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We expect XXL to report Q4/20 EBIT of NOK 96m, 10% above latest Factset consensus of NOK 87m. The positive deviation is explained by an estimated gross margin of 39.0% vs. cons. 38.1%, as we expect profitability to benefit from limited discounting in the quarter. Despite warm weather and poor snow conditions we estimate like-for-like sales growth of 7.8%, driven by strong demand for sporting goods and outdoor equipment across the company's home markets.
Companies: XXL ASA
Arctic Securities
Q3/20 EBITDA of NOK 413m vs. Factset consensus of NOK 367m Solid Q3/20 gross margin of 40.5%, up from 37.3% in Q3/19 LFL sales growth of 16.1% Y/Y driven by 21.1% LFL growth in Norway We expect share price and estimates to move higher today
We expect XXL to report Q3/20 EBITDA of NOK 325m, 11% below latest Factset consensus of NOK 367m. The negative deviation is explained by a combination of lower sales growth and lower gross margins. We estimate Q3/20 sales of NOK 2.9bn, up 19% Y/Y driven by strong demand for sporting goods in all XXL's home markets. We expect gross margins to be slightly down Y/Y, explained by lower supplier bonuses and NOK weakening.
Strong Q1/20 sales driven by 25% Y/Y growth in e-commerce Massive clearance sales resulting in soft Q1/20 gross margin of 27.9% Negative Q1/20 EBITDA explained by increased overhead costs Norway and Sweden have started Q2/20 on a positive note
We expect Q1/20 results to be a non-event given the clearly communicated soft January with the subsequent clearance sale in February and March. As investor focus has turned from a disappointing winter season to the ongoing Covid-19 uncertainty, we expect an update on April 2020 sales to be key for short-term share price momentum. Following 7 quarters of negative LFL revenue growth (including Q1/20), we expect actual April sales to surprise on the upside.
Pål Wibe’s first day as new CEO of XXL was an eventful one, with the share price soaring 85% on the back of the balance sheet restructuring news. While the Nordic sporting goods market remains challenging, XXL has now secured 18 months to improve profitability without constantly worrying about its debt covenant. While we continue to see downside risk for consensus estimates for 2020, we expect improving results from 2021 onwards to drive the share price higher.
XXL announces new bank financing of NOK 1,450m XXL also announces underwritten rights issue of NOK 400m Rights issue guaranteed by Altor, Ferd and Odin Rights issue structures to Altor avoids mandatory offer obligation
Despite having significantly reduced net interest-bearing debt over the past 12 months, we expect the leverage ratio to breach the debt covenant of 4.0x in Q1/20. The ratio increase is explained by a drop in 12-month rolling EBITDA, which we expect will continue to decline through Q2/20 and Q3/20. While we continue to view XXL’s balance sheet issues as fixable, we reduce our target price from NOK 10 to 6 and downgrade our recommendation from Hold to Sell.
Bjørn Rune Gjelsten to become 50% owner of Gresvig Olav Nils Sunde will own 50% of Gresvig and Sport 1 34 out of 94 owned stores to close as part of restructuring Market consolidation positive for XXL in terms of price pressure
XXL’s main competitor Gresvig declares bankruptcy More equity needed to compete rebranding to Intersport Long-term impact on XXL likely to be positive Challenging 2019/2020 winter season to become worse
Research Tree provides access to ongoing research coverage, media content and regulatory news on XXL ASA. We currently have 11 research reports from 1 professional analysts.
Companies: Judges Scientific plc
Shore Capital
Invinity hosted their inaugural capital markets day at their manufacturing facilities in Scotland. The day marked the official opening of the company’s new 26,000 sq. ft assembly facility in Motherwell and included a tour of their current Bathgate facility near Edinburgh, consisting of a deep dive into their technology, manufacturing and R&D focus areas. Our key takeaway from the event is that Invinity are well placed to take advantage of accelerating demand for long duration electricity storage
Companies: Invinity Energy Systems PLC
Longspur Clean Energy
Companies: HSX LRE CDT VIV VIV/H AV/ LGEN PRU CSN JUST DLG BEZ SBRE AVIV CRE CND
Panmure Liberum
eEnergy’s H1 update confirms that trading remains in line with expectations with momentum building at the start H2’24. As previously reported, H1 started slowly as a result of weak market conditions and balance sheet constraints, which were resolved by the sale of the Energy Management (EM) division in Q1. Encouragingly, market conditions have improved and full year revenue guidance has been maintained at £25-26m. We make no changes to our underlying forecasts or fair value of 13p/ share. In o
Companies: eEnergy Group PLC
Equity Development
Companies: PEB PEN ELCO EMR HSP CNSL STX HERC
Cavendish
discoverIE’s Q125 trading update confirmed that underlying earnings expectations for FY25 are unchanged. While the Q125 revenue decline reflects the lower bookings environment in previous quarters, book-to-bill was above one and bookings increased organically year-on-year despite ongoing destocking by customers in the industrial market. Robust gross margins and a well-controlled cost base support the company’s 13.5% target operating margin for FY25 and we maintain our forecasts.
Companies: discoverIE Group PLC
Edison
AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX AU)C; target of A$0.75 per share: Diversified and high impact newsflow over the balance of 2024 – ADX has confirmed a very busy programme of activity from September. The overall unrisked value of the programme is ~A$1.70 per share, which represents 17x the current share price. In early September, ADX will drill the Anshof-2A side track. The well is expected to intersect thick Eocene reservoirs similar to that encountere
Companies: EQNR ENI GPRK ADX KAR WDS GALP REP REP EOG PANR TRIN ZPHR CHAR TTE ENI EQNR VAR ATOM GALP TCF
Auctus Advisors
Companies: FirstGroup plc
SigmaRoc now holds the number one or two position in a duopoly market structure within the European lime and limestone market. This makes it the only UK listed peer with this level of exposure to a fundamentally important sector exhibiting significant organic growth opportunities and strong pricing power. SigmaRoc is now capable of generating revenue in excess of £1bn with EBITDA margins towards 25%, backed by a high-quality asset base and long-term contracts with OEMs. Investors have been patie
Companies: SigmaRoc Plc
Zeus Capital
Strix has released a trading update for the six months to June (H1 24) confirming that trading remains in line with expectations (Zeus FY24e PBT: £24.2m). Cash generation in the period has been strong and follows an exceptional performance in FY23, where management converted over 100% of EBITDA into operating cash flow. Net debt is now comfortably below 2.0x and Zeus forecast it to reach 1.7x by year end. Leverage risk has materially reduced in the last six to eight months and gearing could reac
Companies: Strix Group PLC
Judges Scientific is a group focused on acquiring and developing companies in the scientific instrument sector. As alluded to at the time of the AGM in May, subdued order intake, notably in China / Hong Kong, has persisted, with H1 organic order intake decreasing 4% in H1 (against H1-23 +14%). This, along with ‘some significant projects being delayed into H2 or 2025’, has translated to H1 organic revenue growth of -3%, the impact of which results in an estimated H1 YoY decrease in adjusted basic
We initiate coverage of Van Elle, the UK’s largest ground engineering and foundations specialist. Van Elle is at the ‘front end’ of the construction process and, in our view, will be among the first companies to benefit from national priorities of housebuilding and investment in creaking water and energy transmission sectors, all of which Van Elle has targeted for growth. These sectors should be supported by the Labour government, which has pledged 1.5 million new homes and aims to speed up plan
Companies: Van Elle Holdings Plc
Progressive Equity Research