Due to a change in sector focus Cenkos Securities plc has suspended coverage of the following stocks (see table 1). Our previous recommendation and forecasts can no longer be relied upon.
Please contact Cenkos for further information.
Companies: TUI CCL CPG DOM GNK JDW JE/ MARS MERL MAB FLTR PTEC RTN TCG WTB WMH IHG SSPG
UK equities can maintain current valuations, says Panmure Gordon
We are downgrading the stock from Buy to Hold, setting 800p as our new 12m TP and lowering our FY17/FY18 EPS expectations by 7%/10%. This takes us 3%/8% below consensus. Trading has been mixed for c.3 years and the anaemic 3 year EPS CAGR of 3% is uninspiring. Until management can evidence a higher growth rate we feel the group should be viewed as a utility type stock with yield being the main attraction. We prefer Marston’s in the sector and are buyers of it ahead of next weeks YE update.
Companies: Greene King
Greene King (GNK LN) Stronger than anticipated finals | Harwood Wealth (HW LN) Interims in-line, healthy acquisition pipeline | Infrastructure India (IIP LN) Sale of interest in WMP toll road completes | OMG (OMG LN) Appointment of Non-Executive Chairman
Companies: OMG GNK IIP HW/
We are lifting our 12m TP by 14% to 1030p to reflect upgrades post recent interims and stay at Buy. Our positive stance is purely a valuation call as the FY17 spot multiples are attractive given a 3 year EPS CAGR of 10% and a c.4% yield. Our concerns about the Spirit deal furthering GNK’s exposure to wet sales and earnings growth largely being synergy driven have not eased. But we acknowledge the Group’s strong track record, enhanced FCF and an attractive pub estate.
A satisfactory Q3 trading update from Greene King this morning which shows it had a strong Christmas and that the LFL trend has improved in Q3 vs H1. No consensus upgrades envisaged this morning, but in the context of mixed peer updates recently, today’s news should be viewed favourably. We stay at Buy with a 900p Tp.
Greene King has developed a reputation as a leading pub company combining a consistent record of successful earnings growth and a
meaningful dividend yield. Now 80% larger by market cap than its nearest peer, it continues to lead the consolidation of the sector. Its latest
acquisition, of Spirit Group, is integrating well, which significantly underpins earnings and dividend growth over the next two years.
A stronger then anticipated set of interims from Greene King this morning which should be well received by investors. Current trading appears to be good albeit no LFLs are given. There is good news on Spirit synergies and we envisage three year consensus forecast moving up by 3-5% post the results. The shares should react positively today and we move from Hold to a Buy with a 900p TP.
BREWIN DOLPHIN HLDGS (BRW LN) Finals in line, positive margin progress | FINDEL (FDL LN) Is this why Sports Direct bought at 200p? | GREENE KING (GNK LN) Strong interims, we upgrade to Buy | IOMART GROUP (IOM LN) In-line interims; small adjustments to forecasts
Companies: BRW STU GNK IOM
An in line Q1 trading update from Greene King this morning. LFL sales growth of 1.3% at the Greene King Managed estate is an improvement on the 0.6% reported after 8 weeks, but it's the least we expected given a soft Q1 comp of 0.4%. Trading across the rest of the business is mixed in our view and there's nothing tangibly new around Spirit. Overall, the update reinforces our view that despite a macro tailwind, intense competition is proving a hinderance to strong pub-restaurant sector top and bo
We use this note to preview the forthcoming Q1 update and formally publish our new forecasts and target price post the Spirit merger. We anticipate another sluggish trading update next week despite soft comps. If proved correct, this will act as a further ST sentiment drag for both GNK and the sector in general. We have mixed views about the Spirit deal and reinforce the pros and cons in this note. The main positive is that the deal has helped lift the 3 year EPS CAGR from 5% to 8%, but we quest
Carclo (CAR LN) Trading in line | Greene King (GNK LN) Upcoming Q1 update unlikely to be a positive ST catalyst | Horizon Discovery Group (HZD LN) Collaboration with Redx Pharma | Lookers (LOOK LN) Benfield acquisition for £87.5m – 12.5% upgrades in 1st full year (FY’16) | Redde (REDD LN) Upgrading PBT, strong growth drives dividend | Summit Therapeutics (SUMM LN) Dr Ralf Rosskamp appointed Chief Medical Officer
Companies: CAR GNK LOOK SUMM REDD
An inline set of finals this morning from sector stalwart Greene King. The numbers graphically show that the previous year was a difficult one, with PBT -3% and EPS effectively flat. The current year has not got off to a much better start with weak LFL’s reported after 8 weeks despite softer comps. This further brings into sharp focus the lack of momentum in the Greene King managed estate and the impact an increasingly competitive market at the value-end is having. There is no fundamental new ne
The big event in the Leisure sector next week will be Greene Kings finals on 1st July. These will highlight a difficult 12 months with PBT projected to go backwards (we estimate -3%). The industrial and financial logic of the Spirit deal are well understood and the market will be looking for more colour on synergies, brand rationalisation and organic expansion next week. All this could be overshadowed if current trading remains challenging, despite soft comps. We have no huge axe to grid against
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easyJet’s FY21 results correspond to the market’s anticipations as the preliminary figures were communicated previously. Despite the worsening COVID-19 situation in Europe, the group seems upbeat on its capacity forecast for the next FY. Too early to judge whether it is too optimistic as all depends upon the development of the new Omicron variant.
Companies: easyJet plc
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What’s cooking in the IPO kitchen?
Public Policy Holding Company, to join AIM. PPHC, through its wholly-owned companies, operates a portfolio of independent firms that offer public affairs, crisis management, lobbying and advocacy services on behalf of corporate, trade association and non-profit client organisations. Mkt Cap and Capital to be raised TBC. Expected admission date Mid Dec.
Libertine to join AIM. Libertine has developed a technolog
Companies: TRAK GAMA AAZ FNTL DPP
After a stellar period of trading through the various stages of Covid 19 restrictions, and easings, ScS
has reported a step-back in trading momentum in recent weeks. We await to see if the slower
trading is temporary, reflective of a change in Christmas shopping patterns, or of a more permanent
basis. We leave forecasts unchanged, looking for CPTP of £13.7m and EPS of 26.5p (both IFRS 16
compliant), as such the stock trades on an undemanding EV/EBITDA multiple of 4x for FY22 and 3.4x
Companies: ScS Group plc
Windward (WNWD.L) has joined AIM. Windward is a leading predictive intelligence company, fusing artificial intelligence (AI) and maritime expertise seeking to digitalise the global maritime industry. As at 30 September 2021, the Company had 120 permanent employees and had an annual contract value of US$19.7m, with 99 per cent. of the revenue being subscription based. The Placing raised gross proceeds of £26.3m (US$35m) of new capital for the Company and £8.2m (US$10.9m) for certain exist
Companies: SPSY MMH KEFI BRSD IKA SEMP
One Media iP (OMiP) has released a robust FY21E trading update, with Adj EBITDA of £1.65m; slightly below our forecast of £1.8m, owing to it taking a little longer to deploy cash raised on acquisitions of new royalty assets, and adverse foreign exchange movements. The company ended the period with £0.7m of net cash (vs our forecast of £0.3m of net debt), leaving further financial resources available for acquisitions heading into FY22E. Applying a conservative 8x Net Publisher Share (NPS) multipl
Companies: One Media iP Group PLC
Companies: Loungers Plc
Interim results are stellar, commentary on current trading is upbeat and the pace of rollout is set to be stepped up a notch. We push through a 6% current year EBITDA upgrade and formally introduce FY23 and FY24 forecasts. These show a sector leading 2 year EBITDA CAGR of 27% - all self-funded from FCF. Omicron has created a degree of sector uncertainty but FUL has balance sheet strength and is well positioned to capitalise if trade migrates back to delivery and takeaway. On growth criteria the
Companies: Fulham Shore Plc
Pendragon has released a trading update today increasing its guidance for FY21 underlying PBT from £70m to approximately £80m. The Group attributes this lower than expected shortfall in the supply of new vehicles in the first two months of Q4 2021. Performance has also been supported by a strong GPPU because of a higher mix of premium vehicles sold. We have increased our FY21 forecasts of underlying PBT by 14.1% to £80.2m. We leave our FY22 and FY23 forecasts unchanged at this stage. Whilst we t
Companies: Pendragon PLC
An unscheduled but positive update this morning with good news on 5 fronts – full repayment of the CLBIL, new banking facilities, international franchising, strong current trading and site expansion. Margins are being maintained and going into 2022 we cite various factors which should mitigate the well-publicised sector headwinds. We make no forecast changes today but do see further upside risk. Whilst there’s been a strong recovery in the share price since 2020, the valuation is far from full.
Flutter reported muted Q3 20 sales numbers, which missed estimates. Sales were up 12%, driven by the strength in the US and Australia. However, the former posted its first quarter of sequential revenue decline, an indication of the increased competition in the highly attractive market.
Following the pause in operations in the Netherlands (~£50m EBITDA impact over the next three quarters), the firm lowered its FY21 EBITDA target by ~7%. We will be downgrading our estimates.
Companies: Flutter Entertainment Plc
Companies: Topps Tiles Plc
Cornerstone is a provider of foreign exchange (forex), payment and currency risk management services, with a focus on small and medium-sized enterprises (SMEs) internationally. As one of a handful of UK-listed companies in this segment, the company is well-placed to act as a consolidator in a highly fragmented marketplace. The core technology platform is a source of competitive differentiation in the SME segment, and this is being evolved to integrate with accounting systems, in turn evolving th
Companies: Cornerstone FS Plc
During the challenges of Covid, N Brown has taken the opportunity to accelerate its transformation programme. Strategic change was augmented by the FY2021 £100m equity raise, which alongside strong underlying cash generation sees the Group with a now comfortable balance sheet, with £80.8m of core net cash and all debt securitised against customer receivables. Management has again reiterated medium term targets for 7% annual Product sales growth and a 14% Group EBITDA margin, from which we take c
Companies: N Brown Group plc
Flutter reported consensus-beating H1 21 numbers as pro forma revenue grew 30%. Adjusted EBITDA declined 13%, attributable to larger US losses.
Management expects FY 21 ex-US adjusted EBITDA of £1,270-1,370m, and a £225-275m loss in the US. Hence, aggregate EBITDA should come in at £1.05-1.1bn, in line with consensus but below our estimates.
Following the H1 performance, we do not expect any major changes to our estimates as top-line momentum will be partially offset by softer margin developme
Sportech (SPO) has announced plans to return £36m surplus cash to shareholders by way of a tender offer, at 40p for up to 47% of the issued share capital. Assuming the offer is all taken up, SPO will be left with 100m shares outstanding. The deal requires court approval to create the necessary distributable reserves. SPO also announced that it was in discussions to sell its terrestrial lottery business for ca.$14m. The potential upside from the newly agreed sports betting deal in Connecticut (CT
Companies: Sportech PLC