Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on CRH. We currently have 14 research reports from 2 professional analysts.
CRH has committed to buy the US cement manufacturer Ash Grove for $3.5bn. Ash Grove has eight cement plants. For the year 2016, the company generated pre-tax income of $215m and gross assets of $2.5bn.
Key information : • Sales up by 2%, lfl sales increased by 1%. • EBITDA up by 5%, lfl EBITDA increased by 2%. • EBITDA margin increased by 20bp to 9.0%. • Operating profit rose by 10%. • EPS increased by 29%. • Interim dividend up by 2%.
Key information: • Revenue grew by 4%, up 3% lfl.
Key information: • Sales of €27.1bn, 15% ahead of 2015; up 4% on a pro-forma basis. • CRH’s sales €0.9bn lower than consensus. • EBITDA up 41% to €3.1bn, ahead of November guidance; pro-forma EBITDA up 10%. • EBITDA margin 11.5%, up from 9.4% in 2015. • EPS of €1.50, 69% higher than in 2015 and in line with consensus. • Cash inflow of €2.3bn from operating activities. • Year-end net debt reduced by €1.3bn to €5.3bn. • Net debt/EBITDA is 1.7x.
Close your eyes and trust the equity markets. Major indices on both sides of the Atlantic achieved new record highs again yesterday. The Dow Jones Industrial Average surged straight through 21,000 for the first time, as investors forgave the President for failing to provide any details of his reform programme, deciding instead to simply believe that he and the Federal Reserve will deliver. Led by financials across the globe, the index was up more than 300 points, with similar percentage gains recorded by the S&P-500 and the NASDAQ following earlier rises in Asia and Europe. Indeed, the Dow has put on its the fastest thousand-point jump in history - it took 24 sessions from the first close above 10,000 for the index to climb to 11,000 in 1999. The wall of cash being liberated as investors continue to ditch US Treasuries, where the two-year yield ended at its highest in 7 years, also found its way into the US Dollar, while Fed-fund futures, which are used by investors to guess coming central bank policy, spiked to a roughly 66% chance of a rate rise in March, up from 35% Tuesday, following hawkish tones from Fed and FOMC members. There are, of course, some sceptics out there, notably ones who consider passage of Trump's programme will stall on its passage through Congress but, right now, their arguments are being lost amid new evidence that economic growth is reviving faster than expected. The Institute for Supply Management, for example, yesterday detailed February US factory sales rising at the fastest rate in three years, while the Beige Book also suggests a tightening labor market. The Eurozone markets also got infected with this euphoria, with the Stoxx Europe 600 moving 1.5% higher as the banking sector added 3%, while the FTSE-100 closing 1.64% higher also powered by construction-related stocks, like CRH (CRH.L), which are seen as likely beneficiaries of Trump's proposed US$1tr spend on rebuilding US infrastructure. This same enthusiasm similarly infected Asian equities this morning, with the ASX leading the way as commodity prices revived following recent weakness and the Nikkei touched its highest since December 2015 on Yen weakness before giving back some of its gains; the two main Chinese indices again went in opposite directions, with the Shanghai Composite in the red as traders contemplated prospective new US trade tariffs once again. London equity markets are, however, likely to open in a rather downbeat mood this morning, having seen Theresa May suffer a Brexit setback as the House of Lords voted to amend legislation to entitle roughly 3m EU citizens presently living in the UK to remain after the UK leaves the Union. Although the PM's plans to commence exit negotiations by the end of March remain on track, the fact that the path there may be somewhat less smooth than hoped means momentum gathered by the FTSE-100 yesterday has now been largely dissipated, leaving it to open around 5 points either side of unchanged in early trade. There is limited UK macro data due for release today, with just PMI Construction figures for February, although the Eurozone will produce a batch of numbers, including Unemployment, CPI and PPI. The US contributes Jobless and its New York ISM index, although the principal anticipation is still likely to be remain on Fed Chair Janet Yellen's speech which is due to take place at 18:00hrs GMT tomorrow. UK Corporates due to release earnings or trading updates include Capita (CPI.L), Cobham (COB.L), Merlin Entertainment (MERL.L), Travis Perkins (TPK.L), Melrose Industries (MRO.L) and Jimmy Choo (CHOO.L). Index holders can also be expected to adjust their portfolios before Rentokil Initial (RTO.L) and the Scottish Mortgage Investment Trust (SMT.L) join the FTSE-100, replacing Capita (CPI.L) and Dixons Carphone (DC..L), upon the close of 17th March.
Companies: Servision CRH
Key information: • 9m16 revenue at €20.4bn, 6% higher than 9m15 on a pro-forma basis. • 9m16 EBITDA at €2.4bn, 14% higher than 9m15 on a pro-forma basis. • 9m16 EBITDA margin up by 90bp to 11.7%.
"Fed Chair Janet Yellen yesterday gave her strongest comments to date in favour for a policy tightening in December, telling Congress an increase could be "appropriate relatively soon." She also warned that there would be an eventual price to pay for Donald Trump's 'big government spending', in the form of inflation and a spiralling national debt. The immediate result, however, was for the Dollar to extend its rally during the Asian session, pushing it beyond the Y110 mark for the first time in five months, as yesterday's housing, jobless and inflation data also demonstrated the US to be in its best health for a decade. Another result of this was for the gap between US and German government-bond yields to widen to a 27-year high, as investors placed their bets on Trump's administration sparking an extended phase of expansion, against Europe's political risks, highlighted by Italy's forthcoming Referendum and next years' elections in Germany and France which, some believe, could potentially foster sufficient national tensions to threaten the very existence of the EU. This all blew warm winds over the US equities, with all three principal indices rising once again, as financials and technology stocks celebrated the overnight news. Asia was less convinced, with only Japan putting in a strong performance, sending the Nikkei to a 10-month high in early morning trade as the export-led territory welcomed the weakening Yen. By comparison, the Shanghai Composite closed weaker and other local markets made just fractional movements, as traders considered tomorrow's start of the APEC economic leaders conference in Peru which will discuss cooperation programmes in the Asia Pacific, Trump's proposals for protectionist tariffs and Xi Jinping's vision of the FTAAP following the anticipated collapse of TTIP. Providing no strong direction for London's opening, the FTSE-100 is seen gaining 10 or so points in early trade. There are no significant UK data releases scheduled for today, although a speech by the Bank of England's Ben Broadbent will be studied for any hints regarding of Phillip Hammond's forthcoming Autumn Statement while, later this afternoon the Fed's John Williams may reflect on Janet Yellen's Testimony. UK corporates due to report earnings or trading updates include Electrocomponents (ECM.L), Fuller, Smith & Turner (FSTA.L) and Jimmy Choo (CHOO.L)." - Barry Gibb, Research Analyst
Companies: CRH KIE RMG WJG
Key information: • Pro forma sales up by 8%, up 13% in the Americas, 3% in Europe and 4% in Asia. • Pro forma EBITDA increased by 20% thanks to a 39% increase in the Americas. • EBITDA expected above €3bn for FY2016. • Pro forma EBITDA margin up by 90bp to 9.0%. • Reported EBIT up from €189m to €588m. • Reported PBT up from €63m to €407m. • Operating cash outflow of €0.3bn, better than the normal seasonal pattern. • Net debt at €7.1bn expected to be at €6bn or below by the end of the year.
The wait is almost over. Fed Chair, Janet Yellen, is due to speak at 15:00BST today at the annual Jackson Hole Symposium in Wyoming. Titled ‘The Federal Reserve’s Monetary Policy Toolkit’, every comma, intimation or exclamation within her speech will undoubtedly be scrutinised and giant funds potentially quickly re-directed on any conclusions drawn. Ahead of this Kansas City Fed President, Ester George, a noted sceptic of the central bank’s easy money policy, detailed her own proposal in yesterday’s Wall Street Journal, calling for short-term rates to rise to around 3% over the next couple of years for fear of otherwise creating significant imbalances in the financial system. Yellen, of course, has heard all the arguments before and balancing risks/rewards is likely to end up taking a narrow line between her many advisors, by suggesting the US remains well positioned for continued gradual recovery, employment trends remain good and inflation should slowly pick up; all this would keep the door ajar for at least one rate rise before year end but in investor’s eye not be enough to label the whole event anything but an anti-climax. US markets, perhaps anticipating this and in the absence of significant other macro or corporate news, yesterday had the third-lightest trading session so far this year with all principal equity indices closing fractionally down. Some large long-US$ positions built up since the Fed’s Stanley Fischer hawkish statements of a week or so ago were marginally wound down, leaving the currency slightly weaker, most particularly versus the Yen, during Asian trading. The Nikkei accordingly became the region’s largest casualty in an otherwise modestly mixed session, with the Chinese equity markets gaining while the commodity-heavy ASX gave back some of the previous day’s gains. Against this background, traders should be prepared for the London session to open very quietly this morning, with the FTSE-100 seen drifting less than 5 points either side of unchanged in early trading. Revised Q2’16 UK GDP data is due for release this morning, but unlikely to set off any fireworks. The corporate calendar is also quiet, with just a few earnings numbers anticipated from the likes of Antrim Energy (AEY.L), Avocet Mining (AVM.L), Computacentre (CCC.L), Lavendon Group (LVD.L), Marshalls (MSLH.L) and Restaurant Group (RTN.L)."
Companies: CRH John Laing Group
"With limited news to grab the attention of London traders first thing this morning, equities are expected to rely primarily on the overnight markets to set the opening trend. As a result, the FTSE-100 is seen opening modestly either side of unchanged. Despite the Dow Jones and S&P 500 achieving new record closing highs last week, with reported earnings continuing to slightly surpass consensus expectations, trading volumes remained surprisingly quiet with activity levels down almost one-third from the year-to-date average, marking the US's quietest week since December last year. Asian markets were mostly up despite overall softness in commodity-related issues, with only the Hang Seng and South Korean Kospi indexes succumbing to profit taking. This week will be heavy with central bank statements, including one from the Fed, and global macro-economic data, while Theresa May continues her charm offensive around the UK today visiting Belfast, with a view to calming Northern Irish nerves regarding Brexit and prospective changes to border controls with the South. Of UK corporates, this morning Hammerson (HMSO) is due to releases interims and Ryanair (RYA) to report 1Q progress, although data watchers should also keep an eye out for the Bank of England's quarterly Asset Purchase Facility report." - Barry Gibb, Research Analyst
Companies: BYG CRH VOD
Key information: • 1Q sales rose by 9% y/y with the Americas up 22%, Europe in line, Asia 12% ahead • H1 16 EBITDA Guidance of €1bn supports the FY consensus of c.€3.1bn • Company expects to make progress in H2 16 on a group EBITDA basis.
Key information : • Sales up by 25% and by 17% excluding scope effect. • EBITDA up by 35% thanks to the strong contribution of the Americas and LH assets. • EBITDA margin up 70bp to 9.4%. • EPS at €0.887 vs consensus of €0.969 and €0.789 in 2014. • EPS excluding transaction/one-off costs related to the acquisition of LH assets at €1.118. • Dividend unchanged at €0.625. • Net debt at €6.6bn, better than expected thanks to strong cash generation. • Restarting of the M&A machine: acquisition expenses €8bn, divestment proceeds €1bn. • Net debt/EBITDA at 3.0x, better than expected by management. • LH assets’ synergy target increased from €90m to €120m.
Key information: • Sales from continuing operations (excluding the impact of divested entities and the contribution of LafargeHolcim's assets) were up by 16% on a reported basis to €15.5bn over the 9m15, up 4% excluding currency effects. • EBITDA from continuing operations (excluding the impact of divested entities, the contribution of LafargeHolcim's assets and one-off items) was up 34% on a reported basis to €1.5bn over the 9m15, up 19% excluding currency effects. • Sales from the Americas up 28%. • EBITDA from the Americas up 55%. • Net debt up to €8bn compared to €2.5bn at year-end 2014 reflecting the acquisition spend.
Key information : • Sales increased by 13%. Down 1% in Europe and up 26% in the Americas. • EBITDA from continuing operations up 29%. Up 4% in Europe and up 57% in the Americas. • Margins up in all six operating divisions. • Integration of LafargeHolcim assets. • Acquisition of CR Laurence.
Research Tree provides access to ongoing research coverage, media content and regulatory news on CRH. We currently have 14 research reports from 2 professional analysts.
We are upgrading our forecasts, target price and recommendation on AB Dynamics. Thanks to a growing portfolio of unique testing products that are critical to developing and launching increasingly sophisticated autonomous driving in shortest possible time, we now believe that AB Dynamics can grow at 28% per annum over the next three years. This is much superior growth to Renishaw, the top rated UK robotics/automation stock, which has a consensus forecast CAGR of 8% over the next three years. Applying Renishaw’s 2018 EBITDA multiple of 23x to AB Dynamics generates a minimum valuation of 1,030p per share. We therefore raise our target price to 1,030p and recommendation to BUY. Frankly speaking, for UK investors starved of mainstream self-driving/electric car plays there are very few alternatives.
Companies: AB Dynamics
This quarter we use finnCap’s Slide Rule to provide both top-down and bottom-up analysis of the UK’s Technology and Telecoms sectors. Our findings are very reassuring: the Tech sector scores the best (across all sectors) when considering Growth and Quality – Taptica*, Frontier Developments* and dotDigital* in particular stand out on these metrics. Given these attractive characteristics and growth prospects, the Tech sector is unsurprisingly one of the most expensive – currently trading at 17.2x FY1 EV/EBIT and 23.8x FY1 P/E, versus 15.0x and 18.5x respectively for the wider market. Despite valuations appearing high, we believe there are value opportunities. For example, Proactis* features in finnCap’s QVGM+ portfolio (ranked 17/462) – the company offers attractive organic and inorganic growth, with earnings forecast to grow by 26% CAGR over the next two years, but despite this, only trades on 15x FY1 earnings and offers 8% FCF yield in FY2.
Companies: 7DIG ALT AMO ARTA BOTB BLTG CTP CFHL CYAN ISL DTC DOTD ELCO ESV FDEV GBG IDEA IDOX IMTK IGP IOM KBT KCOM KWS LRM MAI MMX NASA NET ONEV PHD QTX QXT RCN 932 SSY SEE SIM SPE SRT STR TAP TAX TEP TPOP TRAK UNG VIP ZOO
Avon Rubber has delivered a confident FY17 performance and has set out a clear threefold strategy to drive medium-term growth. The core business is buoyed by strong order activity in Protection while dairy market trends look set to stay positive into 2018. Cash performance has also been solid, which underpins selective future acquisitions.
Companies: Avon Rubber
In the November edition of the Hardman Monthly Newsletter, Nigel Hawkins assesses the achievements of AIM – and how it has thrived, despite a challenging financial environment, in recent years.
Companies: SPH AVO SCLP VAL AGY CLIG TRX AVCT APH CMH MCL MUR
T Clarke’s trading update strikes a confident tone and reiterates full year expectations. After a period of share price weakness, we expect this to be well received, with the order book for outer years also being replenished. The Group is on track to deliver PBT of £6.5m and revenue in excess of £300m, which would represent another year of good progress after the significant profit growth of the past two years. It has been a busy period for the Group, which has seen the handover of two significant schemes, Bloomberg HQ and Facebook’s new London HQ at Rathbone Square. The integration of ETON Associates (acquired in August) is progressing well and the reception from the market place has been positive. The order book stands at £380m (£320m at this stage last year) and importantly £190m of planned revenue for FY18 (c.60% of our forecast) has already been secured.
Keystone Law Group— full service law firm with over 250 self-employed lawyers . Due late Nov. Offer TBA | Beeks Financial Cloud -niche cloud computing and connectivity provider for automated (algorithmic) trading in Forex and Futures financial products . Raising £7m. Mkt Cap c.£24.5m. Due 27 Nov. FYJun17 rev £4m. Profitable at operating level | City Pub Group - owner and operator of an estate of 34 premium pubs across Southern England. £30m raise. Consistent track record of strong revenue and EBITDA growth, with a three year CAGR from FY14 to FY16 of 34.9% and 44.8% respectively, and an EBITDA margin of 14.7% in FY16. Due late Nov. Offer TBA | Boku - Independent direct carrier billing company. Revenues were up 21% to US$10.2 in HYJun17. Q32017, revenues grew to $6.5m, up by 44%. The Company also saw continued growth across all of its key metrics: user numbers, total payment and a positive adjusted EBITDA for the month of September 2017. Due 20 Nov. Offer raising £45m at 59p with mkt cap of £125.9m | Ten Lifestyle Hldgs. Technology-enabled lifestyle and travel platform providing trusted concierge services to the world's wealthy. Net revenue increased from £20m in the year ended 31 August 2015 to £33m in the year ended 31 August 2017, a compound annual growth rate of 29%. Offer TBA, expected 27 Nov 2017 | OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m | OG Graphite, brownfield development-stage graphite company focused on the reactivation of its wholly-owned Kearney natural flake graphite mine and mill located 280 km north of Toronto, Canada. Offer TBA, expected mid November |
Companies: FRR AST ABDP BZT AVCT MTFB WEY FFI SAV
Elementis (ELM LN) Share price drift presents buying opportunity | Springfield Properties (SPR LN) Springboard to sustainable long term growth | T. Clarke (CTO LN) Positive update, order book building for FY18/19
Companies: TClarke Elementis
Xaar has issued a trading update downgrading expectations for 2017. This has been driven by lower sales of the 2001 printhead in the competitive Ceramics market, as well as a slower ramp-up of the new 1201 printhead for Graphic Arts due to supply constraints. Management is guiding to H2 17 sales broadly in line with H1, which we have reflected in our estimates, along with reductions for the following years. This has driven cuts in our adjusted PBT forecasts of 31% for 2017, 15% for 2018 and 5% for 2019. These downgrades are disappointing. However it is notable that the issues relate to the decline of Xaar’s legacy Ceramics business, along with short-term issues in meeting demand for the new Graphics product. Demand continues to grow for the portfolio of new products introduced in the last two years, as previously reported. The group’s transition continues towards more diversified and resilient revenue streams, and more effective leverage of its IP, albeit with more volatility than had been hoped. The group’s new and broader product portfolio offers exciting growth prospects, with management’s vision unchanged of £220m sales by 2020.
The company has today warned that revenue in the second half of the year will be broadly in line with the first half. The shortfall against previous expectations of growth results largely from fewer than planned new printer installs of Xaar's 2001 Printhead, and slower than anticipated ramp up of the Xaar 1201 Printhead due to supply constraints. We are placing the stock under review as we assess our forecasts and recommendation.
Xaar has announced two operational developments which strengthen its capabilities and demonstrate its continued momentum. The first is the signing of a European distributor, COMEC Italia, for the digital products of its US Engineered Printing Solutions business. The second is a collaboration with BASF to improve the Photopolymer Jetting process for 3D printing, to produce parts with better properties at lower costs. While these announcements have no near term impact on our forecasts, they represent further steps in Xaar’s transition towards more diversified and resilient revenue streams, more effective leverage of its IP, and progress towards its 2020 vision.
The 2017 fiscal results and the outlook reported last week were broadly in line with our top of the range forecasts for FY17 and beyond. Therefore, fundamentally, there is no change to our forecasts for FY18 and FY19. The company has successfully allayed investor concerns over the expected fall in M50 sales with significant gains in other masks/respirators with the DoD and the MoD, and without requiring the help of acquisitions. However, we have adjusted our numbers marginally to account for the negative impact from strength of the sterling against the US dollar. We believe, ultimately, that current forecasts are academic in that we expect the management to deploy the strong balance sheet on acquisitions. With £25m of net cash at end-October 2017, it has the capacity to spend around £90m and still keep net debt to EBITDA around 1.5x.
Companies: Avon Rubber
Avon has reported FY17 results which are c.4% ahead of our forecasts and c.5% ahead of consensus, with adjusted PBT up 24%. Both businesses delivered good growth in the year, and management is confident of delivering further progress in FY18. This is underpinned by growth in the closing order book and further orders received post the year end, as well as a positive market backdrop. We expect to increase our forecasts modestly post these results, and remain positive on prospects for the group.
Companies: Avon Rubber
Clipper Logistics (CLG LN) In line H1 update; Introducing FY’20 forecasts | Fenner (FENR LN) Upgrades, with more to come | Genus (GNS LN) Trading in line with expectations | Harwood Wealth (HW LN) Ahead of expectations, upgrading forecasts | Xaar (XAR LN) Further operational developments
Companies: FENR GNS XAR CLG HW/
RPC, the international plastics products design and engineering group, held a well-attended Capital Markets Day in London that highlighted how innovation and capex was driving organic growth. Management also discussed how further M&A opportunities existed, both within Europe and outside, though they emphasised the need to remain disciplined. Our conclusion from the event: this is a business that is getting stronger as it grows, benefiting from greater collaboration and scale.
Companies: RPC Group
After a robust overall trading update, we have modestly rebalanced our revenue and EBIT estimates in favour of Industrials, Apparel & Footwear with group profit projections unchanged overall. We believe that management is preparing to set out the group’s growth credentials and this may provide further support for a share price that has travelled well since the beginning of the year.
Companies: Coats Group