H1 23: a strong performance and a record backlog

BAE systems published strong H1 23 results with sales up 13.6%, EBIT up 13.1% and EPS up 20.9% yoy, all above market consensus. The company has upgraded its FY23 guidance and, given the strong order intake (especially in Air and Maritime) and FCF generation moving in the right direction, BAE System’s long-term outlook looks bright and worthy of investor attention.

FY22: Moderate growth now, more to follow later

BAE systems published strong FY22 results with sales up 9%, EBIT up 12% and EPS up 16% yoy, all above market consensus. Order intake, which was mainly based on programmes announced prior to the outbreak of the Russia-Ukraine war, stood at a record level of £37bn, up by 70%. FCF stood at £1.95bn, outperforming the consensus by £700m, of which £500m was due to payment timing but the rest mainly due to better cash management.

Q4 21: no need for outstanding results when in the right market

BAE has published decent Q4 21 results, with impressive cash generation. It is well set to expand through its diverse Defence portfolio. Its FCF guidance has been particularly better than consensus. The guidance does not include the impact of the war in Russia, which will benefit the British company.

BAE confirms its objectives for FY21

BAE has provided a market update to confirm its objectives for FY21 and its cash goals for the next three years. Overall, the business remains strong, with potential growth opportunities linked to the new Auckus alliance.

FY 20: demonstration of resilience

BAE released a sound set of figures for FY20, beating the consensus and shining with its strong cash generation. The company remains poised for groth in FY21 thanks to its defensive backlog and high exposure to strategic contracts.

Reassuring trading update

BAE released a trading update for the third quarter, which was fairly reassuring. Demand remained high across all major markets, fuelling the backlog. Operationally, programme ramp-ups and good execution across divisions maintained earnings, with potential for raising the EPS for 2020.

H1 20: resilient business model, further improvements expected in H2

BAE released a sound H1 set of results, beating consensus at revenue, profitability and cash generation levels. The company’s business model proved to be very resilient and displayed encouraging prospects for the remainder of the year. We maintain our Buy recommendation on the stock.

Limited downside in H1, while productivity should drive FCF up in H2

BAE has issued a pre-close trading update ahead of the H1 publication in July, highlighting a positive and reassuring operational performance across all sectors despite the pandemic. Overall, the impact is mainly on the profitability side, while both top-line and cash generation have turned more resilient. Productivity accelerated through June, near normal, boding well for the expected rebound in the second half of the year.

FY19: good surprise on the cash side

BAE reported sound results today, roughly in line or above estimates, as well as for guidance. The company recorded operational improvements in a number of programmes, which, combined with ongoing contracts that are maturing, lead us to expect a further improvement at the cash level.

Welcome strategic move

BAE Systems has entered into an agreement to buy Collins Aerospace’s Military Global Positioning System business (GPS) and Raytheon’s Airborne Tactical Radios business. We expect the acquisition (fully financed by additional debt) to be both EPS and cash flow accretive while maintaining a healthy balance sheet for further potential acquisitions.

Trading update: business as usual

BAE has released its Q3 trading update, bringing qualitative comments to the market. Overall, no major news nor surprises were released. The company is delivering according to expectations and the guidance for 2019 is maintained.

No big surprises

BAE reported results roughly in line with expectations, with a slight profitability expansion. However, due to the ramp-up of a low margin programme, this performance might not be repeatable in H2. The company has maintained its FY19 guidance despite the current German ban on sales to Saudi Arabia.

Supreme (SUP LN) - Record performance, EBITDA ~doubled

Supreme’s FY24 trading update confirms a record performance in the 12 months to 31 March 2024. Organic revenue and profit growth across all four divisions has driven Group revenue +45% YOY to £225m, with FY24 adj. EBITDA almost doubling to ‘at least £38m’, driving record levels of cash generation. Supreme is actively exploring complementary M&A, supported by a debt free balance sheet. Trading on an undemanding FY25 PE of just 6.7x, with a 3.4% yield, we believe downside risks are more than price

Morning Note – 22 April 2024

Supreme+ (SUP, House Stock at 125p) - Supreme, Supreme!

SP Angel Spec Sits: FY Trading Update (LTHM)

Headlam Group - Strategy for growth in tougher market

Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

SP Angel Morning View: Copper prices hit $9,700/t as China smelts concentrates for zero charge Tc/Rc

LIBERUM: Ilika: CMD confirms operational progression

Hybridan Small Cap Feast - 24 April 24

24th April 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 Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

LIBERUM: Gattaca: Resilient contract performance, perm tough

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LIBERUM: Capex Cycle: Miners' spending continues to lift

Hybridan Small Cap Feast - 22 April 2024

22nd April 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 Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

VSA Morning Flow Test 19/04/24 (Quadrise)

Quadrise (QED LN) has provided an update on its Utah project with Valkor. Valkor’s partner (Heavy Sweet Oil LLC) has received funding and approval to commence drilling enabling production of 20-40bopd of heavy sweet oil providing QED with samples for production of test scale quantities of MSAR and bioMSAR; the company’s key fuel decarbonising emulsion fuel products. This should derisk the commercial scale ramp up. QED management has highlighted that Valkor has not yet raised the minimum of US$