Block Energy— UK based oil exploration and production company whose main country of operation is the Republic of Georgia. Raising £4m. Mkt cap £9.3m. Due early June.
Codemasters Group— video game developer and publisher, specialising in high quality racing games. Offer TBA. Seeking £15m in primary. Due 1 June.
Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine, a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June.
Maestrano Group, a software company with operations in Australia (main country of operation), the UK, US and the UAE, is looking to join AIM. Offer TBC, expected late May.
Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Offer TBA. Due Late May
Team17 Group -video games label and creative partner for independent developers. 2017 revenues of £29.6m and Adjusted EBITDA of £12.9m. Raising £45.1m primary and £62.5m secondary at 165p. Mkt Cap £216.6m. Expected 23 May 2018
Companies: STCK POLX MOGP PIL AGM NTOG BIRD SLE LSAI GETB
Ongoing labour cost challenges, higher input costs, sustained brisk organic sales volume growth and further room for innovation at both product and distribution level were the key investment features of the 2018 British Sandwich & Food to Go Association AGM and Conference, which was held in London yesterday. Moreover, the association had strong messages on food waste reduction and CSR, both of which are important as the industry body continues to lobby the UK government hard ahead of Brexit. The chief UK listed plays on Food to Go are Greencore (GNC LN, BUY, 310p), Cranswick (CWK LN, HOLD, T/P 2700p) and potentially Produce Investments (PIL LN, BUY, T/P 240p). Our overall industry stance remains positive.
Companies: GNC CWK PIL
Produce Investments’ (PIL LN, BUY, T/P 240p) released FY2017 results on 28th September 2017 where revenue beat expectations and matched EPS estimates. In this Quick Sharpener we update our forecasts and take the opportunity to increase our price target from 210p to 240p. BUY. Exhibit 1 details our changes to forecasts. We maintain revenue at £203m, FY2018 and £206m, FY2019. EBIT is increased 18.8% to £9.6m in FY2018 and 16.9% to £10.0m in FY2019. The rise in EBIT margin from 4.0% to 4.8% reflects operational efficiencies achieved through the newly integrated ERP system.
Companies: Produce Investments
A debate about why major US food manufacturers’ margins appear consistently higher than those achieved in Europe is, in our view, worth having. In particular, should greater willingness to outsource production processes and focus more on marketing, new product development, finance and strategic M&A be the answer, there could be significant revenue growth opportunities for those who act as food industry solution providers.
Companies: BN NESN ULVR CA GNC PIL CWK
Produce Investments’ (PIL LN, BUY, T/P 210p) FY2017 results were ahead of both our own and market expectations at the revenue level but matched consensus on EPS. On 21st September 2017 the company stated that trading remained in line with Board expectations whilst it announced key Board changes – i.e. Chairman Neil Davidson and NED Sean Christie will retire from the company this calendar year.
Produce Investments (PIL LN, BUY, T/P 210p) announced yesterday that Chairman Neil Davidson and Non-Executive Director Sean Christie intend to retire from their respective roles at the time of the company’s AGM in November. The company is due to release preliminary FY2017 results on 28th September. Trading remains in line with Board expectations according to today’s press release.
Produce Investment’s (PIL LN, BUY, T/P 210p) interim profits were well beneath inferred market expectations as delays in the recovery of ex-farm potato prices coincided with unusual costs associated with the company’s implementation of a new ERP system. Interim EBIT fell to £0.2m from £3.4m last year.
K3 Capital Group—Schedule 1 from the Group of business and company sales specialists across business transfer, business brokerage and corporate finance. Admission date and fundraise details TBC.
Integumen— Schedule 1 from the personal health company developing and commercialising technology and products for the human integumentary system. Raising £2.16m at 5p. Expected market cap £8.16m. Admission expected 5 April.
Sentinel—Investment company expecting NEX admission/introduction on 24 March. £636k raised pre-IPO.
BioPharma Credit—Expected Gross Initial Acquisition Proceeds now c.$338m. Gross Cash Proceeds capped at $423m with placing and open offer. Results expected 23 March with admission now due 30 march.
Companies: PIL GFIN SOLI CBP CRW IDEA SIS VELA VLG PGY
Produce Investments (PIL LN, BUY, T/P 210p) reported FY2016 preliminary results ahead of both our own and market expectations at the revenue level but with operating profits in line. Net revenue advanced to £185.1m from £178.4m in FY2015 – we were looking for £181.5m - while adjusted operating profits rose from £8.0m to £9.2m. Proposed full year dividend is 7.32p, a 2.2% gain on last year. The company is confident that despite challenging trading conditions, it is in “a strong position to grow.”
The British referendum on EU membership is scheduled for 23rd June 2016. While opinion polls and bookmaker odds still bias towards “remain,” it makes some sense to assess briefly potential the FMCG winners and losers in the event of Brexit happening.
Companies: BATS DGE IMB RB/ SAB ULVR BAG BVIC CARR CWK DCG FEVR GNC PIL STCK TYR
Produce Investments is well placed to prosper, both in its core mainland GB potato business and in such useful additions as Jersey Royals and daffodils. A proven positive M&A track record is a major plus for a cash generative company with clearly achievable targets. In our view, valuation is attractive. BUY
Produce Investments - Jersey Analyst Visit | SABMiller – Trading update | Diageo – Trading update
Companies: PIL SAB DGE
Research Tree provides access to ongoing research coverage, media content and regulatory news on Produce Investments.
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Good set of FY20 results, with the momentum continued to be driven by the Americas, PetCare and Nestle Health Science. The FY21 and mid-term outlook is satisfying, roughly in line with the current consensus expectations.
Companies: Nestle S.A.
The group is acquiring Union Distillers Ltd for an initial £8m plus a revenue-based two-year earn out, in a deal that will deliver additional quality brands, a large new customer base and substantial additional production and warehouse capacity.
Companies: British Honey Company Limited
Finsbury's AGM statement confirms that trading has remained resilient in FY21E, with the group expecting to deliver improved revenue and profitability this year. As such, with visibility improving, we are reinstating forecasts (FY21E Adj EBITDA of £26.0m). We also update our rating to Buy (from Under Review), which is driven by the group's low valuation (c7.7x FY21E P/E), planned reinstatement of the dividend (3.8% yield), and the increasing levels of FCF available to shareholders (11% FCF yield) now that the group has reached the end of a period of heavy investment.
Companies: Finsbury Food Group plc
Cake Box’s interim results reconfirmed the company’s resilience in the face of extremely adverse circumstances for UK High Street retailers. Cake Box reported only single digit declines in sales revenue and profits in the period as the business benefited from its flexibility, financial strength, and an ongoing customer commitment to celebration. In our view, celebration’s resilience as a category, product innovation, increased outlets, and a commitment to “steady, sensible and sustainable” growth, augur well for further revenue expansion. Yet the group’s valuation remains attractive.
Companies: Cake Box Holdings Plc
Cenkos Securities plc has terminated coverage of Finsbury Food Group Plc. Our previous recommendation (BUY) and forecasts can no longer be relied upon.
Please contact Cenkos for further information.
Reverse Takeover by London Stock Exchange Group (LSEG.L) following the acquisition of Refinitiv in an all share transaction for a total enterprise value of approximately US$27 billion.
Companies: ADME ROCK ZPHR DKL VARE SMRT PTRO MHC BOO
The British Honey Company has announced the acquisition of Union Distillers Limited, creating the opportunity to transform its offering with the addition of a well-known brand, increased scale and market presence. The combination provides the basis for BHC to establish its position in the UK as both producer and distributor.
Berentzen-Gruppe is undergoing a transformation in order to become more agile and dynamic after years of stagnation, and the results are starting to come through. The focus has shifted to driving profitability through portfolio simplification and encouraging consumers to trade up: product and segment mix are now being carefully managed to help improve gross margin. The balance sheet remains very conservative, with a small net debt figure at end H119. Management guidance for the financial year has been reiterated, and H2 product launches may provide further upside.
Companies: Berentzen-Gruppe AG
Q1/20 harvesting volume of 18,362 tonnes (16,800)
Biological challenges in Finnmark – EBIT/kg of a modest NOK 4.56 (12.54)
Trading update implies EBIT of NOK 252m (Arctic: 283m, Cons: 372m)
Could imply further upside risk to Q2/20 cost assumptions
Companies: Grieg Seafood ASA
Operational EBIT of DKK 248m (Arctic: 344m, Cons.: 303m)
FY/20 volume guiding 3% above expectations
CapEx guiding reiterated, dividend proposition remains postponed
We expect to lower our estimates
Companies: Bakkafrost P/F
Bakkafrost reported Q1/20 results below expectations, and we have lowered our estimates in response to higher cost assumptions. High freight costs for airborne salmon will also weigh on costs in the next few months, and we see uncertainty related to both realized premiums and the salmon sales price trend as volumes are set to seasonally increase soon. We continue to see more value support elsewhere and stick to our Hold rating.
Q1/20 EBIT of NOK 240m – in line with trading update guidance
FY/20 volume guidance reiterated at 100’t (unchanged)
No dividends (expected), potential postponement of NOK 2-300m CapEx
Estimates to be lowered by ~ 10-15% (costs)
Grieg Seafood reported an underlying Q1/20 EBIT of NOK 240m – in line with its profit warning. The company reiterated its FY/20 volume guiding of 100’t, and our volume assumptions are unchanged. We have however raised our cost assumptions, and our FY/20 and FY/21 estimates are lowered by 11% and 2% respectively. We still see downside risk to our price assumptions near-term, and we stick to our Hold rating and NOK 110 target price.
Grieg Seafood will report its Q2 figures on 18 August and we now expect an adj. EBIT of NOK 95m (112) versus consensus at NOK 55m. Our full-year estimates are virtually unchanged in this preview as we have not made any changes to our price assumptions. Grieg Seafood still trades below its peers but we stick to our Hold rating as we believe a discount is appropriate short to medium-term.
Bakkafrost will release its Q2/20 results on 25 August and we expect an adj. EBIT of NOK 215m (208) vs consensus at NOK 169m. We have implemented the harvest volumes announced on 2 July (lower than expected), as well as prices for the quarter (NOK 4.4/kg above our previous expectation). Although Bakkafrost is a great company we continue to see more value support elsewhere and stick to our Hold recommendation and NOK 550 target price.