Q3 23: Neither bad nor good news, yet

Nexans reported Q3 23 sales in line with expectations across the board and reiterated its FY23 guidance. There was no news on divestments. The company tried its best to provide some transparency on the risk of offshore wind project stoppages. While there has been no indication that Orsted will discontinue its ongoing projects, we will be adding an additional volatility factor to our estimates for the Generation & Transmission business. The scenario discounted by the current share price looks ove

Q2 23: beat and raised outlook with resilient margin and volume slowdown

Nexans’ H1 23 results showed a very strong margin resilience resulting from the group’s premiumisation strategy. The Generation & Transmission division underperformed, and volumes have started to at last decline in the Usages unit. Nexans upgraded its guidance as expected, on the back of a strong Q1 and the award of EuroAsia. Announcements on divestments are likely to occur in H2. We confirm our positive rating and will raise our FY23 forecasts.

Q1 23: the tide is starting to go out... for the better?

Nexans published Q1 23 revenue figures which were broadly in line with consensus estimates. Most of the organic growth was made on the back of the “non-electricfication” businesses, while G&T started FY23 on a weak tone and Usages saw the long-feared inflection of the demand in North America. We expect minor amendments to our figures as management unsurprisingly reiterated FY23 guidance, although it looks like a full set of results is needed to reassure investors that margins survive a cyclical

FY22 results: early cash collection, higher dividend and cautious optimism for FY23

Nexans reported FY22 results in line with our high expectations while showing a strong beat on the normalized FCF line stemming from a large down payment collected in December. As a result, investors are likely to welcome a much better than expected DPS proposal at €2.1. The FY23 guidance is seen as cautious and backed by an expected strong H1. The H2 remains more uncertain on the sustainability of the conjunctural drivers that underpinned the FY22 figures. We expect a 3-5% EPS upgrade to our e

Q3 22: Conjunctural tailwinds hiding the structural step-up

Nexans’ Q3 22 report sums up as: “beat and raise”. All divisions contributed to the growth except Telecom, but the steadily impressive momentum in the US for Usages and Distribution was the biggest driver. No figures were given below the top line but the guidance upgrade for FY22 suggests the good Q3 extended to profitability and FCF metrics. That said, M&A activity remains at a standstill with priority being given to divestments and a wait-and-sea stance as we approach 2023.

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

Morning Note – 16 April 2024

Q1 Operating Results

Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k

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

Plant Health Care - China distribution with AMVAC

Plant Health Care announced it has signed a distribution agreement with AMVAC, an American Vanguard Company, to support commercialisation of novel fertiliser products incorporating Plant Health Care's Harpinαβ in China starting in 2024. The novel product combines Harpinαβ technology with an AMVAC fertiliser and is expected to help growers improve crop quality and yield as part of an integrated and environmentally responsible crop production programme. AMVAC continues to evaluate Plant Health Car

Morning Note – 15 April 2024

discoverIE - Back to organic growth

discoverIE’s March year-end update confirms a strong operational performance in challenging markets. Following two years when sales increased by +48%, FY 2024 Group sales were +1% ahead of 2023 at CER (reported -3%) driven by a +2% contribution from acquisitions and organic -1%. As expected, organic growth returned in the later part of the year (Q4 +2%, +11% sequentially) and the order book has reverted to normalised levels of c.4.5 months’ sales, which – combined with a continuing strong pipeli

Severfield - Multiple positives should excite investors

Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and the company ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, Severfield has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appear

Warns on brine supply costs

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

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.

LIBERUM: Severfield: Erratum: Better EPS and cashflow, and buyback

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.

PROGRESSIVE: Severfield: Step change in European and Indian outlook

Severfield’s full-year results to March will be ‘slightly above’ the Board’s expectations, according to today’s trading update, with net debt significantly better. We maintain our PBT estimates for both forecast years, which are ahead of consensus, but reduce our net debt for FY24E. Record orders were boosted by the steel specialist’s European operations, after last year’s Voortman acquisition, while the Indian JV has seen ‘another step up in profitability’. The group has also launched its first

Clean and competitive fertiliser