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We have dropped our coverage of Hera owing to internal reorganisation. Our valuation range and estimates are therefore no longer valid.
Companies: HERA (HER:BIT)Hera S.p.A. (HER:MIL)
BNP Paribas Exane - Sponsored Research
Hera posted a great performance in the first nine months of 2023, with increasing contributions from Electricity, Waste, and Water, while Gas earnings decreased moderately in Q3 following a weaker start to the year. Earnings benefited from both an organic effect with the acquisition of new customers and M&A transactions. No guidance has been communicated for FY23 but these results are in line with the expected growth in the 2026 trajectory.
AlphaValue
Solid Q3 trends; on track to reach FY23 consensus profitability estimates Q3 EBITDA growth was c. 18% YoY (to EUR289m) thanks to a positive performance in the electricity sector, which continued to benefit from higher unitary margins and higher sales from energy efficiency projects. On the contrary, the gas sector suffered from a tough basis of comparison as it normalized in 2023 and waste EBITDA was flattish in Q3 despite the consolidation of ACR. The customer base growth accelerated to c. +9%
On the same track as in the first quarter and with little surprise, Hera published a solid H1 23 with rising earnings in Electricity, Waste and Water, whilst Gas decreased moderately after a mild winter that weighed on the Q1 23 earnings. The group does not provide a FY 2023 guidance but remains confident that it can deliver the financial objectives of the Business Plan 2026.
Q2 2023 above our expectations due to supply margins expansion Hera has unveiled its Q2 2023 results, which were higher than our estimates: EBITDA +19% YoY, EBIT +21%, net income +7%. The main driver of this set of results was the electricity division, which took advantage of higher unitary margins. Net Debt reached around EUR 4,146m, up vs. EUR 3,815m posted as at the end of Q1 2023. This dynamic is mainly connected with the dividend payment, the capex deployment and a temporary NWC effect lin
Hera published a solid Q1 performance with strong organic growth in its two most strategic growing business units, energy and waste, amidst resilience for the gas segment. The Group will continue to focus on these strategic business units, both internally and supported by M&A, as outlined in its 2022-26 strategic plan presented earlier this year. We are confident in the group’s strategy, particularly with regard to the moderate 2.84x leverage and its past experience in delivering on acquisitions
Q1 2023 a tad higher than expected. Debt reduction driven by gas destocking Hera has unveiled its Q1 2023 results, which were a tad higher than our estimates: EBITDA +9% YoY, EBIT +7%, net income +1%. Net Debt reached around EUR3,778m, down vs. EUR4,250m at end 2022. This dynamic is mainly connected with the reduction in stored gas. We note that the level of gas stored was at 55% of the capacity as at the end of March, which compares with ca. 84% at the end of 2022. Hera was one of the largest c
A more favourable context: easing inflation, rate hikes end and allowed returns upside Easing inflation pressure and the potential imminent end of rate hikes are positive elements for the Italian utility sector and thus for Hera (easier refinancing/debt cost management/DPS appeal). In addition, based on the changes of parameters that drive the revision of the WACC/allowed return, we estimate that the theoretical change in the allowed return would be 0.94%, which could mean the new allowed retur
Hera reported FY2022 results above the market consensus and the group’s outlook, but below our expectations, unsurprisingly mainly attributable to growth in the gas activities as well as the waste management business unit, amidst a soaring energy price environment. The regulated activities suffered from a lower revised WACC although this was notably offset by good progress in the unregulated businesses, through energy transition solutions, circular economy and solutions. The group increased its
No surprises from Q4 2022 results. Dividend yield at ca. 5% Hera has unveiled its Q4 2022 results, which were in line with the preliminary figures unveiled early in February when the company announced its new business plan: EBITDA + 23% YoY, EBIT +36%, net income +315%. On a FY basis, EBITDA was up ca. 6% YoY, EBIT +3% and net income -4% (ca. +1% if we exclude 2021 positive one-offs). The net financial position reached EUR 4.25bn, with a net debt/EBITDA ratio of 3.28x (ca. 2.9x if we exclude the
With a well-balanced business mix and almost no exposure to fluctuations in energy prices/windfall profit taxes, we expect Hera to benefit from steady growth, no major short-term refinancing needs and relatively low leverage. The new plan increases visibility and confirms the dividend policy. 2023 Outlook for Sector Valuation and Performance The sector screens a touch expensive vs. the market but it maintains its historically superior dividend yield and still offers an attractive earnings yie
The new strategic plan introduced by Hera for the 2022-26 period highlights a better balanced business model between regulated activities and liberalised businesses, still focused on waste, networks and energy. After an unprecedented year, the group reported a 19% higher than expected dividend to €0.125 for 2022 and intends to invest more than €4.1bn by 2026, up by 59% vs the last 5-year plan, on a more well-balanced strategic plan, leveraging on both organic growth and M&A operations.
The results reported by Hera for the Q3-2022 again highlighted a resilient business model, especially in such a volatile environment with many uncertainties. Despite the current energy crisis, the Italian utility showed its robustness thanks to its diversified activities, combined with a well-balanced profile between internal growth and M&A. The group continues to make significant investment in its transition to renewable energy as well as a strong effort in gas storage.
A resilient set of results, bang in line with our estimates Hera has unveiled its Q3 2022 results, which were bang in line with our estimates: EBITDA almost flat YoY; EBIT -3% and net income adj. -30% (due to higher provisions linked to higher prices/revenues). The main EBITDA drivers were the positive performance in the energy efficiency sector, the quality premia in the water and businesses and the higher contribution of the plastic recycling business. Net debt reached EUR 4.49bn, up vs. EUR 3
Elections confirm polls, with the right-wing coalition winning a majority of seats The Italian elections resulted in the right-wing coalition led by Giorgia Meloni of the Brothers of Italy winning a majority of seats in both lower and upper chambers, though far from the 2/3 needed to change the constitution. The new government will officially start in the week of Oct 10th, and after an initial phase of selecting ministers, it can begin effectively governing from early November. Thus, we may ne
Companies: SAB LUVE FNM IRE MN SES HER AIW IF TIP FNM IRE GHC CEM IGD WIIT COM SAB IF UNIR SCF CEM ILTY MN LUVE IGD TIP HER SES ORS
Research Tree provides access to ongoing research coverage, media content and regulatory news on Hera S.p.A.. We currently have 18 research reports from 5 professional analysts.
Supreme’s FY24 trading update confirms a record performance in the 12 months to 31 March 2024. Organic revenue and profit growth across all four divisions has driven Group revenue +45% YOY to £225m, with FY24 adj. EBITDA almost doubling to ‘at least £38m’, driving record levels of cash generation. Supreme is actively exploring complementary M&A, supported by a debt free balance sheet. Trading on an undemanding FY25 PE of just 6.7x, with a 3.4% yield, we believe downside risks are more than price
Companies: Supreme PLC
Zeus Capital
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Cavendish
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Vianet has published a positive trading update for FY24 with turnover up 7.6% to £15.18m, a 3.5 percentage point increase in gross margin YoY, and adjusted EBITA ahead of market expectations. Net debt continues to fall and closed FY24 at £1.52m (£2.1m at 30 September 2023), demonstrating strong free cash flow generation, even without the benefit of the £0.9m tax receipt received in 1H24, which augers well for a final dividend. The company reported a new contract with Wilcomatic Wash Systems, the
Companies: Vianet Group plc
Capital Access Group
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SP Angel
Vianet’s FY24 trading update shows FY24 revenue +1% ahead of our previous forecast, adjusted EBITA +2% ahead, EFCF and net debt +£0.6m ahead, and a strategic new customer win with prominent forecourt operator Wilcomatic. A robust FY25 pipeline and outlook leads us to reiterate our FY25E forecasts at this point, with the update highlighting: strong progress renewing and winning new customers on 3-5 year contracts as they migrate from 3G to Vianet’s advanced 4G LTE solutions; the successful integr
Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-
Companies: Headlam Group plc
Edison
Norcros has announced the sale of its Johnson Tiles UK business to the current management team for a consideration of £1.0m, with a further modest earnout based on the equity value of the business, both payable in April 2028.
Companies: Norcros plc
The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no
Companies: AEIT ROOF DGI9 INPP GSF SEIT USFP HICL ORIT BSIF TRIG NESF SEQI HEIT GRP GCP FSFL 3IN AERI PINT RNEW BBGI GSEO DORE TENT GRID CORD HGEN AEET
Hardman & Co
Renewi’s FY24 trading update was in line with management’s expectations and its improved cash generation is reassuring for investors. Attention is now likely to turn the strategic review of the UK Municipals with management stating that they remain on track to update markets by the end of June. This could lead to an exit of key liabilities and leave Renewi as an attractive circular economy investment with strong market positions and organic growth plans, which should assist in generating value,
Companies: Renewi Plc
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24th 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
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Hybridan
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