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We expect NRC Group to report Q4/20 EBITA of NOK -11m, well below latest Factset consensus of NOK 30m. We have revised down our estimates to reflect the company's latest EBITA guidance for 2020 and 2021 (published today) and expect the rest to follow. Until then, we are below consensus EBITDA by 23% for 2021 and 17% for 2022. We expect the share to trade down from opening tomorrow as the negative press release was published after close.
Companies: NRC Group ASA
Arctic Securities
Following the Q3/20 results we have only made minor changes to our estimates for 2020-2022. After several quarters with FX driven top-line growth, we expect a slowdown in Q4/20 as order backlog coverage for Norway and Sweden is thin. Our positive EPS revisions are explained by reduced goodwill amortisation, hence our adjusted EPS estimates remain unchanged for 2021 and 2022. We reiterate our Buy recommendation with a TP of NOK 40.
Reported EBITA of NOK 88m 13% above Factset consensus of NOK 78m Strong top-line growth of 6% Y/Y driven primarily by NOK weakening Finland reported strong profitability, Norway and Sweden on the soft side Solid unannounced order intake and operating cash flow of NOK 129m
We expect NRC Group to report Q3/20 EBITA of NOK 81m, 5% above latest Factset consensus of NOK 77m. The positive deviation is explained by lower estimated operating expenses, as our Q3/20 sales estimate is 3% below Factset consensus. Our estimates imply Q3/20 EBITA margin of 4.5% vs. consensus 4.2% and Q3/19 actual of 5.7%. As the share price is down 39% over the past 3 months, we argue that market expectations are well below sell-side consensus.
NRC Group reported Q2/20 EBITA of NOK 27m vs. Factset consensus of NOK 43m and Arctic estimate of NOK 41m. While the slowdown in Norway was expected and Sweden showed signs of improvement, operations in Finland showed disappointing performance in the quarter. As a result of lower than expected order intake in H1/20, the company has revised down its EBITA margin target to 1.5-2.0% (2.8%) in 2020 and up towards 4.0% (5.0%) in 2021.
Q2/20 EBITDA of NOK 27m vs. cons. of NOK 43m and Arctic NOK 41m Continued revenue growth in Sweden and Finland Profitability improving in Sweden, while Finland was soft Negative revisions of financial targets following H1/20 results
We expect NRC Group to report Q2/20 EBITDA of NOK 41m, 5% below the latest Factset consensus of NOK 43m. Our soft estimated EBITA margin of 2.8% vs. 3.3% in Q2/19 is explained by continued execution on zero margin contracts in Norway and Sweden. As these contracts are finalised through 2020, we expect efficiency measures to gradually start improving reported profitability. We reiterate our Buy recommendation with a TP of NOK 50.
Following project write-downs of NOK 110m in Q4/19, the company has launched an improvement program to reduce costs and increase profitability. While 2020 results will be negatively impacted by execution of NOK 400m in zero margin projects, we expect to see first signs of cost cutting initiatives in the second half of the year. We expect the share price to benefit from continued growth and improving profitability and reiterate our Buy recommendation.
Reported EBITA of NOK -54m in line with expectations 2020 financial target of 2.8% EBITA margin maintained Cost reductions to improve profitability from H2/20 Robust balance sheet supported by order backlog of NOK 8.0bn
While government Covid-19 measures have resulted in minor challenges related to movement of workers and equipment, the positive outlook for Nordic rail remains unchanged. Driven by downward revisions of expectations for 2020 and 2021, the NRC Group share is down 47% over the past 6 months. As the Nordic governments attempt to support economic activity through investing in infrastructure, we expect NRC Group to regain its positive momentum.
We expect NRC Group to report Q4/19 EBITDA of NOK 123m, 5% below the latest Factset consensus of NOK 117m. Our estimate corresponds to an EBITDA margin of 7.8%, supported by double-digit margins in Norway and Finland. We also expect the company to report a NOK 90m gain related to the sale of VR Design to Sweco in the quarter. Following soft implied Q4/19 guidance in the Q3/19 report, we expect comments about outlook for 2020 to be key.
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: 0DSJ 0QWF 2LJ
Research Tree provides access to ongoing research coverage, media content and regulatory news on NRC Group ASA. We currently have 39 research reports from 2 professional analysts.
Strix has reported FY23 results to 31 December 2023 with adjusted PAT of £20.1m, in line with our updated forecast and company guidance provided in January. Revenue grew 35.2% to £144.6m, benefitting from the full year inclusion of the Billi acquisition, albeit slightly below our forecast of £151.0m. Its core Kettle Controls division also performed robustly, growing 2.7%, ahead of the broader market and indicating market share gain. Recent acquisitions have noticeably improved the Group’s growth
Companies: Strix Group PLC
Zeus Capital
Companies: Yu Group PLC
Liberum
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Cavendish
Cohort announces that its subsidiary SEA (Systems Engineering and Assessment Ltd.) has been awarded a major contract by the UK’s Ministry of Defence to provide Electronic Warfare Counter Measures (Increment 1a) (EWCM 1a) to the Royal Navy with a total value of at least £135m. This includes provision and support of SEA’s Trainable Decoy Launcher System, Ancilia. At the FY 24 interim results Cohort had commented on an overall “increased tempo” of order intake. The Group reported a closing order b
Companies: Cohort plc
Equity Development
The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no
Companies: AEIT ROOF DGI9 INPP GSF SEIT USFP HICL ORIT BSIF TRIG NESF SEQI HEIT GRP GCP FSFL 3IN AERI PINT RNEW BBGI GSEO DORE TENT GRID CORD HGEN AEET
Hardman & Co
Positives emerged, particularly in H2, as the recovery commenced within the kettle controls market. Billi was the architect of the revenue improvement, with LAICA also delivering a double-digit increase in the top line. Margins improved, notwithstanding a change in the mix. Encouragingly, investor concerns on debt were allayed with the careful management of cash, and latterly as bankers raised the net debt/EBITDA covenant to 2.75x. With further emphasis on costs and cash conservation and a lik
Companies: Luceco PLC
Quadrise continues to advance towards commercial revenues for its innovative fuel and biofuel technologies, with each of its projects approaching key milestones in 2024. Preparatory steps for the MSC Shipmanagement (MSC) fuel trials are now complete and fuel supply agreements are nearing finalisation. Quadrise will achieve its first licensing revenues on the successful completion of Valkor’s project financing (timing uncertain). Quadrise also successfully concluded its Morocco trial, paving the
Companies: Quadrise PLC
Edison
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Judges Scientific is a group involved in the buy and build of scientific instrumentation businesses. Testament to the strength of its highly engineered offer and global diversified customer base, total revenue increased an impressive 20.2% to £136.1m (organic +15%), with adj. PBT +7.5% to £31.7m (FY2022: £28.3m), 3.1% ahead of our estimate of £30.5m. Fully diluted (FD) adjusted EPS increased a more muted 2.6% (impacted by anticipated tax headwinds) to 368.5p (basic adj EPS 374.5p), 3.4% ahead of
Companies: Judges Scientific plc
WHIreland
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Canaccord Genuity
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Gelion has reported in line H1 FY24 results that demonstrate continued strong cash management and steady progress in its pursuit of next generation lithium-sulphur battery technologies. Encouraging early test results justify last year’s IP acquisitions and validate Gelion’s Li-S battery technology plan, with additional progress expected to be reported in H2 alongside its pursuit of a strategic partner for its planned Advanced Commercial Prototyping Centre (ACPC) facility in Australia. There is a
Companies: Gelion PLC
Forterra’s FY23 (to 31 December) earnings were slightly higher than guidance, which was raised in January, with resilient pricing partly offsetting a steep fall in demand among its main end users, large housebuilders. Our estimates are broadly unchanged, other than reflecting a more conservative stance on the final dividend. Despite a cautious tone in the outlook statement, we believe the largest housebuilders may now rebound more strongly than smaller peers.
Companies: Forterra Plc
Progressive Equity Research
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