Hybridan Small Cap Feast - 06 Apr 23

6 April 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objective

PROGRESSIVE: Gear4Music - Forecasts cut on weaker trading, but net debt reduction beats market expectations

Weaker-than-expected Q4 trading, notably in February and March against soft comparatives, has resulted in G4M guiding to an FY23E EBITDA outturn of between £7.3m and £7.7m, below market expectations. Gross margin of 25.7% (vs 27.8% in FY22) reflected inventory reduction in a tough trading environment. However, year-end net debt of £14.5m is £3m better than expectations of £17.5m, and comfortably within G4M’s borrowing facility.

Margin hits forecasts, but debt substantially reduced

In tough conditions for discretionary spending, G4M grew sales in Q4, implying market share gains continued. Some of this growth, however, reflects efforts to reduce elevated stock levels. This has impacted gross margin and profits, with Mar’23/Mar’24 EBITDA downgraded c15%. However, the goal of reducing net debt was a success, falling more than markets expected and rolling through to outer years. Leverage is well within the bank’s covenants. Margins and FCF can build from here in the absence of

Hybridan Small Cap Feast - 19 Jan 23

19 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

On track after Q3, including targeted ND reduction

Growth of 5% over peak includes the adverse effect of Royal Mail strikes in the UK in Dec, offset by expansion in Europe. A temporary margin fall, in part due to targeted stock reduction which supports ND reduction, has been offset by labour efficiencies and lower marketing costs. It remains on track to meet FY EBITDA and lower ND, concerns about which have weighed on the rating despite significant balance sheet flexibility. Growing confidence here is helpful.

PROGRESSIVE: Gear4Music: Steady progress over peak trading period

G4M delivered a solid performance over its peak Q3 trading period, with financial performance in line with Board expectations. Group sales rose 5% over last year, with Europe performing particularly strongly (+11%). In the UK, sales were flat, with Royal Mail strikes and their knock-on impacts compounding the effects of weaker consumer sentiment. Lower marketing spend and labour efficiencies offset a temporarily softer gross margin, with G4M reiterating that FY23E EBITDA and net debt reduction a

In line interims, improved Q3 momentum

Today’s in-line results confirm a material uplift in European conversion rates, driven by its in-territory DCs and improved customer proposition. It delivered a number of key web projects in H1, and is on track to deploy other growth-oriented initiatives over the next 6-12 months. With trading momentum having improved ahead of peak, and stock/net debt now reducing, this update has the potential to support some re-rating from just 3x Mar’24 EV/EBITDA.

PROGRESSIVE: Gear4Music: Interim results in-line, with clear focus on future platform evolution

G4M’s interim results reflected the previously disclosed headline performance featured in last month’s AGM trading update. The improved H2 trading momentum highlighted in the AGM statement has pleasingly continued into November, with the company reiterating confidence that the full-year FY23E outturn will be in line with consensus market expectations. Future platform developments will focus not only on enhancements to customer service and experience, but also on evolution of the platform to supp

Hybridan Small Cap Feast 20/10/22

Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Ithaca Energy, a UK independent exploration and production company focused on the UK North Sea, intends to join the Premium Segment of the Main Market. Ithaca Energy is one of the largest independent oil and gas companies in the UKCS, ranking 2nd by resources and 3rd by production. During the six months ended 30 June 2022, Ithaca Energy's average daily production (oil and gas) on a net working interest bas

H1 update in line with previously reset expectations

Today’s update is in line with expectations that were reset in early Sept due to the cost of living uncertainties and weak trading over the hot summer months. We take encouragement from improved momentum in late Sept and Oct to date. It is on track to deploy several new growth initiatives in H2, as well as further productivity enhancements. Ahead of peak, G4M’s expanded infrastructure is performing well and it has strong inventory levels. Net debt is expected to reduce by year end, and the group

PROGRESSIVE: Gear4Music: Improved September momentum continuing into H2 – unchanged forecasts

G4M reported H1 sales growth of 2% to 30 September, despite the trading challenges laid out in its September AGM trading update. The star of the show was Europe and Rest of the World, which delivered a sales uplift of 10%, reflecting the benefits of the additional Irish and Spanish hubs opened last year. The improved period-end trading momentum has continued into early October. Together with a return to a more normalised seasonal trading pattern, a number of website upgrades to be implemented in

PROGRESSIVE: G4M: Lack of visibility on consumer sentiment upturn prompts more prudent guidance

Gear4music’s AGM trading update has reported sales growth in Q1 against tough comparatives. Trading over July and August was, however, impacted by the combination of extremely hot weather and the cost of living crisis, which has dampened discretionary consumer spending. While sales growth has picked up in September, the company believes it prudent to rein back full-year expectations given the prevailing market conditions. G4M is pointing to FY23E revenue of c.£155m with EBITDA of £9m.

Weather warning after tricky Jul/Aug

In its scheduled update, G4M reports growth in Q1 then weakness in Jul/Aug, albeit sales still accelerated in Europe. We believe the heatwave across its markets is a key factor and sales have improved in early Sept. Management can’t be certain planned growth materialises, though, given the uncertainties and spending squeeze, and is guiding Mar’23 EBITDA down £3m (-31%). Pending more info, we reduce Mar’24 EBITDA too (-17%). Markets were discounting bad news though and, post revision, it’s on onl

Gearing up for next growth phase

Results met previously downgraded expectations. Despite the challenges, including disruption from Brexit and weak performance in Europe (c45% of sales), profitability remains well above pre-covid levels (6% EBITDA margin) and it has a strong pipeline of exciting growth initiatives landing this year. So, although downgrades have disappointed and triggered a de-rating, this is far from the end of the story. On good execution these initiatives will bolster G4M’s long term potential and open up a pa

Gear4Music: A tougher gig in FY22; strong growth over FY20

G4M delivered FY22 results slightly ahead of guidance in the April post-close trading update, with EBITDA some £0.2m better at £11.2m. FY22 results were down on the exceptional FY21 but show strong progress over FY20, better reflecting the underlying growth trajectory. In light of recent acquisitions, planned enhancements and service additions to its proprietary trading platform, and its prescient investment in inventory ahead of inflationary pressures, G4M’s business model is set fair to delive

Sector-leading growth and returns

XPF is a fast growing and exciting young company in the experiential leisure sweet spot. We like the structural themes and resilience driving this sub-sector and see XPF as uniquely positioned with two differentiated and growth orientated brands Boom Battle Bar and Escape Hunt. A low capex and opex model drives high returns and fast payback. XPF exited FY22 generating positive adj. EBITDA/FCF and Q1’23 trading is ahead of expectations. Expansion headroom is vast, backed by a favourable property

Launch of ZOO Spain

ZOO Digital has announced a strategic investment in an established dubbing and localisation company (AM Group) that adds new facilities in Spain. ZOO has acquired a 30% stake in AM Group for a total consideration of €825k (c.$900k) payable in cash on completion. AM was founded in 2004 and has been a partner to ZOO since 2021. AM’s website does not disclose any major customers but the company has provided recording and mixing services for hit shows such as Fleabag (A BBC and Amazon Studios co-pro

Hybridan Small Cap Feast - 23 Feb 23

23rd May 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Marks & Spencer (MKS) - House Stock at 164p - FY23A preliminary results - smashing it...!

Sparks Flying

Full year beat and raise MandS delivered FY Mar-23 adjusted profit before tax c.11% ahead of consensus, driven by a strong second-half recovery in Food profits. Clothing and Home improvements continue and both divisions have carried this momentum into the new financial year. We lift our profit forecasts materially and our price target rises to GBp 190. Following today''s share price move, however, we see greater upside elsewhere in the sector and maintain our Neutral rating. Top Marks for the n

LIBERUM: Topps Tiles* - Record H1 revenue; raising forecasts

Encouraging progress despite the challenging environment

M&S has published its FY22/23 (ended on 1 April 2023) results, beating consensus and our expectations. Both the food and C&H businesses posted better-than-expected performances. The group expects to deliver modest growth for the year ahead despite ongoing cost inflation and the weaker consumer environment. The group plans to resume an annual dividend payment from November on the back of the improved shape of the business.

Hybridan Small Cap Feast - 25 May 23

25th May 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 22 Feb 23

22 February 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objec

Hybridan Small Cap Feast - 26 Apr 23

26th April 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

Initial Equity Trading Comments - 10 May 2023

Don''t believe the hype?

Just how good will the summer be? Ryanair is playing its usual coy game on summer pricing, and tempering enthusiasm around an exceptional peak period. This is despite industry capacity being indicated by the company down 5-10% against 2019 levels, average fares tracking 20% above pre-Covid in the last published quarter, and unit ancillaries reported 10% ahead. We acknowledge that the group is only 40% sold for the summer, but we have increased our expectations on fiscal Q224 pricing to +7% y/y (

No surprises in the FY performance

Kingfisher’s FY22 performance was a mixed bag. The Group’s lfl sales declined by 2.1% yoy, with no surprises in the UK and France businesses. The adjusted PBT of £758m (-20.2% yoy) was 2.3% ahead of the market expectations. The FCF softness was a one-off in our opinion. We expect kingfisher to continue to gain market share in the core segments. The strategy to roll out compact store formats and monetize retail media opportunities are steps in the right direction. No major changes expected in ou

Germany to the forefront

Adevinta reported in-line Q1 results last night The group have delivered healthy top line growth (+14%), c1% ahead of cons. Reported EBITDA was in line with Visible Alpha consensus (145m, c100bps YOY margin improvement) Mobile.de a standout performer again; France margins below consensus Mobile.de was very strong with 32% revenue growth (vs cons at 24%) via ARPU growth and inventory rebound, boosting margins by c250bps. France revenue growth at +10% was in line but EBITDA margins down to 42% (

Luxury EDGE: global brand heat in April 2023

Brand momentum and popularity is key to both long- and short-term performance. Luxury EDGE distils the latest trends on social media and search engines for up-to-the-minute views on brand heat. What''s new on Luxury EDGE Strong momentum at Cartier, Bulgari, Dior, Hugo Boss, Cucinelli and Tod''s. Key highlights of April were the significant amounts of pop-up stores opening and exhibitions in China. WeChat: Dior, Hugo Boss and Bulgari increased their popularity the most Brands that increased their