Despite the opportunities for MySale’s digital marketplace platform presented by sector inventory/supply chain disruption + a rapid online channel shift, there can be no assurances that the recent sales surge is sustained. Indeed NZ rules changed today. Given the uncertainty, the Board is sensibly adopting a prudent approach and has taken immediate steps to preserve its cash position and has at its disposal numerous levers to reduce costs and manage cashflow until certainty re-emerges.
Companies: Mysale Group
Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets through its subsidiaries Calvin Capital and Lowri Beck . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale. Expected Admission February 2020 The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m. Due 28 February. Investment firm Nippon Active Value fund is seeking to raise up to £200m at an issue price of 100p per share via an IPO. The company aims to invest in a portfolio of quoted Japanese stocks with market capitalisations of up to $1bn. First day of dealings expected early February.
Companies: PPIX DBOX CLL EME MSYS AURA MYSL THR TEK ECR
MySale is executing a clear strategy, focused on the sizeable ANZ market. It is leveraging its proprietary Marketplace platform, which is highly cost efficient, scalable and inventory light. Also the balance sheet is now debt free and cash positive. This facilitates execution of the strategy through to positive EBITDA next year. The new strategy has a near zero risk approach to inventory, and the release of stock/receivables tied up by its previous own buy/wholesale activities is progressing well. Once complete, MySale will operate with negative working capital. It has a unique and appealing proposition for global suppliers and ANZ consumers alike. On good execution value creation could be significant.
Alumasc Group plc, the prem ium building products, system s and solutions group, has announced its intention to m ove from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019 Expected market cap of £36.5m
Argentex a UK-based forex service provider founded in 2011 by its current management team which operates as a Riskless Principal for nonspeculative and forward foreign exchange as structured financial derivatives is looking to join AIM. Offer TBC, expected 25 June
Companies: SO4 VEL THR AFC TERN SENS TILS MYSL SIXH IMMO
Following the RNS 2 weeks ago, MySale has today confirmed the disposal to Brandalley UK of its UK business Cocosa has completed (for £1.5m). The review of its SE Asia operations, which generated c11% of group revenue in FY18 (and incurred a loss) is ongoing. This is in line with the group's strategy to rationalise its non-ANZ divisions and focus on its sizeable core ANZ markets where there is significant growth potential. However, the update indicates current trading remains challenging and that the focus is on reducing the cost base, where it continues to make progress. Once these changes are completed, the more streamlined and focused approach will allow MySale to provide an improved offering for its customers and brand partners with the aim of rebuilding profitability. For now though, and pending clarity around the various changes to the group and their financial effects, we are temporarily withdrawing forecasts.
Essensys plc—a provider of mission-critical SaaS platforms and on-demand cloud services to the high growth flexible workspace industry, plans to join AIM. Offer TBC, expected 29 May 2019. Induction Healthcare Group plc—a healthcare technology company focused on streamlining the delivery of care by Healthcare Professionals looking to join AIM. Expected raise of £14.58m at 115p, market cap of £34.07m. Expected 22 May 2019. SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019
Companies: SAR MYSL SEE BLV LID IND ERGO DDDD AEO
MySale has agreed the disposal of Cocosa to Brandalley UK for £1.5m. Although small, the disposal is accretive as Cocosa incurred a loss before tax of A$0.4m in the year to June 2018. This disposal is in line with the group's strategy to rationalise its non-ANZ divisions and focus on its core and sizeable ANZ markets where there is significant growth potential. Completion of the disposal is expected on 9 May. Prior to this transaction the stock was trading on 0.15x EV/sales and, given some accretion, this will reduce slightly post completion.
SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m
Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019.
Distribution Finance Capital Holdings plc — specialist lender which builds relationships with manufacturers and then provides working capital solutions up and down their supply chains to drive their growth is looking to join AIM. No raise, secondary offering of £19.8m at 90p, expected market cap of £95.98m. Expected 09 May 2019.
Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019
Arbuthnot Banking Group plc, primarily involved in banking and financial services including commercial banking, private banking, wealth planning and investment management, is looking to joining the NEX Exchange Growth Market. Expected 17 May 2019
Companies: ITM SML MYSL NUM SYM SFOR VGAS RMM ITX DPP
In line with revised guidance, H1 EBITDA declined to a A$5.0m loss reflecting worse than expected market disruption in Australia following sales tax changes, and related execution challenges incl. geographic stock locations. Net cash increased to A$2m reflecting good w/c performance. Although immediate actions were taken in response, including accelerating platform automation and cost savings, improvements are taking longer to flow through. Management is also adopting a more prudent view of wholesale. This means an EBITDA loss is now expected in H2. It should return to profit in FY20 but our forecasts are being withdrawn temporarily pending further clarity on the various moving parts.
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MySale Group has released a trading update for the six months ended 31 December 2018. As previously announced (11 December 2018), trading in H1 has been adversely impacted by the combination of changes to Australian Goods and Services Tax (GST) along with product mix and delivery cost factors. Revenue for the first six months of FY19 is down 17% to A$126m with gross profit 35% lower at A$29.5m. Management have taken swift action to address these issues with annualised cost savings in excess of A$10m anticipated. Strong working capital management resulted in a better than expected net cash position of £2.7m at 31 December 2018, an improvement of A$8.9m on net debt of A$6.2m at 30 June 2018. The board remain confident that execution of the Group’s action plan will deliver improved performance in the second half and expects full year results to be in line with current market expectations. Our forecasts are unchanged today.
MySale has released a trading update covering the 6 months ended 31 December, indicating that the full year outcome will be in line with market expectations, which were revised on 11 December. The principle challenge they experienced was greater than anticipated market disruption, and execution challenges, after the new sales tax rules were introduced in Australia, MySale’s largest market (>75% of sales). This was exacerbated by the product mix, and an insufficient proportion of own-buy inventory being located in the local DC. Revenue has also been impacted by the reduction in offline activities, albeit this is planned and supports working capital improvements. Driven by better working capital management, net cash balances grew ahead of expectations in H1, increasing to A$2.7m (vs A$6.2m net debt at the end of June). The impact in H1 was material, with sales and margin performance (-17% and -680bps) resulting in a cA$5m EBITDA loss. However, the actions that have been rapidly deployed are gaining traction, and in excess of A$10m annualised cost savings are anticipated. Consequently, performance is expected to improve significantly in H2 putting them on track to meet full year expectations. The strategic review of UK/SE Asia operations is ongoing, as are trials to commercialise OurPay. After the warning in Dec we suggested that pencilling in divestments at cA$50m and placing the core on <0.5x EV/sales implies fair value of 57p, with potential value upside from OurPay. We are not making any changes to that view today and await a further update with the interim results in mid March.
United Oil & Gas (UOG.L) an oil and gas exploration and development company brought to the Official List (Standard Segment) in July 2017 by way of a reverse takeover of Senterra Energy plc. No capital to be raised, expected market cap of £17m and expected 28 Feb Techniplas –global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient. FYDec17 rev $515m.
Companies: SKIN MPM MWG EUSP VAST PLMO MYSL CLNR SMS HDD
Kin & Carta (KCT LN) Evolution not revolution | LiDCO Group (LID LN) Interims as expected, all to play for in H2 | MySale Group (MYSL LN) Real capability of online platform becoming clear | Stock Spirits (STCK LN) Q3 update supportive of bull thesis
Companies: LID MYSL STCK
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We note this morning’s announcement from Boohoo Group strongly refuting several allegations made in a short-selling note published yesterday afternoon. In our opinion arguments made in the short selling note are flawed and do not disclose any new or unexpected information about the Group. The unprecedented market backdrop resulting from the COVID-19 crisis has only acted to highlight the strengths of Boohoo’s agile, pure play, e-commerce model and we see current share price weakness as offering an attractive entry point.
Boohoo Group has announced the acquisition of the remaining 34% of shares in prettylittlething.com (‘PLT’).
- Terms of the deal: Boohoo Group has acquired the remaining 34% of shares in PLT for initial consideration of £269.8m, comprising cash consideration of £161.9m and share consideration of £108.0 including £54m of share consideration subject to an 18 month lock-up, £54m of share consideration subject to a 24 month lock-up payable on completion. A further £54.0m of contingent consideration is payable if the Group’s share price averages 491p (+46.7% on last night’s closing price) over a six-month period between completion and 14 March 2024. PLTs management team will remain in the Group, with the structure of the share consideration providing strong alignment of management interests with the wider Group shareholder base.
After launching a £1bn recapitalisation by way of a rights issue at a price with a heavy discount, the UK-based restaurant and (the largest) hospitality group, Whitbread, saw its share price plummet by 13%. The market movement reflects investors’ concern about the uncertain duration of Whitbread’s business downturn.
Whitbread was on our list of issuers likely to be wrongfooted by the crisis the day before the rights issue announcement.
Directorate change: DWF has announced that Andrew Leaitherland will step down as Group CEO and a managing partner of DWF Law LLP and DWF LLP with immediate effect and will be replaced by the Group’s Chairman Sir Nigel Knowles. Sir Nigel has over 40 years of experience in the legal sector and was previously. Global Co-Chairman and Senior Partner of DLA Piper. We believe he has the experience and leadership qualities required to lead the Group through the near-term challenges it faces. Chris Sullivan, Senior Independent Non-Executive Director, has been appointed as interim Chairman.
Companies: DWF Group
Following last week’s trading update, in this note we revisit the progress Inchcape has made, along with the structural benefits it has gained, in focusing its business on its distribution model. Whilst there is no doubt the Group faces pressures at present, we believe it has sufficient liquidity to withstand this crisis within its current banking facilities and see scope for further significant cost savings and efficiencies that should help mitigate current pressures, which we expect hear more on at the H1 results in July.
In FY20, prior to COVID-19, management delivered on its four key proof points, including growing group EBITDA and membership at Roadside. The business model is proving resilient during COVID-19 and we have reduced our FY21 EBITDA forecast by only 7% since the outbreak began – much less than most.
Companies: AA Plc
Unsurprisingly, the limited business progression in H1 19/20 and the pandemic outbreak towards the end of the year have resulted in a significant FY profit contraction.
However, the unprecedented pandemic crisis seems to be dragging all the industry to the same starting line, in terms of market transformation. In particular, after the group showed a better than expected cash position after additional RCF and CCFF and substantial cost-savings, this gives new hope to the market.
Companies: Marks And Spencer Group
FY19 was a transformational year, with the addition of seven new hostels to the estate/pipeline and strong growth in Revenue (+26%) and adj EBITDA (+11%) demonstrating that the model can work across European cities. Significant liquidity headroom remains following the RCF extension and £5m overdraft facility recently agreed.
Loungers continues to outperform, delivering the scarce trinity of LFL sales growth (5.4%), unit growth (10 openings) and margin growth (40bps). This drove a 22% increase in Revenues and 26% increase in EBITDA in the first half of FY20E.
The travel bans and quarantines due to COVID-19 have had a significant impact on PPHE since mid-March and are likely to continue to do so. We now expect a deeper and longer downturn than previously and a slower recovery, so we reduce our forecasts for occupancy for FY20, while holding our prior EBITDA margin assumptions reflecting cost cutting and a high level of government support on key costs. We downgrade FY20 revenue by c 32% and EBITDA by c 29%. The shares are trading at a c 54% discount to the last-quoted EPRA NAV of 2,546p per share.
Companies: PPHE Hotel Group
FY20 year-end trading update
Companies: Dart Group
Boohoo Group has raised £197.7m in new equity as is readies itself to take advantage of M&A opportunities expected to emerge in the global fashion industry over the coming months. Following the fundraise we estimate the Group to have c.£500m in cash, giving it significant firepower to rapidly execute attractive brand acquisitions as they arise.
H1 (to end of March) adj. PBT of £1.2m is in line amidst difficult trading. COVID-19 and closing all stores has seen April’s sales decline 80% y/y. There are promising signs with online sales 3x pre-COVID levels and management is being very pro-active in adapting and re-opening stores, such that the entire estate could be open on a controlled entry basis by the end of June. Liquidity at c.£14m remains comfortable and should rise by £10m in June as additional CLBILS funding becomes available. We move to BUY and present a scenario for FY20E in this note. We will publish formal forecasts when Topps next reports in early July.
Companies: Topps Tiles
Borussia Dortmund’s Q320 results were positive from a profit and cash flow perspective despite the impact of COVID-19 at the end of the period. The Bundesliga has led the way in recommencing games after the season was temporarily suspended, albeit games are to be played behind closed doors, which will lead to lost ticket revenue (among other revenues). Borussia Dortmund is well placed to qualify for the Champions League in the 2020/21 season if the current season can be completed. We downgrade our EBITDA forecast for FY20 by c 49%, to reflect lost revenue due to COVID-19 and lower net transfer income. The share price looks well supported by asset valuations.
Companies: Borussia Dortmund GmbH & Co.KGaA
Motorpoint is the UK’s largest independent vehicle retailer, operating out of 11 sites throughout the UK. The company has a good track record of growth and roll out potential. Despite this, we believe the franchised dealers have a more diversified business model and Motorpoint’s performance will prove more cyclical. Given the asset backing and greater diversity of the listed, we see better opportunities elsewhere in the sector.
Companies: Motorpoint Group