H1 23: a strong performance and a record backlog

BAE systems published strong H1 23 results with sales up 13.6%, EBIT up 13.1% and EPS up 20.9% yoy, all above market consensus. The company has upgraded its FY23 guidance and, given the strong order intake (especially in Air and Maritime) and FCF generation moving in the right direction, BAE System’s long-term outlook looks bright and worthy of investor attention.

FY22: Moderate growth now, more to follow later

BAE systems published strong FY22 results with sales up 9%, EBIT up 12% and EPS up 16% yoy, all above market consensus. Order intake, which was mainly based on programmes announced prior to the outbreak of the Russia-Ukraine war, stood at a record level of £37bn, up by 70%. FCF stood at £1.95bn, outperforming the consensus by £700m, of which £500m was due to payment timing but the rest mainly due to better cash management.

Q4 21: no need for outstanding results when in the right market

BAE has published decent Q4 21 results, with impressive cash generation. It is well set to expand through its diverse Defence portfolio. Its FCF guidance has been particularly better than consensus. The guidance does not include the impact of the war in Russia, which will benefit the British company.

BAE confirms its objectives for FY21

BAE has provided a market update to confirm its objectives for FY21 and its cash goals for the next three years. Overall, the business remains strong, with potential growth opportunities linked to the new Auckus alliance.

FY 20: demonstration of resilience

BAE released a sound set of figures for FY20, beating the consensus and shining with its strong cash generation. The company remains poised for groth in FY21 thanks to its defensive backlog and high exposure to strategic contracts.

Reassuring trading update

BAE released a trading update for the third quarter, which was fairly reassuring. Demand remained high across all major markets, fuelling the backlog. Operationally, programme ramp-ups and good execution across divisions maintained earnings, with potential for raising the EPS for 2020.

H1 20: resilient business model, further improvements expected in H2

BAE released a sound H1 set of results, beating consensus at revenue, profitability and cash generation levels. The company’s business model proved to be very resilient and displayed encouraging prospects for the remainder of the year. We maintain our Buy recommendation on the stock.

Limited downside in H1, while productivity should drive FCF up in H2

BAE has issued a pre-close trading update ahead of the H1 publication in July, highlighting a positive and reassuring operational performance across all sectors despite the pandemic. Overall, the impact is mainly on the profitability side, while both top-line and cash generation have turned more resilient. Productivity accelerated through June, near normal, boding well for the expected rebound in the second half of the year.

FY19: good surprise on the cash side

BAE reported sound results today, roughly in line or above estimates, as well as for guidance. The company recorded operational improvements in a number of programmes, which, combined with ongoing contracts that are maturing, lead us to expect a further improvement at the cash level.

Welcome strategic move

BAE Systems has entered into an agreement to buy Collins Aerospace’s Military Global Positioning System business (GPS) and Raytheon’s Airborne Tactical Radios business. We expect the acquisition (fully financed by additional debt) to be both EPS and cash flow accretive while maintaining a healthy balance sheet for further potential acquisitions.

Trading update: business as usual

BAE has released its Q3 trading update, bringing qualitative comments to the market. Overall, no major news nor surprises were released. The company is delivering according to expectations and the guidance for 2019 is maintained.

No big surprises

BAE reported results roughly in line with expectations, with a slight profitability expansion. However, due to the ramp-up of a low margin programme, this performance might not be repeatable in H2. The company has maintained its FY19 guidance despite the current German ban on sales to Saudi Arabia.

Renold - Strong end to FY24: EPS up 11%. Robust FY25: EPS up 27.6%

The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as manageme

Q1 Operating Results

Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k

Billington Holdings - Record result boosts dividend; forecasts upgraded

FY23 results show very strong growth over FY22, driven by strong Structural Steel activity, with results slightly ahead of upgraded profit expectations, while stronger than expected cash flow resulted in an unexpectedly generous dividend of 33p (offering a FY23 yield of 7.0%). The group now has net cash of £22.1m and is debt free and is therefore in a strong position for potential M&A activity. Following the recent £90m of new orders to increase the order book to record levels we conservatively

Morning Note – 16 April 2024

Plant Health Care - China distribution with AMVAC

Plant Health Care announced it has signed a distribution agreement with AMVAC, an American Vanguard Company, to support commercialisation of novel fertiliser products incorporating Plant Health Care's Harpinαβ in China starting in 2024. The novel product combines Harpinαβ technology with an AMVAC fertiliser and is expected to help growers improve crop quality and yield as part of an integrated and environmentally responsible crop production programme. AMVAC continues to evaluate Plant Health Car

Morning Note – 15 April 2024

discoverIE - Back to organic growth

discoverIE’s March year-end update confirms a strong operational performance in challenging markets. Following two years when sales increased by +48%, FY 2024 Group sales were +1% ahead of 2023 at CER (reported -3%) driven by a +2% contribution from acquisitions and organic -1%. As expected, organic growth returned in the later part of the year (Q4 +2%, +11% sequentially) and the order book has reverted to normalised levels of c.4.5 months’ sales, which – combined with a continuing strong pipeli

Severfield - Multiple positives should excite investors

Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and the company ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, Severfield has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appear

Warns on brine supply costs

SP Angel . Morning View . Copper prices hold higher as China processing fees fall below $0/t amid low feedstock availability

PROGRESSIVE: Severfield: Targeted acquisition strategy aids growth path

Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.

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

LIBERUM: Severfield: Erratum: Better EPS and cashflow, and buyback

Invinity Energy Systems - Update on Strategic Investment

Invinity’s update on discussions with strategic investors reveals interest from multiple parties. While this has slightly delayed finalising an agreement it increases the potential for a better outcome. Although details are unknown at this stage, we think there is enough in the statement to be comfortable that any agreements will be consistent with the company’s strategy of growing market share in core markets and using a licencing and royalty model in other markets.

Clean and competitive fertiliser