Research, Charts & Company Announcements
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Some moves in HAL’s portfolio
08 Aug 16
In addition to the transactions concluded by its holdings and subsidiaries, HAL completed some transactions during 2015 and announced some other ones to be realised in 2016. The great transaction of the 2015 year was the GrandVision’s IPO which was conducted in February. The year before, all the optical retail activities were transferred by HAL to GrandVision, which has become the only optical retail subsidiary of the group. GrandVision NV commenced trading on Euronext Amsterdam as a result of a secondary offering, by HAL, of 21.9% of the outstanding shares of the company. The offer price of €20 per share corresponded to an equity value for GrandVision of €5.1bn and gross proceeds for HAL of €1,112m. At the end of 2014, the book value of HAL’s 98.6% ownership interest in GrandVision was only €799m (but €3.8bn in our NAV). Net cash proceeds amounted to €1,086m and HAL realised a positive result of €900m on this transaction. In accordance with IFRS, this result was not recognised in the income statement but recorded through shareholders’ equity because HAL remains the controlling shareholder of GrandVision. At the end of 2015, the stock market value of HAL’s 76.72% interest in GrandVision was €5,399m. It amounts today to about €4,861m. In H2 15, HAL sold its 25% interests in Navis Capital Partners Ltd (a company focused on private and public equity investments primarily in and around South-East Asia) for a net capital gain of €35m (non-disclosed selling price). But HAL retains an economic interest through preferred shares in Navis and remains an investor in five of the private equity partnerships managed by the company. The first 2016 months recorded a certain number of transactions. Concerning the divestitures: HAL sold its 80.6% interests in InVesting BV (a company active in the purchase of bad debt portfolios for its own account and in credit management) to the British company Arrow Global Group Plc. The transaction resulted in a net capital gain of €38m for HAL (non-disclosed selling price). But InVesting’s interest in Infomedics Groep BV (a provider of business process outsourcing and factoring services for the Dutch health care sector) was not part of the transaction, with HAL retaining an indirect stake of 38% in this company. HAL completed the sale of its 46.7% interests in the specialist provider of surety and trade credit insurance: Nationale Borg-Maatshappij to the American insurance company Am Trust Financial Services Inc. The transaction resulted in a net capital gain of €28m. In May 2016, HAL entered into an agreement to sell the 95% it holds in the hearing and retail subsidiary AudioNova International BV to the Swiss company Sonova Holding AG for €830m. With 1,361 stores in eight European countries, AudioNova reported 2015 revenues of €359m and an operating income of €47m. The sale will result in an expected net capital gain for HAL of about €470m. Concerning the acquisitions: HAL increased its ownership interest from 45% to 70% in Atlas Services Group Holding BV, which is specialised in supplying professional staff to the energy and maritime industries worldwide. HAL is acquiring 20% of Coolblue Beheer BV, one of the leading online retailers in the Benelux. Selling a diversified portfolio of consumer electronics and domestic appliances, the company reported revenues of €555m in 2015. The acquisition price is for the moment not disclosed. HAL is a long-term owner of its holdings. In GrandVision which it has listed, it has had an ownership interest since 1996. Concerning the holdings and subsidiaries it divested, it has had an ownership interest in Navis since 1999, in AudioNova since 2001 and in InVesting since 2006.
Good performance in optical retail continues
28 Dec 15
HAL Trust has continued its strategic approach as confirmed at the beginning of the year (see our Latest dated 04/12/2015). For the first nine months of 2015, the company’s press release reported that revenues had increased to €3.8bn (+13.5%, of which +5.8% at constant currency exchange rates and excluding the acquisitions). But this figure does not apparently include the revenues from the recently fully-consolidated groups, Vopak and Safilo, since, at end-June 2015, consolidated revenues had already reached €3.9bn (of which €1.4bn for Vopak and Safilo). The nine months 2015 figures seem to be pro forma interim consolidated financial statements, excluding the integration of Vopak and Safilo. In this pro forma perimeter, the optical retail’s share remains just slightly more than 63% of revenues, at €2.4bn and after a rise of +13% yoy. Excluding the effect of acquisitions (€130m) and positive currency exchange differences, optical retail’s revenues increased by +6.2% and by +4.8% for “same store sales” (excluding franchise stores). The good growth in operating income led to a margin improvement, but at a rate we find difficult to apply for the whole year. At 30/09/2015, HAL gave no information about Vopak and Safilo. The 2014 dividend (€5.05 per share) was distributed in June 2015, of which €21m in cash and €354m in shares, leading to issuance of 2,258k new shares.
N+1 Singer - Morning Song 30-11-2016
30 Nov 16
Sanderson has delivered full year results in line with expectations and the 19 October trading update after a strong finish to the year compensated for a slower start. A healthy level of pre-contracted recurring revenue (50%), incremental sales to existing customers and new customer wins at higher average order values helped deliver solid revenue growth in both the Digital Retail (+9%) and Enterprise (+12%) divisions. A decent order book and good sales momentum suggest that the company is on track to deliver on unchanged profit expectations for the current year. We continue to view the valuation (FY17 EV/EBITDA 8.6x) as undemanding given an attractive combination of accelerating growth potential, strong cash generation and growing dividends.
VPC Speciality Lending Investments PLC – sticking to your knitting pays dividends
05 Dec 16
A 25% discount on a dividend paying vehicle suggests either (a) lack of belief in the NAV, (b) lack of belief in the dividend, (c) concerns over future delivery, (d) a shareholder’s base not normally exposure to “closed end structures” or (e) some combination of (a) to (d). We had a first meeting with the management team and London representative of VPC Speciality Lending to try to better understand why the share price had fallen quite so much.
N+1 Singer - Grainger - Final results in line, further progress on PRS investment pipeline
01 Dec 16
Grainger has reported FY16 final results this morning with key NNNAV and recurring PBT metrics in line with our forecasts. Sales performance and rental income growth was strong in H2, as previewed in the positive FY trading update driving our 19% PBT upgrade in early October (11/10). The PRS investment pipeline continues to grow now standing at £389m secured and £347m in legals as Grainger pursues an £850m investment target by 2020. A 3.05p final dividend is in line with the revised policy to distribute 50% net rental income. The shares continue to trade on a significant, and unwarranted, 20%+ discount to NNNAV. We reiterate our BUY recommendation.
Panmure Morning Note 30-11-2016
30 Nov 16
Brewin Dolphin’s results for FY16 are a mixed bag, with most numbers beating consensus but the key numbers failing to beat management’s KPIs. So although AUM is up more than 10% and revenue/adjusted PBT/EPS/DPS beat consensus estimates, in our view the continuing struggle to increase revenue and expand margins could weigh on the valuation. Despite this, our investment case is unchanged and we retain our Buy recommendation and price target of 320p.
05 Dec 16
As we mentioned in our 18 November 2016 note, a continuation vote was expected to be announced before the end of 2016. The announcement last Friday included details of the continuation vote, and in particular, a recommendation by the Directors to replace the June 2015 strategy of selling non-core assets and developing the core projects, with a new strategy of an orderly sale of the Company’s assets, with a target of selling all assets by 31 December 2019 and a distribution policy for returning monies to shareholders following disposals. Alongside these recommendations, there are proposed changes to the remuneration for the investment manager.