Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on CRH. We currently have 13 research reports from 2 professional analysts.
Key information : • Sales up by 2%, lfl sales increased by 1%. • EBITDA up by 5%, lfl EBITDA increased by 2%. • EBITDA margin increased by 20bp to 9.0%. • Operating profit rose by 10%. • EPS increased by 29%. • Interim dividend up by 2%.
Key information: • Revenue grew by 4%, up 3% lfl.
Key information: • Sales of €27.1bn, 15% ahead of 2015; up 4% on a pro-forma basis. • CRH’s sales €0.9bn lower than consensus. • EBITDA up 41% to €3.1bn, ahead of November guidance; pro-forma EBITDA up 10%. • EBITDA margin 11.5%, up from 9.4% in 2015. • EPS of €1.50, 69% higher than in 2015 and in line with consensus. • Cash inflow of €2.3bn from operating activities. • Year-end net debt reduced by €1.3bn to €5.3bn. • Net debt/EBITDA is 1.7x.
Close your eyes and trust the equity markets. Major indices on both sides of the Atlantic achieved new record highs again yesterday. The Dow Jones Industrial Average surged straight through 21,000 for the first time, as investors forgave the President for failing to provide any details of his reform programme, deciding instead to simply believe that he and the Federal Reserve will deliver. Led by financials across the globe, the index was up more than 300 points, with similar percentage gains recorded by the S&P-500 and the NASDAQ following earlier rises in Asia and Europe. Indeed, the Dow has put on its the fastest thousand-point jump in history - it took 24 sessions from the first close above 10,000 for the index to climb to 11,000 in 1999. The wall of cash being liberated as investors continue to ditch US Treasuries, where the two-year yield ended at its highest in 7 years, also found its way into the US Dollar, while Fed-fund futures, which are used by investors to guess coming central bank policy, spiked to a roughly 66% chance of a rate rise in March, up from 35% Tuesday, following hawkish tones from Fed and FOMC members. There are, of course, some sceptics out there, notably ones who consider passage of Trump's programme will stall on its passage through Congress but, right now, their arguments are being lost amid new evidence that economic growth is reviving faster than expected. The Institute for Supply Management, for example, yesterday detailed February US factory sales rising at the fastest rate in three years, while the Beige Book also suggests a tightening labor market. The Eurozone markets also got infected with this euphoria, with the Stoxx Europe 600 moving 1.5% higher as the banking sector added 3%, while the FTSE-100 closing 1.64% higher also powered by construction-related stocks, like CRH (CRH.L), which are seen as likely beneficiaries of Trump's proposed US$1tr spend on rebuilding US infrastructure. This same enthusiasm similarly infected Asian equities this morning, with the ASX leading the way as commodity prices revived following recent weakness and the Nikkei touched its highest since December 2015 on Yen weakness before giving back some of its gains; the two main Chinese indices again went in opposite directions, with the Shanghai Composite in the red as traders contemplated prospective new US trade tariffs once again. London equity markets are, however, likely to open in a rather downbeat mood this morning, having seen Theresa May suffer a Brexit setback as the House of Lords voted to amend legislation to entitle roughly 3m EU citizens presently living in the UK to remain after the UK leaves the Union. Although the PM's plans to commence exit negotiations by the end of March remain on track, the fact that the path there may be somewhat less smooth than hoped means momentum gathered by the FTSE-100 yesterday has now been largely dissipated, leaving it to open around 5 points either side of unchanged in early trade. There is limited UK macro data due for release today, with just PMI Construction figures for February, although the Eurozone will produce a batch of numbers, including Unemployment, CPI and PPI. The US contributes Jobless and its New York ISM index, although the principal anticipation is still likely to be remain on Fed Chair Janet Yellen's speech which is due to take place at 18:00hrs GMT tomorrow. UK Corporates due to release earnings or trading updates include Capita (CPI.L), Cobham (COB.L), Merlin Entertainment (MERL.L), Travis Perkins (TPK.L), Melrose Industries (MRO.L) and Jimmy Choo (CHOO.L). Index holders can also be expected to adjust their portfolios before Rentokil Initial (RTO.L) and the Scottish Mortgage Investment Trust (SMT.L) join the FTSE-100, replacing Capita (CPI.L) and Dixons Carphone (DC..L), upon the close of 17th March.
Companies: Servision CRH
Key information: • 9m16 revenue at €20.4bn, 6% higher than 9m15 on a pro-forma basis. • 9m16 EBITDA at €2.4bn, 14% higher than 9m15 on a pro-forma basis. • 9m16 EBITDA margin up by 90bp to 11.7%.
"Fed Chair Janet Yellen yesterday gave her strongest comments to date in favour for a policy tightening in December, telling Congress an increase could be "appropriate relatively soon." She also warned that there would be an eventual price to pay for Donald Trump's 'big government spending', in the form of inflation and a spiralling national debt. The immediate result, however, was for the Dollar to extend its rally during the Asian session, pushing it beyond the Y110 mark for the first time in five months, as yesterday's housing, jobless and inflation data also demonstrated the US to be in its best health for a decade. Another result of this was for the gap between US and German government-bond yields to widen to a 27-year high, as investors placed their bets on Trump's administration sparking an extended phase of expansion, against Europe's political risks, highlighted by Italy's forthcoming Referendum and next years' elections in Germany and France which, some believe, could potentially foster sufficient national tensions to threaten the very existence of the EU. This all blew warm winds over the US equities, with all three principal indices rising once again, as financials and technology stocks celebrated the overnight news. Asia was less convinced, with only Japan putting in a strong performance, sending the Nikkei to a 10-month high in early morning trade as the export-led territory welcomed the weakening Yen. By comparison, the Shanghai Composite closed weaker and other local markets made just fractional movements, as traders considered tomorrow's start of the APEC economic leaders conference in Peru which will discuss cooperation programmes in the Asia Pacific, Trump's proposals for protectionist tariffs and Xi Jinping's vision of the FTAAP following the anticipated collapse of TTIP. Providing no strong direction for London's opening, the FTSE-100 is seen gaining 10 or so points in early trade. There are no significant UK data releases scheduled for today, although a speech by the Bank of England's Ben Broadbent will be studied for any hints regarding of Phillip Hammond's forthcoming Autumn Statement while, later this afternoon the Fed's John Williams may reflect on Janet Yellen's Testimony. UK corporates due to report earnings or trading updates include Electrocomponents (ECM.L), Fuller, Smith & Turner (FSTA.L) and Jimmy Choo (CHOO.L)." - Barry Gibb, Research Analyst
Companies: CRH KIE RMG WJG
Key information: • Pro forma sales up by 8%, up 13% in the Americas, 3% in Europe and 4% in Asia. • Pro forma EBITDA increased by 20% thanks to a 39% increase in the Americas. • EBITDA expected above €3bn for FY2016. • Pro forma EBITDA margin up by 90bp to 9.0%. • Reported EBIT up from €189m to €588m. • Reported PBT up from €63m to €407m. • Operating cash outflow of €0.3bn, better than the normal seasonal pattern. • Net debt at €7.1bn expected to be at €6bn or below by the end of the year.
The wait is almost over. Fed Chair, Janet Yellen, is due to speak at 15:00BST today at the annual Jackson Hole Symposium in Wyoming. Titled ‘The Federal Reserve’s Monetary Policy Toolkit’, every comma, intimation or exclamation within her speech will undoubtedly be scrutinised and giant funds potentially quickly re-directed on any conclusions drawn. Ahead of this Kansas City Fed President, Ester George, a noted sceptic of the central bank’s easy money policy, detailed her own proposal in yesterday’s Wall Street Journal, calling for short-term rates to rise to around 3% over the next couple of years for fear of otherwise creating significant imbalances in the financial system. Yellen, of course, has heard all the arguments before and balancing risks/rewards is likely to end up taking a narrow line between her many advisors, by suggesting the US remains well positioned for continued gradual recovery, employment trends remain good and inflation should slowly pick up; all this would keep the door ajar for at least one rate rise before year end but in investor’s eye not be enough to label the whole event anything but an anti-climax. US markets, perhaps anticipating this and in the absence of significant other macro or corporate news, yesterday had the third-lightest trading session so far this year with all principal equity indices closing fractionally down. Some large long-US$ positions built up since the Fed’s Stanley Fischer hawkish statements of a week or so ago were marginally wound down, leaving the currency slightly weaker, most particularly versus the Yen, during Asian trading. The Nikkei accordingly became the region’s largest casualty in an otherwise modestly mixed session, with the Chinese equity markets gaining while the commodity-heavy ASX gave back some of the previous day’s gains. Against this background, traders should be prepared for the London session to open very quietly this morning, with the FTSE-100 seen drifting less than 5 points either side of unchanged in early trading. Revised Q2’16 UK GDP data is due for release this morning, but unlikely to set off any fireworks. The corporate calendar is also quiet, with just a few earnings numbers anticipated from the likes of Antrim Energy (AEY.L), Avocet Mining (AVM.L), Computacentre (CCC.L), Lavendon Group (LVD.L), Marshalls (MSLH.L) and Restaurant Group (RTN.L)."
Companies: CRH John Laing Group
"With limited news to grab the attention of London traders first thing this morning, equities are expected to rely primarily on the overnight markets to set the opening trend. As a result, the FTSE-100 is seen opening modestly either side of unchanged. Despite the Dow Jones and S&P 500 achieving new record closing highs last week, with reported earnings continuing to slightly surpass consensus expectations, trading volumes remained surprisingly quiet with activity levels down almost one-third from the year-to-date average, marking the US's quietest week since December last year. Asian markets were mostly up despite overall softness in commodity-related issues, with only the Hang Seng and South Korean Kospi indexes succumbing to profit taking. This week will be heavy with central bank statements, including one from the Fed, and global macro-economic data, while Theresa May continues her charm offensive around the UK today visiting Belfast, with a view to calming Northern Irish nerves regarding Brexit and prospective changes to border controls with the South. Of UK corporates, this morning Hammerson (HMSO) is due to releases interims and Ryanair (RYA) to report 1Q progress, although data watchers should also keep an eye out for the Bank of England's quarterly Asset Purchase Facility report." - Barry Gibb, Research Analyst
Companies: BYG CRH VOD
Key information: • 1Q sales rose by 9% y/y with the Americas up 22%, Europe in line, Asia 12% ahead • H1 16 EBITDA Guidance of €1bn supports the FY consensus of c.€3.1bn • Company expects to make progress in H2 16 on a group EBITDA basis.
Key information : • Sales up by 25% and by 17% excluding scope effect. • EBITDA up by 35% thanks to the strong contribution of the Americas and LH assets. • EBITDA margin up 70bp to 9.4%. • EPS at €0.887 vs consensus of €0.969 and €0.789 in 2014. • EPS excluding transaction/one-off costs related to the acquisition of LH assets at €1.118. • Dividend unchanged at €0.625. • Net debt at €6.6bn, better than expected thanks to strong cash generation. • Restarting of the M&A machine: acquisition expenses €8bn, divestment proceeds €1bn. • Net debt/EBITDA at 3.0x, better than expected by management. • LH assets’ synergy target increased from €90m to €120m.
Key information: • Sales from continuing operations (excluding the impact of divested entities and the contribution of LafargeHolcim's assets) were up by 16% on a reported basis to €15.5bn over the 9m15, up 4% excluding currency effects. • EBITDA from continuing operations (excluding the impact of divested entities, the contribution of LafargeHolcim's assets and one-off items) was up 34% on a reported basis to €1.5bn over the 9m15, up 19% excluding currency effects. • Sales from the Americas up 28%. • EBITDA from the Americas up 55%. • Net debt up to €8bn compared to €2.5bn at year-end 2014 reflecting the acquisition spend.
Key information : • Sales increased by 13%. Down 1% in Europe and up 26% in the Americas. • EBITDA from continuing operations up 29%. Up 4% in Europe and up 57% in the Americas. • Margins up in all six operating divisions. • Integration of LafargeHolcim assets. • Acquisition of CR Laurence.
Research Tree provides access to ongoing research coverage, media content and regulatory news on CRH. We currently have 13 research reports from 2 professional analysts.
We take another look at lithium, where there is a growing realisation that the forecast massive increase in demand is already upon us. This realisation has been matched by an awareness that there is no shortage of lithium in geological terms. However, there is still a considerable degree of ignorance about which types of lithium mineralisation are commercially valuable using current processes and technologies; this will require the development and proving of new processes. In this note, we look at what attributes are required for a lithium-bearing deposit to be attractive for development into a successful mine in the present technical and economic environment.
Companies: APF ACP ATYM ASO BKY CAML FDI GEMD HZM PAF PDL SAV SHG WTI WLF
Keywords Studios (KWS): Ticking every box (except valuation) (HOLD) | OptiBiotix* (OPTI): SlimBiome commercial update (CORP) | Surface Transforms* (SCE): Steady progress (CORP) | Gem Diamonds (GEMD): Recovery of high quality 115 carat diamond (BUY) | ClearStar* (CLSU): Record H1 driven by direct sales and medical business (CORP)
Companies: KWS OPTI SCE GEMD CLST
Interims are in line with July’s trading update, with sales up 17% LFL and adj PBT margins robust at 15.0%, +90bps vs. 1H16. Despite this strong performance and our long-term confidence in the business, we move from Buy to Hold in view of the stock’s exceptionally strong run.
Companies: Keywords Studios
Anpario (ANP LN) Impressive growth highlights strategic initiatives bearing fruit | Augean (AUG LN) H1 results in line with expectations | Brady (BRY LN) Contract win | First Derivatives (FDP LN) Investment in Machine Learning | Northgate (NTG LN) In line AGM statement, but higher H2 weighting now expected | Sinclair Pharma (SPH LN) H1’s in line; growth expected to accelerate in H2 | Speedy Hire (SDY LN) H1 update slightly ahead of expectations driven by further cost savings | Swallowfield (SWL LN) Strong progress in FY17 and positive outlook | Yu Group (YU LN) Strong interim results – expectations increased
Companies: AUG NTG SPH SDY SWL FDP BRY ANP YU/
Marshalls, the UKs leading provider of landscaping products, continues to deliver superior growth. Outperformance reflects the systematic investment in new products and the production/distribution network. However, management has not pursued a “growth at any cost” approach and the balance sheet is now ungeared. Moreover, its sustainability credentials makes Marshalls a worthy SRI stock.
Avon Rubber’s pre-close has confirmed that the group will meet market expectations and that performance in H217 has continued apace. With positive mix effects in Protection & Defence and continued strengthening in Dairy, we believe that the eventual revenue and margin mix may alter slightly but that our profit levels will be achieved. With CEO Paul McDonald signalling continued confidence into 2018 and with further medium-term product developments to come through in both divisions, we continue to view Avon as delivering in the short and medium term.
Companies: Avon Rubber
Empresaria Group plc (EMR.L, 134p/£65.7m) Appointment of COO | Harvey Nash Group plc (HVN.L, 87.125p/£64m) Acquisition of Crimson Limited | Hydrogen Group plc (HYDG.L, 31.5p/£10.4m) Interim results to 30 June 2017 | The Kellan Group plc (KLN.L, 0.65p/£2.2m) Purchase of Secured Fixed Rate Loan Notes | Nakama Group plc (NAK.L, 1.675p/£2.0m) Resignation of CEO | Parity Group plc (PTY.L, 10.25p/£10.5m) Interim Results | SThree plc (STHR.L, 337p/£437m) Q3 Trading Update
Companies: EMR HVN HYDG KLN NAK PTY STHR
Continuation of 2H’16 momentum leaves management “optimistic for our full year prospects”. 30% increase to our target price.
Companies: Christie Group
Nasstar* (NASA): Trading update (CORP) | Solid State* (SOLI): Initiation of coverage: Intention to double revenues in five years (CORP) | Mortice* (MORT): Further strong growth (CORP) | Petra Diamonds (PDL): Trading and guidance update (BUY) | The Mission Marketing Group* (TMMG): Positive trading update (CORP) | Connect (CNCT): In line but with a different mix (BUY) | Quixant* (QXT): Strong H1 performance underpins FY forecasts (CORP)
Companies: NASA SOLI MORT PDL TMMG CNCT QXT
In the September edition of the Hardman Monthly Newsletter, Dr Martin Hall - based partly on his personal experiences as a long-standing investment analyst - addresses various accounting issues that are highly relevant to today's investors. In particular, he concludes that measuring company cash flow - and especially projecting future cash flows - is pivotal to undertaking rigorous financial analysis, irrespective of how individual companies may present it.
Companies: ABZA AVO AGY APH ARBB AVCT BUR CMH COS DNL EVG MCL MUR NSF OBT ODX OXB PPH NIPT PHP PURP RE/ RGD SCLP SCE TRX VAL
The expiry of Avon’s DoD contract for the M50 in July 2018 is likely to result in trading headwinds but we believe that the opportunity pipeline is sufficient to support overall growth and Avon is confident of delivering this outcome. On a September 2018 PER of 13.3x, with forecast net cash accounting for over 10% of the market cap, these risks are already priced in. We continue to favour Avon as a long term growth story.
Companies: Avon Rubber
Harvey Nash is an international recruiter specialising in the technology sector. The group has a strong portfolio of powerful brands and operations spanning more than 40 countries. In its AGM statement in June, it announced a transformation plan aimed at streamlining the business, with £700k in savings already identified for FY18. The Group has a solid balance sheet and has utilised this morning by acquiring UK based Crimson IT, which is expected to increase PBT by >£2.0m on an annualised basis (potential for >£3.0m). The business is cash generative and offers an above average dividend yield of 5.2%, which we feel is secure given the Group’s low gearing and a cover building to 3.0x by 2019E. Harvey Nash trades at a substantial discount to other UK listed recruiters; an FY18 EV/EBITDA of 4.5x and a PER of 7.6x equates to a 45% and 37% discount versus its UK listed peer group.
Companies: Harvey Nash Group
The Interim results had been well flagged in the pre-close trading update (16th August) but importantly today’s announcement provides detail with regards the issues with the two largest customers. Both situations are on-going but developments, particularly with entu, offer the opportunity to assess the likely impact in more detail. This leads to cuts in pre-tax profit of c.7%, c.19% and c.13% in FY17, FY18 and FY19, respectively. New forecasts are a best estimate of the potential impact and ZC feel this is a robust and realistic assessment of the situation. A better outcome might be forthcoming should entu trade well under new ownership and the impact from the new owner of SIG’s distribution network is less than expected. Valuation post today’s downgrade is 5.9x FY17 earnings increasing to 6.7x in FY18, the trough year for earnings. The shares yield 9.1% with free cash flow cover of 1.1x in the current year increasing to 1.5x in FY18
Companies: Epwin Group
Avon Rubber (AVON LN) FY17 PBT in line with expectations | BCA Marketplace (BCA LN) Further strong growth + bright prospects. H1 preview | Gym Group (GYM LN) Consolidation becoming part of the investment thesis | N Brown Group (BWNG LN) Curve Catwalk singles Simply Be out as key power brand | River and Mercantile Group (RIV LN) FCA refers industry to CMA, reiterate BUY
Companies: BWNG AVON BCA RIV