9m 23: management still confident on GTF market share

MTU announced adjusted 9m 23 figures above the market expectations. The main revenue driver was the GTF engine for the A320neo and this was supported by the growth in the spare parts business which expanded across all the businesses. The OEM EBIT margin was supported by a favourable business mix and FX tailwinds and, contrary to our expectations, the MRO EBIT margin held up well despite the high share of GTF. Given this strong performance, the company confirmed its FY23 guidance.

H1 23: financial implications of GTF inspection still unknown

MTU announced strong H1 23 figures, which were in line with the company collected consensus and our expectations. The main revenue driver was the GTF engine for the A320neo and this was supported by the growth in the spare parts business which expanded across all the businesses. The OEM EBIT margin was supported by a favourable business mix, FX tailwind, and under-proportional costs but the MRO EBIT margin shrank due to higher share of GTF. Given the strong performance, the company has confirmed

Q1 23: guidance upgrade expected in next results release

MTU Aero Engines reported strong Q1 results. After pre-releasing its Q1 sales and EBIT figures which were above the market consensus, the company has again surprised the market by publishing stronger than expected adj. net profit of €157m (+28% vs consensus). However, despite delivering the strongest quarter in its history, the company has not upgraded its FY23 guidance, citing supply chain constraints.

CMD22: blue sky horizon

MTU has surprised the market with strong profitable growth perspectives in the short-, mid- and long-term. The Aerospace industry is experiencing strong resilience in civil aviation in the adversity of a potential recession. MTU has stable cash generation coming from Defence to fuel this growth. With its broad portfolio of engine repairs, MTU is well positioned to benefit from the recovery of civil aviation and outperform the industry thanks to its exposure to the most promising markets.

Q3 22: MRO pulls the guidance higher

MTU has reported strong results. Though there were some delays in the military OEM segment, the aftermarket business performed strongly, leading to a guidance increase in both sales and potentially FCF for FY22. The demand continues to outstrip MTU’s capacity and the company should have no issue in increasing its prices for the coming quarters. The poor GTF mix has resulted in improved profitability levels. All in all, strong results.

Q2-22: Improved traffic forecast yet unchanged guidance

MTU beat the consensus in most metrics, thanks to an outperformance in MRO sales and a strong mix due to lower GTF volumes. MTU has reiterated its guidance thanks to a strong dollar but has reviewed the organic growth of its MRO activity due to lower maintenance activity than expected on its GTF shop visits. Overall, it is still well positioned to benefit from the air traffic recovery.

Q1 22: Strong mix generates impressive margins

MTU reported strong results. Military revenues were the driver of the consensus beat, linked to a spill-over effect of deliveries. MRO growth was also solid, driven by its activities for the V2500 and GTF engines. The strong Q1 mix generated impressive margins linked to proportionally more military and service parts revenues than standard levels. The FY22 guidance was reiterated.

Q4 21: outlook confirmed with an increased dividend

Due to several headwinds, MTU’s sales have been disappointing. However, the stronger than expected profitability has more than offset the lower revenues and the outlook confirms MTU’s growth trajectory. The strong cash generation has enabled MTU to propose a dividend that is 68% above last year’s.

GTF structural shift impacts margins

MTU provided a strong growth outlook at its CMD last Thursday, with strong recoveries in the MRO and commercial OEM sales expected next year. However, a structural shift in the MRO of GTF engines is dragging down margins, which disappointed the market on the day.

Q3 21: confident heading into FY22

MTU has published decent Q3 results but has removed all hopes of reaching the higher end of guidance FY21 in terms of sales. Due to supply issues, revenues and military have been postponed. However, profitability was strong, with OEM margins above expectations. We have clear visibility on Q4 and, hence, FY21.

Q2 21: on track to achieve guidance

MTU Aero Engines published results in line with consensus and narrowed the range of the guidance for FY21, with a slight improvement in the profitability midpoint. MTU shows more confidence in its commercial and military business, but this is offset by reduced forecasts for commercial maintenance.

Q1 21 results in line with consensus

MTU has shown good resistance through the year and remains optimistic as the recovery of the narrow-body market is expected in H2, in which MTU is exposed thanks to the PW1100G-JM used in the A320 family.

Q4 20: still a dull market for 2021

The results roughly met expectations in Q4, with a nice surprise at the FCF level. It was an occasion for the company to shed more light on 2021, which did not appear that bright, especially at the profitability level where we see downward pressures on our estimates.

Keeping the pace on R&D

During its Capital Market Day, MTU shed some light on its 2021 perspectives. Maintenance should clearly be the growth driver on the back of catch-up work and strong freighter activity. In the longer run, the company remains focused on its long-term technological roadmap, a key driver to emerge from the crisis and prepare for the next-generation platforms.

Q3 20: Slightly better than anticipated

MTU posted good Q3 figures, especially at the profitability level. The FY20 guidance has been fine tuned, with clearly positive FCF for the year, and slightly better profitability, a positive for the stock.

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

Morning Note – 16 April 2024

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

Q1 Operating Results

Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k

Plant Health Care - China distribution with AMVAC

Plant Health Care announced it has signed a distribution agreement with AMVAC, an American Vanguard Company, to support commercialisation of novel fertiliser products incorporating Plant Health Care's Harpinαβ in China starting in 2024. The novel product combines Harpinαβ technology with an AMVAC fertiliser and is expected to help growers improve crop quality and yield as part of an integrated and environmentally responsible crop production programme. AMVAC continues to evaluate Plant Health Car

Morning Note – 15 April 2024

Severfield - Multiple positives should excite investors

Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and the company ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, Severfield has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appear

Warns on brine supply costs

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

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.

discoverIE - Back to organic growth

discoverIE’s March year-end update confirms a strong operational performance in challenging markets. Following two years when sales increased by +48%, FY 2024 Group sales were +1% ahead of 2023 at CER (reported -3%) driven by a +2% contribution from acquisitions and organic -1%. As expected, organic growth returned in the later part of the year (Q4 +2%, +11% sequentially) and the order book has reverted to normalised levels of c.4.5 months’ sales, which – combined with a continuing strong pipeli

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.

LIBERUM: Severfield: Erratum: Better EPS and cashflow, and buyback

PROGRESSIVE: Severfield: Step change in European and Indian outlook

Severfield’s full-year results to March will be ‘slightly above’ the Board’s expectations, according to today’s trading update, with net debt significantly better. We maintain our PBT estimates for both forecast years, which are ahead of consensus, but reduce our net debt for FY24E. Record orders were boosted by the steel specialist’s European operations, after last year’s Voortman acquisition, while the Indian JV has seen ‘another step up in profitability’. The group has also launched its first

Clean and competitive fertiliser