Zeus Building Products Round-up - 6 September 2024

August has been a quiet month for industry newsflow as companies gear up for half year announcements and markets await commentary on current trading and outlooks as we exit the summer period. On the macro data front, there has been positive movements on mortgage approvals with July seeing banks approve 62k mortgages, the highest since September 2022 as it closes in on the pre-pandemic average of c. 66k. Whilst consumer confidence was flat in August at -13, personal finance confidence improved 5

Topps Tiles - Acquisition of well-respected competitor

The acquisition of certain assets of CTD Tiles (CTD) brings complementary activities to Topps Tiles’ (TPT’s) existing Omnichannel and Commercial businesses. Management believes these will enable faster progress in some current markets (with architects and designers) and provide a meaningful entry into new addressable markets, such as the volume housebuilder segment. The acquired revenue and profit will accelerate TPT towards its Mission 365 financial goals. We upgrade our FY25–26 profit estimate

Topps Group (TPT LN) - Acquisition of CTD Tiles Limited

Topps Group announced it has acquired the CTD Tiles brand, 30 stores, selected stock and all related IP from tile specialist CTD Tiles Limited for a consideration of £9m. Based on £44m of LTM revenue, the transaction represents a headline EV/Sales of 0.2x, however, when considering inventories acquired, the price appears extremely attractive, in our view. The UK Tile market has experienced a challenging and prologued downturn over the last 18-24 months, causing multiple peers to enter administra

Zeus Building Products and Construction Round-Up - 7 August 2024

Collectively, the Building Products and Construction sectors had a strong performance over July, no doubt supported by positive statements made from the newly appointed Labour government, continued expansion in Construction PMI and the highly anticipated 25bp interest rate cut.

Topps Tiles - Covering the bases…and walls

Topps Tiles’ (TPT’s) updated medium-term strategy is focused on leveraging its core competitive strengths into much larger addressable markets, while continuing to grow its core brands and services, which are at various stages of development. Management’s pedigree on delivering prior market-share-based strategies suggests TPT can generate significant profit growth, even with conservative estimates on the scale of an expected cyclical recovery. We believe the growth prospects are not reflected in

Topps Group (TPT LN) - Q3 Trading Update

Topps Group released a Q3 update for the 39 weeks to the June period end confirming trading continues to remain challenging with total sales in Q3 down 6.9% yoy and down 6.2% ytd.

Topps Tiles - Signs of stabilisation in Q324

Topps Tiles’ (TPT’s) brand strength continues to shine through with ongoing market share gains versus a weak repair, maintenance and improvement sector. There is also some encouragement that overall revenue trends were relatively unchanged through Q324, with no deterioration versus what was reported for the first seven weeks, albeit it remains challenging overall. For the individual group companies, the trends and narrative are consistent with recent updates: Omni-channel remains weak given the

Zeus Building Products and Construction Round-Up - 2 July 2024

As we close off the first half of 2024, economic data has provided mixed signals with signs of improvements, albeit from a low base. GDP grew 0.7% in Q1 (QoQ), however, a timelier monthly estimate for April indicated no growth due to a rise in Services being offset by a fall in Production and Construction. This slightly contradicts what Construction PMI is reporting however, which saw activity rise at fastest pace in 2 years, with the index at 54.7 (April: 53.0). Residential projects grew only m

Zeus Building Products and Construction Round-Up - 5 June 2024

The positive momentum in macro data seen at the start of the year is beginning to wane as the economy increasingly looks for a catalyst to elicit any sustained improvement. Banks are continuing to lend more cautiously following the pre-emptive cuts in mortgage rates seen at the start of the year. January saw the typical 2-year fixed mortgage rate fall to just over 4.7%, however, recent weeks have seen this rise back to 5% as investors expect only one rate cut for 2024. This is starting to feed t

Topps Group (TPT LN) - Interim results & updated strategy

Topps Group has announced its interim results to March period end highlighting a good relative performance against a tough backdrop as sales fell 5.8% yoy to £122.8m versus c. 10-15% for the wider market, according to management. Adj. PBT of £3.1m is down 30% yoy and covers 40% of Zeus’s FY24 forecast, implying Topps will need to see some improvement in the operating environment to meet current estimates, which Zeus keep unchanged. The big news comes from the updated ‘Mission 365’ strategy, whic

Topps Tiles - Looking to the future

Topps Tiles’ (TPT’s) H124 results demonstrate the effects of the general market softness of spend on repairs, maintenance and improvement, as evidenced by other companies and external data. Of more importance is TPT’s updated strategy, which includes targeting new markets and further/better leverage of existing brands, and ‘medium-term’ financial goals, the most notable being an indicated more than quadrupling of adjusted PBT from our FY24 estimates. Management points to more encouraging forward

Delivering on the financial & strategic roadmap

DPP has delivered a strong H1 and is executing very well against strategy. We make 5 points: (i) Organic growth was stellar at 22% LFL (virtually all volume) and this supported a move into positive EBITDA. (ii) Post the fund raise, capital is being deployed rapidly on new site expansion (16 for FY24). (iii) The franchising strategy has kickstarted with an overseas franchisee acquiring 4 corporate stores, with more in the pipeline. (iv) Current trading has remained strong (>20% LFLs Jul-Aug). (v)

Contract wins help underpin FY confidence

Zinc has today announced two contracts, worth a combined £4m of revenue. The first is for “a major global steaming platform” which has commissioned Zinc to produce a new (un-named) series. This follows on from a previous commission titled ‘Defending Europe’, which recently premiered in the UK and also Finland (where it’s the highest rated premier on the channel in 2024) and so is good example of on-going/repeat business. Zinc has also been commissioned by a “global music label” (a new customer)

Warpaint London+ (W7L, House Stock at 586p) - Strong momentum continues

Hybridan Small Cap Feast - 17 September 2024

17th September 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced, or it is a rumour *New product launch* In addition to our Small Cap Feast, which will continue to bring you the latest IPO news and stories across the small cap universe, we will shortly be launching “Friday Takeaway”. This will delve a little deeper on individual companies and focus on non-h

HeiQ - Trading update

HeiQ has published a trading update covering the 18-month period to June 2024, which will be the next period it reports on by the end of October 2024. The company notes ongoing challenging market conditions through the period, particularly due to weak consumer discretionary spending that has particularly impacted its Textile & Floorings and Antimicrobials business units. Through the period, HeiQ has aimed to balance the weaker revenue performance against investment in its growth opportunities, s

Allenby Capital TMT Update - 16.09.24 - ENSI.L, BIRD.L, NWT.L, ENET.L, ELEG.L, FIN.L, LST.L

Please find below our weekly update covering themes that we feel that are of interest to investors and participants in the small and mid-cap TMT sector as well as commentary on recent newsflow.

PANMURE LIBERUM: The Panmure Liberum Leisure Digest: Lead indicators looking up

Beat to FY24 EBITDA & positive new funding news

XPF has continued to prove its concepts appeal and slick execution with positive momentum in LFL, site numbers and margin. This has resulted in FY24 being ahead of our estimates. With no change to management expectations, we hold our 2-year EBITDA forecasts and introduce FY27. Whilst current LFL’s have moderated from historical highs, this is in keeping with the wider sector, against which it continues to outperform. Critically, forward bookings for peak December trading are at record highs. Add

LIBERUM: Loungers* - Outperforming with LFL, unit and margin growth

Morning Note – 12 September 2024

Ready for the next leg of growth

PANMURE LIBERUM: Loungers: More good stuff

Hybridan Small Cap Feast - 12 September 2024

12th September 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced, or it is a rumour Dish of the day Admissions: None Delistings: None What’s baking in the oven? Our daily digest of news from UK Small Caps If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”. Hybridan Chefs research@hybridan.com Banquet Buffet*** Andrad

PROGRESSIVE: Vertu Motors: Robust market progress

Vertu Motors’ trading update for the five-month period to 31 July, released today, confirms that FY25 adjusted PBT is expected to be broadly in line with market consensus. Profits in H1 will have been lower than in FY24, as anticipated, and H2 is expected to be better than in FY24 because of the improved used vehicle market and stable used car pricing. Although the new retail car market is soft and the BEV (battery electric vehicle) segment remains particularly weak, the used vehicle market is m

Dominos Pizza - On the front foot

Delivery is the byword for Domino’s, with successful affirmation in 2020 of a proven model in challenging conditions. With collection (21% of 2019 sales) hampered by COVID-19 restrictions, delivery stepped up with 24% top-line growth, driving a 7% rise in full-year like-for-like PBT. This is complemented by a new digital-led strategic plan (medium-term target of 20–40% higher system sales) and a commitment to return surplus cash to shareholders (£88m for 2020). Also, longstanding friction with