Alfa Laval reported rather solid results given the current situation, with both orders and revenues remaining resilient. Management decided to withdraw the dividend in order to protect cash and it expects demand in the second quarter to be lower than in the first quarter.
Companies: Alfa Laval
Alfa Laval reported a strong set of Q4 results, with both sales and adjusted EBITA beating consensus (6% above for EBITA). The only downside of this release was on orders which slipped 6% organically (c.2% below consensus), mainly due to Marine. All divisions have contributed to growth. The favourable trend in both Food and Energy end-markets still drives the performance, further propped up now by Marine thanks to the IMO regulation.
The return to growth in Marine was much appreciated when the Q3 figures came out. This was, once again, largely driven by the IMO 2020 sulphur regulation. Now, the question is rather to identify where the industry is going and what level of growth in scrubbers is sustainable.
Alfa Laval reported a strong set of Q3 results, with both sales and adjusted EBITA growing in double-digits. Following a weak momentum in Q2, the Marine division was back in positive territory at record levels. This trend should continue to be supported by the IMI 2020 regulation, and management gave a positive outlook for Q4, with demand expected to be somewhat higher compared to this quarter.
Alfa Laval reported a mixed set of results, with declining orders due to both pumping systems and scrubbers, a better than expected development in Energy and Marine, while Food and Water underperformed and affected the whole group’s performance. The Marine division continues to drive growth thanks to good deliveries and execution. Management remains confident and expects demand to be “somewhat higher” in Q3 compared to Q2.
Alfa Laval reported a good set of results, once again driven by the Marine division which continues to benefit from strong orders for scrubbers PureSOx and, as expected, demand for PureBallast (ramp-up). The only dampener from this release is the cautious Q2 outlook given by management, expecting to be “somewhat lower” than the first quarter.
Order intake and earnings were weaker than expected in Q4. The Energy business reported decreasing margins (-130bp), and FX headwinds have not helped despite strong demand for environmental products. Indeed, in the Marine division (growth driver), we continue to see a positive trend but at a slower pace, while the Energy business dragged down the performance due to overcapacity. Has the peak been reached? What is clear is that growth would continue in the coming quarters, but at a slower pace.
Alfa Laval reported strong Q3 results. Orders intake increased by 35% over the quarter and +26% on an organic basis. Net sales increased +24% to SEK10.1bn, while adjusted EBITA was up +33% to SEK1.7bn (including a positive FX impact of SEK50m). The gross margin progressed to 34% (+20bp), while the adjusted EBITA margin progressed from 16% to 17.1%. Free cash flow increased +12.7% to SEK877m.
Revenues were SEK10.1bn and operating income came in at SEK1.4bn, both are beating consensus expectations.
The order intake increased by 12% to SEK9.7bn, mainly driven by the buoyant Marine division and the continuing positive trend in the Food & Water division during the year.
Outlook 2018: management expects the demand in Marine & Energy division to decrease sequentially in Q1. Meanwhile, Food & Water should continue its upward momentum and be somewhat higher than in Q4 17.
The Q3 17 revenue was SEK8.2bn (-5% yoy), and the adjusted EBITA was SEK1.3bn, both below the consensus expectations but in line with our estimates.
The order intake came in at SEK8.4bn (+12% yoy), mainly driven by the good order intake for environmental applications and improved contracting for the ship made in the Marine division.
Free cash flow from operating activities was SEK1.0bn (15% yoy).
Management expects that demand in Q4 should be higher than in Q3.
Q2 17 net sales were SEK8.9bn, above consensus expectations.
The adjusted EBITA was SEK1.41bn (+1.2% vs 2016), beating consensus by 5%. Net income, at SEK479m, has been impacted by currency effects in the revaluation of loans.
Q1 17 net sales were SEK8.1bn (-1% yoy), somewhat above consensus expectations.
The operating income was SEK1,016m (-5% yoy), beating consensus. The net income, at SEK776m (vs. SEK871m in Q1 16), was also a positive surprise.
Outlook for Q2 17: demand in line or somewhat lower than in Q1.
Q4 16 net sales were SEK9.9bn (-8% yoy), above consensus expectations.
The operating income was SEK820m (vs. SEK1,483m in Q4 15), missing consensus. Net income at SEK 616m (vs. SEK935m in Q4 15) was also below expectations.
On the other hand, the order intake, at SEK8.7bn, beat estimates.
Outlook for Q1 17: demand somewhat lower than in Q4.
The company reduced its annual average growth to 5% (from 8%).
Other targets are confirmed:
- capex at or below 2.0% of sales;
- R&D spending at 2.0-2.5% or sales;
- tax rate rate at 28%;
- pay-out ratio at 40-50%.
Q3 results: net sales were SEK8.6bn (-11% yoy), in line with consensus expectations.
The order intake came in at SEK7.5bn (-13% yoy), below estimates.
The adjusted EBITDA, at SEK1,339m (-20% yoy), is also in line.
However, the company reported an operating loss (-SEK33m, vs. a SEK1,402m operating income in Q3 15) due to restructuring costs: SEK1.1bn in Q3, o/w SEK600m of write-offs and SEK500m for redundancies (700 employees, c. 4% of headcount); Alfa Laval expects SEK1.5bn in total.
The company aims at saving SEK300m on sales and administrative costs.
The net loss was at SEK106m (vs. a SEK988m profit in Q3 15).
Outlook for Q4 16: demand in line with or somewhat higher than in Q3.
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A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.
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Successful businesses ‘never let a crisis go to waste’. Indeed since an otherwise strong Q1’20 was interrupted by COVID-19, Mpac has further streamlined operations, accelerated R&D and launched new remote equipment diagnostic/acceptance testing, virtual reality & other ‘Industry 4.0’ services.
RBG Holdings pre-close trading update to June 30th confirms a strong H1 performance for RBL, the Group’s law firm, with revenues up 36% like-for-like to c.£11.4m YoY. Convex, the CF boutique, understandably has faced COVID headwinds, with most of its H1 pipeline deferred indefinitely, whilst Litigation Finance continues to grow its pipeline and financing commitments on a longer term view. Due to continued uncertainty from COVID we withdraw our forecasts this morning, with a view to reinstating once more clarity on H1 outturn and momentum into H2 is available.
Companies: Rosenblatt Group
The year-end trading update was encouraging, with expected results showing good YoY growth, modestly below but close to our earlier expectations. Trading has been resilient, particularly in safety critical areas such as its nuclear exposure, with some weakness being seen in oil & gas, where there is limited exposure. Two new contract wins in the nuclear sector have also been announced today. FY 2021 forecasts remain under review. With strong finances, the company is well positioned to maximise M&A opportunities, through its PIE strategy.
Revenue for FY 2020 is ahead of expectation and we adjust our forecast accordingly. Sales are growing at an impressive rate; >50% pa despite COVID-19 and the virus had no effect on the company’s ability to deliver projects with 23 new customers live in Q4. We note COVID concerns are causing some delay on contract decisions, and sales would have been even stronger but for that. These delays do lead to caution on FY 2021, and we ease back our forecasts on more prudent management guidance. However, with the recent £5m equity placing, PCIP has plenty of cash to continue to invest in rolling out its exciting secure payments proposition. This cloud-based solution can be deployed remotely and assists call centres in moving agents to WFH and still collect payments securely. The outlook remains very bright with continued rapid growth expected.
Companies: PCI Pal
The group has issued a trading update for the year ended 31 May 2020 highlighting an adjusted EBITDA of at least £11.5m which is close to the group’s original expectation, despite widespread disruption to operations in the second half. The statement notes ample liquidity headroom in excess of £10m with net debt (excluding IFRS 16 lease liabilities) reducing in H2 to £7.5m as planned. The Group’s order book and prospect pipeline remains strong overall and the update is accompanied by the announcement of two meaningful contract wins in the nuclear sector. A further significant positive development is the grant of outline planning permission for the conversion of the group’s 7 acre Hayward Tyler site in Luton into residential housing for up to 1000 dwellings. Whilst financial guidance for FY2021E remains withdrawn at this point due to on-going uncertainties around the impact of COVID-19, we see the group continuing to demonstrate good resilience, operating at close to normal levels, supported by exposure to multiple markets and a strong customer base that includes governments and their agents.
Caledonia's Q2 2020 production from its 64% owned Blanket mine in Zimbabwe was 13.5koz gold. This was an increase over the same period last year of 6.2%, leaving Caledonia with a first half production of 27.7koz – well ahead of this time last year (24.7koz) and on track to meet its 2020 full year guidance of 53-56koz (WHI etc. 55.5koz).
Spectra Systems Corporation is a provider of machine-readable high-speed banknote authentication, brand protection technologies and gaming security software. The company has announced that it has executed a new contract with a major world central bank to ‘enhance existing authentication sensors to detect a unique type of counterfeit notes'.
Companies: Spectra Systems Caledonia Mining Corporation Plc Com Shs Npv
Marlowe delivered a strong performance during FY20A, with +7% organic revenue growth, and improved Adj EBITDA margins. Integration of acquisitions is progressing well, and with receipt of c£40m gross proceeds, Marlowe is well placed to accelerate the consolidation of its markets. We leave our forecasts unchanged and reaffirm our Buy rating.
Jubilee today takes us through its H1 2020 numbers, which, importantly, cover the critical COVID-19 initial lockdown period in South Africa. The numbers continue to show growth and progress, with headline H1 2020 operational earnings up 54% to GBP 12.8 million – the sixth consecutive, six-monthly period of double-digit growth. The cash position increased to £10.8m despite settling the final payment of £1.4m for the acquisition of additional PGM and chrome rights as well as settling historical debt of £2.5m, all while commissioning the Zambian Sable Refinery.
Following the appointment two months ago of new CEO Rob Richards, VDTK's newsflow has been encouraging in recent weeks, and we view this morning's announcement as a further affirmation of the company's renewable energy solution. Today's RNS highlighting a contract to supply ultra lightweight, flexible solar panels to Black Tulip Minerals SA, of Peru, is, at over €200,000, the latest in a string of recent positive announcements, while also taking the company into a completely new sector which it had announced as a target area.
Image Scan is a specialist in the field of X-ray imaging for the security and industrial inspection markets. The company has announced, as part of its organic growth strategy, a new partnership agreement with a major security technology company that will lead to the launch of a new range of security X-ray screening systems for the international market. Competitively priced, and leveraging Image Scan's IP and direct and indirect international channel partners, the new system will be a high performance, competitive conveyor X-ray machine, suitable for security checkpoints in government and commercial buildings around the world. Importantly, these systems will also allow the company to increase its recurring service and support revenue.
Companies: IGE JLP VDTK
Scotland’s only quoted housebuilder recorded its highest ever weekly number of reservations following the reopening of its sales offices after the prolonged construction lockdown north of the border. As a result, Q1 2021 sales are expected to be “significantly higher” Y/Y, after the inevitable disruption caused by Covid. In this morning’s FY 2020 trading update, the Group also highlighted the widely reported trend across the housing market to larger homes with gardens, Springfield’s ‘sweet spot’ in our view.
Companies: Springfield Properties
Tipping point: Proven, revenue generating, now scaling
Updating forecasts following 2019 results
Companies: Trackwise Designs
The Norcros operating companies largely performed relatively well in challenging market conditions (in both the UK and South Africa) in FY20 though year end trading was affected by COVID-19 lockdowns, as flagged previously. The group’s financial position appears robust following management actions (including foregoing an FY20 final dividend) and well-placed to both contend with weaker near-term markets and the pursuit of market share gains from a position of relative competitive strength. Our estimates remain suspended at this time.
Strong H1 results, prospects good, investing in the future WEY's H1 results this morning reflect both the positive effect of proactive actions taken by the company last year and strong demand from the market at large. Sales up 43% YoY and PBTA of
£0.3m (2019: £0.1m) reflect increases across both sides of WEY's business and are accompanied by margin uplift (62% gross margin as against 56% last year). The company is a well-established leading supplier of online education, having built a 15-year track record of excellence in its sphere. Covering the half year ending on February 29th, the period of the results precedes the lockdown; however this morning's statement lays out the heightened demand for WEY's product which is an inevitable result of the new focus on remote working and online learning. WEY is plainly extremely well-placed to grow in the current environment, and it has made significant investments in educational quality and in marketing – in both cases including senior and wellrespected hires. The Covid-19 crisis has generated a new appreciation of online education from parents, pupils and educational authorities, who increasingly see this as a real, practical and highly effective substitute for traditional education, adding to the already strong demand across
WEY's brands. Our 30p-plus fair value assessment rests on the inherent opportunities and is also supported by the strong balance sheet (£6.6m of net cash, +£1.6m in the period).
Companies: Wey Education
Much has been written about the effects of the virus on the world and on the stock market. Here is one analyst’s take on some of the likely impacts on the way we should look at companies. This article was originally produced as a blog, “10 Changes Post Virus”, which was published a few weeks ago.
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