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Vallourec released a very encouraging set of results for Q323. All the lights are green with improving profitability, lower-than-expected net debt and a sound outlook. The group upgraded its guidance for Q4. Although these good Q3 results had been expected (albeit to a lesser extent), this is good news and shows that the investment case is still valid.
Companies: Vallourec (VK:EPA)Vallourec SA (VK:PAR)
AlphaValue
There was no major surprise in the group’s presentation, which is no wonder in a CMD. The group reiterated its FY23 guidance and gave slightly more detail to its longer-term targets. We remain confident in the ability of the group to catch-up, at least partly, with peer Tenaris. The current momentum is positive and new energy markets will help further in the near future.
Vallourec released a sound (albeit expected) set of results for Q2/H1 23. Supported by high prices, the group posted its best operating margin since 2008. Net debt has declined more than expected, obviously another piece of good news. Momentum is slowing down though (in particular in the US), which explains the cap on the share price, even if management expects a bottoming out of the US market after Q3. We will not change our numbers much after this release.
The Q123 results were in line with expectations. The positive free cash was obviously good and will help the group reach its target of lower net debt by the 2023 year-end. The management did not mention a significant slowdown in its markets while the resumption of the mine production in Brazil will further support the results. We do not expect to change our numbers materially.
The FY22 results showed a significant improvement, something which had been widely expected given the health of the group’s markets in terms of volume and (even more) prices. The group is also doing the job in terms of restructuring with its “New Vallourec” plan to boost profitability. Considering what peer Tenaris can achieve, there is room for Vallourec to catch up (at least partly) and further grow margins. Given the encouraging OCTG market environment we remain positive and will fine-tune ou
Vallourec released a decent set of results despite the soft market reaction. The group benefited from the healthy US market, although it is less exposed to the latter than peer Tenaris. The tone is quite positive going forward, in particular on the price front. A further recovery in EAMEA markets (and the ramp-up of the Brazilian mine) would definitely support the group’s results. Management confirmed its guidance for FY22. We don’t expect to change our forecasts/target price that much.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Vallourec. We currently have 42 research reports from 2 professional analysts.
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
Companies: Renold plc
Cavendish
Companies: BILN ELCO NXQ CUSN ATG
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
Companies: Billington Holdings Plc
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
Companies: Plant Health Care PLC
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
Companies: Capital Limited
Tamesis Partners
Companies: 88E RNO TRIN KRM EXR BOOM
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
Companies: Severfield Plc
Edison
Companies: Iofina plc
Canaccord Genuity
Companies: PLL TLG HZM SAV KAV KP2 SVML
SP Angel
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.
Progressive Equity Research
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
Companies: discoverIE Group PLC
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.
Companies: Invinity Energy Systems PLC
Longspur Clean Energy
Liberum
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
Companies: ATOME PLC
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