Resetting forecasts after the sale of Privilege (Hanseyachts)

Resetting forecasts after the sale of Privilege TARGET CHANGE CHANGE IN EPS 2022 : € (0.78) vs 0.33 ns 2023 : € 0.21 vs 0.60 -64.8% We have rolled over our model and updated our estimates following the group's FY21/22 publication and the divestment of Privilege. Our estimates also take into account the half-year results of the group for this fiscal year, in which it cut its guidance for EBITDA and net income. Hence, our EPSs for both 2022 and 2023 have been slashed to reflect the upat

Target cut by -17.9% (Hanseyachts)

TARGET CHANGE CHANGE IN EPS 2021 : € (1.12) vs 0.13 ns 2022 : € 0.33 vs 0.33 We have cut our EPS forecasts following the revised guidance from the group, which now indicates much-lower profitability. Like other companies, the ongoing supply-chain issues and cost inflation have affected Hanseyachts. Additionally, employee hiring and costs are also proving to be a hurdle. However, we see the situation gradually improving as these pressures ease. CHANGE IN NAV € 8.53 vs 9.22 -7.45% O

Strong orders and revenues even as costs bite, FY22 outlook slashed

Hanseyachts Q3 results were a mixed bag. Similar to previous quarters, revenues and orders registered significant growth yoy. However, EBITDA was hampered by higher costs arising from the ongoing price inflation and supply-chain hurdles. Personnel hiring and costs were also an area of concern. These issues hindered the delivery of yachts to customers. Consequently, the company revised downwards its EBITDA guidance. On the positive side, the demand has not abated and the company has been able to

On track for a strong finish

Hanseyachts released a decent set of numbers for H1 FY22. The company saw sustained momentum in orders and recorded higher revenues over the previous year. The company, however, did face some pressure on costs due to input price inflation. The supply-chain issues seen in Q1 also persisted. Despite these factors, the company narrowed its loss yoy. With production facilities running at full capacity and, given that H2 is the stronger half, FY22 should finish on a strong note.

Q1 shows that 2022 holds a lot of promise

Hanseyachts not only finished FY21 with a record number of orders and a strong liquidity position, it continued to build on it in Q1 FY22. The company’s FY21 revenues came in slightly above our estimates but profitability was lower than expected. However, Q1 was better than anticipated on all fronts despite the ongoing supply chain restrictions. The outlook for FY22 is also exciting and Hanseyachts aims to reach €200m in revenues and an EBITDA margin of 10% in the medium term.

Rentals, a risky move or a way out?

In this piece, we explore the recent steps taken by Beneteau to explore the waters by investing in rental companies and its potential implications for Hanseyachts.

Laying foundations for the future

Hanseyachts has concluded its year with a record number of orders in its history with more than 1,000 boats expected to be delivered in the next couple of years. However, supply chain issues continue to plague the delivery and may not abate immediately. On the positive side, the company is launching another brand related to motorboats and will expand its manufacturing in Poland to service the order book.

Q3 closely resembles Q2, pandemic still an inconvenience

Hanseyachts’ Q3 results showed similar trends to those seen in Q2. Orders continued to be the standout with the company registering a record tally. However, this did not translate into revenue and profit growth as the aftereffects of the pandemic continued to hamper operations. Cash flow from operations, though, was positive and the liquidity position remained strong. In terms of outlook, the management has guided for both revenues and EBITDA to be lower than the previous year.

Good Q2 brightens up H1

Hanseyachts continued to build up on its strong Q1 results with a good Q2, which improved the first-half performance. The order backlog touched new highs, even though revenues somewhat declined due to the effects of the pandemic. The most interesting development was a positive cash flow from operations compared to a negative one in the previous year. Liquidity, too, remained at an assuring level.

Q1 does more than just allay concerns

Hanseyachts reported better than expected figures for Q1 FY21, as both new orders and the order backlog registered record highs. Revenues and EBITDA were also better than expected compared to the previous year. Moreover, the outlook for the market appears to be improving and the group’s production capacity is already full when it comes to sailing & motor yachts as well as catamarans. The group’s liquidity position also remains solid should the need for it arise.

Worsened outlook but well armed for the future

Hanseyacht’s 9M earnings have been affected by the acquisition of Privilège and the lockdown. This has resulted in lower productivity and slower production, which mechanically has increased the level of inventories with boats in progress to be finished and delivered. Due to the lack of visibility, management is now expecting a net loss for the group in FY19/20. We, however, remain positive on Hanseyachts which has a strong brand portfolio and should also benefit from its leaner structure of prod

Negative earnings due to Privilège integration

Hanseyachts’ H1 earnings came into negative territory largely driven by the integration of Privilège, high marketing costs supporting the group’s strategy, and boat show expenses. Because all this was expected, we stick to our scenario based on a recovery in H2. We confirm our positive view on the stock.

Motorboats are running at full throttle

The growth in motorboats is intact. 2019 was a very good year for all boating companies and 2020 remains promising, with motorboats remaining the growth driver. Therefore, we remain confident on Hanseyachts, which is well positioned in this segment and prepared to capture the future growth thanks to its in-house development department with a connected mould-milling facility.

Q1 results in line with expectations

Hanseyachts reported its Q1 results. Figures were overall well-oriented and the company provided a positive outlook for the year, despite the low single-digit one-off losses related to the integration of Privilège. Buy rating confirmed.

On track for the future

Hanseyachts reported a very robust set of FY18/19 results, with a strong performance in all KPIs. The average selling price also improved to a record level of €250k per boat, benefiting from a better mix in motor boats, but not only. We start to see the benefits related to efficiency measures implemented last year, resulting in lower production costs. Therefore, we believe the company is now well oriented and prepared for the coming years. Buy rating confirmed.

Surface Transforms - New guidance – forecasts under review

Surface Transforms has issued new revenue guidance for FY24, with the company now expecting revenues in the range £17.5-22m. We are withdrawing our previous forecasts for FY24 and withdrawing our price target while we review the impact of the new guidance.

Surface Transforms plc (SCE LN) - Forecasts and valuation withdrawn

We note the regulatory announcement this morning from Surface Transforms and withdraw our estimates and valuation, pending conversations with management.

Morning Note – 16 April 2024

Robust margin and cash performance

Surface Transforms (SCE LN) - Obstacles removed for higher production

Surface has issued a brief Q1 update. Production will ramp-up this year as final new equipment is installed, and manufacturing teething problems recede.

Initial Equity Trading Comments - 19 February 2024

Hybridan Small Cap Feast - 16/04/2024

16th 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: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radical Limited for

Dowlais Group - Motoring forward

Dowlais Group’s first set of results were ahead of our expectations, with positive cash generation a highlight despite restructuring and demerger costs. Softer automotive markets will limit margin progress in FY24 towards the double-digit target. Despite this, margins of c 6.5% are still ahead of automotive peers, although the shares trade at a significant discount to our implied generic peer-based valuation.

Morning Note – 9 April 2024

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div

Morning Note – 4 April 2024

LIBERUM: New Energy Nuggets: Hydrogen - the future is green

Hybridan Small Cap Feast - 17 April 24

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

Nexteq - FY23 adj EBITDA +4% ahead, FY24E upgrades of +1-10%

Nexteq’s FY23 results show adjusted EBITDA +4% ahead of the +6% upgrade at the January trading update, record FY23 EFCF of $17.4m, and a confident outlook that leads us to reiterate our FY24E revenue and upgrade FY24E gross profit, adj EBITDA, and EFCF by +1-10%. The strategic focus on higher-margin products and customers reducing elevated inventory levels led FY23 group revenue -5% yoy to $114.3m, with Quixant 6% lower at $69.3m and Densitron 2% lower at $45.1m. Effective supply-chain managemen

Morning Note – 25 March 2024