A path fraught with challenges for HelloFresh

In the short-term, the ramp up phase of Factor may be a lighthouse in the storm. However, the limited growth potential within a highly-competitive industry, a mixed retention rate for a leader such as HelloFresh and the expected increased use of online grocery shopping all pose additional downside risks.

First take: FY 2023 outlook maintained, but caution on active customers

Long story short, HelloFresh maintained its FY 2023 guidance, with the results roughly in line with expectations, EXCEPT for active customers, which remained a bit of a grey area.

Slowdown under the spotlight

Despite achieving the highest ever quarterly level of Adj. EBITDA, this was not enough to offset the decrease in the number of Active Customers and the overall slowdown in consumption (the stock price is down by c.10% at mid-day). Lower marketing expenses and improved pricing power helped protect profitability. Finally, the company has revised its FY23 guidance.

RTE as an engine and EBITDA as a parachute

Facing a high comps period, the adjusted EBITDA and FY-23 outlook have reassured the market. RTE is still in a ramp-up phase and could become the new success story of HelloFresh.

Not the most prosperous period

A mixed bag of FY22 figures and disappointing guidance for FY23. All hopes are now pinned on the CMD (23 March) which could potentially reassure on the mid-term.

Active customer mission successful

The group performed worse than expected on its bottom-line but the market should be reassured by the number of active customers that was ultimately better than expected.

Q1 and reiterated FY21 guidance reassure

All the figures and metrics beat expectations, without which the group would probably not have reiterated its FY22 guidance. Good job.

Doubts about a return to normal life

Unsurprising annual results, but indicators for Q4 suggest that there is (still) no let-up. Reassuring for the new year with signs of a return to normal (COVID-19) and inflation. There are obvious questions about the sustainability of the post-pandemic model, but we continue to see, at least, significant short/mid-term growth drivers.

Please don't be dramatic

Hellofresh first disappointed with its 2022 guidance well below expectations, then, during the CMD, with the announcement of a doubling of its investment next year without improving the revenue target expected in the mid-term. A lack of coherence at first sight, but also targets that were previously unachievable without these investments, which we believe are indeed necessary. Perhaps it is even time to get in. There was a similar reaction from investors in August after a disappointment, but fol

Third sales guidance upgrade

The market liked for the Q3 sales beat and the upward revision of revenue guidance for the year. At the current 2.1x FY21 EV/sales vs. peers at 3.8x, we believe the valuation is still attractive at this time.

Medium-term ambitions counterbalance post-COVID-19 concerns

We initiate coverage of Hellofresh, the global leader in the growing meal-kit market, with a Buy recommendation and 24% upside.

Alphawave Semi: FY23 trading update, amended forward guidance

Alphawave Semi has reduced guidance for FY23 and prospectively citing lower revenues from China, changes in expected revenue recognition from long-term contracts, and continuing investment in R&D. The share price has reacted negatively, giving up most of the gains since the trading statement at the end of January. Current consensus, which is a good match for pre-existing guidance, should be reduced, most likely following release of the FY23 results and full 1Q24 trading update due on 23 April. H

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

It’s not what you sell, it’s the way that you sell it

This report is intended to help UK small- and mid-cap investors gain a better understanding of software companies’ routes to market, and to highlight how one of the most important facets of the way in which they grow and deliver value is routinely ignored.  We examine sales processes for six UK-listed companies and one that has recently been taken over, and consider why they have followed their respective paths.

Synectics + (SNX, House Stock at 185p) - Strong FY23A profit growth to continue

Maintel - Strong FY23 year-end TU continues trend of over-delivery

Maintel has reported a trading update for the year ending December 2023, indicating revenue in of at least £101m and adj EBITDA of “in excess of £9m”, compared with respective forecasts of £98m and £8.6m. Net debt of £18.1m also outperforms our expected year-end net debt of £18.6m. The group is continuing the trend established with the reintroduction of forecasts in April 2023, where growing confidence in delivery led to upgraded forecasts in both August and September, and still achieving outper

Eleco - FY23E EBITDA +3% ahead, FY24-26E EBITDA & EFCF reiterated

Eleco’s FY23 trading update highlights record recurring revenue growth of +22% to £20.7m, strong profitability that leads us to expect FY23E adjusted EBITDA +3% ahead of our previous forecast, and a confident outlook that leads us to reiterate our FY24-26E EBITDA and EFCF. Across the group, excellent execution of the SaaS transition has driven recurring revenue to 74% of group revenue from 64% in FY22, and ARR is +24% yoy to £22.6m (£19.7m at H1), including c£2m of ARR from the successful acquis

Morning Note – 4 April 2024

Auction Technology Group - H1/24 Trading update

ATG’s H1/24 trading statement indicates revenue for the six-month period to 31 March 2024 was $86m, a 6% increase on H1/23 (1% organic growth), helped by the addition of the EstateSales.Net (ESN) marketplace last year, which performed well in the period. Total marketplace revenue increased 2% (organic), driven by growth in value-added services (VAS) and event fees, offsetting a decline in commission revenue (mainly through lower asset prices).

Intelligent Ultrasound Group - GE Healthcare launches new Voluson Signature with

GE Healthcare has announced the launch of the Voluson Signature 20 and 18 ultrasound systems, with the related press release noting these systems ‘comprehensively integrate artificial intelligence’ to improve the ultrasound procedure for clinicians and the women being scanned. These ultrasound systems include SonoLyst, the AI which incorporates Intelligent Ultrasound’s ScanNav Assist and ScanNav AutoCapture AI software. The launch of additional Voluson systems including the SonoLyst suite of AI