Our Hot Off The Wires daily newsletter takes a look at the morning's market movements, news stories and company announcements.
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Companies mentioned in this edition include: IAG, Tesco, Bunzl, Rathbones, Dunelm, Marks & Spencer, Mitchell & Butlers, Card Factory, *SIG, Galliford Try, Liontrust, Hipgnosis Songs Fund, *Avation, Nichols, Naked Wines, John Lewis and the potential upcoming IPO of Calisen Group Holdings.
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*Capital Access represents SIG and Avation - if you would like more information or access to the Management teams of either of these companies, please get in touch.
Companies: AVAP SHI GFRD
Dame Agatha Christie (née Miller) published more than 80 books and plays; and the Guinness Book of World Records lists her as the best-selling novelist of all time with roughly two billion copies sold. ‘And then there were none’ was originally published in 1939, with an un-politically correct title; and it is still the world’s best-selling mystery (with more than 100 million sold). It is also number six on the list of best-selling books of all-time.
Companies: ABBY CSP WJG TW/ BWY PSN GLV BDEV RDW BKG VTY CRN GLE SPR GFRD
Due to a change in Analyst role, Cenkos Securities plc has suspended coverage of the following stocks (see table 1). Our previous recommendation and forecasts can no longer be relied upon.
Companies: BDEV BWY BKG VTY COST CRST BBY FERG GLE KLR KIE MSLH MER MTO NXR PSN RDW RNWH SFR SHI MGNS TW/ CTO TEF TPK GFRD
See what's trending this week...
Galliford CEO Greg Fitzgerald will join the housebuilder as of 18 April
Companies: Vistry GroupGalliford Try
Yesterday’s Autumn Statement appears to be: good for 'alternative' housing providers, UK-focused contractors and materials producers; potentially problematic for mainstream housebuilders; and bad news especially for lettings-dominated agents. Chancellor Philip Hammond’s key spending measures included an additional £3.7bn funding to boost new housing volumes and £1.1bn for roads. Shares in estate agents, however, have fallen in response to the threat to ban them from charging fees to tenants.
Companies: KIE FORT CWD FOXT WINK COST GFRD
GFRD revenues increase 10% with profits up 16% to £157m
Companies: Galliford Try
Research Tree provides access to ongoing research coverage, media content and regulatory news on Galliford Try.
We currently have 90 research reports from 6
Codemasters has announced that it has signed a licence agreement for the exclusive rights to develop and publish the FIA World Rally Championship videogames and Esports tournaments. The initial 5 year annual series will be out from 2023, with the agreement ensuring a step-up in the release cycle of Codemasters’ off-road games to three games over two years rather than the current one per year. The major success of F1 highlights the potential of combining another global racing license with the company’s gaming expertise. This news, following the F1 contract extension with Liberty Media, the deal with NetEase in mobile, and the acquisition of SMS, adds to the visible growth profile of the business and increasingly underlines Codemasters’ position as the leading car racing platform in the gaming sector.
Much has been written about the effects of the virus on the world and on the stock market. Here is one analyst’s take on some of the likely impacts on the way we should look at companies. This article was originally produced as a blog, “10 Changes Post Virus”, which was published a few weeks ago.
Companies: AGY ARBB ARIX DNL GDR NSF PCA PIN PHNX PHP RE/ RECI STX SCE SIXH TRX SHED VTA
Project Cars 3 release date confirmed for summer
New franchise win: World Rally Championship
Warpaint has announced another exciting new contract win with a large national retailer. The new agreement is with Wilko which, from mid-September, will stock about 100 exclusive Body Collection branded products which will be stocked in 355 UK stores, and over 115 Technic branded products which will be stocked in 189 UK stores. Warpaint’s brands will be merchandised on bespoke display stands in prime locations in the stores, and will also be sold online through Wilko’s website. In addition, it is envisaged that a range of Technic and Body Collection gift sets will also be stocked in stores for the Christmas shopping period. This is excellent news and should be well received by the market.
Companies: Warpaint London
Delivery on the transformation plan has been swift and the £78.75m sale and leaseback of TED's head office represents further decisive action. Combined with cost savings and cash conservation measures, we estimate it could improve the group's cash position by over £100m.
Companies: Ted Baker
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.
Companies: Walker Greenbank
FY19 Results: In line with January trading update
Following this week’s updated guidance from the Government, Gleeson Homes will now implement its plan to restart build and sales activity across its 67 sites. This will be carefully managed with the emphasis on the safety of staff, subcontractors and customers. Gleeson has also launched its Key Worker Priority Programme to prioritise sales to key workers, who already represent 2/3 of customers. It is too early for the company to provide forward guidance but we remain of the view that Gleeson will emerge strongly, given the strength of its proposition with a focus on highly affordable good quality homes across the Midlands and North of England.
Companies: MJ Gleeson
Guidance beaten for FY20; upping our target price
Companies: Frontier Developments
Much of the UK’s privatisation programme took place between the early 1980s and the mid-1990s: subsequent sales have been few. Undoubtedly, privatisation attracted many private investors to the market, many for the first time.
Companies: AVO AGY ARBB ARIX BUR CLIG DNL FLTA GDR NSF PCA PIN PXC PHP RE/ RECI RMDL STX SCE SIXH TRX SHED VTA
COVID-19 update: div. suspended, expect downturn in orders
Companies: Headlam Group
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).
Companies: WJG BKG CSP CRST MCS INL BDEV RDW GLE SPR TW/ PSN VTY GLV CRN ABBY BWY
Performance in FY20 is substantially ahead of expectations; EBITDA is expected to be no less than £7.0m, equating to at least £5.6m pre-IFRS16, a beat of >36% versus our forecast (>52% in H2). While trading has strengthened as a result of Covid-19 lock-down and the channel shift, this has principally been a feature post period end. The determining factor in FY20 was successful execution of the strategic, commercial and operational initiatives outlined a year ago in response to growth pains in late 2018/early 2019. Despite several levers yet to contribute in full, gross margin improved 50bps more than forecast (+310bps) and cost ratios were 80bps better than expected. As a result, it has almost delivered FY21 forecasts in FY20. We are not upgrading FY21 at this stage, pending guidance in June, but the higher base, enhanced P&L KPIs and recent sales boost all bode well for forecast momentum - which the valuation discounts.
Frontier has raised guidance given the strong revenue backdrop the whole industry has witnessed over the last few weeks. We upgrade our FY20 profit forecast by 20%. The company has also announced an exclusive IP licence with Games Workshop to develop and publish a Warhammer real-time strategy game. This takes Frontier into an exciting new genre, extends revenue visibility into FY23 and highlights the increasing value and potential of their development and publishing platform.