Ocean Wilsons Holdings - Strong FY23 results with strategic review in FY24

Ocean Wilsons Holdings’ (OCN’s) FY23 results highlight a robust performance from the Brazilian subsidiary Wilson Sons, as well as growth from the investment portfolio. Our forecasts are under review following the announcement but, prior to this, we valued OCN at 2,564p/share, which implies it is currently trading at a 48% discount. Given the strong trading and optimistic outlook, risks appear to be to the upside.

Ocean Wilsons Holdings - Strategic options being considered

Ocean Wilsons Holdings’ (OCN’s) strategic review remains ongoing. Despite the review and the potential for value realisation, OCN still trades at a c 51% discount to its value, which we believe is 2,564p.

Ocean Wilsons Holdings - Adverse financial markets but PORT3 is doing well

Ocean Wilsons (OCN) reported in its Q322 trading update that its investment portfolio’s (OWIL’s) NAV had declined by 19.5% year to date due to the current difficult financial markets (eg the MSCI World Index fell by 25%). However, Wilson Sons (PORT3), the listed Brazilian maritime company in which OCN has a controlling 57% stake, saw its quarterly PBT grow 20% y o y in US dollar terms. The towage and offshore vessels divisions (two of PORT3’s three key divisions) continue to have positive operat

Ocean Wilsons Holdings - Hit by markets, valuation eye-catching

Ocean Wilsons (OCN) reported a H122 loss of $34.7m (H121 profit of $39.5m), chiefly due to weak financial markets which led OCN’s international investment portfolio (OWIL) to report a $48.9m loss. Despite headwinds in the container terminal business, some good operating trends allowed Wilson Sons (PORT3) to boost OCN’s H122 revenue by 12% y-o-y and EBITDA by 2%. We are cutting our forecasts for FY22e (to a $14.8m net loss) and FY23e (22% EPS reduction). OCN is trading at 50% of the look-through

Ocean Wilsons Holdings - FY21 was in line but headwinds remain

Ocean Wilsons (OCN) is an investment holding company with a controlling interest in Wilson Sons (WSON), a long-established Brazilian maritime services company, and a globally diversified investment portfolio (OWIL). OCN reported FY21 PBT of US$110.4m (+48% y-o-y), in line with our forecasts. OWIL had a good year, but WSON’s results were a mixed bag. The container terminal business is still suffering from worldwide supply bottlenecks, whereas the towage business did better than expected. Looking

Ocean Wilsons Holdings - Operations and markets drive good H121

Ocean Wilsons (OCN) reported PBT of $66.2m in H121 versus a loss of $1.8m in H120. Buoyant financial markets have allowed OCN’s global investment portfolio (OWIL) to swing from a loss in H120 to a strong performance. At the same time, OCN’s EBITDA grew 13% y-o-y to $79.6m and its operating profit by 23% as Wilson Sons’ (WSON) results improved as expected from recovering business levels and firmer prices. We have made some adjustments to our forecasts on the back of the results. We have kept EPS

Ocean Wilsons Holdings - Smoother sailing ahead

The COVID-19 pandemic has been tough on Brazil but OCN has weathered it well with a respectable 5.1% ROE in 2020 and maintained its 70c (4.3%) dividend. Business volumes fell in Wilson Sons (WSON), its Brazilian maritime services company, but prices firmed up and allowed WSON to post a 4.3% ROE. OCN’s international investment portfolio (OWIL) had a good year in 2020 with favourable if choppy markets. Business is now picking up in WSON’s key container terminals and tugboat business and a recovery

Ocean Wilsons Holdings - Sailing against the wind

We forecast Wilson Sons’ (WSON’s) EBITDA to fall 6% y-o-y this year, still affected by the sluggish Brazilian economy and a tough competitive environment, before rebounding 10% in 2020. However, our Ocean Wilsons (OCN) 2019 forecasts are boosted by good returns in the investment portfolio. The business continues to benefit from the stabilising effect of the diversification of earnings by activity and currency and ownership of its international investment portfolio (OWIL). The current 42% discoun

- Making headway in a challenging environment

Ocean Wilsons’ (OCN) first-half figures reported in August showed that its quoted Brazilian operating subsidiary, Wilson Sons (WSON), made progress despite a still difficult trading background, particularly for its offshore JV. The main container terminal and towage businesses are well invested and positioned to exploit a longer-term revival in the local economy. Confidence in this appears to be growing if strength in the currency and Bovespa equity index are taken as indicators.

- Wilson Sons' Q1 shows further resilience

Ocean Wilsons (OCN) is an investment holding company with a controlling interest in Wilson Sons (WSON), a long-established maritime services company in Brazil, and a globally diversified investment portfolio. Both are managed with a long-term perspective. Wilson Sons’ Q117 results were further evidence of the resilience of this business in the face of the Brazilian economic recession and, while the near-term outlook is uncertain, recent investment in the business and extension of the Salvador co

Resilient Q3 performance

The third-quarter results from Ocean Wilsons’ quoted subsidiary, Wilson Sons, represented another resilient performance against a still difficult economic background in Brazil. In addition, the company has announced the extension of its concession for the Salvador container terminal confirming (as expected) the long-term future of this element of the business. The longer-term prospects for Wilson’s maritime services businesses remain promising and the 32% discount that Ocean Wilsons shares trade

Brazil now a more positive influence

After a period in which its controlling investment in Wilson Sons (WSON), a seasoned Brazilian maritime services business, was a source of earnings and valuation risk, Ocean Wilsons (OCN) has been benefiting from strength in Brazil’s equity market and currency. There may be setbacks as economic recovery has barely begun, but diversification within WSON, OCN’s global investment portfolio and the 33% discount to a look-through NAV can all be seen as helping to provide some margin for error to inve

An unusual proposition

Ocean Wilsons Holdings (OCN) is an investment holding company that offers investors an unusual proposition: a controlling interest in a long-established Brazilian maritime services company (Wilson Sons) and a diversified investment portfolio, both run with a long-term view. While the trading background in Brazil is challenging, this is factored into market thinking and Wilson Sons has demonstrated resilience. An investor in OCN also gains the diversification provided by the global portfolio and

Look beyond near-term challenges

Ocean Wilsons’ (OCN) main investment is its controlling interest in Wilson Sons (WSON), the Brazilian maritime services company. Against a background of negative macro newsflow from Brazil, WSON has proved relatively resilient and stands to benefit from a resumption of growth both domestically and internationally. OCN’s international investment portfolio provides a balance to WSON and is run with a long-term approach. OCN's shares trade at a significant discount to a look-through valuation and o

Renold - Strong end to FY24: EPS up 11%. Robust FY25: EPS up 27.6%

The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as manageme

Morning Note – 16 April 2024

Q1 Operating Results

Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k

Billington Holdings - Record result boosts dividend; forecasts upgraded

FY23 results show very strong growth over FY22, driven by strong Structural Steel activity, with results slightly ahead of upgraded profit expectations, while stronger than expected cash flow resulted in an unexpectedly generous dividend of 33p (offering a FY23 yield of 7.0%). The group now has net cash of £22.1m and is debt free and is therefore in a strong position for potential M&A activity. Following the recent £90m of new orders to increase the order book to record levels we conservatively

Plant Health Care - China distribution with AMVAC

Plant Health Care announced it has signed a distribution agreement with AMVAC, an American Vanguard Company, to support commercialisation of novel fertiliser products incorporating Plant Health Care's Harpinαβ in China starting in 2024. The novel product combines Harpinαβ technology with an AMVAC fertiliser and is expected to help growers improve crop quality and yield as part of an integrated and environmentally responsible crop production programme. AMVAC continues to evaluate Plant Health Car

Morning Note – 15 April 2024

discoverIE - Back to organic growth

discoverIE’s March year-end update confirms a strong operational performance in challenging markets. Following two years when sales increased by +48%, FY 2024 Group sales were +1% ahead of 2023 at CER (reported -3%) driven by a +2% contribution from acquisitions and organic -1%. As expected, organic growth returned in the later part of the year (Q4 +2%, +11% sequentially) and the order book has reverted to normalised levels of c.4.5 months’ sales, which – combined with a continuing strong pipeli

Severfield - Multiple positives should excite investors

Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and the company ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, Severfield has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appear

Warns on brine supply costs

SP Angel . Morning View . Copper prices hold higher as China processing fees fall below $0/t amid low feedstock availability

PROGRESSIVE: Severfield: Targeted acquisition strategy aids growth path

Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.

LIBERUM: Severfield: Erratum: Better EPS and cashflow, and buyback

Invinity Energy Systems - Update on Strategic Investment

Invinity’s update on discussions with strategic investors reveals interest from multiple parties. While this has slightly delayed finalising an agreement it increases the potential for a better outcome. Although details are unknown at this stage, we think there is enough in the statement to be comfortable that any agreements will be consistent with the company’s strategy of growing market share in core markets and using a licencing and royalty model in other markets.

PROGRESSIVE: Severfield: Step change in European and Indian outlook

Severfield’s full-year results to March will be ‘slightly above’ the Board’s expectations, according to today’s trading update, with net debt significantly better. We maintain our PBT estimates for both forecast years, which are ahead of consensus, but reduce our net debt for FY24E. Record orders were boosted by the steel specialist’s European operations, after last year’s Voortman acquisition, while the Indian JV has seen ‘another step up in profitability’. The group has also launched its first

Clean and competitive fertiliser