Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Entu. We currently have 16 research reports from 3 professional analysts.
As previously guided in its trading update on 14 June, H1 results have been adversely impacted by operational and supply chain issues in the core Home Improvement’s business, resulting in reduced installations during the peak seasonal trading months of March and April. An unaudited EBITDA loss of £2.3m announced today is in line with revised guidance. Management have taken positive action to address current challenges; operational improvements introduced in recent months are yielding results and a further restructuring exercise implemented in July has identified £0.8m in annualised savings. Alongside this, the senior leadership team has been strengthened with the addition of several experienced interim managers. A strategic review of the business is underway, with KMPG engaged to consider various debt and equity finance options as well as potential interest in certain parts of the business. At current levels Entu trades on an FY18 PER of 4.1x and EV/EBITDA of 3.7x.
The firm has struggled with supply chain problems, fit capacity constraints, and competition
Entu has announced a trading update this morning, with H1 performance held back by supply chain problems and fit capacity constraints, while intense competition in its non-core boilers and energy-switching businesses has resulted in the decision to discontinue these operations. Tighter market conditions have also meant the postponement of planned reductions to customer discounting and the Group now expects to report an underlying LBITDA of c£2.0m for H1. The Group remains committed to executing the action plan outlined alongside preliminary results in March and has appointed an external consultant to accelerate its implementation. We have cut our forecasts to reflect revised expectations, Entu now trades on 9.7x FY18 PER.
Phoenix Global Mining— US Brown field copper play. Expected late June. Offer TBA Touchstone Exploration— Oil exploration and production company active in the Republic of Trinidad and Tobago. Interests of approximately 90,000 gross acres. Production c. 1,300 boepd. Raising £1.45m. Expected mkt cap £7.5m. Due 26 June. I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK. Offer TBC, 7 June admission. Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission in late June Tiso Blackstar Group—Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Expected late June. Vordere—RTO targeting German Property. Raising £9m at 17p. Readmission c. 15 June. Residential Secure Income - social housing REIT raising up to £300m Admission due c.12 July. ScotGems—Admission due 26 June. Seeking £50-£100m. To investing in a diversified portfolio of Small Cap Companies listed on global stock markets DP Eurasia—Intention to float from the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia . £20m primary raise plus a partial vendor sale. Film Finances—Sky News reports that ‘movie financing company with credits including the Hollywood hits La La Land and Nocturnal Animals is plotting a blockbuster premiere on the London stock market that will value it at several hundred million pounds.’ Expected ‘during the summer’. AIB—Intention to float from AIB, Ireland's leading retail and commercial bank . The Minister for Finance intends to sell approximately 25% of the Ordinary Shares of AIB. Valuation range €10.6-€13.3bn. Admission end June. Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. Flying Brands (FBDU.L)—Prospectus approved by FCA. RTO of Stone Checker Software, supplier of technology solutions in the field of kidney stone analysis and prevention. Has raised £550k at 3p. Subject to GM on 15 Jun. Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe
Companies: IRR MNC K3C FUM EHG ENTU PTCM WAND RHL IGAS
Final results in line with expectations following a challenging year that has included significant divisional restructuring, and a detailed balance sheet and accounting policy review. EBITDA for FY16 of £2.7m is in line with management’s revised guidance of £2.6m to £2.7m and ZC forecast of £2.7m. As previously announced no final dividend has been declared, resulting in a total dividend for the year of 0.5p. Management have affirmed intentions to reinstate a dividend as soon as possible; our forecasts of 1.0p in FY17 and 1.5p in FY18 are unchanged and reflect the improved profitability of the business going forward as cost savings are realised. Encouragingly, revenues for the first quarter of FY17 are ahead of plan with £4.0m of annual savings targeted for the year. Entu is on track to meet FY17 expectations whilst implementing the necessary changes to establish a foundation for future growth. Trading on just 5.6x FY17 earnings the valuation is undemanding if restructuring plans continue to be well executed.
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Entu has announced that EBITDA from continuing operations will be within the range of its previous guidance of £2.5m to £2.9m at £2.6m to £2.7m. This is in line with ZC forecast of £2.7m in FY16. The FY16 outcome, combined with the fact that revenue for the first three months of FY17 are also in line, is reassuring considering the issues the business has faced during the year. FY17 forecasts assume a c. 60% increase in EBITDA as profitability bounces back. However, as a result of a balance sheet review and the introduction of more prudent accounting policies, the company will not pay a final dividend for FY16. This means total dividend for the year will be 0.5p, not the 1.5p forecast. We leave income forecasts unchanged in FY17 and FY18 but reduce dividend expectations. Although the company does state that it intends to reinstate the dividend as soon as possible the cut to the dividend is disappointing. The valuation on FY17 earnings of 5.4x reflects the difficulties the business has faced over the last twelve to eighteen months.
Arix Bioscience — Intention to float on the main market from the global healthcare and life science Company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management Eco (Atlantic) Oil & Gas—Schedule One Update. Now expects admission ‘early February’. Ramsdens Holdings –Schedule One from the financial services provider and retailer, operating in the core business segments of foreign currency exchange, pawnbroking loans, precious metals buying and selling and retailing of second hand and new jewellery. Expected admission to AIM 15 Feb raising circa £15.6m. Expected mkt cap £26.5m.
Companies: XLM MDXG BHRD ENTU AMO RGM WGB ASA HRN
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Entu has announced it has agreed the disposal of Astley Facades and its wholly owned subsidiaries to Duality Group for a nominal sum. The disposal is in line with Entu’s strategic focus on improving the performance of, and driving growth in its core Home Improvements business. In addition, it de-risks the business from a potentially significant increase in working capital commitment. Astley’s contribution to FY16 adj EBITDA is £1.1m, this will now be classified as discontinued. Adj EBITDA from continuing operations is expected to be between £2.5m and £2.9m, in line with guidance provided in the pre close statement (11 th October), excluding Astley’s contribution. The impact in FY17 and FY18 EBITDA is less muted at just c. £400k in each year respectively. Dividend assumptions remain unchanged offering a prospective FY17 yield of 11.9% and on new FY17 earnings the shares trade on a PER of just 4.3x.
Physiomics* (PYC.L) | Milestone Group (MSG.L) | Inspired Energy (INSE . L) | Entu (ENTU.L) | BMR Group (BMR.L) | Independent Oil & Gas (IOG.L) | Northamber (NAR.L) | Mirada (MIRA.L) | Distil (DIS.L) | BNN Technology (BNN.L)
Companies: PYC ENTU BMR IOG NAR BNN DIS INSE MIRA CTEA
Ahead of the year end (31 Oct) Entu has released a pre close trading statement. EBITDA for FY16 will be in the range of £3.6m to £4.0m, this is below the estimated £4.2m. As a result, forecasts in FY16 are cut to the mid- point of the range £3.8m, a 9.5% decline. This leads to a decline of c.11% in profit after tax on revenue falling from £108m to c.£103m. The impact in FY17 is greater at c.34% with adj operating profit cut to £4.6m (prev. £7.0m) on revenue now expected to be broadly flat at c.£103.0m (prev. £113.6m). The impact of the downgrade in H216 into FY17 is exacerbated by planned cost savings now expected to be reinvested into the business to strengthen management, controls and the balance sheet. The net debt estimate for the year end increases to c. £5.0m on larger exceptional costs than had previously been forecast. Despite this, management expect to honour the commitment to a 1.0p final dividend making 1.5p for the FY and, despite the cut to numbers, maintains its intention to pay 2.4p in FY17 equating to a c. 10% yield at the current 24.5p share price.
Interim results show a solid performance in terms of core revenue but the ongoing cost base of the discontinued solar business leads to significant downgrades to earnings in FY16 and FY17 of 50% and 17% respectively. As a consequence, the interim dividend is cut to just 0.5p and estimates now assume a total dividend for FY16 of 1.5p, previously 5.3p. That the anticipated new revenue streams did not come through in H1 is disappointing and has left the business with a cost base substantially above where it needs to be. The Board has taken action making changes to senior management and instigating a cost saving initiative to rebase profitability of the business moving forward. Post the cut in earnings expectations the shares trade on a current year PER of 11.4x based on last night’s closing price. However, the bounce back in profitability in FY17 puts it on multiple of 6.4x yielding 4.6%.
So what is the profile of a typical AIM quoted company? The market’s detractors may argue that London’s junior market is peppered with cash consuming companies that are not sufficiently advanced in their route to profitability nor corporate governance regimes to justify their listing. Supporters of the London Stock Exchange’s growth market would say that the Alternative Investment Market is the world’s most successful market for growing companies rewarding investors prepared to brave the risks of earlier stage funding, and driving innovation and job creation. Neither view suggests that AIM would be a fertile hunting ground for income generating stocks. However a glance at the FTSE AIM All Share constituents (Source: Fidessa) suggests that over 250 of its members or circa a quarter of the market’s members pay dividends.
Companies: BVXP BOTB ITQ SHOE CGS DX/ HSP JIL IBEX PRP CAML GTC JIM CCAP ENTU FXI NAH ASY HGM PEN PEG AVG NXR
Lower profitability in Entu's H115 results has been well explained, as have the reasons for expecting an improvement in H2 and beyond. We believe that momentum in commercial contracts should ultimately outweigh limited drag from changes to industry incentives. However, in the current year, we have elected to lower EPS by 4.3%. Ahead of demonstrating regained momentum in H2, the 7% prospective yield should appeal to investors.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Entu. We currently have 16 research reports from 3 professional analysts.
|31Aug17 10:52||RNS||Resignation of NOMAD and Broker|
|31Aug17 10:36||RNS||Appointment of Administrators|
|30Aug17 09:38||RNS||Holding(s) in Company|
|25Aug17 16:07||RNS||Intention of NOMAD and Broker to resign|
|25Aug17 13:38||RNS||Notice of intention to appoint Administrators|
|24Aug17 07:30||RNS||Suspension - Entu (UK) Plc|
|24Aug17 07:00||RNS||Suspension of Trading on AIM|
GVC reported decent Q1 20 numbers, with total NGR growing by 2%, on a cc basis. More importantly, the firm now expects COVID-19 related EBITDA headwinds to halve to £50m/month, following the mitigation measures put in place. The firm has suspended the second interim dividend for FY19, in order to preserve liquidity. In spite of the mitigation measures put in place, we will be trimming our estimates, given the extended length of closures (we expect a minimum of six weeks).
FY results in line with expectations, but the final DPS has been suspended. Free cash flow improved significantly and was also in line with guidance. There is good liquidity and ample covenant head-room. The cash costs of the pension have been reduced.
Companies: AA Plc
Vertu has announced the temporary closure of all of its dealerships. Management had started taking pre-emptive action on costs and capex earlier in March and we expect banks and OEMs to provide support over the coming months. The company still plans to issue FY20E (to Feb) results on 6 May and we will review our estimates then. The start point is a strong, asset backed balance sheet and operational excellence. We expect Vertu to weather the storm better than many peers. CY21E PE 3.1x, £209m of freehold/long leasehold NBV. Maintain Buy.
Companies: Vertu Motors
GAN has provided an update today on the Italian and US real-money internet sports betting outlook, as well as the momentum they are seeing in their core Simulated Gaming operation. Management have confirmed current guidance, which underscores the high underlying growth and the diversified resilience of their SaaS model. The company is on-track for a NASDAQ listing, hopefully in Q2. No material change to forecasts or our Target Price of 200p
Companies: GAN Plc
The proposed acquisition of the US Marshall Retail Group indicates that the Travel business here is moving into a much different position with accelerated global aspirations. Sight unseen it also clearly increases the risk profile of the group at a time of a change of senior management. We would imagine that the timing of the deal has been driven by availability and as such is not entirely as WHS would have wanted. This said one of the constraints on the scale of the international part of WHS’s Travel business has been the rate of organic growth available through bidding for individual or groups of travel concessions.
Companies: WH Smith
Boohoo Group has delivered a stellar performance over the key Christmas trading period resulting in a further upgrade to FY20 guidance, its third since 5 th September. Strong growth has been seen across all brands in all key geographical regions. We note the excellent performance seen at the Group’s most mature brand boohoo, where sales in the four months to December are up 42%, an acceleration on the 27% YOY growth posted in Q1 and a continuation of the exceptional 41% growth seen in Q2 of this year. Revised EBITDA margin guidance of 10.0% to 10.2% (previously c.10.0%) is after accounting for investment in three brands acquired in the year and implies strong underlying trading in the Group’s more established brands (boohoo.com PLT and Nasty Gal). The Group continues to deliver an impressive cash performance, with £245m net cash at 31 December.
We are placing our recommendation, target price and recommendation U/R. The company has withdrawn guidance, which is understandable in our view.
Companies: Joules Group
Franchise Brands has provided a trading update addressing the uncertainty posed by COVID-19. The majority of services provided by Metro Rod, Metro Plumb and Willow Pumps have been designated by the Government as essential services to ensure the smooth running of public utilities and other key businesses. The Group has legal flexibility to remain open across these businesses and will reduce overheads in line with any expected revenue reduction. The B2C division has experienced a recent contraction in demand and management are taking cost saving initiatives to keep the division at a cash break-even level during the crisis. The Group's B2C and B2B divisions intend to make use of the Government's Coronavirus Job Retention Scheme. Franchise Brands expects to remain profitable for the year but at lower levels than originally anticipated, we leave our forecasts unchanged but expect a fuller update at the time of FRAN's AGM on 28 April 2020
Companies: Franchise Brands
Rotala's trading update confirms the government will provide necessary financial support to bus operators to ensure the continuation of their essential services throughout the Covid-19 crisis. Given the uncertainty around when conditions will return to normal, we withdraw our forecasts. However, we maintain our Buy recommendation, believing that the company remains capable of generating profitability approximately in line with our prior FY20E forecasts once life returns to normal, and that even if this is in two years' time, the c4x Adj P/E that this implies is far too low.
Card Factory is a deep value retailer, offering a core product at 99p that retails for twice that at high street competitors. Despite the wide price gap, management is adamant that it does not need to raise prices to maintain profitability, with a range of actions in progress to optimise both top line and cost structure. The share price has fallen steeply, but this could present an opportunity as there are a number of potential catalysts.
Companies: Card Factory
The well documented headwinds afflicting the casual dining sector continued to impact Tasty in FY18A, with the company's sales (-6% YoY) dented by a further weakening in consumer confidence and site closures. Margins are being squeezed by significant cost inflation (eg labour, commodities, business rates). Management is taking the sensible decision to sell underperforming sites, and focus on controlling costs. A planned £3.0-3.25m equity raise will significantly strengthen the balance sheet. With a clear turnaround plan underway, we revise our recommendation to Buy.
Loungers’ all-day café-bar concept has a hyper-local strategy offering hospitality, community, atmosphere, and value for money. It appeals to a broad demographic across an array of locations, perpetually evolving to stay relevant and ahead of the competition.
Investors have been choosing to take a more risk-averse position here until prospects for the UK consumer and AO’s German operation become clearer
Companies: AO World Plc
Dart Group has released FY19 results ahead of current market expectations albeit this was flagged at the trading update in April. The Board remain optimistic of meeting FY20 market expectations and commentary in the press release indicates that customer demand and operational momentum continues to be strong. We have long viewed Dart’s Leisure Travel strategy as well differentiated vs competition and see this contributing to ongoing share gains in the industry. Buy.
Companies: Dart Group