PET has reported good progress at Underlying PBT level driven by 7.6% Group LFL growth. 1H PBT growth of 18.9% will moderate in 2H as the full effect of changes in billing Joint Venture Vets impacts the business. But this, like the resetting of food prices over the last two years, is by way of a one-time adjustment. Full year PBT guidance has been raised by 3-4% on the back of the better than expected Retail performance. Overall we believe the shares already discount successful implementation of
Companies: Pets At Home Group Plc
After consensus-beating Prelims we present revised numbers and our updated view of the risk/reward position here. The trajectory of our forecasts has gone from down to flat over the next three years. The swing back into more positive profit delivery in Retail needs in our view to be gauged for longevity as delivery on the services side is likely to be constrained by re-setting the JV part of the business. Buying on Retail prospects is effectively partly a bet against Amazon it should be remember
PET is doing an IR-Sell-side round up. Our view of our meeting was broadly positive but with little of significance news-wise likely to emerge at the Prelims. There were some interesting insights into in-store experimentation. Our view is that the financials are still vulnerable to downward pressure in the short term but that new senior management will start to pivot the story here back towards the fundamentals and away from financial engineering in due course – which is encouraging.
Company has reported LFL sales change of +4.7% in Retail (WHE +3%) and +9.1% in the Vet Group (WHE +10%) resulting in a Group 3Q LFL of +5.1%. Full year 2018/19 PBT guidance has been re-confirmed in the £80-85m range previously guided. There has been no update on previous guidance of a slight decline in 2019/20. Omni-channel revenues grew by 41.5% to 9% of retail revenues.
While full year profit guidance has been held broadly in line with consensus (adjusted for lost Vet JV fees) at £80-85m the decisions on restructuring the Vet Practice business mean a fundamental re-balancing of the investment characteristics here, with online pressure on pet food pricing set to continues but without as much offset from growth of the Vet business. This is clearly an unfavourable combination but one which is already reflected to some extent in the de-rating of the shares to aroun
Jadestone Energy (JSE.TO)—an independent oil and gas production and development company focused on the Asia-Pacific region. Pro-forma production of 13.9 mboe/d, 2P reserves of 45.3 MMboe, and a 2P NPV10 of US$563.7 million . Offer TBA. Current mkt cap C$135m. Due early August.
Ovoca Gold (to be renamed Ovoca Bio PLC) - RTO of IVIX, a Russian company developing a drug candidate for the treatment of female sexual dysfunctions. No monies to be raised, market cap of £8.5m, due 30 July
Companies: PETS TEK ANCR BRSD MMX TRU ORCP FFWD W7L
PET may be characterised as a Service and Merchandise business. Merchandise is predominantly Food (mainly Dog and Cat, within that mainly Dog) and Accessories while the most important part of the Service business is its various Veterinary Surgeon activities. These are mainly First Opinion Practices which are owned by Joint Ventures between PET and the practitioner. In the enhanced disclosures provided with these Prelims PET showed that they accounted for around one third of EBIT in 2017/18.
Merchandise LFLs of +6.8% slightly ahead of 2Q rate against weaker comparative benefiting from price investment and 77% growth of online (c half of the merchandise LFL), Services LFL +10.1%. Full year guidance elements unchanged. We expect small (1-2%) upward revisions to 3/18E PBT consensus today.
PAH has a variety of strategies which were discussed at the September Capital Markets Day. We believe that the most significant for investors are its current re-pricing actions in the Pet Food markets (seen as negative) and the economics of its largely Joint Venture Vets operation (seen as positive). This note looks at the pricing strategy in some depth.
Interims beat slightly, FY guidance held, some major compositional changes, retirement of Group CEO.
Animal Health is a vast market with multiple long-term growth characteristics and opportunities. In this report we have outlined valuations, M&A activity and the key growth drivers in two animal health subsectors: companion animal health and livestock health. Although the commercial positioning of the eight companies covered in this report (Animalcare, Anpario, Benchmark Holdings, CVS Group, Dechra, ECO Animal Health, Genus and Pets at Home) differ significantly, all have exposure to positive ma
Companies: GNS ANCR CVSG DPH BMK EAH ANP PETS
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Last week Lookers announced a record set of H1 results for the six months to 30 June 2021. Underlying PBT was £50.3m, versus an underlying loss of £36.5m in H1 2020. This stronger trading, coupled with cost control and working capital initiatives, has led to substantial cash generation. Lookers has gone from net debt of £40.7m (excl. leases) at the FY20 year end to net cash of £33.0m at 30 June 2021. With legacy issues now behind them, good evidence of trading outperformance and a strong balance
Companies: Lookers plc
Exactly one year ago, the FTSE 100 closed at 5,862, having fallen 100 points on the day, the lowest point since mid-May 2020, due in part, to the strength of sterling vs US$ at $1.34. One year on, the FTSE 100 has risen to 7,119, a rise of 21%, it remains 7% below the peak in January 2020. From an international viewpoint, US and European markets continue to trade at record highs. The US Federal Reserve is close to withdrawing some of its economic support this year as inflation picks up and the e
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Pendragon has announced interim results for the six months to 30 June 2021, which are ahead of guidance and our expectations. The Group has made strong progress in terms of growth, cost efficiencies and strategic implementation to ensure further progress can be made.
Companies: Pendragon PLC
MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST. The company has raised £5m giving a market capitalisation on listing of c. £23m. MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*. MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market. PensionBee has confirmed its intention to float on the High Growth Se
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The AGM update reveals a bounce back to positive YoY growth in the UK, but a slower growth trajectory in Europe, given post-Brexit challenges. These are being addressed and new DCs in Eire/Spain are on track to launch shortly. G4M is on track to meet FY estimates despite well documented supply chain challenges. Momentum is expected to rebuild from Q4 onwards and today’s acquisition in the audio-visual space further bolsters growth prospects beyond FY22.
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Amid a background of uneven and subdued economic growth, persistent low interest rates and choppy financial markets, we posit the idea that “dividend surprise” may be a significant contributor to outperformance in the short to medium term. We have screened for particularly well-supported dividends, which has produced a list of 71 stocks. We then considered the wider fundamentals to arrive at a focus list of 10 companies, where we believe dividend surprise has a good chance of coming into play.
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Strong performance in H1 means full year EBITDA is expected to be no less than £4.0m (£5.7m post-IFRS16), driving an 8% EPS upgrade while still leaving risk to the upside. Gross margin has strengthened further and forecasts assume some reinvestment to drive future growth, including in key operational areas and its EU project, which is said to be progressing well. With room for multiple expansion (vs 0.5x EV/sales) the investment case remains compelling.
Companies: Angling Direct Plc
Restaurant Brands International delivered a strong set of Q2 results driven by several key initiatives of the management. The company saw a significant improvement in system-wide sales growth as well as revenues through digital platforms. The post-Covid recovery has been strong and the company’s revenues grew by 32% year-over-year and over 4% compared to the pre-pandemic levels in 2019. New product launches were another major growth driver and in the recent quarter, the company introduced new li
Companies: Restaurant Brands International Inc
Lookers has announced a very strong set of H1 results for the six months to 30 June 2021. Underlying PBT was a record £50.3m, in line with the H1 trading update statement guidance. The company announced trading in July and August was above expectations, but the voluntary decision to repay H1 furlough support of £4.1m means that full year PBT guidance remains unchanged. We will be tweaking our forecast assumptions post the analyst meeting today. Lookers is now trading at a PER of only 5.5x FY1 an
A highly positive update this morning. Trading in recent weeks has accelerated significantly above pre-pandemic levels as normality begins to return to city centres and the West End of London. The opening programme is also firmly on track. We will closely review our forecasts in late September with the AGM/H1 update, but clearly if the current trading momentum is sustained then we see scope for an upgrade. Our central view remains that we are in the early stage of the earnings cycle, with scope
Companies: Fulham Shore Plc
The company reported an encouraging first half, driven by the strong performance of Protective Films and Healthcare Solutions, though all divisions contributed positively to the group’s profitability in H1. With cash generation from operations having reached €131m over the past 18 months, Chargeurs disposes of a sizeable war chest with its acquisition strategy now back on the offensive. On the organic growth front, strong order books for its core activities stand as encouraging signs of an upbea
Companies: Chargeurs (CRI:EPA)Chargeurs SA (CRI:PAR)
We have performed a second refresh of our consistent growth screen, first established with our research note of 17 December last year. As previously, the screen produces a basket of 25 stocks that exhibit not only good growth in EPS and sales, but also a consistency of growth in both measures each year. This basket, or style, has underperformed the small-cap benchmark by 9.1% since inception last December, and by 4.8% since the last refresh on 13 April. We highlight stocks leaving and joining t
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The final results revealed adjusted PBT up 99% year-on-year, which was 10% better than forecast despite four upgrades during the financial year. This strong performance reflects the financial benefits that have accrued following the shift in the business model to online only, as well as management’s strategic decision to significantly increase marketing spend. A second special dividend for the 2020 financial year has also been announced, reflecting the strong cash flow characteristics of the bus
Companies: Best of the Best plc
Alphawave IP Group is considering an IPO on the standard listing segment of the London Stock Exchange. Alphawave IP is a leading semiconductor IP company focusing on the hardest-to-solve connectivity challenges created by the exponential growth of data. Funds and accounts managed by BlackRock, and Janus Henderson, have each entered into cornerstone agreements with the Company to subscribe for, subject to certain conditions, in aggregate, c. USD 510m of Offer Shares at an offer price representing
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Kingfisher’s Q2 FY21/22 trading update came in ahead of market expectations. Following an impressive c.64% lfl sales growth in Q1, the momentum finally receded with Q2 registering a sales decline of >1% so far, as DIY spend tailwinds unwind. On the back of the better-than-expected performance, management upgraded its sales and profitability outlook for H1 FY21/22. Although we will raise the estimates and target price, ‘Reduce’ recommendation is re-affirmed as DIY spend normalises and the limited
Companies: Kingfisher Plc