Judges Scientific+ (JDG, House Stock at 11,600p) - FY23A - solid organic order book

Christie Group + (CTG, House Stock at 85p) - Reassuring FY23F trading update

Sainsbury (J)+ (SBRY, House Stock, 276p) - Strategy Update Day - Positioning for a higher next level

Wynnstay Group+ (WYN, House Stock, 325p) - FY23A a perfect storm - FY24F recovery

Higher expectations for the full year

Next has raised its expectations for FY23/24 on the back of additional full price sales during the first half. The group believes the better trading performance to have been mainly driven by the exceptionally warm weather in May and June, and salary increases in an inflationary environment. However, the group expects those positive effects to diminish over time owing to ongoing inflation, and the guidance for H2 23/24 remains unchanged.

Year-end trading ahead of expectation

Thanks to the better-than-expected trading performance during the Christmas period, Next reported an encouraging trading update for Q4 22/23. The group remain cautious for the year ahead. Next expects full-price sales to decrease 1.5% and profit before tax to be £795m, implying a contraction of 7.6% versus the FY22/23.

Better Q2, unchanged outlook

The warmer weather and return to social events has boosted the demand for summer clothing. Next has slightly raised its FY22 guidance for both top-line growth and profitability on the back of better-than-expected full-prices sales in Q2 22. The group still expects an inflation impact on consumer spending to worsen in the second half.

FY22 guidance downgrade

Next published good FY21/22 figures, exactly in line with the updated guidance (6 January) and consensus. However, the group cut its guidance for FY22/23 (February 2022-January 2023) due to the suspension of activity in Ukraine and Russia and the inflationary environment. We believe the limited guidance downgrade is a wake-up call to the non-food retail sector; the uncertain consequences of the Russian-Ukraine conflict will not be limited to the losses from the temporary suspension of their ac

Better qtd trading, softer outlook

Next raised its FY21/22 guidance on the back of the better-than-expected quarter to date trading performance. However, the uncertain post-pandemic trading environment (essentially good inflation, price hikes of NEXT’s products and the recovery in leisure activities…) has led the group to maintain a very cautious outlook for FY22/23.

Softer year-end growth

Next has experienced a satisfying Q3 21, as full-price sales came in slightly ahead of the group’s expectations and our estimates. However, the group expects that the inflation in essential goods and the ongoing industry-wide supply-chain challenges will drag down the pace of growth in Q4 21.

Strong recovery in demand for adult clothing

Next’s share jumped 9% on the back of the impressive Q2 21 performance. The encouraging improvement in retail sales as a result of gradually eased social restrictions in the UK alongside the continued strong momentum in online sales have led the group to finish the quarter with 18.6% sales growth vs. the same period in 2019 (vs. guidance of 3% previously). The better-than-expected trading performance has enabled the group to raise again its FY21 guidance and to declare a special dividend.

Online-first retailer

The British clothing retailer has just published its FY20 results (ended in January). Although both total revenue and pre-tax profit were slightly below consensus expectations, the accelerated shift in online business has led the group to upgrade (again) its outlook for FY2021. The group expects pre-tax profit to reach £700m for FY21, beating consensus and our expectations.

Topps Group (TPT LN) - Initiation: Market leader trading at cyclical lows

Topps Group is the UK’s largest specialist supplier and distributor of tiles and associated products to the UK’s domestic and commercial markets. Each of the last three years the Group has successfully achieved record revenue in a market that’s seen recent volume declines and regional peers enter administration. Following the right sizing of its business, Topps Group is now well positioned to capitalise on the economic recovery and continue taking share from competitors, supported by its global

HeiQ - Forecast update and Ecolab contract

HeiQ reported its interim results for the 12-months to December 2023, a period characterised by challenging conditions in the markets in which the company currently operates. In-line with the recent trading update, the company reported revenues of $41.7m for FY23 and closed the period with a cash balance of c$10m and a net debt position of $2.2m. We have updated our forecasts to reflect the FY23 results and HeiQ’s outlook in 2024, leaving our revenue forecast unchanged but adjusting gross margin

Pinewood Technologies (PINE LN) - Strong results, growth ahead

Pinewood Technologies’ results for the 13 months to 31 January 2024 confirmed good growth in user numbers, revenue and operating profit for the continuing automotive software business. Our unchanged forecasts (see 6 March research) show strong revenue growth, high margins, and good cash generation over the period to FY26 as the Group executes its accelerated growth plan. As of Tuesday this week, Pinewood’s shares are ex-dividend and a 1-for-20 share consolidation is effective, meaning our discou

Morning Note – 24 April 2024

LIBERUM: Tortilla Mexican Grill: Prioritising profitability over roll-out

Hybridan Small Cap Feast - 24 April 24

24th 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

PROGRESSIVE: Gear4music: FY24 trading in-line and debt reduction ahead of market expectations

At its FY23 results in June 2023, G4M announced its intention to focus on product margins, overhead cost reduction, and efficiency ahead of revenue growth, along with further net debt reduction, in FY24. The FY24 year-end trading update confirms G4M has delivered on these rebalanced priorities, with gross margin rising and net debt almost halving compared with FY23. Cost savings achieved in FY24 and the continued development of higher-margin categories should deliver further upside in FY25E.

React Group H1 Trading Update

React Group has released a positive update that has confirmed that the strong 2H 2023A momentum has continued into 1H 2024E, with what was described as a ‘record trading performance'.

PPHE Hotel Group Limited

PPHE has released its usual Q1 trading update (31 March period-end) which reads reassuringly. The outlook says that “the Board remains confident in delivering full year performance in line with market expectations”. Revenue rose by 11.9%, from £68.8m to £77.0m. Growth was 11.0% on a Like-for-like (LFL) basis excluding the first three months of operation from art’otel Zagreb, Croatia. Revenue growth was driven by a rise in occupancy as room rates continued to normalise across both leisure, corpo

LIBERUM: The Liberum Leisure Digest: NLW increase - pricing power is key

Hybridan Small Cap Feast - 25 April 2024

25th 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: Smart Metering Systems (SMS.L) has delisted from the AIM market 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

Pinewood Technologies (PINE LN) - Driving growth in automotive software

Pinewood’s transition to a pure-play automotive SaaS business is now largely complete. Today we introduce summary forecasts out to FY26 and reiterate the investment case. We see significant opportunity for Pinewood to grow its user base in the UK and internationally whilst generating high EBITDA margins and cash conversion. With a 24.5p special dividend embedded in the current price (payable Q1/Q2), the effective price today is 12.3p. Based on the Group’s FY27 target of £27m EBITDA, we estimate

PROGRESSIVE: Vertu Motors: Traction control

Vertu is the fourth largest automotive retailer in the UK, with 188 sales outlets and a track record of cross-cycle growth, principally through businesses it has acquired, funded by equity, debt and most importantly cash generation. Vertu operates across the entire vehicle lifecycle, including new and used vehicle sales, and vehicle servicing, repair and parts. Service and repair is a 40+% gross margin repeating business. With economic headwinds, the transition to electric vehicles, recent overs

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div

Domino's Pizza - Growing the base

Domino’s Pizza Group’s (DOM’s) new CEO has set an ambitious long-term growth target, including an acceleration in its net store opening programme. With better alignment between the company and its franchisees, management believes DOM should be capable of generating improved profit growth, versus that achieved in recent years, and potential higher returns.