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Research Tree provides access to ongoing research coverage, media content and regulatory news on Korian. We currently have 9 research reports from 1 professional analysts.
Korian gained almost 6% yesterday following a robust pace in the FY16 results, coming in line with the consensus and the group’s guidance (September 2016). Sales were up 15.8% on a reported basis, fuelled by acquisitions completed by Korian with a strong contribution from the German Casa Reha. EBITDA leaped by 23.5% (EBITDA margin at 14.1% vs 13.3% in 2015) boosted by c.€12m of non-recurring income (EBITDA margin at 13.7%, i.e. +40bp excluding this one-off). Sales grew by 3.8% lfl, reflecting robust performances across the group’s geographies, particularly outside France (47% of group sales, +6.7% lfl), in Germany (+8.4% lfl, reflecting the ramp-up of new facilities opened and acquired in 2015) and Belgium (+9.1%) both benefiting from increased occupancy in mature facilities. Growth in France (+1.3% lfl) was held up by the rehab clinic business, penalised by a regulatory pricing decrease but slightly offset by a steady nursing home segment. Italy (+1.8% in sales lfl) benefited from the portfolio optimisation measures (exit from four non-performing facilities). The opening of 2,744 new beds along with a favourable pricing environment also contributed to Korian’s robust organic performance. The occupancy rate reached 95% in three out of the four geographies. The group’s EBITDAR margin gained 30bp to 26.7%, fuelled by France (+50bp at 27.2%) which benefited from the synergy gains from the Korian-Medica merger and a steady activity. In Germany, the acquisition of Casa is behind the 59.7% rise in EBITDAR, while the EBITDAR margin stood at 27%, experiencing a drop of 80bp in H1 but the strategic efforts (the 2020 Action Plan) led to an upturn in H2. Italy recorded a 23% EBITDAR margin, flat compared to 2015 (impact of the Brescia facility). Promising 2017 targets with growth to accelerate in H2 The group added 2,744 new beds to the network excluding the additional beds stemming from the Casa Reha acquisition (10,182 beds) which brought the total number of beds to c.72k at the end of 2016. At year end, Korian’s portfolio was made up of 715 facilities (vs 621 at end 2015), including 600 retirement homes. The group confirmed its 2017 targets (+5% in sales, EBITDA margin at 13.7%, flat vs 2016 but in line with the 2020 Plan) on the back of the steady pricing environment in the Senior Business, the ramp-up of new facilities opened in 2016 and to be opened in H2 17 (“greenfield”) and the expected growth in the number of beds (c.2,500 beds to be opened in 2017).
Korian lost up to 5% this morning after the announcement yesterday that 13 residents of a 110-room Korian retirement-home passed away (average age of 91.5 years-old), all victims of flu. However, six of the 13 victims had been vaccinated against seasonal flu. Six other residents who are showing flu symptoms are still hospitalised, while a seventh resident has been admitted to hospital as a precautionary measure. The immunisation rate within this residential home is a dramatically low 38% (against an average of 80% in the rest of Korian’s retirement homes and the Ehpad network in 2015). In December 2016, a severe outbreak of flu began in France and there have been numerous alerts sent to the public in recent weeks. The Ministry of Health announced it had opened an investigation. Korian’s reputation under pressure This stands as a hard blow for Korian since it raises questions about the quality of care given by the group’s staff and the possible lack of preventive measures taken by the retirement home (hygienic ones in particular) which is crucial for both clients and the brand’s reputation. It also raises questions about Korian’s capacity to cope with risky situations and, in this case, to manage sick and very contagious residents despite the high degree of vulnerability of Korian’s elderly residents. These dead residents may highlight that the staff were too slow in alerting there was a problem when they should have sent the sick residents to hospital or placed them in quarantine to prevent any contagion risk within the retirement home.
Following the unconvincing H1, Korian released a satisfactory Q3 slightly above consensus. It was marked by an organic growth of 4.1% yoy, while the reported growth reached 15.5%. Revenues year-to-date reached €2,224m, mainly growing in Belgium and Germany. In Germany, revenues grew by 66.3% on a reported basis thanks to the integration of Casa Reha, while Belgium saw the integration of Foyer de Lork making reported revenues rise by 12.9%.
1/ Q1 sales grew by 16.3% reported and 4.1% organic, with France 2.5% reported and 2.1% organic and International +37.1% reported and +7.2% organic. 2/ The company announced an acquisition in Belgium.
FY15 sales were up 16.1% (+3.2% pro forma), EBITDAR increased by 11% (-1.3% pro forma), EBITDA by 8.8% (-4.1%). Operating CF fell slightly (-0.8%). Net financial debt reached €1.6bn at 31/12/2015 including €0.6bn related to real estate. The restated debt ratio represented 3.1x EBITDA, well below its ceiling (4.5x).
FY15 sales were up 16.1% (+3.2% pro forma). The FY15 EBITDA margin is expected to be lower than in FY14 (c. -100bp) due to a stricter definition, by the new management of the group, of some non-current items as well as capitalised expenses and lower than expected operating performance in H2.
The company announced the removal of Yann Coleou with immediate effect and decided « unanimously » to appoint Sophie Boissard, who will arrive on 26 January. Until this date, Christian Chautard, chairman of the board, will assume the role of CEO.
Q3 revenue grew 3.5% (pro-forma). Over the first nine months, growth was 3.1% pro forma, 21% as reported and 2.7% lfl.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Korian. We currently have 9 research reports from 1 professional analysts.
Last Friday we reprised our successful speed dating format with excellent presentations from the CEOs of Access Intelligence, Corero Network Security, LiDCO Group, OrganOx and Yu Group. Each company gave a ten minute overview of its business and the investment case and we had quick-fire Q&A from a group of fund managers. Below we summarise our thoughts on each company, with more details inside, plus we include the slides presented by each management team. We believe all five companies have excellent potential and are happy to arrange further contact. We also look forward to setting up our next speed dating event.
Companies: ACC CNS LID YU/
This morning AnimalCare has announced it has entered into a conditional share purchase agreement to acquire the entire issued share capital of Ecuphar NV, a European animal health company focused on the development and sale of veterinary pharmaceutical products that provide significant benefits to animal health in the companion animal, equine and production animal markets.
Companies: Animalcare Group
Following the strategic review of the Medication Adherence division announced with the finals on 3 May, the group has sold Biodose Services, the largest business within this division. Quantum will now be focussed entirely on the higher margin Specials and Niche Pharma divisions which increases the group’s quality of earnings, continues its move under the new management team towards a simpler, leaner business strategy and positions Quantum as a pure pharma group. We strip the Biodose Services modest contribution from our numbers, but this is largely offset for FY18 & FY19 by an upgrade to the Niche division as a result of today’s positive trading commentary. Going forward we think the recent re-rating of the company, which is moving steadily from turnaround to growth, should continue, assuming further positive underlying momentum at the update scheduled for 9 August.
Companies: Quantum Pharma
Carador Income Fund (CIFU LN) Level of refinancing and reset activity remains high | Imagination Technologies Group (IMG LN) No progress with Apple; Whole group for sale | Uncovered Gems - Speed Dating Lunch Another five sparkling gems
Companies: IMG CIFU ACC CNS LID YU/
Ergomed (ERGO LN) Top line PeproStat™ Phase IIb data now expected in Q4 2017 | Touchstone Innovations (IVO LN) IP Group confirms Takeover Offer | Walker Greenbank (WGB LN) Strong o/seas & manufacturing demand counter soft patch in UK in May
Companies: WGB IVO ERGO
GYG—Intention to float by the superyacht painting, supply and maintenance company. Due 5 July. Raising £6.9m new plus vendor sale of £21.5m at 100p. Mkt Cap c. £47m. Revenue of €54.6m in FY16 and adjusted EBITDA of €6.7m. Greencoat Renewables - Schedule 1. Targeting a portfolio of operating renewable electricity generation assets, initially investing in wind generation assets in Ireland. Offer TBC. Due Mid July. FFI Holdings— Specialist in the provision of completion contracts to the entertainment industry for films, television, mini-series and streaming product. Offer TBA. Expected 30 June. QUIZ— Omni-channel fast fashion womenswear Company intention to float. Due July 2017. Offer TBA Ethernity Networks—Schedule 1 from Israeli based specialist in data processing technology used in high end carrier ethernet applications across the telecom, mobile, security and data centre markets. Expected late June. Offer TBA. Jangada Mines—Sch 1 advanced stage PGM exploration project containing what the Directors understand to be the largest PGM resource, and only pre-development PGM project, in South America. Offer TBA. Expected late June. Phoenix Global Mining— US Brown field copper play. Expected late June. Offer TBA Touchstone Exploration— Oil E&P company active in the Republic of Trinidad and Tobago. Interests of approximately 90k gross acres. Production c. 1.3k boepd. Raising £1.5m. Expected mkt cap £7.5m - 26 June. I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK. Offer TBC, 7 June admission. Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission late June Tiso Blackstar Group—Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Postponed. Rockpool Acquisitions—Northern Ireland based Company seeking strong NI acquisition with an international outlook. Raising £1.5m at 10p. Due 5 July. Residential Secure Income - social housing REIT raising up to £300m Admission due c.12 July. ScotGems—Admission due 26 June. Seeking £50-£100m. To investing in a diversified portfolio of Small Cap Companies listed on global stock markets DP Eurasia—Intention to float from the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia . £20m primary raise plus a partial vendor sale. AIB—Intention to float from AIB, Ireland's leading retail and commercial bank. The Minister for Finance intends to sell approximately 25% of the Ordinary Shares of AIB. Valuation range €10.6-€13.3bn. Admission end June. Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe Supermarket Income REIT– Up to £200m raise to acquire a diversified portfolio of supermarket real estate assets in the UK, providing long-term RPI-linked income. Due 21 July.
Companies: VLS GSH EGI MSG FDEV UNG TND LTHM REDX CREO
Abzena reported solid FY17 results with underlying revenue growth of 41% (to £18.7m). In FY17, Abzena continued to focus on the integration of its service offering across its three sites (US and UK), which has been expanded by its recent placing of £25m gross (issuing 75.8m new shares at 33p). We expect this to enable strong growth and take Abzena to profitability in FY20, which will be a significant milestone for the company. We maintain our valuation at £132m, 62p per share, but note potential upside as it demonstrates growth and as Abzena inside products progress.
Today’s AGM statement confirms that trading YTD has been in line with the Board’s expectations, highlighting strong YoY revenue and an improving cash position. As outlined in our initiation of coverage on 30th May, we believe that the company is entering a new growth phase following the change in management, and that the valuation discount to peers is unwarranted. We reiterate our Buy recommendation.
Companies: Surgical Innovations Group
Top line data from the Phase IIb trial evaluating PeproStat™ is now expected in Q4 2017, earlier than the original Q1 2018 due to reaching recruitment mid-point ahead of schedule. This highlights Ergomed’s ability to recruit patients successfully and undertake trials efficiently. PeproStat™ offers a differentiated approach to current products in the haemostat market in that it is manufactured from blood-free components and is formulated in a ready-to-use solution. We reiterate our highly positive stance on Ergomed and look forward to the data later this year.
genedrive, an emerging UK medtech company, focuses on the development and commercialization of an innovative, point-of-care diagnostic system, also called Genedrive® (in this report, "genedrive" refers to the company, whereas "Genedrive®" indicates the product). genedrive is poised to become the first company to launch a decentralized Hepatitis C diagnostic, entering a large market at a time when new curative therapies for the disease are transforming opportunities for testing and treatment. A Genedrive® TB diagnostic has already been launched and the platform has a wide range of alternative applications.
Chi-Med has today announced the initiation of a Phase I/II clinical trial of its novel FGFR (fibroblast growth factor receptor) inhibitor HMPL-453 in China. This follows and complements the first in-human Phase I clinical trial of HMPL-453 in Australia that was initiated earlier this year. We consider the momentum behind Chi-Med’s clinical pipeline is strong and growing, both in terms of earlier clinical progress (such as today’s update) and also, of course, the later-stage pipeline as demonstrated by the recent CFDA regulatory submission of the fruquintinib NDA (advanced colorectal cancer). It’s the combined breadth and depth of the portfolio – and the corresponding potential for significant news flow catalysts for the stock – which we think allows Chi-Med to stand out from its peers. We remain Buyers.
Companies: Hutchison China Meditech
Inspiration Healthcare (IHC) is a global supplier of medical technology for neonatal intensive care units (NICUs) and operating theatres. With excellent customer service relationships built up over many years, IHC has unique selling channels in both domestic (i.e. NHS) and international markets. Current product mix comprises IHC’s own branded neonatal intensive care and operating theatre warming devices with sales to over 50 countries and third-party distributor agreements in the UK and Ireland. We expect FY18 & FY19 sales growth of 8% and 10% respectively due to global sales expansion, own product sales and future M&A activity. IHC trades on a forward EV/EBITDA multiple of 9.4x (against a peer group of 11.5x). We value IHC at £21m and initiate coverage with a Buy recommendation and 68p target price.
Companies: Inspiration Healthcare Group
Motif Bio (MTFB) has raised $25.8m (£20m) through the placing of 6.6m shares at 30p with new and existing shareholders. The funds allow for the completion of REVIVE-2 and subsequent regulatory applications. With our strong belief that REVIVE-2 data readout will be positive (finnCap est. 85%), we expect iclaprim to potentially begin commercial sales in early 2019 for the treatment of acute bacterial skin & skin structure infections (ABSSSI). Given the similarities between both REVIVE1/2 clinical trial designs, we remain confident that iclaprim will repeat earlier REVIVE-1 results, which showed iclaprim to be safe, effective and once again show non-inferiority to vancomycin. Post fundraise (and passing at general meeting on 22/6/17) we adjust our target price to 100p (34% increased share base) and maintain our Buy recommendation with REVIVE-2 data readout in H2-17 acting as a clear price catalyst.
Companies: Motif Bio
Touchstone Exploration— Oil exploration and production company active in the Republic of Trinidad and Tobago. Interests of approximately 90,000 gross acres. Production c. 1,300 boepd. Raising £1.45m. Expected mkt cap £7.5m. Due 26 June. I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK. Offer TBC, 7 June admission. Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission in late June Tiso Blackstar Group—Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Expected late June. Vordere—RTO targeting German Property. Raising £9m at 17p. Readmission c. 15 June. Resiential Secure Income - social housing REIT raising up to £300m Admission due c.12 July. ScotGems—Admission due 26 June. Seeking £50-£100m. To investing in a diversified portfolio of Small Cap Companies listed on global stock markets DP Eurasia—Intention to float from the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia . £20m primary raise plus a partial vendor sale. Film Finances—Sky News reports that ‘movie financing company with credits including the Hollywood hits La La Land and Nocturnal Animals is plotting a blockbuster premiere on the London stock market that will value it at several hundred million pounds.’ Expected ‘during the summer’. AIB—Intention to float from AIB, Ireland's leading retail and commercial bank . The Minister for Finance intends to sell approximately 25% of the Ordinary Shares of AIB. Valuation range €10.6-€13.3bn. Admission end June. Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. Flying Brands (FBDU.L)—Prospectus approved by FCA. RTO of Stone Checker Software, supplier of technology solutions in the field of kidney stone analysis and prevention. Has raised £550k at 3p. Subject to GM on 15 Jun. Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe
Companies: AAU GRPH IGP PPIX COS ABZA AUTG RIC BYOT FOGL
Shire PLC (SHP.L) reported strong Q4-16 results today, with growth across all therapeutic areas contributing towards double digit underlying earnings growth, strong cash generation and a very positive 2017 outlook statement. Two key business areas, those of Genetic Diseases & Internal Medicines grew by 14% and 17% respectively, ahead of management’s expectations. Trading on only 11.6x FY-17 EV/EBITDA, this company is undervalued we believe. Putting it on the multiple it deserves, around 14x, we arrive at our target price of 6200p and thus reiterate our Buy recommendation.