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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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 CTEA MIRA
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.
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|
Boohoo Group has released a brief statement confirming ongoing strong trading across its key brands (boohoo.com, PrettyLittleThing, Nasty Gal and BoohooMAN) and another record-breaking performance over the allimportant Black Friday weekend. Confirmation that the Group is trading “comfortably in line with market expectations” (FY20 company complied revenue growth consensus +37.6% YOY), implies growth at the top end of management’s guided 33% to 38% range. We upgrade our forecasts to reflect this, having previously sat at the mid-point of this range and the lower end of consensus. We see scope for history to repeat itself and deliver further upgrades in January, given management’s traditionally cautious stance ahead of peak December trading in contrast to ongoing momentum across the Group’s portfolio of brands.
Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.
Companies: ABBY AMS ANX ARS ATYM AVON BLVN PIER BUR CGS CAML CDM CSRT TIDE CYAN DTG DEMG ELM EMR FPO FDEV GTLY GENL GHH GRI GEEC GKP HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KAPE KEYS KWS KCT KGH LAM LIT LOK MACF MANO MOD OXIG PCA PANR APP SRE PHC PMO RBW RMM RBGP REDD RSW RNO ROR SUS SCPA SEN SHG SOLG SOM SUMO TM17 INCE TWD TRAK TRI VNET VTC ZOO ZTF
At first glance, H1 sales growth appears more subdued than expected. This is because of a weak September, well flagged across the sector.
Companies: Joules Group
The trade-off in the risk/reward for gold and gold mining equities is improving, as central banks push the current iteration of the post-World War II Bretton Woods financial order towards its limits.
Companies: AVO AJB AGY ARBB BUR CLIG DNL DPP FLTA GTLY GDR MCL MUR NSF PCA PIN SRE PHP RE/ RECI RMDL STX SCE TON SHED VTA W7L
Loungers continues to outperform, delivering the scarce trinity of LFL sales growth (5.4%), unit growth (10 openings) and margin growth (40bps). This drove a 22% increase in Revenues and 26% increase in EBITDA in the first half of FY20E.
MySale is executing a clear strategy, focused on the sizeable ANZ market. It is leveraging its proprietary Marketplace platform, which is highly cost efficient, scalable and inventory light. Also the balance sheet is now debt free and cash positive. This facilitates execution of the strategy through to positive EBITDA next year. The new strategy has a near zero risk approach to inventory, and the release of stock/receivables tied up by its previous own buy/wholesale activities is progressing well. Once complete, MySale will operate with negative working capital. It has a unique and appealing proposition for global suppliers and ANZ consumers alike. On good execution value creation could be significant.
Companies: Mysale Group
Accor is to sell about half of its holdings in Chinese hotel group Huazhu and will continue seeking opportunities to sell other non-strategic assets.
The global online gaming market generated c £40bn of gross gaming revenues (GGR) in 2018 and newly regulating markets (the US) are expected to contribute to 7% CAGR to 2023 (according to H2 Gambling Capital (H2GC)). However, while regulated markets have provided significant opportunities for operators to date, government intervention remains a constant threat and legislation is tightening. Some mature markets (notably the UK) have been raising taxes and implementing regulatory burdens, which increases the cost of business. In our view, success will depend on a combination of scale, diversification, proprietary technology and a strong balance sheet. Many of the 12 operators in this report should benefit from these dynamics and sector valuations remain attractive, at 12.6x P/E, 8.2x EV/EBITDA and 6.0% dividend yield for FY19.
Companies: 888 ACX BETSB ORPH GVC GYS OPAP PTEC RNK WMH
On numbers M&S has reported a weak 1H with Underlying PBT of £177m (HY 2018/19 £213m re-stated) down 17% as the company suffered weak sales in Clothing & Home (LFL – 5.5%) and invested revenue in repositioning both sides of its offer. We would expect that the updated guidance and the 1H performance are likely to result in full year 2019/20 market consensus estimates staying at around £450-470m pre-exceptional items, implying less of a reduction in 2H.
Companies: Marks And Spencer Group
Dart Group has reported another strong set of interim results and indicates that the Board now expects current market expectations for FY20 to be significantly exceeded. In our view, the Group’s strategy and focus on customer service and a flexible offering has put it in a position to benefit from the current market conditions following the exit of Thomas Cook and we anticipate the Group will continue to build on this position in the medium term to overcome inherent industry cost challenges. Reiterate buy rating.
Companies: Dart Group
Compass’s share price sank over 7.6% yesterday due to macro-led slowdown prospects in Europe, despite the deliverance of satisfying FY19 results. The gloomy forecast meanwhile has penalised the whole catering industry.
Companies: Compass Group
AIM will turn twenty-two this June and it is fair to say it has had its fair share of ups and downs, with 2016 being a case in point. We ask what will the rest of 2017 hold in store? Arguably the US dollar, Brexit, bonds, and banks will be the four big themes for the new year.
Companies: PEG SOU EVRH TST VANL G4M GAN AMYT
Motorpoint has this morning released a solid set of interim results achieving adjusted PBT for the first half of £10.5m, in line with our forecasts, which we updated following a positive trading update in October. We leave our forecasts unchanged for the full year and expect adj. PBT of £20.3m in FY18E. The company has also announced this morning a £10m share buyback programme, signaling confidence in the future prospects of the business. While Motorpoint continues to trade at a premium to the franchised dealers, the company has a robust balance sheet, good underlying cash generation and confidence in the near-term earnings.
Companies: Motorpoint Group
Legalisation of online sports betting in the US will provide opportunities for AIM online gaming companies. The Supreme Court of the United States has decided to overturn the Federal prohibition of sports betting. The state of New Jersey argued that congress had exceeded its authority and the judges agreed. The US sports betting market, both onsite and online, could be worth $6bn by 2023, but individual states will have to enact legislation to enable online sports betting to commence in their territory.
Companies: AOR TYR SML STR MWE RNWH
Bowling, alongside low-cost gyms, is the strongest sub-sector of Leisure at present. Its fortunes have been revived over the last 5 years through product diversification, investment and a more family focused offering which is resonating with consumers seeking value and experiential treats. The sector is well established accounting for 3% of the family leisure market. We are attracted by its positive growth dynamics and minimal exposure to rising costs. We explore 6 themes in this note and initiate coverage on Hollywood Bowl (Buy; 250p 12m TP) and Ten Entertainment (Buy; 315p 12m TP), albeit with current year EPS forecasts 4% below consensus, reflecting recent prolonged hot weather concerns. On a 1-3 year view both have plenty of scope to further enhance shareholder value through self-help and site expansion.
Companies: Hollywood Bowl Ten Entertainment Group