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Good set of 9m results.
14 Nov 16
Results Total group revenue reached €4,129m, up 3% during the first nine months, supported by a strong performance in Toll roads (+6%) and airports (+12%). Group EBITDA was up 6%, at €2,640m, while net profit grew 8%, at €813m. EBIT was down by 5%, mostly reflecting a €149m charge related to the adjustment to the present value of the provisions following the significant decline in the related interest rates during the period. Operating cash flow totalled €1,836m, up 14% on a reported basis and 6% on a lfl basis. Net attributable profit was up 8%, as 2015 financial expenses included €185m of negative one-offs which eased the comparison. At 30 September, net debt stood at €10,189m (down c.€200m ytd) and cash amounted to €4,927m. Capex reached €998m in the period, in line with last year’s (€999m). Guidance The outlook remains unchanged. The company expects consolidated gross operating profit to register an “overall improvement”. Recent developments The company confirmed the acquisition of the Nice airport system in the South of France, which was already announced on 9 November. The acquisition of the 64% stake has been made through the Azzurra Aeroporti Srl SPV, 65% owned by Atlantia. The consideration amounts to c.€1.3bn and has been financed with a five-year acquisition financing facility of €653m obtained by the SPV.
International acceleration, sale of a 15% stake in ASPI
20 Oct 16
Atlantia’s CEO, Giovanni Castellucci, was in London to give a strategy update and present the new 2020 targets. New structure The CEO presented the group’s new structure which, in 2017, will result in an organisation with four main divisions focusing on the following businesses: Italian motorways, led by Autostrade per l’Italia (ASPI), which will have the role of operating parent and will continue to hold the controlling interests of the group’s other Italian motorway operators. Overseas motorways, which today includes the investments in Grupo Costanera and Los Lagos in Chile, Atlantia Bertin Concessoes in Brazil and Stalexport in Poland, control of which will be transferred from Autostrade per l’Italia to Atlantia. Airports, led by Aeroporti di Roma (ADR) and Aéroports de la Côte d’Azur (ACA), following the French government’s provisional selection of the consortium in which Atlantia has a 75% stake as the operator’s purchaser, following the government’s decision to proceed with its privatisation. Other related businesses, which, in addition to Pavimental and Spea Engineering, will also include Telepass and ETC, control of which will be transferred from Autostrade per l’Italia to Atlantia, with the aim of boosting promotion of the group’s automated payment solutions for transport in international markets. Source: Company’s presentation.
July-August 2016 traffic on Italian networks confirms H1 16 trend
07 Sep 16
July-August 2016 traffic on Italian networks operated by Atlantia was up by 2.9% (km travelled vs July-August 2015) of which LV +2.9% and HV +2.3%. January-August 2016 traffic up is 3.5% vs + 3.0% recorded in the 12 months of 2015.
H1 16 positive traffic trend except in Brazil, Q2 16 traffic slowdown, negative forex effect
05 Aug 16
Atlantia’s Italian motorways network: traffic +3.8% (+3% after stripping out the leap year effect); LV +3.6%; HV +5.1%). Annual toll increase was 1.09% from 01/01/2016. Revenue +1% (+3% lfl) and EBITDA +1% (+3% lfl). The group’s overseas motorways network: traffic +1.9% overall (+1.4% after stripping out the leap year effect) with +5.6% in Chile, +12.1% in Poland and -2.4% in Brazil. Revenue (€255m; -9%) and EBITDA (€188m; -10%; +4% at cc) are down due to the poor performance in Brazil’s EBITDA (€76m; -€32m; -30%; -11% at cc) due to maintenance and resurfacing work, a 2.4% reduction in traffic and the depreciation in the Brazilian real. Chile and Poland’s EBITDA were up by a respective +14% and +25% (at cc +23% and + 13% respectively). Aeroporti di Roma: traffic +2.8% (+2.3% after stripping out the leap year effect). Revenue (€399m) and EBITDA (€230m) were up 8% translating growth in traffic and tariff increases. Consolidated revenue (€2,566m; +€71m) was up +3% despite the negative forex impact of €40m. Consolidated EBITDA (€1,578m; €+60m) was up +4% (+€81m but +5% lfl). H1 16 reported EBIT and net profit are barely comparable to H1 15 due to the provisions for the repair and replacement of motorway infrastructure and the provisions for the refurbishment of airport infrastructure which reflect charges of €112m following an adjustment to the present value of the provisions due to the significant decline in the related interest rates (vs H1 15 income of €67m due to increases in the matching interest rates). D&A and impairments were broadly in line with H1 15. Consolidated EBIT €965m is down by €110m (-10%) after provisions of €159m). Financial expenses are down by €195m to €251m because they don’t reflect the complex non-cash financial expenses and non-recurrent financial expenses in H1 15. Reported net attributable profit (€413m) is up €36m (10%; +5% lfl). Capex was €566m (-14%), of which €311m in Italian motorways (-€134m due to the opening of Variante di Calico). Group net debt at 30/06/2016: €10,191m (+€104m compared with 31/12/2015) Atlantia’s management expects an overall improvement in the consolidated operating result for the current year.
H1 16 traffic release translates slowdown of traffic in Q2 16
06 Jul 16
- H1 16 Atlantia Italian motorways network: traffic +3.7% and c.3.2% lfl after stripping out the leap year effect. Q1 16 traffic was up +7.2% and +4.2% lfl - the group’s overseas motorways traffic numbers not yet released - Aeroporti di Roma: passenger traffic +2.8% (vs 7.2% in H1 15) and c.+2.3% lfl after stripping out the leap year effect. Q1 16 traffic was up +4%
Q1 16 toll road traffic trend higher than expected, slowdown in airport traffic growth
09 May 16
Q1 16 performance is good with a tangible balance between the activities EBITDA €721m (+39m; +5% reported and lfl) EBIT €1,185m (+€64m; + 4%) Reported net profit attributable to parent company €164m, + €132m and + 9% lfl
07 Dec 16
Severfield’s (SFR’s) H117 results were well ahead of the previous year; margin performance and order book development cause us to raise our FY17 profit expectations. This combination has also proved to be a catalyst for share price outperformance following the results. Revenue growth and further margin development towards management’s stated aim of doubling FY16 PBT by 2020 can sustain further progress.
Focused on the long term
08 Dec 16
These are rare events but it is nice to see a management use its public listing advantageously to trade short-term dilution in EPS for the optionality of asymmetric upside in the long term. With over £10m already in the balance sheet, ABD has successfully raised £5.4m gross in a placing and expects to raise another £1m from an offer. We were not surprised to learn that the placing was over 3.5x oversubscribed. How many listed UK companies are positioned to take advantage of the digital revolution in the automotive industry? The additional investment in new people, facilities, products & services should be dilutive to FY2017-18 EPS but this is small price to pay to establish the leading supplier of integrated test, measurement and simulation solutions to the autonomous vehicle industry. Our forecasts assume that growth will accelerate from FY2019. We raise our target price to 575p based on 15x FY2019 EPS, equivalent to Ricardo, the only other UK stock which has embraced the optionalities offered by the technological changes in the automotive industry.
Exceptional trading continues
08 Nov 16
Keywords has announced that the strong trading in localisation and audio services has continued into H216. In particular, the Synthesis business acquired in April continues to benefit from exceptionally strong trading. Full-year results are now expected to be materially ahead of consensus and we upgrade our FY16e EPS by 13%. Erring on the side of caution, we have not changed our FY17 estimates significantly. Nevertheless, we believe the company does have a platform to sustain double-digit earnings growth, and hence medium-/long-term prospects for further share appreciation remain good.
08 Dec 16
Elderstreet stake acquired 02 GENERAL NEWS Globalworth premium In this issue Venture capital firm Draper Esprit has taken a 30.8% stake in venture capital trust manager Elderstreet. Both investment managers focus on the technology sector and they will be able to co-invest. Elderstreet has investments in a number of AIM-quoted companies through its VCTs. The purchase was funded by an issue of Draper Esprit shares worth just over £250,000. Simon Cook, the chief executive of Draper Esprit, is a former partner at Elderstreet so he knows the business and the people who run it, although he did leave more than 14 years ago. Cook has previously acquired portfolios from 3i and Cazenove, two other firms where he has worked. Draper Esprit has an option to acquire the remaining shares in Elderstreet, which has more than £25m under management. Adding Elderstreet to the group enables Draper Esprit to offer investors a range of EIS funds, VCTs and an ISA qualifying listed evergreen patient capital fund. The enlarged group has venture capital assets under management of more than £350m. At the end of September 2016, Draper Esprit had a net asset value of 352p a share, which is similar to the current share price. The June 2016 flotation price was 300p a share. Draper Esprit is quoted on Ireland’s Enterprise Securities Market as well as AIM.
02 Dec 16
On 30 September 2016, when the company announced its full year results, it reported that the UK business had seen a slow start to the year, with particular weakness in repair and renewal spending by the NHS as well as “reticence” in the education sector. However, with the UK only representing about a third of the business, this weakness was expected to be more than offset by the positive effect of a weakened sterling on its overseas business, given the benefits for competitiveness and margins.