The dividend will finally be increased in 2023 and 2024

The Q4 performance was pretty much in line with our expectations. The key point is that Orange has announced it will increase its dividend floor to 72 euro cents for 2023, and to 75 euro cents for 2024. Very good news indeed in that only three months ago the group had dashed our hopes of a 2022 dividend increase despite the sharp expected rise in Orange’s cash flow in 2022 (+27% yoy). We maintain our Buy on the stock.

Unfortunately no dividend increase for 2022

Nothing special to say regarding the Q3 performance which was pretty much in line with our expectations, with a reassuring Spain but a modest growth slow down in Africa. The key point is that having confirmed its outlook of EBITDA growth coupled with a capex decline, the group had been expected to increase its dividend. Unfortunately this will not be the case. Since Telcos are yield stocks and shareholders have been overlooked, this news is likely to weigh on the stock in the coming months.

Confirmation of entering a virtuous circle

A decent set of Q2 results for Orange with stable revenues yoy in reported terms and EBITDA up by 4.5% yoy (adjusted for the co-financing). With a forecast of a fairly significant increase in EBITDA less capex, the group should be able to steadily increase its dividend from 2023. We stick to our Strong Buy on the stock. However, in the short term, the rotation toward quality growth stocks at the expense of telcos is likely to continue.

A Q1 in accordance with the start of a possible virtuous circle

The Q1 figures were in line with our expectations but they confirmed the outlook for 2022 of an EBITDA growth of 2.5/3% and a c.5% decrease in capex. We still expect the group to enter a virtuous circle of vigorous FCF growth in the coming years allowing steady dividend growth. So we stick to our Strong Buy. Orange deserves to return to the best-in-class group in the telecom sector consistent with its 4.5% dividend yield.

Stephane Richard's great leaving gift

Orange and MasMovil announced this morning the combination of their operations in Spain. The combined entity would become a strong second player in Spain with revenues of €7.5bn (vs €12.5bn for Telefonica), EBITDAaL of €2.2bn. It is expected to generate €450m of synergies from the third year post closing onwards. So, clearly a nice leaving gift for Orange from its future ex-CEO Stephane Richard. We maintain our Buy on the stock.

Start of a possible virtuous circle

Nothing special to say about the Q4 results which were in line with expectations. For the whole year, revenues were up by 0.8% yoy and lfl, while EBITDA was down by 0.5% yoy. The key point is indeed the outlook for 2022 which is finally as we hoped. EBITDA should grow by 2.5-3%, while capex should decrease by 5%. The time has arrived to see a regular increase in the FCF in the coming years. We stick to our Strong Buy.

A dividend desperately... flat

A correct Q2 for Orange but the poor EBITDA outlook for 2021 has been confirmed and the dividend proposed for 2021 will be stable at €0.7. So nothing to wake up the stock. The group is not expensive compared to its peers, and it offers an enticing c.7.5% dividend yield. Although not for this year, the group could surprise the market by a higher dividend increase than expected in the coming years. We stick to our Strong Buy.

A solid Q4 but a misunderstanding regarding the towers assets

The EBITDAaL was eventually down by 1% yoy but should have grown by 3.2% excluding the COVID-19 impact. Despite this solid performance and the return to normal of its dividend, the stock is still languishing 20% below its pre-pandemic levels. At first investors were also quite circumspect about Orange’s determination to keep its new towers company within the scope of the group. But later, Stephane Richard made it clear that Orange won’t go it alone in the towers space.

A return to a €0.70 dividend for 2020

A decent Q3 for Orange as the impact of COVID-19 was more limited than in Q2 with only the sharp decline in roaming due to travel restrictions. The key point of this release is, however, a proposed return to a €0.70 dividend for 2020 (with an interim dividend of €0.40 in December). We maintain our Strong Buy on the stock with a 7.75% dividend yield for the coming 12 months.

A correct Q2 and a return to normal for the future dividends

Q2 revenues were down by only 0.4% yoy and the impact of COVID-19 was indeed very limited. This correct Q2 performance reflects a better than expected solid growth in France. But, more importantly, given an expected stable EBITDA less capex in 2020, Orange will pay a dividend of €0.70 for 2020 (to be confirmed after Q3). So a return to normal which deserves a better price. We maintain our Strong Buy on the stock.

Take advantage of the disappointment on dividend to... buy the stock

Orange presented yesterday its new strategic plan “Engage 2025”. The stock was, however, down by 4% yesterday while the group refused to commit to increasing its dividends over the period. We maintain, however, our opinion at Buy on the stock with a significant upside.

Solid growth in Africa but slight disappointment in Spain

Q2 revenues were up by 0.7% yoy and lfl, a satisfactory number and better than the zero growth recorded in Q1. The correct Q2 performance reflects this time a very solid resilience in France (+0.4%) and an acceleration in Africa & Middle East (+5.8%), while Spain was disappointing with revenues down by 1.6% due to a highly promotional market. EBITDA has grown by 2% yoy and lfl and was slightly above expectations. We maintain our Buy on the stock.

A stable dividend for 2019 that won't make investors dream

Q4 revenues grew organically by 1.4%, a satisfactory number in line with the growth recorded in H1 (+1.7%) after a weaker Q3 (+0.6% yoy). The 2.4% growth recorded in Spain is quite good as Orange had seen its impressive growth trend of 2017 slowing in the two previous quarters (+0.5% in Q3 vs. +1.8% in Q2, +4.3% in Q1 and +7.1% for the whole year 2017). In France, Q4 revenues were however only flat yoy and that is a little bit disappointing. Q4 EBITDA has grown by 1.4% yoy but by 2.6% for the t

Convergent offers in France do well

A good Q3 performance despite a slowdown in growth in Spain. Quarter after quarter, the group is confirming it has crossed an inflection point in terms of revenue and EBITDA growth. Orange’s dividend has been raised to €0.65 in 2017 and looks to be €0.7 for 2018. We believe that the prospect of a regular rise in the dividend in the coming years, if it officially committed to this, would be likely to make Orange’s stock break the €15 level.

Slight slowdown in Spain due to fewer equipment sales

A good Q2 performance despite a less impressive growth in Spain. Quarter after quarter, the group is confirming it has crossed an inflection point in terms of revenue and EBITDA growth. Full-year EBITDA should grow by 3 to 4% yoy… and with capex which should decrease from 2019, the dividend could be better than expected next year.

Hybridan Small Cap Feast - 23 Mar 23

23 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 14 Mar 23

14 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 13 Mar 23

13 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

SRT Marine Systems - £145m project won but Systems sees implementation delays

Following an extensive selection and negotiation process SRT has secured a huge £145m contract to provide a full MDA system to a new foreign Coast Guard customer. The project is being financed through a UK government (UKEF) loan to the overseas government and will proceed when that paperwork is completed in a few months; a LoI has been issued pending the formalities. Deployment should take two years (c80% of the contract value likely to be booked in FY24 and FY25) followed by ongoing support and

Morning Note – 23 March 2023

Bigblu Broadband - Strong FY22 with EBITDA +2% ahead, focus on realising value

In today’s FY22 results, BBB has reported organic revenue growth of +12% to £31.2m, adjusted EBITDA +2% ahead of the trading update at £5.1m, and net cash in line at £4.2m. Australasia’s +14% organic growth to £26.5m has powered the group, while Nordic organic revenue growth was -13% due to the cyber-attack on ViaSat impacting BBB’s satellite customers, and the lapping of the decommissioning of c100 fixed wireless towers in FY21. Management’s focus on cost while selectively investing in growth h

Morning Note – 20 March 2023

PROGRESSIVE: Gamma Communications - Continuing UK growth drives profit and cash

Gamma’s results for the year ended 31 December 2022, released today, are in line with expectations and guidance, and show a strong performance with 8% growth in revenue (£484.6m vs FY21 £447.7m), 10% improvement in adjusted EBITDA (£105.1m vs FY21 £95.4m) and 12% increase in adjusted diluted EPS (71.8p vs FY21 64.0p). Cash generated by operations was up by 10%, resulting in year-end net cash (pre-leases) of £92.5m (FY21 £49.5m). Trading in the UK, in both the Indirect and Direct businesses, was

Cyanconnode (CYAN): Acceleration, and revenue uplift for FY24 and beyond

CyanConnode is currently involved in Indian tenders for more than 100m meter endpoints, and its partners have already secured L1 preferred bidder status for c.30m incremental meters. In addition to the 2.3m orders won in the fiscal year to date, CyanConnode has entered into a framework agreement with a partner to supply hardware and software for 3m endpoints for future contract awards under the Indian smart meter programme. Our revised forecasts represent an initial step towards reflecting the p

SRT Marine Systems - Systems revenue and Transceiver growth sees 1H profit

1H23 saw a welcome return of significant Systems revenue alongside strong yoy growth for the Transceivers business. In the past two years, the pandemic slowed installation of existing Systems contracts and paused the processing of new deals, leaving SRT to rely on c.£8m pa of Transceivers sales. With lockdown restrictions easing around the world this year, Systems deployment has accelerated, and meeting revenue milestones helped group 1H revenue jump >300% to £18.8m, generating Adj. PBT of £2.2m

Hybridan Small Cap Feast - 16 Feb 23

16 February 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objec