publity - Termination of coverage

Edison Investment Research is terminating coverage on: • 2G Energy (2GB) • Apontis Pharma (APPH) • Artec technologies (A6T) • Beta Systems (BSSA) • Blue Cap (B7E) • Cyan (CYR) • Consus Real Estate (CC1) • Daldrup & Soehne (4DS) • DATAGROUP (D6H) • Datron (DAR) • Delignit (DLX) • Deutsche Börse (DB1) • Deutsche Grundstücksauktionen (DGR) • Deutsche Rohstoff (DR0) • DVS Technology (DIS) • Edel (EDL) • Ernst Russ (HXCK) • Exasol (EXL) • expert.ai (EXAI/EXSY) • Fashionette (FSNT) • Formycon (FYB)

publity - Changes to group structure on the horizon

On 19 October 2021, publity announced a European consortium led by a Luxemburg investment company has signed a Letter of Intent to become the new majority shareholder of PREOS (publity’s property investment subsidiary) in exchange for contributing a Luxemburg property portfolio to GORE (PREOS’s subsidiary) and measures to finance PREOS’s portfolio expansion. publity will continue to serve as an asset manager for PREOS, with management targeting PREOS portfolio growing by at least €3bn by 2023 (c

publity - Lower transaction activity in FY20

While publity continues to pursue its two-pillar strategy based on real estate asset management and own investments, it is in discussions with a large Asian conglomerate to sell a majority stake in PREOS, which (through publity Investor and GORE German Office Real Estate) holds the group’s investment properties. The parties are also negotiating the provision of an additional three-digit million euro in funding to PREOS (on the successful closure of the deal) to fuel its international portfolio e

publity - Strengthening the second business pillar

As publity shifts towards a two-pillar business model, focused on real estate asset management and investment, its portfolio of fully owned properties (held by PREOS) expanded to €1.5bn, with €8.0bn targeted by 2024. The company aims for both domestic and international expansion, focused on large metropolitan areas in Europe. Prospective growth is planned to be fuelled by a €400m bond issue already announced by PREOS to replace its 2019/2024 convertible, which will be followed by issuing new cap

publity - Focusing on its portfolio

In FY19, publity focused on expanding beyond its pure-play asset management profile through direct office real estate investment activities. This was driven by property acquisitions executed by publity investor, as well as obtaining a controlling stake in PREOS. As a result, the company moved to a more asset-heavy business model fuelled by debt financing. The company expects to continue the expansion, and considers the economic slowdown related to the coronavirus outbreak as an opportunity for a

publity - Developing both as asset manager and owner

publity is evolving from a pure asset manager and is building its own portfolio of German office properties (valued at €243.3m at end-June 2019) through its subsidiary, publity Investor (Investor). The next strategic step is combining Investor with PREOS Real Estate (an asset owner also controlled by publity’s main shareholder, Thomas Olek). We believe that the parent company will now devote part of its capacity to managing its subsidiary’s portfolio (apart from third-party assets). However, thi

publity - Creating a new real estate investment group

publity plans to transfer up to 94.9% of its stake in subsidiary publity Investor (Investor) to PREOS Real Estate (PREOS), a listed real estate investor controlled by publity’s main shareholder. The transaction is structured as a capital increase for PREOS in exchange for a contribution in kind, implying a valuation for Investor of €400m. The deal will create a real estate investment group led by publity and valued at c €574m, according to company own estimates. We believe this will also solve a

publity - Back on track

In FY18, publity managed to post a rebound from the weak FY17, with an almost 50% y-o-y increase in revenues, PBT and net income (close to record-high FY16 figures). The company has also been moving closer to resolving its dispute with convertible bondholders, with a new share issue and partial bond repurchase that will continue in FY19. As the covenant limiting the increase in financial liabilities beyond €5m was recently waived, publity continues to review options for a potential new bond issu

publity - Stable AUM despite asset disposals

After being able to considerably grow its assets under management (AUM) in 2017 (albeit below initial management guidance), publity’s focus in 2018 is on retaining the asset base in line with the prior year. Despite the disposal of several office projects covering 100,000 sqm of lettable office space in H118, AUM remained stable at €4.6bn. publity is confident the current advanced-stage discussions around asset purchases should allow it to maintain the AUM level at the end of 2018 despite anothe

publity - Slower AUM growth and delayed disposals

The recent selling pressure on publity’s shares (price down 48% ytd) was accompanied by negative newsflow in January, including a profit warning and missed AUM guidance for FY17. The negative sentiment might have also resulted from the ongoing discussions with bondholders around the modification of convertibles’ terms and conditions. Management now guides to FY18 net profit in the range of €15-20m (implying c 34-80% y-o-y growth) based on a cautious assumption of no AUM growth this year (vs prev

New mandates secure future growth

publity’s H117 earnings momentum reflects both the ability to leverage its asset management expertise (AUM increased to €3.8bn from €3.2bn at end-2016) and its good cost discipline (OPEX down 11.2% y-o-y). New institutional mandates received ytd, coupled with a solid project acquisition pipeline should assist the company in achieving the AUM targets set for FY17e and FY18e at €5.2bn and €7.0bn, respectively. The stock currently trades at a FY17e P/E ratio of 6.1x, implying a 62% discount to the

An experienced investor in German real estate

publity is an asset manager with long-term experience of investing in German office buildings. It is the largest servicer of non-performing loans (NPLs) in Germany and is able to acquire assets from restructuring German banks. It focuses entirely on asset management and is not distracted by property and facility management. It evaluates and analyses more than 1,000 assets per year, acquiring individual assets for its clients, rather than making portfolio acquisitions. It currently has AUM of €3b

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

Bluefield Solar Income Fund – Fundamentals shine despite discount

The manger comments that, in common with the other trusts in the renewable energy sector, the last six months have continued what has been a challenging period for the Bluefield Solar Income Fund (BSIF). It adds that the trust’s ongoing fundamental performance has failed to reverse a steady slide in its share price which began back in May 2023. Despite this, it says the company has continued to deliver solid NAV growth and market-leading shareholder distributions thanks to a range of contractual

LSL Property Services (LSL LN) - Transformation & market recovery

2023 results are, as indicated in its February pre-close update, “slightly ahead of market expectations”. Current trading continues to improve, with 1Q24 underlying operating profit up yoy, “reflecting the benefits of the Group’s transformation programme completed in 2023 as well as improving market conditions.” With net cash of £35m at end 2023, the Board approved 7.4p final DPS and £7m buy back.

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

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

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

International Public Partnerships - Consistently and responsibly delivering

International Public Partnerships’ (INPP’s) FY23 results show that it continues to deliver consistent and predictable returns for investors, while delivering environmental and social benefits for the individuals and communities that are served by its assets. Despite this strong performance and a substantial need for private infrastructure funding, the macroeconomic environment has weighed on INPP’s share price, in common with the wider sector. Regardless, attractive returns are available from th

LIBERUM: PensionBee: Strong start to the new financial year

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

LIBERUM: NewRiver: Q4 trading update: Continued operational momentum

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi