Cake Box’s interim results reconfirmed the company’s resilience in the face of extremely adverse circumstances for UK High Street retailers. Cake Box reported only single digit declines in sales revenue and profits in the period as the business benefited from its flexibility, financial strength, and an ongoing customer commitment to celebration. In our view, celebration’s resilience as a category, product innovation, increased outlets, and a commitment to “steady, sensible and sustainable” growth, augur well for further revenue expansion. Yet the group’s valuation remains attractive.
Companies: Cake Box Holdings Plc
Cake Box has started FY2021 positively with strong same store sales growth, new store openings and an excellent online performance. The company is not only able to repay its furlough monies, but also reward shareholders with a special dividend. Cake Box released a trading statement as such this morning.
Cake Box’s preliminary FY2020 results, released today, reconfirmed strong sales growth in FY2020 with scope for an expanded distribution footprint to deliver further sales revenue expansion in FY2021. While the Covid19 lockdown clearly disrupted franchisees’ in-store sales, Cake Box appears well placed to spring back both quickly and with a positive growth trajectory.
Cake Box’s FY2020 trading statement released today confirmed that, ahead of the impact of the COVID-19 measures, the company was enjoying brisk growth – both in terms of overall and like-for-like sales revenue. Moreover, in the current period of uncertainty the company’s finances are underpinned by its strong balance sheet and franchised business model.Cake Box’s FY2020 trading statement released today confirmed that, ahead of the impact of the COVID-19 measures, the company was enjoying brisk growth – both in terms of overall and like-for-like sales revenue. Moreover, in the current period of uncertainty the company’s finances are underpinned by its strong balance sheet and franchised business model.
Companies: MHC SRB UFO FOX MOS NUOG CBOX JIM GCM
Cake Box, which announced strong interim results today, benefits from a unique value for money fresh Devon cream egg-free cake product offering, unusually visible growth and high returns on capital associated with its franchise model. The company should continue to add value as a brand manager, food manufacturer, and franchise retailer, with excellent execution.
The Pebble Group, a provider of products, services and technology to the global promotional products industry, announces its intention to seek admission of its shares to trading on the AIM market of the London Stock Exchange, which is expected to take place in early December 2019.The Group delivered revenue of £99.8m in the year ended 31 December 2018.No mention of bottom line and a suggestion that funds raised would provide an exit to private equity shareholders and the repayment of debt. Offer TBA. Longboat Energy raising £10m. Expected admission November 2019. The company has been established by the former management team of Faroe Petroleum to create a new full-cycle North Sea oil and gas company .The strategy to achieve this will initially be through the acquisition of assets where the management team can add value through subsurface and operational improvements, follow-up deal opportunities and nearfield exploration; and by value creation through the drill bit. Sapo PLC - Seeks to invest in the developing market for rural broadband in the UK. Due 2 Dec. Taseko Mines - North American focused copper producer and developer, seeking a London Listing. No capital raise. Due 22 Dec SDIC Power - “potential intention to float”. Proposed GDR listing. Leading power generation company in China, with a diversified portfolio of projects across hydropower, coal-fired power, wind power and solar power. Offer TBA. Octopus Renewables - Seeking raise of up to £250m. Will seek to provide investors with an attractive and sustainable level of income returns, with an element of capital growth by investing in a geographically and technologically diversified spread of renewable energy assets—Due 10 Dec
Companies: SPO WAND CNS IDOX IGP BRCK LTHM CBOX NQMI SAV
Registration document approved for Helios Towers. The Group provides essential network services, flexible infrastructure solutions and reliable power supply to mobile network operators in five African growth economies. Revenue increased 7 per cent. year-on-year to US$191m (H1 2018: US$178m), with Adjusted EBITDA up 15 per cent. year-on-year at US$99m (H1 2018: US$86m) for the six months ended 30 June 2019. Pricing rumoured at 115p to 145p implying valuation of up to $1.8bn. Expected Oct 2019.
Companies: SHED SSY SYS1 CBOX OMG PPS RMS RNO CER RENX
2019 started well for investors with U.S. stocks rallying on the back of trade talks between China and the U.S. resuming. Sterling rebounded in Q1 2019 as expectations built the UK would avoid a “no deal” Brexit, providing a further tailwind to more internationally focused UK companies. This sentiment spread across the globe and filtered its way down into small caps.
Companies: PRSM KMK SYS RAI MNO CCS MANO CBOX KGH
Techniplas –global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient. FYDec17 rev $515m.
Companies: SHEP ANP CNC OGN CAMB ODX CBOX AUTG FDEV
What is rare about Cake Box’s investment case is that it is a unique concept which is also low-tech. The simplicity of the retail offer and of the franchise formula, management’s track record, the ungeared balance sheet, as well as continuing current like-for-like growth despite depressed consumer sentiment and macro uncertainty, all argue for lower execution risk in the straight-line growth proposition.
AIM showed no signs of a summer slowdown with three strong months with regards to total funds raised (new and further issues). June, July and August averaged over £700m per month, boosted by a particularly strong June which delivered 14 IPOs (historically AIM has 5-6 new joiners per month). Through the end of August 2018, the total amount raised (new and further issues) of £4.80bn is +15% on the same period in 2017 which itself was the best year since 2007.
Companies: CDM LOOP YEW BLOE AQX SAE ANX TGP INX CBOX MIND KGH RAI TGL YCA IMMO DGOC NUC OVB TWD CNIC
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Nichol’s YE update is in line with guidance given in November at the time of the 9-month update. This is reassuring and a positive outcome given tier restrictions created additional challenges during the critical month of December. Overall, sales are reported to be down 19.3% to £118.7m vs our £119.4m, with OoH the principal drag. This should not overshadow another excellent year for UK Vimto packaged and further international progress. Pleasingly the company generated £6.4m of cash in the period resulting in net-cash of £47.3m (119p per share). Going into 2021, we are encouraged by management being on the front-foot re NPD/marketing and Middle-East Ramadan orders being in line. And whilst lockdown 3.0 is clearly unhelpful, Q1 is traditionally the quietest quarter. Overall, notwithstanding near-term CV19 uncertainty we expect the core Vimto business to further outperform and international sales to move ahead. For OoH the year is one of transition as management look to reset future direction given the mid-long term implications on end markets from CV19. Fundamentally, Nichols is a winner with significant growth runway, excellent cash generation credentials and a strong balance sheet which affords it optionality.
Companies: Nichols plc
In its key trading quarter, Distil has delivered a strong year-on-year revenue increase of 22%, despite 2020’s relatively muted Christmas and New Year festivities. This brings the cumulative year-to-date (YTD) revenue growth for the first nine months to 70%. Distil has also announced the launch of TRØVE, an innovative Botanical Vodka brand, catering to the emerging consumer trend for lower alcohol by volume (ABV) drinks but without flavour compromise. This expands and complements Distil’s brand portfolio, further underpinning future growth prospects.
Companies: Distil PLC
Cenkos Securities plc has terminated coverage of Finsbury Food Group Plc. Our previous recommendation (BUY) and forecasts can no longer be relied upon.
Please contact Cenkos for further information.
Companies: Finsbury Food Group plc
Further media reports that Dr Martens, the British Boot brand is planning an IPO on the LSE. It is currently owned by PE group, Permira who is expected to sell down its stake at the IPO. March 2020 YE the group had revenues of £672m and EBITDA of £184m. Deal size TBC. Upon Admission to AIM, Nightcap will acquire The London Cocktail Club Limited (the "London Cocktail Club"), which is an award winning independent operator of ten individually themed cocktail bars in nine London locations and one location in Bristol. Offer TBC Due mid Jan. HSS Hire Group, HSS.L transfer from Main to Aim. Mkt Cap c. £70m. Recently raised £52.6m. Leading supplier of tool and equipment for hire in the United Kingdom and Ireland and has provided equipment hire services in the United Kingdom for more than 60 years, primarily focusing on the B2B market. Due 14 Jan. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange. Due by Early Feb.
Companies: IUG CBP KAT APP RST DIS NICL BOKU CNIC HE1
Dekel Agri-Vision has announced palm oil production figures for Q4, 2020 and the year ended 31 December 2020. The Company ended FY2020 with strong momentum following a good performance in CPO production in Q4, 2020 and with CPO prices in international markets above US$1,000/MT, as the company enters its high season period in H1, 2021.
Companies: Dekel Agri-Vision Plc
Dekel Agri-Vision has announced that following significant advances made in 2020 preparing for the Round Table for the Sustainable Palm Oil (‘RSPO') certification process, it has now engaged Proforest to undertake the final RSPO pre-audit of the Company's 100%-owned, vertically integrated palm oil project at Ayenouan, Cote d'Ivoire.
Carr’s trading update for the first 19 weeks of FY21 notes that trading in Agriculture was ahead of management expectations because of strong sales of supplements. This was offset by a weaker than expected performance in the Engineering division caused by continued low crude oil prices. We note that net debt (excluding leases) was 24% lower year-on-year at the end of November, reflecting close inventory control and lower commodity prices. We leave our estimates broadly unchanged and reiterate our indicative valuation of 170p/share.
Companies: Carr's Group PLC
Upon Admission to AIM, Nightcap will acquire The London Cocktail Club Limited (the "London Cocktail Club"), which is an award winning independent operator of ten individually themed cocktail bars in nine London locations and one location in Bristol. Offer TBC. HSS Hire Group, HSS.L transfer from Main to Aim. Mkt Cap c. £70m. Recently raised £52.6m. Leading supplier of tool and equipment for hire in the United Kingdom and Ireland and has provided equipment hire services in the United Kingdom for more than 60 years, primarily focusing on the B2B market. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange.
Companies: PMI RMM SUN BOIL ITM TRMR MLVN 88E IME ANP
Finsbury's AGM statement confirms that trading has remained resilient in FY21E, with the group expecting to deliver improved revenue and profitability this year. As such, with visibility improving, we are reinstating forecasts (FY21E Adj EBITDA of £26.0m). We also update our rating to Buy (from Under Review), which is driven by the group's low valuation (c7.7x FY21E P/E), planned reinstatement of the dividend (3.8% yield), and the increasing levels of FCF available to shareholders (11% FCF yield) now that the group has reached the end of a period of heavy investment.
Cranswick’s H121 results underscore the company’s strength and broad-based positive momentum. Revenues were up an impressive 17% on a like-for-like basis, adjusted operating profit was up 31% to £62m with margins up +50bp, and adjusted EPS was up 30% to 93p, with reported EPS up 12%. The interim dividend was up 12% to 18.7p, and net debt (excluding IFRS 16 lease liabilities) was £54.6m. Cranswick has made a strong start to the year. Management is understandably cautious given uncertainty surrounding both the pandemic and Brexit, but the outlook for the current year remains unchanged.
Companies: Cranswick plc
Nichols continues to justify its premium rating, posting a strong set of interims with LFL sales growth of 12% and EPS of 7%. The core Vimto brand has continued to comfortably outperform the UK soft drinks market and International momentum remains impressive. Today’s interims are also accompanied by a small bolt-on deal of a distributor which triggers FY18 and FY19 EPS upgrades of 3%/4% respectively. The shares trade on a premium FY18 P/E of 25x which we feel is deserved given the internationally diversified nature of income and excellent track record of positive forecast momentum. Given favourable ongoing growth prospects and optionality afforded by a growing net-cash position, we feel Nichols should be a core mid-cap holding. We stay positive and argue for ST fair value towards 2100p – 27.5x FY18 EPS.
We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.
Companies: BCA CLIN CLG CBP DNLM EAH STU FCRM FUTR GTLY INS GLE NICL SPR TRI
Warren Buffett once said that as an investor, it is wise to be ‘fearful when others are greedy and greedy when others are fearful’. Fear is not in short supply right now.
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A strong H2/19A meant Finsbury reported LFL revenue growth of +4% for the year, outpacing the market. FY19A was largely in line with our expectations, and we leave FY20E forecasts broadly unchanged. A heavy capex period is reaching an end, resulting in rising FCF for investors (c18% FCF yield for FY20E). Buy.
Distil has reported an impressive H1 performance against a backdrop of volatility and other challenges resulting from the Covid pandemic. The company has delivered a profit before tax of £154K compared with last year’s breakeven position, driven by a sales increase of 128% to £1.9m. The period saw new product launches within the leading RedLeg brand, with more new lines to follow. Distil has increased headcount in both marketing and New Product Development (NPD) to support its future growth. Despite the success achieved in H1, considerable short-term uncertainty remains around the impact of the emerging second wave of Covid and consequent restrictions. The company therefore feels it is prudent not to provide guidance at this stage on the outturn for the full FY21 financial year.