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We expect NRC Group to report Q4/20 EBITA of NOK -11m, well below latest Factset consensus of NOK 30m. We have revised down our estimates to reflect the company's latest EBITA guidance for 2020 and 2021 (published today) and expect the rest to follow. Until then, we are below consensus EBITDA by 23% for 2021 and 17% for 2022. We expect the share to trade down from opening tomorrow as the negative press release was published after close.
Companies: NRC Group ASA
Arctic Securities
Following the Q3/20 results we have only made minor changes to our estimates for 2020-2022. After several quarters with FX driven top-line growth, we expect a slowdown in Q4/20 as order backlog coverage for Norway and Sweden is thin. Our positive EPS revisions are explained by reduced goodwill amortisation, hence our adjusted EPS estimates remain unchanged for 2021 and 2022. We reiterate our Buy recommendation with a TP of NOK 40.
Reported EBITA of NOK 88m 13% above Factset consensus of NOK 78m Strong top-line growth of 6% Y/Y driven primarily by NOK weakening Finland reported strong profitability, Norway and Sweden on the soft side Solid unannounced order intake and operating cash flow of NOK 129m
We expect NRC Group to report Q3/20 EBITA of NOK 81m, 5% above latest Factset consensus of NOK 77m. The positive deviation is explained by lower estimated operating expenses, as our Q3/20 sales estimate is 3% below Factset consensus. Our estimates imply Q3/20 EBITA margin of 4.5% vs. consensus 4.2% and Q3/19 actual of 5.7%. As the share price is down 39% over the past 3 months, we argue that market expectations are well below sell-side consensus.
NRC Group reported Q2/20 EBITA of NOK 27m vs. Factset consensus of NOK 43m and Arctic estimate of NOK 41m. While the slowdown in Norway was expected and Sweden showed signs of improvement, operations in Finland showed disappointing performance in the quarter. As a result of lower than expected order intake in H1/20, the company has revised down its EBITA margin target to 1.5-2.0% (2.8%) in 2020 and up towards 4.0% (5.0%) in 2021.
Q2/20 EBITDA of NOK 27m vs. cons. of NOK 43m and Arctic NOK 41m Continued revenue growth in Sweden and Finland Profitability improving in Sweden, while Finland was soft Negative revisions of financial targets following H1/20 results
We expect NRC Group to report Q2/20 EBITDA of NOK 41m, 5% below the latest Factset consensus of NOK 43m. Our soft estimated EBITA margin of 2.8% vs. 3.3% in Q2/19 is explained by continued execution on zero margin contracts in Norway and Sweden. As these contracts are finalised through 2020, we expect efficiency measures to gradually start improving reported profitability. We reiterate our Buy recommendation with a TP of NOK 50.
Following project write-downs of NOK 110m in Q4/19, the company has launched an improvement program to reduce costs and increase profitability. While 2020 results will be negatively impacted by execution of NOK 400m in zero margin projects, we expect to see first signs of cost cutting initiatives in the second half of the year. We expect the share price to benefit from continued growth and improving profitability and reiterate our Buy recommendation.
Reported EBITA of NOK -54m in line with expectations 2020 financial target of 2.8% EBITA margin maintained Cost reductions to improve profitability from H2/20 Robust balance sheet supported by order backlog of NOK 8.0bn
While government Covid-19 measures have resulted in minor challenges related to movement of workers and equipment, the positive outlook for Nordic rail remains unchanged. Driven by downward revisions of expectations for 2020 and 2021, the NRC Group share is down 47% over the past 6 months. As the Nordic governments attempt to support economic activity through investing in infrastructure, we expect NRC Group to regain its positive momentum.
We expect NRC Group to report Q4/19 EBITDA of NOK 123m, 5% below the latest Factset consensus of NOK 117m. Our estimate corresponds to an EBITDA margin of 7.8%, supported by double-digit margins in Norway and Finland. We also expect the company to report a NOK 90m gain related to the sale of VR Design to Sweco in the quarter. Following soft implied Q4/19 guidance in the Q3/19 report, we expect comments about outlook for 2020 to be key.
NPL companies: Proposal for changes to debt collection law in Norway Axactor: Renews and expands forward flow agreement in Norway NRC group : SEK 149m contract in Sweden Zalaris: Renews payroll and HR services for leading fertilizer company
Companies: 0DSJ 0QWF 2LJ
Research Tree provides access to ongoing research coverage, media content and regulatory news on NRC Group ASA. We currently have 23 research reports from 2 professional analysts.
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
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Cavendish
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
Companies: Capital Limited
Tamesis Partners
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
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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
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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
Companies: discoverIE Group PLC
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
Companies: Severfield Plc
Edison
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Canaccord Genuity
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SP Angel
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
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Hardman & Co
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.
Progressive Equity Research
Liberum
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.
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Longspur Clean Energy
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