Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on NEOPOST SA. We currently have 8 research reports from 1 professional analysts.
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Limited organic decrease in Q3 16 is encouraging
02 Dec 16
Neopost reported Q3 16 revenue of €279m (€284m in Q3 15), corresponding to a -2.1% organic decrease yoy. SME Solutions decreased by 3.4% organically, while CSS grew 7.4% yoy. For the first 9M16, the organic decline reached -2.9% yoy. The integration of Icon Systemhaus in the Enterprise Digital Solutions division is going to plan, while organic growth in Enterprise Digital Solutions this quarter was penalised by the high comparison basis (the company recorded a licence sale of c. €2m in Q3 15). Excluding Icon Systemhaus, Enterprise Digital Solutions is growing in double-digits. The Neopost Shipping division reported growth of more than 10% this quarter. In SME Solutions, Neopost continued the roll-out of digital and shipping solutions to offset the decline in sales of Mail Solutions. This roll-out is coupled with a plan to lower costs by more than €50m by 2018 in this division. The restructuring costs will represent €10-15m per year for the next two financial years.
Not as bad as it looks
29 Sep 16
Neopost reported H1 16 results below market expectations. H1 16 revenue reached €557m, a 5% reported decrease but -3.3% organically (-3.8% in Q2 16), including a 4.8% decline for mailing (-5.6% in Q2 16) and +8.8% in CSS (+10.4% in Q2 16). The operating profit was €100m, corresponding to an 18.0% margin. For the CSS division, the current operating margin was 4.6% (versus 7.2% in H1 15), while the mailing division stabilised at 21.0% versus 21.4% last year. Leasing portfolio and other financing services receivables amounted to €780m, down from €802m at the end of H1 15, a decrease of 0.7% at constant exchange rates. The group’s net attributable income came in at €58m, corresponding to a net margin of 10.5%, compared with 11.0% last year. The EPS was €1.56, down 18% from €1.85 in the previous year. The company confirmed its mid-term target which consists of a return to organic growth coupled with an operating margin above 18%.
No major change in business trend
02 Jun 16
Neopost reported Q1 revenue of €273m, down 4.7% yoy. Given a negative currency impact of 2.2% and a positive scope effect of 0.3%, organic growth was -2.8%. Organically, the Communication and Shipping solutions increased by 9.7% but restated for the scope effect of the consolidation of Temando, organic growth in sales for CSS stood at 7.0%. Within the SME solutions (ex. NIO), of which revenue decreased by 4% yoy, sales of Mail Solutions were down 5.0% at CER, reflecting a contrasting situation for equipment sales as business remained resilient in North America, but there was a marked downturn in Europe and in the ROW. Neopost confirmed it intends to maintain a current operating margin, before acquisition-related expenses, at above 18% throughout the period of transformation, and return to above 20% (before acquisition-related expenses) in the medium term. This target will be achieved by optimising its organisation, reducing costs and continuing to improve the operating margins of its Enterprise Digital Solutions and Neopost Shipping divisions.
FY15 results in line, but no EPS turnaround short term
30 Mar 16
Main facts: Revenue at €1,190m up 6.9% and down 1.8% organically, including a 5.3% organic decline for Mail Solutions and +11.4% organic increase for Communication and Shipping Solutions. In Q4, revenue came in at €321m, a +2% yoy growth but -3.5% organically. The current operating result reached €234m (vs €245m in 2014) and corresponding to a 19.7% margin (vs 22% last year). The net income was unchanged at €134m and corresponding to a €3.72 per share (vs €3.89 last year). The dividend proposed is €1.70, in line with expectations. Neopost confirmed its mid-term target to maintain the operating margin at above 18% with the target of returning to over 20%, and a return to organic growth. The company did not disclose any short-term guidance for 2016.
Another bleak quarter
02 Dec 15
Neopost reported Q3 15 revenues of €283.6m, slightly below market expectations (€290m), and corresponding to +5.6% yoy growth and -1.1% organic change including -4.1% for mailing solutions and +9.9% for Communication and shipping solutions. The company made an early repayment on its German private placements (Schuldschein) and one of its French private placements, for the respective amounts of €67m and €50m to optimise its financing conditions. Revenue guidance for FY15 is updated at the lower end of the prior range with organic growth at about -1% instead of between -1% and +1% and confirmation of the operating margin (before acquisition-related expense) at a minimum level of 19.5% (vs between 19.5% and 20.5%). The dividend of €1.70 per year is confirmed and an interim dividend of €0.8 will be paid in cash on 9 February (dividend ex-date is 5 February 2016).
Management looks confident of the transformation story
15 Oct 15
During a Paris road show with the company, following its H1 15 results and the change in dividend policy, we had the opportunity to discuss several issues with the CFO. The company's increasing focus on its transformation towards solution & software resulted in a sharp cut in the dividend (from €3.90 to €1.70), a margin erosion in H1 15 due to R&D investment, acquisition costs and lower margins from the companies acquired. However, the normative growth of the new businesses acquired is around 15% per year which should continue at least for the next three years. The stock is now under strong pressure, as investors look worried by the transformation and the dividend cut.
N+1 Singer - NCC Group - Further issues in Assurance
22 Feb 17
NCC released a trading update yesterday afternoon highlighting further issues in its Assurance division. Sales growth has been lower than expected in all regions, resulting in a significant reduction in full year expectations. We have reduced our EPS forecasts by 25% in FY’17 and 22%/25% in FY’18/’19 respectively. Escrow continues to perform in line with expectations. In response to these issues the Board has announced a strategic review into all of the Assurance businesses. The results of the strategic review are expected to be announced at the FY results in July. With an extended period of uncertainty on the horizon we believe it will be hard for investors to gain confidence in NCC in the short term. That said we see fundamental value in the stock. Escrow is unaffected by this warning and remains an extremely high quality business, which we value at £353m in our SOTP. At the current share price this leaves Assurance valued at c.5x cal’17 EBITDA. While this appears to be an attractive multiple for a rare cybersecurity asset, we would like further clarity on the underlying nature of the current issues, hence our Hold recommendation. Our 138p target price assumes a 12x EBITDA multiple for Assurance but we apply a 20% discount to the group to account for the current uncertainty.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
21 Feb 17
Lighthouse Group* (LGT): Middle Britain growth (CORP) | Utilitywise* (UTW): Double-digit sales growth (CORP) | Trakm8* (TRAK): Earnings expectations cut again (CORP) | dotDigital* (DOTC): Myriad growth opportunities (CORP) | Artilium* (ARTA): Five-year Telenet deal secured and prepaid (CORP) | Netcall* (NET): Cloud investment pays off (CORP)
N+1 Singer - Small-cap quantitative research - New quality style screen + 11 quality focus stocks
09 Feb 17
We introduce our fourth and final style screen representing “quality”. This screens for stocks with the best combination of high returns on capital/equity, EBIT margins and operating cash-flow conversion rates. These criteria should help us monitor how strong underlying returns translate into share price performance over time and under varying market conditions. The screen selects the “best” 25 stocks from our universe of just over 500 stocks and, as usual, we focus on a shorter list of stocks we cover or otherwise know and believe to be particularly interesting. We provide brief investment summaries on these focus stocks on pages 4 – 9. We will monitor performance and refresh the screen in approximately 3-4 months time.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - PROACTIS Holdings - H1 in line
20 Feb 17
A positive interim trading update confirms that H1 results are in line with expectations, with revenues up 36% to c£11.8m on the back of strong organic growth (13%) and an in-line contribution from acquisitions. We make no changes to our forecasts, recommendation and target price pending the release of interim results on 26 April.