Delignit - Termination of coverage

Edison Investment Research is terminating coverage on: • 2G Energy (2GB) • Apontis Pharma (APPH) • Artec technologies (A6T) • Beta Systems (BSSA) • Blue Cap (B7E) • Cyan (CYR) • Consus Real Estate (CC1) • Daldrup & Soehne (4DS) • DATAGROUP (D6H) • Datron (DAR) • Delignit (DLX) • Deutsche Börse (DB1) • Deutsche Grundstücksauktionen (DGR) • Deutsche Rohstoff (DR0) • DVS Technology (DIS) • Edel (EDL) • Ernst Russ (HXCK) • Exasol (EXL) • expert.ai (EXAI/EXSY) • Fashionette (FSNT) • Formycon (FYB)

Delignit - Automotive drives strong recovery in H121

Delignit’s H121 results showed a strong recovery compared to last year’s results, which were affected by the pandemic. The company maintained its FY21 guidance of at least 14% revenue growth and an EBITDA margin of at least 9%. However, there is some uncertainty about the impact of the shortage of electronics components and higher raw materials prices. Delignit’s strategy is focused on several ecologically driven trends, such as the use of renewable materials and weight optimisation of products.

Delignit - Further recovery anticipated in FY21

Delignit’s FY20 results exceeded company guidance due to the recovery in automotive segments in the second half of the year. Revenues declined 9% in FY20 with good growth of 3% in the second half. The normalised EBITDA margin increased 40bp, fuelled by lower ramp-up costs of the motor caravan order. Delignit’s FY21 guidance assumes at least 14% growth in revenues and >30% growth in normalised EBITDA. In the longer term, Delignit will benefit from expected growth in commercial vehicles, further g

Delignit - Ecological hardwood-based products

Delignit manufactures ecological materials, mostly based on European hardwood, which makes them CO2 neutral in their lifecycle. Within the automotive division (85% of revenues), the company focuses on light commercial vehicles (cargo bay protection and cargo securing systems), motor caravans (interior furnishings such as cabinet systems) and passenger cars (trunk covers). FY20 results so far have been affected by the impact of COVID-19 on the automotive sector. Longer term, Delignit will benefit

Delignit - Gradual recovery ahead

Delignit’s H120 results were clearly affected by the COVID-19 pandemic, with revenues down 20.6% and EBITDA decreasing by 35%. Cost-cutting measures, such as using so-called Kurzarbeit (short-time working arrangements) and reducing temporary work, have somewhat limited the decline in profitability. Delignit’s FY20 guidance assumes a 5–21% y-o-y fall in revenues in H220, which implies at least flat revenue in H2 vs H1. Longer term, Delignit will benefit from expected growth in commercial vehicles

Delignit - Betting on long-term potential

Delignit’s annual results were in line with the preliminary numbers and the company had already warned of the significant impact of COVID-19. Delignit has a large exposure to the automotive segment and OEMs’ factories have been shut for six to seven weeks. Delignit therefore withdrew its guidance for 2020. The company is well positioned to return to growth in the longer term driven by improving market conditions for commercial vehicles, further expansion in the US, the addition of new customers

Delignit - Missing a gear

After further positive guidance in April, Delignit’s H119 earnings shortfall (EBITDA down 16%) and full-year profit warning are all the more disappointing. In mitigation, the company has arguably been a victim of its own successful Automotive OEM business in ramping up for special call-offs that may yet materialise, while incurring higher costs than planned for a still potentially transformative motor caravan order. Management now expects 2019 revenue of €64m (ahead of last year but below the or

Delignit - Confidence undimmed

Delignit continues to please with a 16% rise in FY18 EBITDA despite a demanding comparative and one-off contract as well as project start-up costs. Automotive, the major sector, stole the show with revenue up a quarter thanks to strong OEM activity and the maximisation of revenue per vehicle. This momentum, allied with an initial contribution from a potentially transformative OEM motor caravan order, underpins guidance of further double-digit growth in 2019 revenue at maintained EBITDA margin. F

Delignit - Delignit delivers

Delignit has combined another strong trading performance (H118 EBITDA up 16%) with further signs of a potentially lucrative return on its strategic goal of business model transition. While early days, the award of a high-profile OEM contract for motor caravans brings not only the promise of double-digit million annual sales but, yet more importantly, encouraging evidence of Delignit’s ability to transfer its model to new markets. Meanwhile, H1’s clear EBITDA margin beat (by 10%) suggests that, a

Delignit - Firing on all cylinders

Delignit is delivering across the board with growing evidence that well-defined strategic development is paying off. While 2017 performance was impressive (EBITDA up a third), the pace may accelerate thanks to recent bumper investment in capacity, efficiencies and a more diversified revenue base, allied with continued positive conditions. Indeed, management looks to double annual revenue at enhanced margin by 2022, which suggests that, as for 2017, current year guidance of sales up 8%+ at broadl

- Investment paying off

Strong H1 results (EBITDA +42%) and recent major orders in the LCV and rail transport segments reinforce confidence in confirmed positive profit guidance for 2017. Moreover, it is particularly encouraging that well-defined strategic development looks increasingly to be paying off, with the current 2016/17 €6m bumper capex affording capacity expansion, efficiency gains and a more diversified revenue base. Finances remain secure (net debt/EBITDA of 1.3x for the last 12 months), allowing ample room

Leveraging ecological strengths

The recent orders in the LCV and rail transport segments illustrate Delignit’s ability to deliver customised solutions and foster technological advancements in ecological materials. Dependence on the domestic market is also gradually reducing as the group is diversifying its revenue base globally. Delignit posted a 9.2% revenue CAGR in FY12-16 and management’s guidance is for a 10-15% sales increase in FY17, which is reflected in an FY16 P/E multiple of c 33x.

Renold - Strong end to FY24: EPS up 11%. Robust FY25: EPS up 27.6%

The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as manageme

Billington Holdings - Record result boosts dividend; forecasts upgraded

FY23 results show very strong growth over FY22, driven by strong Structural Steel activity, with results slightly ahead of upgraded profit expectations, while stronger than expected cash flow resulted in an unexpectedly generous dividend of 33p (offering a FY23 yield of 7.0%). The group now has net cash of £22.1m and is debt free and is therefore in a strong position for potential M&A activity. Following the recent £90m of new orders to increase the order book to record levels we conservatively

Morning Note – 16 April 2024

Morning Note – 15 April 2024

PROGRESSIVE: Severfield: Targeted acquisition strategy aids growth path

Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.

Invinity Energy Systems - Update on Strategic Investment

Invinity’s update on discussions with strategic investors reveals interest from multiple parties. While this has slightly delayed finalising an agreement it increases the potential for a better outcome. Although details are unknown at this stage, we think there is enough in the statement to be comfortable that any agreements will be consistent with the company’s strategy of growing market share in core markets and using a licencing and royalty model in other markets.

SP Angel . Morning View . Copper prices hold higher as China processing fees fall below $0/t amid low feedstock availability

FY results: strong cash flow

Warns on brine supply costs

Clean and competitive fertiliser

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

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

Windar Photonics - Major order, successful net £4m fund-raise, target fair value price raised

WPHO's announcement last week of a major new contract award with a North American customer represented an encouraging step forward in building the group's presence in this crucial market for wind power; and has been followed by news of the over-subscribed fund-raise which has strengthened the company's balance sheet to the tune of £4m net (£4.4m gross). The company is a pioneer in the field of wind turbine optimisation and continues to grow through innovation based on its unique IP. Following th

LIBERUM: Gattaca: Resilient contract performance, perm tough

Norcros - FY24 trading in line with expectations

FY24 trading underpins Norcros’s compelling investment case, where its new product development initiatives, market positioning and self-help initiatives allow it to take market share in both the UK and South Africa. We believe that Norcros’s key strengths are underappreciated and that legacy issues have been resolved. Its rating is low at 5.6x FY24e P/E, which is attractive, especially when compared to its yield of 5.7% on its well-covered dividend. We retain our estimates and value the shares a

Trading report in-line with sector peers

The results for the six-months to January are robust against a backdrop of declining confidence in both clients and candidates generally. With an improvement in the contract book during early Q3 we think this highlights that the tide is starting to turn and likely to feed through to demand for permanent hires ahead of the CY24 end. With net cash accounting for over 70% of the current market capitalisation, the operating business appears undervalued. H1 results were broadly in line with expectat