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FY17 results
- Published:
11 Apr 2018 -
Author:
Cavendish Research -
Pages:
4
Arena has announced FY17 earnings in line with expectations reporting 25% growth in EBITDA to £10.6m (3.5p EPS) and a proposed final DPS of 0.9p to bring the FY to 1.35p. Net debt at the period end was £11.5m. Trading in Q1 has been in line with expectations and the group has exchanged on a further bolt-on acquisition. We maintain our 2018E EBITDA forecast at £12.5m, although our EPS forecast increases slightly to 4.7p reflecting the net benefit of updated depreciation, interest and tax guidance. The group will invest in additional capex this year to drive EBITDA margin to >12% in the medium term. This leaves the stock trading on a 2018E P/E of 10.7x and an EV/EBITDA of 5.7x whilst yielding 3.8%. Combined with the organic growth profile and acquisition pipeline we reiterate our Buy recommendation.