SAP CEO talked about the weak guidance in a Bloomberg interview
…says it is evidence of cloud transition
Covid-19 is speeding shift from on-prem to cloud software
Could be viewed as more “company specific” than broad sector specific
Companies: Zalaris ASA
Despite Covid-19 halting growth and scale for Zalaris, the company is delivering on its cost cutting with another solid quarter, showcased by an underlying EBIT margin of 8% and 6.1% FCF yield (incl. leases) YTD. Management also seemed confident of further margin improvement and growth in 2021, with the latter being key for achieving more scale as the fixed cost base is still high. We reiterate our BUY recommendation and lift our target to NOK 63/sh.
Revenues of NOK 189.7m, 7% and 4% below ARCe and Consensus
Underlying cash-EBIT margin of 8.2%, in line with ARCe
Still slight revenue impact by Covid-19, but better outlook
Figures slightly below expectations, but still supportive
SAP cut both its 2020 and mid-term targets yesterday
…citing more muted demand, following re-introduced lockdowns
ZAP expects this to last to at least 1H 2021
Outlook risk on Zalaris, but margin improvement our main focus in Q3
Zalaris will report Q3 figures 27 October and we expect another solid quarter with further margin improvement. We have lifted our Q3 estimates on lower cost assumptions and slightly upped growth for Q4/20 and Q1/21 following continued easing of Covid-19 restrictions. If Zalaris delivers on our Q3 EBIT margin, we argue it should lead to a repricing as it adds further support to the margin recovery with the third consecutive quarter of margin improvement.
Zalaris reported strong Q2 figures, which added confidence to our margin expansion view. Management also gave a positive outlook statement and Zalaris is on track to deliver on its 10% adj. EBIT margin target, already achieving a 5% FCF yield (incl. leases) in 2020 despite modelling negative FCF in H2 due to WC. We lift our target price to NOK 61 based on revised estimates and lower NIBD, but emphasize further upside as we currently model 8% FCF yield in 2022.
Strong Q2 figures and underlying margins
DPS of NOK 0.5 per share has a strong signalling effect
Zalaris highlights strong pipeline and positive effects post COVID-19
We expect positive estimate revisions and spread tightening
Strong figures and underlying margin
Dividend of minimum NOK 0.5 per share announced
Zalaris expects positive effects post COVID-19
We expect positive estimate revisions and share to trade up
NPL companies: Proposal for changes to debt collection law in Norway
Axactor: Renews and expands forward flow agreement in Norway
NRC group : SEK 149m contract in Sweden
Zalaris: Renews payroll and HR services for leading fertilizer company
Companies: ACR NRC ZAL
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Friday's market sell off saw some violent downward moves in many stocks with little initial differentiation between sectors or the key drivers of businesses, creating significant share price drops in a number of higher quality or uncorrelated names. We take a look at some stocks we believe have either seen an unwarranted sell-off, have seen weakness go under the radar or where there is now a more attractive opportunity.
Companies: ANX IBPO CYAN SOM EQT AFM
Companies: Appreciate Group plc
ValiRx is a life sciences company which accelerates the development of treatments in oncology and women's health. The company is reaching a significant strategy inflection point as it continues implementation of its “connected innovation” strategy. It has signed a letter of intent to out-license VAL201, demonstrating good progress has been made to generate value from its legacy assets and move towards consolidating ValiRx' position as a key player in oncology and women's health. We initiate with
Companies: ValiRx PLC
Anexo has announced that it has signed a major new claims agreement with MCE Insurance to provide claims services to non-fault motorcycle insurance customers. This looks like an excellent deal for the Group in our view and underlines the opportunity available to grow credit hire cases, supported by the well invested legal services business. Significant upside to come in our view. Buy
Companies: Anexo Group Plc
Companies: PayPoint plc
Franchise Brands has announced the earnings accretive acquisition of Azura Group, a leading franchise management software system developer for net consideration of £825k. Franchise Brands has partnered with Azura since 2018 to develop its Vision works management system. The acquisition consolidates Franchise Brands' technology investment and IP to date as the group develops a common technology platform across all its businesses. In addition, Franchise Brands sees considerable scope to develop Az
Companies: Franchise Brands plc
Companies: Alpha Financial Markets Consulting PLC
Arrow Exploration Corp. (AIM:AXL; TSXV:AXL), the high-growth operator with a portfolio of assets across key Colombian hydrocarbon basins, has joined AIM, alongside a fundraise of approximately £8.8m.
No Leavers Today
What’s cooking in the IPO kitchen?
ATOM headquartered in Leeds, focussed on the large-scale production of green hydrogen and ammonia intends to join AIM towards the end of the year. ATOME intends to be spun-out from AIM-listed President Energy Plc, an oil and gas com
Companies: SPA ECR KP2 SAR SYM
Companies: Hill & Smith Holdings PLC
RBG’s interims offer no surprises, with performance strong across all divisions and progress on track against our FY21e forecasts (Revs: £45.5m, Adj. EBITDA: £11.8m). The Group’s diversified revenue model has proved resilient against a continued backdrop of uncertainty – driving revenues +53% YoY against a somewhat weak comparative, split +35% organic, +18% from Memery Crystal (despite only one month of contribution). Demand for services across all three businesses remains strong, and management
Companies: RBG Holdings Plc
ADM Energy* 1.7p £2.7m (ADME.L)
Fundraise and Issue of Equity to Raise £475,000 at 1.5p and Business Update by the natural resources investing company. Conditional Issue of 6,666,667 warrants with an exercise price of 3p each for a period of two years from Admission. Subscriptions by five Directors amounting to £175,000 at the placing price. Additional conversion by debt holders, consultants and service providers equating to £228,500 at the placing price. The funds will be used
Companies: SHED AGL ADME AAU KIBO MKA ORPH SEE SGI
Against the backdrop of the 26th UN Climate Change Conference of the Parties (COP26) we take a closer look at the rapidly developing technology and industries surrounding the evolution of the so-called hydrogen economy. Hydrogen is an energy vector or fuel that is capable of storing, transforming and transporting energy with zero emissions at the point of use. It can also be made by renewable energy sources. It is also the most abundant element in the universe accounting for some 75% of all matt
Companies: STA CZA 1PG AFC CWR CHAR EQT GTC HAYD IGAS ITM ORCP PPC RCDO RIO SNT TOU UKOG WG/
Westminster Group has released a trading update highlighting positive news on potential new business, offset by timing related challenges regarding implementation of current projects. While the reduction in expectations for the current year is frustrating, we believe the shares had started to price in some delays and right shifting of projects. With these issues largely timing related around year end, we continue to see 2022 as an important year for earnings and substantial upside for the shares
Companies: Westminster Group plc
CRU has announced the sale of its Haydock property which it had retained following the sale of Coral Mouldings. It needs to spend £650k replacing the roof and the property will then be sold for £3.5m which should generate a book profit of £350k. The proceeds should be received by the end of 3Q 2021. We forecast cash balances as at April 2022 will be c.£12m, or £8m net of lease liabilities and other borrowings. NAV should be c.17.5p.
Companies: Coral Products plc