SThree’s trading commentary through the second half of FY’20 had already highlighted the resilience of the business model. Yesterday’s trading update served to highlight how well positioned SThree is to exit the pandemic in good shape. Two key markets; DACH and the USA (together 60% of group net fees) have delivered positive YoY growth; ahead of expectations. Whilst +19% YoY growth in the US will capture the headlines, +3% growth in DACH is arguably more impressive given the strength of the Q1’2
Companies: SThree plc
SThree has delivered Q1 ahead of expectations, with reported NFI up 1% y-o-y and back to pre-COVID levels. Germany and the US are the star performers, but all regions are improving. The contractor order book is back in growth territory, up 1% in Q1 after -9% in Q4. Productivity is improving strongly which bodes well for EBIT drop-through. We increase FY21E PBT by 5.5%, with risks on the upside. Growth prospects are excellent and the shares are cheap. Remains our top pick. TP raised from 475p to
The Q4 trading update had already flagged a better than expected net fee and profitability performance and these results have put more meat on the bone. Beyond the resilience SThree has shown in what has been an extraordinary year; the key questions looking forward are going to revolve around the maintenance / acceleration of Q4 productivity improvements and the pace of any recovery in net fees. Progress on either is likely to see further upward pressure on estimates. As it is, we are following
SThree has delivered FY20 PBT in line with expectations and returned to paying a dividend. There is no update on current trade, but we expect the positive momentum to continue. We raise our FY21E PBT by 6.5% to account for restructuring and impairment costs taken in FY20 that will not recur. Management is steadfast in its strategy and market share ambitions, with the model having navigated the pandemic far better than peers. A 10.1x, CY21E EV/EBIT is cheap. TP raised from 450p to 475p. SThree re
Looking Ahead At The Next Week
Today’s scheduled Q4 trading update provides a fuller net fee performance picture, following the November update that prompted material upgrades to consensus forecasts for FY’20. The key headline is one of good resilience across much of the group and two areas of notable strength in the US and Germany. The US stands out in terms of delivering positive net fee growth (+2%) against such a challenging backdrop.
On the back of improving NFI trends and strong productivity gains in Q4, SThree is set to deliver FY20E PBT in line with the guidance given at the 23 November update, when we increased our forecast by 16% to £28m (including c. £2m of Australia losses). The business is well positioned for FY21E and we expect the market to start to refocus on longer term ambitions as we move out of crisis management mode. SThree remains our top pick amongst the recruiters trading on just 5.6x FY19 peak EBIT. Buy.
SThree has released a brief update ahead of the scheduled Q4 trading update expected on 12th December. The key headline is that an improving trading backdrop over the last few months has driven a better than expected profit performance. Market consensus was clearly too light with the company now guiding for an FY’20 outcome above the top end of the range of expectations. We have updated our forecasts accordingly and now look for FY’20 PBT and EPS of £28.1m / 13.3p respectively – a PBT upgrade of
SThree has issued a brief, unscheduled update as a result of stronger than expected trading in October and November. Management now expects FY20E PBT to be ahead of the top end of the consensus range. Reflecting this, we increase our FY20E PBT by 16%. SThree remains our top pick among the professional recruiters, reflecting its strong, defensible position in the STEM and flexible working markets. We raise our TP from 420p to 450p. Buy.
An encouraging Q3, with improving sequential contract order book trends, combined with a better H2 drop-through rate drives a 22% increase to FY21E EBIT. Cash management remains strong and the company has repaid UK furlough money, paving the way for a return to dividends in due course. SThree remains our top pick amongst the recruiters, given its differentiated business model. A CY21E EV/EBIT of 8.6x and 4.7x peak FY19 EBIT is cheap. TP raised from 385p to 420p. Buy.
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The group has released a positive trading update with strong trading seen recently in the US along with signs of recovery in Europe and Australia. It is quite unusual for this conservative company to boost its guidance at this fairly early stage in the year, with raised guidance for FY21 leading us to increase our adjusted EPS by 15%. The shares trade on a discount to peers and offer a premium yield. We lift our price target from 435p to 520p, up 20% and offering decent upside to current levels.
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AFC Energy hosted a virtual Capital Markets Event yesterday attended by over 750 participants.
The company re-emphasised its key technological advantage, namely, AFC Energy's technology can successfully run on a range of cheaper hydrogen sources including hydrogen ‘cracked' from green ammonia. Based on AFC Energy's market analysis, it stated that on an energy equivalent basis ammonia costs less than one quarter of the cost of hydrogen. Ammonia is a liquid under normal conditions, making it a d
Companies: AFC Energy plc
AFC Energy hosted its maiden Capital Markets Event yesterday, giving an excellent summary of its progress in the last year and its prospects. The company is making good progress in commercialising its EV charging product alongside ABB and should be ready for market in 2022. We believe the long-term prospects for the company remain exciting.
Powerhouse has announced progress with the international roll out of its DMG waste to hydrogen technology with an agreement towards the licencing of the technology in Greece and Hungary. This follows a similar agreement in Poland and demonstrates the global appeal of Powerhouse’s solution in our view. While development of the Protos project in the UK remains important, the ability to expand internationally is part of the appeal of the Powerhouse investment case and it is good to see progress her
Companies: Powerhouse Energy Group PLC
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in spor
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The AGM trading update quantifies the current order book position which, at a fully committed £472m, has put on another 3.5% since the end of January. In itself that may look a modest sum but YoY the increase is 23.5% and is a critical aspect of the trajectory towards its medium-term target of £500m revenue (pre-COVID 2019 was £335m). Allied to strong levels of outstanding tenders and pipeline bid opportunities, management's target revenue is becoming more credible and with it the underpinning o
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For investors, the UK telecoms sector has presented immense challenges. Having boomed in the 1990s, mainly on the back of mobile telephony growth rates, telecom shares subsequently fell back sharply, as major debt concerns predominated. With Cable & Wireless (C & W) having exited, the UK sector now consists of little more than British Telecom (BT), privatised in 1984, and Vodafone, which was founded in the early 1980s.
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The UK market showed a continued recovery in the first quarter albeit the indices are still well short of their all-time peaks, unlike many of their international peers. The FTSE 100 has risen by 1,186 points (21.4%) since the end of October and the FTSE 250 by 4,304 points (25.0%). The comparable performance since the start of the year is less spectacular- the FTSE 100 has risen by 253 points (3.9%) and the FTSE 250 has risen by 1,070 points (5.0%). The factors behind the sustained rally are fa
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Oil rose this month with a slew of positive economic data and signs of a budding fuel consumption revival in key economies offsetting a worsening coronavirus crisis elsewhere.
Futures in New York rose this week, extending its monthly gain to 7.5%. The near-certain likelihood of higher fuel consumption in the US, China and the UK has brightened the overall demand outlook, even as a resurgent pandemic in countries such as India, Brazil and Japan cloud those prospects. OPEC and its allies see wo
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Oil posted a gain this week as expectations for growing economic activity in nations from the US to Europe fuelled optimism around stronger summer demand. Futures in New York advanced 2.1% this week in the first back-to-back weekly increase since early March. Fuel sales in the UK rose to the highest since the pandemic again, and in the US, refineries are running at their highest rate since the pandemic began as they gear up for the summer driving season.
Crude's advance this week comes amid s
Kevin Freeguard, Gattaca
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Bacanora Lithium (BCN LN) – Potential offer from Ganfeng
Lucara Diamonds (LUC CN) – Reports healthiest diamond market for 5 years
Pasofino Gold (VEIN CN) – C$9m equity raise
Power Metal Resources* (POW LN) – New corporate presentation
Rambler Metals and Mining* (RMM LN) – 2021 Q1 results and progress of recovery plan
Rio Tinto (RIO LN) – Battery-grade lithium produced at California plant
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CRU has announced the sale of its Haydock property which it had retained following the sale of Coral Mouldings. It needs to spend £650k replacing the roof and the property will then be sold for £3.5m which should generate a book profit of £350k. The proceeds should be received by the end of 3Q 2021. We forecast cash balances as at April 2022 will be c.£12m, or £8m net of lease liabilities and other borrowings. NAV should be c.17.5p.
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MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST. The company has raised £5m giving a market capitalisation on listing of c. £23m. MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*. MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market. PensionBee has confirmed its intention to float on the High Growth Se
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Microsaic’s business model is evolving, and whilst results today reflect a financial performance that has been severally tempered by COVID-19, there are encouraging early signs of a turnaround now funding has been secured. Microsaic is transitioning its business beyond the capital sale of its novel miniaturised mass spectrometry (MS) instruments, consumables and support services, to a business model that uses its technology and instruments to deliver complex solutions for end users. There are a
Companies: Microsaic Systems plc