies who get it right is significant, and the risk from not changing much greater. There are positive early signs with Crossrail providing tangible examples of Smart Infrastructure using innovative sensors.
Companies: FOUR ACL BOOT CLL CNCT FCRM LOK PPH RNWH STAF UTW WATR VANL WYG
Since August, Augean has released four updates and in the process lost 28p or 50% in value. Two of the updates related to HMRC landfill tax assessments, one was for the interims and the remainder related to a profit warning and changes on the Board. The first HMRC tax assessment accounted for 86% of the decline with the remaining three having little or no impact. From this it is clear that the share price is being weighed down by the potential tax liability and this, we argue, needs to be addressed before we see any material share price appreciation, regardless of the operational improvements introduced by the new management team.
As anticipated, Severfield has announced a contract award on the new Google Headquarters in King's Cross, London. It will provide 15,900 tonnes of structural steelwork services for the new 11-storey building with the work scheduled to commence on site in June 2018. The Company has previously indicated that the work would be worth around £50m in the order book. Having recently upgraded our forecasts, we do not expect to make any further changes after this morning’s positive announcement. However, this clearly strengthens the order book in an end market (commercial offices) where there has been some uncertainty and also helps to underpin our FY’19 and FY’20 forecasts. The win once again demonstrates Severfield's market leading position with unrivalled design, fabrication and construction capabilities. Trading on an FY’18 P/E multiple of 11.3x and yielding 3.5%, we continue to believe that Severfield is attractively valued vs. peers.
Xaar has reached an agreement to receive an upfront payment instead of future royalties from one of its licensees. Xaar will receive a total payment from Seiko of ¥2.98bn/c.£20m, paid in two tranches. These will both be paid by the end of H1 18, although exact payment dates have yet to be confirmed. We view this upfront payment as a better outcome for Xaar than the royalty stream, which we have always forecast to decline towards zero by the early 2020s (N+1Se £5m in 2018, £4m in 2019). We have not yet amended our forecasts, pending clarity over timing of payments. However clearly we would anticipate an increase in net cash by 2018 and an associated reduction in underlying sales and profits, as the future royalty stream will represent only one remaining licensee (Toshiba TEC).
In the October edition of the Hardman Monthly newsletter, Chief Executive, Keith Hiscock analyses the much misunderstood – but highly important – issue of stock liquidity. In particular, he focuses on the lower echelons of the Main Market and of AIM.
Companies: OPM ABZA AVO AGY APH ARBB AVCT BUR CMH CLIG COS DNL EVG GTLY MCL MUR NSF OBT ODX OXB NIPT PHP PURP RE/ RGD SCLP SPH SCE TRX VAL
Cohort continues to make progress in a tough UK defence trading environment. Our earnings forecasts remain largely unchanged as performances at MASS and EID continue ahead of expectations, compensating for pressures at MCL and SEA. Our fair value calculation currently stands at 483p implying significant unrecognised potential. The recent share price fall seems unwarranted given the maintained outlook.
This quarter we use finnCap’s Slide Rule to provide both top-down and bottom-up analysis of the UK’s Technology and Telecoms sectors. Our findings are very reassuring: the Tech sector scores the best (across all sectors) when considering Growth and Quality – Taptica*, Frontier Developments* and dotDigital* in particular stand out on these metrics. Given these attractive characteristics and growth prospects, the Tech sector is unsurprisingly one of the most expensive – currently trading at 17.2x FY1 EV/EBIT and 23.8x FY1 P/E, versus 15.0x and 18.5x respectively for the wider market. Despite valuations appearing high, we believe there are value opportunities. For example, Proactis* features in finnCap’s QVGM+ portfolio (ranked 17/462) – the company offers attractive organic and inorganic growth, with earnings forecast to grow by 26% CAGR over the next two years, but despite this, only trades on 15x FY1 earnings and offers 8% FCF yield in FY2.
Companies: 7DIG ALT AMO ARTA BOTB BLTG CTP CFHL CYAN ISL DTC DOTD ELCO ESV FDEV GBG IDEA IDOX IMTK IGP IOM KBT KCOM KWS LRM MAI MMX NASA NET ONEV PHD QTX QXT RCN 932 SSY SEE SIM SPE SRT STR TAP TAX TEP TPOP TRAK UNG VIP ZOO
discoverIE (previously called Acal) reported strong interims, proving that its strategy to grow the design and manufacturing (D&M) side of the business is bearing fruit. Organic revenue growth of 9% drove improved operating margins and EPS, while growth in orders and design wins position discoverIE for sustained growth. Management continues to seek out suitable acquisitions to accelerate growth of D&M – based on a similar profile to previous deals, we estimate that using existing credit facilities to make £50m worth of acquisitions could add 20-25% to FY19e EPS.
Driver’s FY17 results confirm the significant turnaround of the Group over the past 12 months. Revenue from continuing operations increased by 15% to £60.2m. Compared to last year’s loss making position (£0.4m LBT), Driver has reported underlying PBT of £2.5m, slightly ahead of our forecast (£2.4m). Cash generation has been a priority under the new management team, translating into negligible net debt at the year end (£0.2m and falling), compared to £9.9m (and rising) at the last year end. Driver is delivering on all the priorities set out at the time of the equity raise in February and begins the new year on very strong footing.
Companies: Driver Group