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Faurecia reported a slight beat to expectations on Q1 23 revenues, while sticking to its prudent FY23 targets. We read this as a reassuring set of results with no major announcements on the group’s liquidity; the #1 priority for the management and Investors. We confirm our positive stance on the company, backed by an improving supply chain situation, sound implementation of the deleveraging plan and strong ties with Chinese OEMs to hedge against a price war.
Companies: Faurecia (EO:EPA)Forvia SE (FRVIA:PAR)
AlphaValue
Faurecia’s FY22 results met the company’s guidance through the P&L and showed better than-expected net cash, lowering the closely-watched leverage ratio to 2.6x. The FY23 outlook backs the margin recovery scenario with decreasing cost headwinds, yet with a cautious view on global automotive production. Faurecia also raised its cost synergies assessment and announced a divestment for €540m, reaching its €1bn divestment plan. This answers investors’ debt concerns and raises speculation on: is ther
With its Power25 CMD, Faurecia reset its mid-term targets to a more cautious level on trimmed worldwide auto production assumptions. Synergies with Hella were kept intact, with an upside potential as always, based on the usual prudence of Faurecia’s management. A focus was made on cash generation and deleveraging, eventually confirming that the structural benefits from the acquisition of Hella should account for the largest part of the NCF margin improvement. No dividend is likely to be proposed
With a FY22 guidance upgrade and a consensus-beating Q3 22 revenue figure, Faurecia at last came through although investor concerns about the company’s debt load the post-Hella acquisition seem to be overshadowing any reassuring daily business reports. The management reiterated its confidence concerning the €1bn (at least) divestment plan but only the materialisation of these divestments looks able to reverse the current doubtful sentiment. Market-wise, while Chinese OEMs are knocking at Europea
As planned, Faurecia is launching a capital increase as part of its financing for the acquisition of Hella. The most surprising thing remains the timing of this operation given that the company has until early 2023 to proceed with the €705m rights issue. This removes some uncertainty around the acquisition of Hella and its complex financing but raises questions on the management’s confidence in future market conditions.
Faurecia posted consensus-beating Q1 22 sales combined with a much more realistic FY22 outlook. The new guidance includes the 11-month consolidation of Hella and a +1% yoy expectation for global auto production (down by 6.2pp vs. last estimates). The improvement in the financial situation had been much needed; the dividend payment was thus cancelled, the debt covenant renegotiated and the asset disposal plan doubled. Anyway, the incomplete takeover of Hella is likely to be a drag on the company’
Faurecia’s standalone FY21 results and guidance met expectations at both the top line and margin, but the net cash flow line’s recovery looks weaker than anticipated. The US issue in Seating highlighted a lack of flexibility with the headcount. Faurecia reassured after two successive profit warnings in H2 21. The FY22 outlook offers upside risk on a cautious H1 22 volume assumption.
Faurecia released globally expected sales after its recent profit warning and guidance cut in late September. Some delays in volume and labour shortage in the US weighed on the Seating business, while this was offset by a consensus beat on Clean Mobility. Overall, Faurecia posted an 11.4% yoy organic decline, outperforming the market by 780bp. At current valuation, we believe that the share price does not fully reflect the opportunities offered by acquiring Hella.
Faurecia met consensus expectations on H1 21 sales, while posting a slight beat on the operating margin and cash generation, leading to a minor upgrade on the net cash flow guidance for FY21. A conservative speech and favourable seasonality in H2 21 call for guidance beat, but the market is concerned about the risk of an equity raising for M&A purposes.
Faurecia reported revenue up by 8.9% yoy including 12.2% yoy organic growth driven by China which overtook pre-crisis (Q1 19) figures. Despite an outperformance in all its markets, Faurecia underperformed worldwide automotive production by 60bp due to an unfavourable geographical mix. Q2 should see an acceleration of the outperformance as production in North America and Europe resumes. Lastly, the (too) conservative FY21 was maintained.
Faurecia and BAIC have just give birth to their 50/50 JV, expanding further the French auto supplier footprint in China. Though strategic for its Seating unit development, all eyes are currently on Hydrogen and the Symbio JV with Michelin. Additionally, the emancipation of Faurecia from Stellantis should come by the end of March 2021.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Faurecia. We currently have 25 research reports from 2 professional analysts.
FY24 performance reflects decisive action in a challenging market: Gross merchandise value (GMV) of £1,809m is down 13% YOY, driven by lower sales in brands, partly offset by growth in the Debenhams marketplace.
Companies: boohoo group Plc
Zeus Capital
Companies: Frontier Developments Plc
Liberum
The company expects Adjusted EBITDA to be above expectations due to strong game portfolio performance, positive sales mix towards own-IP and effective cost management.
Companies: Eden Research plc (EDEN:LON)Solid State plc (SOLI:LON)
Cavendish
Companies: CPX PHC PIER
Please find below our weekly update covering themes that we feel that are of interest to investors and participants in the small and mid-cap TMT sector as well as commentary on recent newsflow.
Companies: CPX CNC TRAK CLCO TERN MWE
Allenby Capital
Surface Transforms has announced a Placing and Subscription seeking £6.5m at 1p, combined with an Open Offer for up to £2m (before expenses). Proceeds will be used for working capital for existing operations and to support the manufacturing scale-up. We introduce summary estimates pending the outcome of the entire fundraising event (including the Open Offer) and the full outturn statement for 2023a due in late May. Our base case assumption is for revenue of £17.5m in 2024e (2023a: £8.3m); this c
Companies: Surface Transforms PLC
SCE has announced its intention to raise £6.5m via an institutional placing, with an open offer pending, to assist the scale-up and to fund near-term working capital requirements. We reduce our forecasts to factor in base case assumptions and greater prudence to expectations. Our FY24E adj pre-tax loss rises by £3.9m to a loss of £6.9m, increasing LPS from -0.6p to -0.9p. The placing should provide sufficient cash runway and some headroom through to EBITDA profitability, anticipated throughout F
Companies: IG Design Group plc
Canaccord Genuity
Sanderson Design Group (SDG) has announced its FY24 full-year results, which are in line with the headline figures from its February trading update. A record year for Licensing and a strong performance in the key North America market helped to offset a challenging consumer environment in other geographies, most notably the UK. While this backdrop is set to persist in FY25E, the group will continue to focus on its strategic growth drivers, notably North America and Licensing, to deliver sharehold
Companies: Sanderson Design Group PLC
Progressive Equity Research
IG Design Group’s trading update for the year ended 31 March 2024 has exceeded market expectations in terms of both profitability and, most significantly, cash generation. The FY24 results confirm the progress the group has made on its strategic journey to simplify the business and improve operational efficiency. Notwithstanding ongoing uncertainty on the economic backdrop and consumer expenditure, the group remains confident of delivering its target of returning to its pre-Covid adjusted operat
7th May 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: Change of Market: Dual Listing: Our daily digest of news from UK Small Caps If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”. Hyb
Companies: EDEN EBQ SOLI NTBR CNS CORO TLY KIBO MWE
Hybridan
17th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi
Companies: ARS TIDE SCE SNX ECK CNS TST SPEC SSTY
This morning's announcement from SPSY highlights the company's innovative technology in the interest of “meet[ing] clients' needs”. A global first from SPSY, today's news heralds the first polymer banknote substrate which will be certified as sourced and manufactured through an accredited circular supply chain, commencing with Toray Plastics America, SPSY's partner. This new development follows on from SPSY's invention of the Fusion substrate, a transformative technology which we expect to mak
Companies: Spectra Systems Corporation
WHIreland
SCE is raising £16m through a placing (and up to a further £3m through open offer) to fund substantial expansion and additional working capital. This will enable the Group to grow to £75m revenue capacity in the near term, commence the build and equipping of a new factory and then (with internally generated free cash flow) scale to £150m revenue capacity and beyond. With a contracted order book of £190m and a prospective pipeline of £400m, this is clearly the time to seize the opportunity. The e
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