Strong Interim Results – FY upgrades, Buy
Dart Group has reported another strong set of interim results and indicates that the Board now expects current market expectations for FY20 to be significantly exceeded. In our view, the Group’s strategy and focus on customer service and a flexible offering has put it in a position to benefit from the current market conditions following the exit of Thomas Cook and we anticipate the Group will continue to build on this position in the medium term to overcome inherent industry cost challenges. Reiterate buy rating.
21 Nov 19
Quarterly Research Outlook Autumn 2019
Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.
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21 Oct 19
Positive Trading Update
Dart Group has released a positive trading update indicating booking trends have continued to strengthen, boosted by later season bookings, and that the Board believes market expectations for FY20 PBT will be exceeded. There had been indications from other market players that demand had been strengthening in the later season and this announcement suggests Jet2 has been well positioned to capture the upside. Reiterate Buy.
11 Oct 19
Small Cap Feast
Registration document approved for Helios Towers. The Group provides essential network services, flexible infrastructure solutions and reliable power supply to mobile network operators in five African growth economies. Revenue increased 7 per cent. year-on-year to US$191m (H1 2018: US$178m), with Adjusted EBITDA up 15 per cent. year-on-year at US$99m (H1 2018: US$86m) for the six months ended 30 June 2019. Pricing rumoured at 115p to 145p implying valuation of up to $1.8bn. Expected Oct 2019.
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11 Oct 19
Dart Group - AGM Statement inline, outlook remains cautious
Dart Group has released an AGM statement this morning with the Board remaining optimistic that current market expectations for FY20 PBT (pre-FX revaluations) will be met but with caution over the outlook given rising costs and uncertainty which could impact FY21. We continue to believe that, in the face of industry headwinds highlighted in the statement, Dart Group’s well differentiated Leisure Travel strategy positions the Group very well vs competition and should contribute to ongoing share gains in the industry in coming years. Reiterate buy.
05 Sep 19
Quarterly Research Outlook - Summer 2019
In January, we provided a list of 11 stocks for 2019 that we believed would perform strongly with attractive catalysts that could lead to material outperformance. In this Quarterly Research Outlook, we revisit these views, analysing what has happened and how the remaining six months of the year could play out.
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23 Jul 19
FY19 Results, Strategy Paying Off
Dart Group has released FY19 results ahead of current market expectations albeit this was flagged at the trading update in April. The Board remain optimistic of meeting FY20 market expectations and commentary in the press release indicates that customer demand and operational momentum continues to be strong. We have long viewed Dart’s Leisure Travel strategy as well differentiated vs competition and see this contributing to ongoing share gains in the industry. Buy.
11 Jul 19
Taking Share in Tough Environment
Dart Group has released a trading update indicating that FY19 Group PBT (pre-fx revaluation) is expected to be slightly ahead of current market expectations. Additionally, the Board remains optimistic of meeting current market expectations for FY20 despite the overall uncertain UK economic outlook. We continue to we see attractions in the Group’s strategy, attractive package holiday offering and approach to customer service which positions the Group well in the current uncertain environment. Maintain Buy.
16 Apr 19
Quarterly Research Outlook
We’re just over three months in to 2019 and we’ve seen a 10% UK market rally, retracing much of the Q4 decline, such is the nature of fickle market sentiment. That said, many of the issues we wrote about three months ago that were impacting markets remain: notably Brexit, trade wars, geopolitics and global monetary policy. The 2019 rally thus far feels somewhat fragile, with competing forces of optimism on a potential trade deal which could underpin the rally, against the deterioration in underlying economic data that could ultimately undermine the recent market gains. In this context, we look at what the lead indicators and the market are telling us about the industrial cycle and the stocks most exposed to various industrial trends. The Q4 derating in short cycle industrials and autos had been vicious and while these sectors have seen a more solid footing in 2019, with earnings downgrades being priced in, it will likely take a trough in lead indicators before short cycle stocks can start to perform again and re-rate relative to the market.
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11 Apr 19
Quarterly Research Outlook
The market has not faced quite so many conflicting challenges for a number of years, whether related to global geopolitics, trade wars, ongoing Eurozone issues or the “will they, won’t they” saga of Brexit. In our Best Ideas, we sought to highlight stocks that present investors with interesting opportunities following recent market moves. Those stocks, we believe, warrant investor attention, in many cases for uncorrelated or stockspecific reasons, regardless of the near-to-medium term market direction. These stocks, in general, represent attractive and well-managed businesses or assets, with share price catalysts and where valuations or recent stock performance provide investors with a good entry point.
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31 Jan 19
Gaining Market Share but Costs Rising
Dart Group has released strong interim FY19 results, citing a particularly strong season for Leisure Travel, which contrasts well with weaker commentary from peers in recent weeks. Cost pressures are rising which will impact margins but we see attractions in the Group’s strategy, attractive package holiday offering and approach to customer service. Maintain buy.
15 Nov 18
Quarterly Research Outlook
The June IPO of Knights Group Holdings, a Top-100 regional law firm, marked the fifth entrant to the burgeoning UK-listed legal sector. Following recent expansion of our coverage across all five listed legal firms, complemented by coverage of three broader support services peers with exposure to the sector, we revisit and build upon our views on this rapidly evolving sector.
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23 Oct 18
Quarterly Research Outlook
In Q2, UK equities regained some of their poise after the draw down in Q1, although uncertainty around Brexit continued to grab the headlines. On the back of this, investor concern about the UK economy has been understandable in recent months given a number of negative data points. However, we see reasons for optimism for UK Plc with wage growth supporting an improving outlook for the consumer and business investment holding up. That said, continuing UK political disruption clearly remains a risk going forward.
DTG AMER EMR HMI JOG PDG ABBY AMS AVON BLVN PIER CGS CALL CSRT TIDE DEMG ELM EMR FPM FPO GTLY GENL INCE GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG LAM MACF MKLW NAH OXIG PCA APP CAKE PDG RBW REDD RSW RNO RKH ROR SUS SCPA SHG KCT TRAK TRI VTC ZTF
18 Jul 18
Bullseye! – Substantial FY19 Upgrades
Dart Group reported FY18 results in line with our expectations. However, the Group points to strengthening demand year-to-date supporting Group expectations for PBT to “substantially” exceed current market expectations. We therefore adjust FY19 earnings forecasts, resulting in near 60% upgrades and reiterate our buy rating.
12 Jul 18
Trading Update - Material Earnings Upgrades
Dart Group has provided a trading update this morning, indicating that improving pricing dynamics are likely to see FY18 underlying PBT materially ahead of current market expectations (Bloomberg consensus: £95m). In addition, the Group highlights that FY19 trading performance is expected to be “broadly” inline with FY18.
19 Feb 18
Small Cap Breakfast
Belluscura— Provider of premium medical devices at value prices to address part of the global unmet need for affordable, premium quality medical devices. Raising £7.5m to £10m. Offer TBA. Due early Dec | Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native invideo advertising . 2016 rev £0.7m and £7.3m operating loss. Offer TBA | Keystone Law Group— full service law firm with over 250 self-employed lawyers . Due late Nov. Offer TBA | Beeks Financial Cloud -niche cloud computing and connectivity provider for automated (algorithmic) trading in Forex and Futures financial products . Raising £7m. Mkt Cap c.£24.5m. Due 27 Nov. FYJun17 rev £4m. Profitable at operating level | City Pub Group - owner and operator of an estate of 34 premium pubs across Southern England. £30m raise. Consistent track record of strong revenue and EBITDA growth, with a three year CAGR from FY14 to FY16 of 34.9% and 44.8% respectively, and an EBITDA margin of 14.7% in FY16. Due late Nov. Offer TBA | Boku - Independent direct carrier billing company. Revenues were up 21% to US$10.2 in HYJun17. Q32017, revenues grew to $6.5m, up by 44%. The Company also saw continued growth across all of its key metrics: user numbers, total payment and a positive adjusted EBITDA for the month of September 2017. Due 20 Nov. Offer raising £45m at 59p with mkt cap of £125.9m | Ten Lifestyle Hldgs. Technology-enabled lifestyle and travel platform providing trusted concierge services to the world's wealthy. Net revenue increased from £20m in the year ended 31 August 2015 to £33m in the year ended 31 August 2017, a compound annual growth rate of 29%. Offer TBA, expected 27 Nov 2017 | OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m | OG Graphite, brownfield development-stage graphite company focused on the reactivation of its wholly-owned Kearney natural flake graphite mine and mill located 280 km north of Toronto, Canada. Offer TBA, expected mid November.
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16 Nov 17
Monarch toppled by industry revolution
The collapse of Monarch has been a shock to many, but comes as less of a surprise to industry watchers that have seen the pressures building in its markets. To a significant extent this is part of a European wide phenomena, as capacity growth by airlines such as Ryanair, easyJet and Wizz Air have run ahead of demand, which has put pressure on ticket yields and this has been a major factor in the recent failures of Alitalia and Air Berlin.
11 Oct 17
Finals – Another year of strong growth
Dart’s finals reflect another successful year of growth, with revenues up 23% to £1,729.3m. Operating profit declined 2% to £103m reflecting the “considerable investment” to launch the two new bases at Birmingham and London Stansted and with slightly higher finance costs, adjusted PBT (excluding a £10.9m FX revaluation loss) fell 4% to £101.0m (Arden forecast £97.0m).
13 Jul 17
Small Cap Breakfast
Quiz—Sch 1 from the omni-channel and international own brand in the women's value fast fashion sector. Offer TBA. Expected late July. Last year Quiz posted sales of £87.4m while pre-tax profits grew by 17pc to £5.7m | Arena Events Group -provider of temporary physical structures, seating, ice rinks, furniture and interiors. Raising £60m. Mkt cap £63m. Expected on the Chef’s birthday. 25th July. | Altus Strategies—African focused natural resource Company. Offer TBC. Expected Mid July. | Harvey Nash Group— Provider of professional recruitment and offshore solutions moving to AIM from Main. No capital to be raised. Mkt Cap c. £57.8m. | AnimalCare—RTO of Ecuphar NV, a European animal health company. £30m raise. Ecuphar FY16 rev £68.4m, underlying EBITDA £8.9m. Due 13 July. | NEXUS Infrastructure—£35m vendor sale. Mkt cap £70.5m. Provider of essential infrastructure services to the UK housebuilding and commercial sectors. Expected 11 July. FYSep16 rev £135.7m. | Greencoat Renewables - Schedule 1. Targeting a portfolio of operating renewable electricity generation assets, initially investing in wind generation assets in Ireland. Offer TBC. Due Mid July. | I3 Energy –Schedule 1 Update. Independent oil and gas company with assets and operations in the UK. Offer TBC, Mid July admission. | Verditek— Sch 1 update. The Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission late June | Rockpool Acquisitions—Northern Ireland based Company seeking strong NI acquisition with an international outlook. Raising £1.5m at 10p. Due 5 July. | Hipgnosis Songs Fund investment company offering pure-play exposure to Songs and associated musical intellectual property rights. Prospectus yet to be published. | Impact Investment Trust—Exposure to a diversified portfolio of funds providing SMEs across developing economies with the growth capital they need to have a positive impact on the lives of the world's poorer populations. Raising up to $150m at $1.00 | Residential Secure Income - social housing REIT raising up to £300m Admission due c.12 July. | Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. | NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. | Kuwait Energy— has not been able to complete its initial public offering as announced in its Intention To Float of 3 May 2017. However, in light of positive feedback from potential investors, the Company remains committed to obtaining a London listing and continues to explore its options. | Supermarket Income REIT– Up to £200m raise to acquire a diversified portfolio of supermarket real estate assets in the UK, providing long-term RPI-linked income. Due 21 July.
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13 Jul 17
Small Cap Breakfast
EJF Investments— Publication of prospectus from the closed-ended investment company investing in assets benefitting from regulatory and structural change in the financial services sector. To join Specialist Fund Segment of the Main Market | ADES International Holding— Intends to join the Standard List in May raising up to $170m plus a vendor sale. Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa. | Franchise Brands—Schedule 1 detailing £28m reverse takeover of Metro Rod. Admission expected 11 April. | Alpha FX Group— Schedule 1 update from the foreign exchange provider focused on managing exchange rate risk for UK corporates that trade internationally. Raising £30m. Expected market cap £64.2m and admission 7 April. | 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. | Tufton Oceanic Assets– Offer extended to 9 May to enable investors to complete further due diligence.
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05 Apr 17
Interims – Further strong growth delivered
Overview. Interim results show that the Group had a very successful summer 2016 trading season, with revenues up 21% to £1,240.8m and operating profit up 14% to £167.5m. Adjusted PBT (excluding a £4.6m FX revaluation loss) was up 14.6% to £168.3m. Cash generation was also strong, with net cash up £144.6m since the year end, to £465.7m. The interim dividend was increased 53% to 1.375p.
17 Nov 16
Conroy Gold & Natural Resources* (CGNR.L) | Crossword Cybersecurity * (ISDX:CCS) | Karelian Diamond Resources (KDR.L) | SCICYS (SSY.L) | Keywords Studios (KWS.L) | Redstone Connect (REDS.L) | ZOO Digital Group (ZOO.L) | Genedrive (GDR.L) | Shanta Gold (SHG.L) | Dart Group (DTG.L)
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17 Nov 16
Time to grab a late season holiday bargain?
Dart Group’s AGM update contained two good news messages. Trading in the first half of the current year has continued to be strong and is ahead of our forecasts. Also, in addition to the new base at Birmingham Airport announced in July, the company revealed that it was opening a base at London Stansted, which would also start operations in spring 2017. The considerable costs of setting up these two bases falls in the current financial year and the company therefore guided that reported profits are likely to be slightly behind market expectations. We think that the market has misconstrued the reasons for the forecast downgrade, leading to unwarranted share price weakness, which provides an excellent buying opportunity.
22 Sep 16
Strong finals & a good start to the year
The strong final results reflect the planned growth in the holiday business and the benign market conditions seen last year, with Group revenues up 12% to £1,405.4m and underlying operating profit up 109% to £105.0m. Adjusted PBT grew 82% to £104.2m and EPS increased 90% to 60.22p, helped by a lower than expected tax charge.
14 Jul 16
New Birmingham hub for 2017
Dart Group has announced that Jet2.com and Jet2Holidays will commence operations at Birmingham International Airport from March 2017, making it the Group’s eighth UK hub. The programme for summer 2017 includes 15 sun destinations with 590,000 seats available on four of Jet2.com’s brand new Boeing 737-800 aircraft.
07 Jul 16
Interims – An exceptionally strong summer
The strategy of building a more integrated leisure travel business is clearly delivering. Holiday passenger numbers have grown rapidly, accounting for 33% of the airline seats and 54% of divisional revenues last year and the proportion of holiday passengers this year is on track to exceed 40%, with holidays likely to account for about 60% of divisional revenues. With revenues from a holiday passenger roughly three times that for flight-only, achievement of the Group’s 50:50 target for holiday & flight-only passengers more stable and hopefully higher sustainable margins.
19 Nov 15
Jet2holidays’ ascent continues
Dart’s strategy of building an integrated leisure travel business is working. Holiday passenger numbers have grown rapidly, and will account for c.40% of the airline’s passengers this year and c.60% of divisional revenues. This is delivering good revenue growth and, over time, should also result in more stable and potentially higher margins. The macro picture is also positive, with low oil prices and the weak euro providing cost tailwinds, particularly for FY 2017, which should stimulate demand.
22 Oct 15
H1 Update – An exceptionally strong summer
At the time of the finals, in July, Dart Group reported “a good start to the new financial year, with strong demand for holidays”, resulting in us upgrading our FY 2016 adjusted PBT forecast from £52m to £60m. The AGM update on 3 September reported that this good start to the financial year had continued with strong summer trading in the Leisure Travel business, resulting in us upgrading again, from £60m to £75m.
08 Oct 15
AGM – Strong trading and aircraft purchases
Dart Group reports that the good start to the financial year has continued with strong summer trading in the Leisure Travel business. Against the background of slightly reduced seat capacity, demand for package holidays has increased, resulting in a higher proportion of holiday passengers, with higher airline load factors and ticket yields than in summer 2014. Early indications for winter 15/16 Leisure Travel bookings are “satisfactory”.
03 Sep 15
Strong momentum into FY16; earnings forecast +16%
This strong cash performance reflects net cash inflows of £39.2m. We do not anticipate a similar level of cash generation in FY16 as capital expenditure relating to new aircraft, IT and logistics is likely to increase to around £125m and we expect a broadly cash neutral pattern over the year.
16 Jul 15
FY15 Trading ahead of expectations
After a difficult Q1, which caused us to pull back our FY2015 PBT forecast from £45m to £30m, swift corrective action by the company, and an improving market background resulted in us upgrading our forecasts following the H1 update and again at the interims.
13 Mar 15
Interims – Better trading conditions maintained
In June, Dart Group announced record annual results, with underlying profits up 28% to £49.2m, well ahead of our expectations, but also warned of more difficult trading conditions in the current year, causing us to reduce our PBT forecast from £45m to £30m. Having reported “some uplift in the market” at the AGM in early September, October’s H1 update confirmed an improvement in trading in the late summer months.
20 Nov 14