Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on CRH. We currently have 12 research reports from 2 professional analysts.
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 12 research reports from 2 professional analysts.
Victoria* (VCP): FY17 results beat expectations (CORP) | Proteome Sciences* (PRM): Interims – organisational changes to benefit (CORP) | Acal (ACL): Strong organic progress (BUY) | Revolution Bars (RBG): FY17 earnings guided up (BUY) | Mortgage Advice Bureau (MAB1): In-line trading with a Buy to Let spike (HOLD) | Gem Diamonds (GEMD): H1 trading update (BUY) | GB Group (GBG): AGM statement reveals trading in line (BUY)
Companies: PRM ACL RBG MAB1 GEMD GBG VCP
Aberdeen Diversified Income & Growth Trust (ADIG LN) Unconstrained and flexible approach | accesso Technology (ACSO LN) Six Flags miss not a red flag | Bodycote (BOY LN) Good growth for H1 17, guidance raised to upper end of expectations | Brewin Dolphin Holdings (BRW LN) Positive Q3 update, upgraded 394p target price | Brooks Macdonald Group (BRK LN) Strong Q4 net inflows but additional cost investment planned | Burford Capital (BUR LN) Exceptionally strong first half results | Itaconix (ITX LN) First application agreement under AkzoNobel collaboration | Oxford BioMedica (OXB LN) Forecasts updated for new Novartis supply agreement | Renishaw (RSW LN) Strong growth for FY17, confident of further progress for FY18
Companies: OXB RSW BOY BRW BUR ITX BRK ADIG
Joules Group (JOUL): Small beat to upgraded forecasts (BUY) | Quartix* (QTX): Interims show the benefits of Fleet focus (CORP) | Scientific Digital Imaging* (SDI): FY 2017 – acquisitions performing well (CORP) | OptiBiotix* (OPTI): First launch of LPLDLcapsules in Germany (CORP) | Staffline (STAF): New market opportunities and a strong balance sheet (BUY) | Minds + Machines* (MMX: .vip renewing at 75% (CORP)
Companies: JOUL QTX SDI OPTI STAF MMX
RTC has announced a material contract win with SSE Plc. It has been awarded a 3yr contract to source, train and provide at least 250 ‘Dual Fuel’ installers for the roll-out of SSE’s smart metering programme. The revenues will be £28m for the period November 2017 to December 2020. As a result, we have upgraded our 2018 and 2019 PBT forecasts by 13% and 11% to £1.8m and £2.1m and increased our price target from 85p to 95p. The contract significantly derisks the earnings profile with 76% of gross profits (ex DCC) now deemed recurring and confirms our argument that RTC deserves a higher rating and should not be viewed as just a cyclical recruitment company. With it trading on a PE rating of 7.7x for 2018 and offering a sustainable dividend yield of c4%-5%, we re-iterate our BUY recommendation.
Companies: RTC 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
Paysafe is potentially the target of a 590p per share (all cash) bid from a private equity consortium. Paysafe’s largest shareholder supports the bid, which must formally be made by 18 August. At the same time, Paysafe has announced the all-cash acquisition of a US payment processor for $470m. This reduces the group’s exposure to the gambling sector and strengthens its position in North America.
Companies: Paysafe Group
We update this table which we first published in early January and highlight the continued progress of the biggest AIM companies so far this year and activity in general. The latest AIM Statistics show that there are 963 companies currently, with 28 new issues year to date raising £441m. What’s more, this momentum has been maintained since June. This demonstrates that despite, the uncertainty surrounding the UK economy, generally investors continue to be active in the AIM market. In Share News & Views we comment on Cohort, ECSC*, Porvair, Quarto*, SQS* and Xafinity.
Companies: BMS CRPR ECSC EUSP FDM PCF PPIX QRT SNX SPRP SQS TCN W7L
No change to forecasts following H117 update; our forecast equates to earnings growth of 23% in FY17. We believe a PE valuation around 10x remains inconsistent with current trading, geographical alignment and delivery of the strategy to acquire niche growth businesses such as Rishworth and ConSol. We anticipate an ongoing narrowing of the discount to its peer group as superior growth rates compensate for size/liquidity and cash generation drives a rapidly improved balance sheet. A rating of at least 13x is a realistic short term expectation providing scope for meaningful share price outperformance from current levels.
Companies: Empresaria Group
Whether we know it or not, advanced materials are a core component in the everyday life of the everyday person. They are the key material in items we often disregard, such as printer inks and lotions, to objects which defy the laws of gravity like the Airbus A380 and London’s Shard. Furthermore, these materials are not only essential to many objects and structures, but, due to their superior qualities, are the key to the advancement of many industries. One such example is the use of carbon fibre which offers five to ten times more rigidness, stiffness, and strength than its aluminium counterpart. As a result of these impressive qualities, motorsport and athletics have improved ten-fold since their mainstream use and new records are broken every year.
Companies: AGM AUTG BIOM BOY CAR EKT EMH EXO GRPH HDD HAYD IKA ITX CRPR MGAM NANO OXIG PLA SCE SYM VCT ZEN
Since its inception in 2010, the Panmure Gordon Conviction List has outperformed the market, returning 284% against a Small Companies index that would have returned 221% over the same period.
Companies: ALD AVON CTH GKN HVN HCM INF NOG OTB POLY SNR SQS STJ
A fortnight into the Brexit negotiations and we’re none the wiser. We have had comments from a number of smaller company funds in the last week regarding the ongoing uncertainty and the possible impact of Brexit. As we await some clearer indicators regarding it and the state of the UK economy, generally shares may well mark time. Among the likely developments is an “implementation phase” lasting possibly until 2020 that may give companies time to navigate the process. In Share News & Views, we comment on AdEPT, Bloomsbury, Manx Telecom, PCF Group*, ProPhotonix* and Synectics*.
Companies: BMS CRPR ECSC EUSP FDM PCF PPIX QRT SNX SPRP SQS TCN TRI W7L
Augean (AUG LN) H1 trading flat, guidance reduced due to I&I | Dialight (DIA LN) Good progress, now we await momentum pickup | Gresham Technologies (GHT LN) Further positive confirmation of Clareti opportunity | Rathbone Brothers (RAT LN) Interims show progress but we remain at SELL on low earnings growth | Restore (RST LN) In line H1 update; on track for another year of significant growth | Servelec Group (SERV LN) Reassuring return to underlying growth for this “Best Idea” | St Ives (SIV LN) Disposal aids deleveraging | Victrex (VCT LN) Strong core revenue growth suggests upside to FY forecasts
Companies: AUG GHT VCT SIV DIA RST SERV RAT
Recent FY results were in line with expectations. Significant investment in facilities and people has positioned the group to up-scale its activities. Its ambition is to double revenue over the next five years through acquisitions and organic growth. The group should experience a recovery in its manufacturing business and is also well placed to continue consolidating a fragmented market, with acquisitions that extend its technology reach and result in market share growth. The shares remain attractively rated, at a discount to its peers, and offer decent upside to our 535p price target.
Companies: Solid State
Today we publish our H1 review of our Best Ideas for 2017 – the document in which we also outlined our key top down and bottom up investment themes for the year. Our 12 top picks in January were Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield which have collectively outperformed the wider market by 13% YTD. At the half way stage we retire Cineworld and Hill & Smith from the portfolio (both were moved from Buy to Hold in May after outperformance), to be replaced by CVS Group and Renold. We also give a brief update on the rationale for our picks.
Companies: IQE RNO SDL CVSG ELM REDD RENE MYSL SERV HRI SFR RTHM CINE HILS