Full year results slightly ahead; improving trend in trading since April
Walker Greenbank is a higher end interior furnishings business with well-established global brand names and manufacturing facilities in the UK. The Group has this morning released full year results to 31 January 2020, slightly ahead of our forecasts at the PBT and EPS levels. During the year, and against what was already a challenging wider market backdrop, brands such as Morris & Co as well as the group's core licensing revenue stream largely offset wider weakness in the UK and US markets. As would be expected, trading since year-end has been extremely difficult, with product sales c.35% down in the first five months of the current financial year. Encouragingly, product sales in the last four weeks are reported to have been 31% below the comparative period, reflecting a steadily improving trend since the beginning of April. At this stage we leave our forecasts under review but it is encouraging to see the more recent improvement in trading patterns, whilst internal actions and the refocused strategy continue to improve the outlook for the group.
Companies: Walker Greenbank
The phased reopening of Walker Greenbank’s two manufacturing facilities (both in the UK) is underway with Standfast & Barracks already operational and Anstey restarting this week. The company’s business model is such that near-term activity levels can be rebuilt gradually. It may also support new business development in the UK in due course compared to overseas supply sources. No new financial information was provided ahead of the company’s scheduled FY20 results announcement on 30 June, at which point activity levels during FY21 to date should also be disclosed. Our estimates remain suspended at this time.
Walker Greenbank’s FY20 results date has been reset to 30 June (and complies with updated FCA policy guidance). Its latest update provides no new financial information though orders continue to be received despite lockdown conditions. Operational steps already taken appear to be appropriate, retaining sufficient infrastructure to service prevailing sales demand levels while additional actions aimed at preserving business liquidity are referenced, consistent with those seen elsewhere in the quoted sector. Taken together, the company appears to have quickly adjusted its business model to meet current market challenges in FY21.
Walker Greenbank is a higher-end interior furnishings business with well-established global brand names and manufacturing facilities in the UK. This morning, the group has provided a further update on the business in relation to COVID-19 following its previous announcement on 25 March. In addition, and in line with recent FCA/FRC guidance, full year results to 31 January 2020 have been rescheduled to 30 June (previously expected 23 April).
With cash ahead of expectation in a year of transformation, PTY has reported inline results for the year to December 2019, with revenues standing at £80.4m and £0.1m adj. PBT. Net cash at £0.9m is ahead of our expectation prior to the company's pre-close update by some £1.9m, a significant beat.
Dillistone's update this morning is, on the whole, reassuring. Although the economic implications of COVID-19 will likely materially affect FY2020E results, as with many businesses seeing a significant reduction in demand for products and services, it is too early to determine the quantum. As such, we remove our FY2020 estimates that previously looked for an EBITDA contribution of £1.6m and adjusted PBT to £0.1m.
Companies: WGB DSG PTY
The coronavirus pandemic is having wide-ranging effects on the general trading environment and Walker Greenbank has announced the steps it is taking in response. Manufacturing facilities are temporarily being closed, but the company is still currently able to support customers and sales through carried inventory levels. Consistent with others, actions being taken to preserve business cash and operate within existing banking facilities look sensible. The company has withdrawn financial guidance and, apart from FY20, our estimates have been removed.
A reassuring year-end update confirms Walker Greenbank’s FY20 ended in line with management expectations. There do not appear to have been any major changes in market conditions in H2 for each of the three reporting regions. Going into FY21, a progressive strategy roll-out by the new management team will set the scene for future growth aspirations. Our estimates are unchanged and the company’s P/E remains below 10x.
Full year trading update in line; strategic progress emerging
Walker Greenbank is a higher-end interior furnishings business with well-established global brand names and manufacturing facilities in the UK. The Group has this morning released a full year trading update, confirming that results for the year to 31 January 2020 will be in line with expectations. Against a challenging wider market backdrop, Morris & Co, Clarke & Clarke, core licensing and digital fabric printing have performed strongly, with the year-end net cash position standing at c.£1.0m (ex IFRS 16). Whilst the refreshed strategy under the new leadership team will take time to come through, this morning's update provides encouraging evidence of green shoots emerging and we leave our forecasts unchanged. After a difficult few years, the shares remain lowly rated and in our opinion have the potential to re-rate if the new management can continue to deliver on the refreshed strategy. A calendarised 2020 PER rating of c.13x, in line with the peer group, would imply fair value for the shares at 110p.
Solid State (SOLI) – Corporate – Powering ahead from solid foundations
Market Cap £53.7m Share Price 633p
Solid State is a manufacturer of computing, power and communications products, and value added distributor of electronic components. This morning we have published a 24pp note setting out our investment thesis following a strong period for the group. Interim results in December demonstrated the strength of progress being delivered, putting the group well on track to meet our FY 2020E expectations and moving back into a net cash position for the first time since the acquisition of Pacer in 2018.
Walker Greenbank (WGB) – Corporate – Full year trading update in line; strategic progress emerging
Market Cap £50.4m Share Price 71p
Walker Greenbank is a higher-end interior furnishings business with well-established global brand names and manufacturing facilities in the UK. The Group has this morning released a full year trading update, confirming that results for the year to 31 January 2020 will be in line with expectations. Against a challenging wider market backdrop, Morris & Co, Clarke & Clarke, core licensing and digital fabric printing have performed strongly, with the year-end net cash position standing at c.£1.0m (ex IFRS 16).
Serinus Energy (SENX) – Corporate – Moftinu 1004 Well Successfully Tested at 6.0 mmcf/d
Market Cap £24.5m Share Price 10.3p
Serinus has announced that the Moftinu 1004 well produced on test at a maximum stable rate of 6.0 mmcf/d (1,000 boe/d) with no progressive pressure decrease throughout the test, which was undertaken with a 40/64” choke.
Jersey Oil & Gas (JOG) – Corporate – Buchan Note Published by WHI
Market Cap £21.8m Share Price 103p
WHI view: Jersey supported by Rockflow Resources, petroleum consultants, has estimated that the development of the Buchan field has a potential to recover 58.5 mmb, 81.2 mmb and 99.3 mmb of oil under low, mid and high cases respectively. We met recently with Jersey and Rockflow to better understand the Buchan field and its forward looking production potential. We have gained confidence in the company's resource estimates and we have outlined our reasons for that in a note published today.
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A narrower focus on core business strengths driven with greater operational intensity is an appealing proposition under a revised strategy and new senior management team. More detail will emerge here, but an intention to regain revenue momentum will be a clear marker to watch. H120 results were in line with pre-close comments and our earnings estimates are unchanged at this stage. They – and we suspect the company valuation – have yet to fully factor in renewed strategic impetus.
Walker Greenbank is a higher-end interior furnishings business with well-established global brand names and manufacturing facilities in the UK. The Group has this morning released interim results, which whilst complicated by IFRS15, IFRS16 and change in US distribution model in the period, have come out in line with the Board’s expectations as indicated in August. Importantly, the strategy update post change of leadership in April points to much greater focus on the group’s core brand and product offering, where it has greatest customer and geographical penetration. Encouragingly, and although ahead of the group’s key autumn selling period, the expected out-turn for the full year remains in line and as such, we leave our earnings expectations unchanged. The current backdrop will take time to improve but it is encouraging to see Walker Greenbank holding its own; and with a new strategic focus in place, we believe that the group remains well positioned to grow in the years ahead in its core markets. The shares remain lowly rated and in our opinion have the potential to re-rate if new management can deliver on the refreshed strategy. A cal.2020 PER rating of 11x, in line with the peer group, would imply fair value for the shares at 95p.
Positive steps have been taken in the UK and US that will benefit Walker Greenbank in future periods and although the domestic market remains challenging, management’s full year expectations are unchanged. The upcoming strategic update may bring the prospects for re-building earnings and associated valuation metrics into sharper focus for investors.
Freyherr International Group PLC the Medicinal Cannabis holding company established in 2016, is planning to list on the NEX exchange on the 13 August.
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Voyager AIR The Com pany w ill focus on the acquisition, leasing and m anagement of prim arily widebody aircraft, w ith asset management services to be provided by Amedeo Limited he IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m·
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An in line AGM update is to be welcomed after a tough trading year in FY19. Market conditions have yet to show any marked improvement, but UK cost savings and some international progress support our existing estimates. The new management team expects to deliver a strategy update in the Autumn and this should provide insight regarding future growth prospects. The rating has increased in recent months though FY20 should represent trough earnings in our view.
Walker Greenbank (WGB) – Corporate – AGM update - YTD trading in line with expectations against a continued challenging backdrop | Immotion Group (IMMO) – Corporate – Exclusive free-roaming content deal with Survios
Companies: Walker Greenbank Immotion Group
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AGM statement: upbeat
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Games Workshop’s (GAW) interim results are ahead of expectations. The highest rates of revenue growth were achieved in the channels with the highest operating margins, ie Trade (40% margin) and Online (64% margin). This has produced a strong improvement in free cash flow generation and ROCE has improved from 96% to 111%. We upgrade our forecasts for FY20 and FY21 by a further 3% following the 9% upgrade in November. Our DCF-based valuation increases by 11% to 5,748p.
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Red Dwarf, the very British sci-fi comedy franchise, ran for 11 seasons – most recently in 2017; and The Promised Land is a feature-length TV movie – out this year. Yes, the programme is an acquired taste. Strangely, too, many episodes are impacted by a virus or three (physiological, not main-frame).
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A strong finish to FY20
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GaaS and eSports a welcome boost; Buy
Full year results – corrective actions taken to protect the business
Immotion is a leading UK-based ‘out of home' Virtual Reality (VR) experience provider. This morning, the group has released full year results to 31 December 2019, broadly in line with our forecasts. Post year-end and reacting to COVID-19, management took the previously reported actions to reduce the company's cash burn, including salary reductions and the furloughing of staff, whilst the two successful fundraisings in recent months have provided additional liquidity of some £4.0m. Reflecting the high degree of uncertainty at this point in time given the present backdrop, driven by the timing of easing of restrictions in Immotion's core territories and then consumer behaviour once this has eased, our forecasts remain under review for the time being. Whilst changes will no doubt need to be made at Partner sites, we believe that the out of home VR opportunity has not gone away once a degree of normality returns
Companies: Immotion Group
Warpaint has issued a brief, but positive, update alongside its AGM today. Sales have been at a higher level than anticipated in H1, albeit significantly below the prior year due to the pandemic. In line with management’s original ambitions, there has been an improvement in gross margin. Together with lower costs, which the furlough scheme has contributed towards, this has helped the group deliver a positive EBITDA in the half, with no erosion of cash. This is a good outcome and ahead of general market expectations, we believe, albeit there is no guidance or consensus for the year ahead.
Companies: Warpaint London
Autins has reported interim results consistent with its trading and COVID update at the end of March 2020. The first five months performance was ahead of management expectations and Q2 saw the Group achieve the majority of its targeted £2m p.a. cost savings, materially lowering the Group’s breakeven point. Automotive deliveries have restarted after a significant fall off in demand - all Autins’ sites were closed on 22nd March 2020 - and with PPE equipment orders building, 50% of the workforce has returned. The term sheet for a £2.75m CBILS loan has been agreed and the Group’s modelling of potential downside scenarios, including £1m of permanent liquidity headroom, shows that Autins could withstand an extended downturn along with the impact of other identified risks. The Group’s liquidity headroom looks to have improved further with the extension of UK & overseas support schemes, growing PPE sales and current trading volumes ahead of its downside scenario. Guidance remains withdrawn with FY2020 results set to be impacted by a significant reduction in H2 revenue. Nevertheless, with costs reduced and an opportunity pipeline of over £40m (incl. Neptune £30m) and a building conversion rate, Autins is now positioned to deliver a strong recovery in profitability.
Companies: Autins Group
We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.
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Japanese PMI falls to lowest level since 2009, GE Aviation cuts 10% of workforce, Kone downgrades 2020 outlook
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COVID-19 update: div. suspended, expect downturn in orders
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