Alumasc (ALU): Corp | Photo-Me (PHTM): Corp
Companies: Alumasc Group Photo-Me International
Mothercare (MTC): Corp | Photo-Me (PHTM): Corp
Companies: Photo-Me International Mothercare
Photo-Me’s H1 results are solid with sales up +3.3% (-1.4% underlying), adj. PBT up +6.7% and FCF up +24.9%. Continental Europe led this growth through the acquisition of Sempa, the continued roll-out of Laundry and a better-than-expected photobooth performance in France. This was partly offset by challenges in the photobooth market in the UK. We expect these trends to continue, make no major changes to our full year forecasts and continue to highlight the 10% dividend yield (the interim dividend was held as expected) and the £25m net cash balance.
Companies: Photo-Me International
Photo-Me (PHTM): Corp Growth in Europe and Asia | Wameja (WJA): Corp HomeSend draws on facility for second time
Companies: Wameja Photo-Me International
eve Sleep (EVE): Corp H1 FY19 pre-close: Good broad-based progress | Minds + Machines (MMX): Corp Positive H1 trading update with new buyback announced | NAHL (NAH): Corp On track, evidence of success building gently | Photo-Me (PHTM): Corp Laundry remains the core growth driver | Scientific Digital Imaging (SDI): Corp FY results; acquisitions to fully benefit FY 2020 | SRT Marine Systems (SRT): Corp FY 2019 confirms step change from projects business
Companies: MMX PHTM SDI SRT NAH EVE
FY 2019 results are line with our revised expectations, save for a higher net cash balance (£16m) due to lower capital expenditure and cash tax. Free cash flow covered the dividend cost for the first time since FY 2016 and management has highlighted its intention to again hold the FY 2020 dividend. As previously highlighted, the UK suffered from Brexit-related uncertainty and weaker consumer demand. We have downgraded our EPS forecasts by 5%, assuming difficult UK conditions continue. Rolling forward our free cash flow and net cash based valuation model plus our revised short-term outlook edges down our target price from 155p to 150p.
Photo-Me has acquired 96% of Sempa, a manufacturer of commercialised fresh fruit vending equipment, based in France. The net cash consideration is €11.6m, and Sempa reported sales of €9.4m and PBT of €3.7m in 2018, meaning the group has paid an attractive 3.1x PBT. We have upgraded our FY 2020E EPS by 6% and we now forecast net cash of £10m at April 2019. We reiterate our view that the 10% dividend yield supported by a net cash balance should continue to provide good support for the shares that now have the added interest of potential growth in the large juice vending machine market.
Photo-Me (PHTM): Corp Entering a new, large market
Techniplas –global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient. FYDec17 rev $515m. Loungers plc—the operator of 146 café/bar/restaurants across England and Wales under the Lounge and Cosy Club brands, announces its intention to seek admission on AIM, offer to raise £61.6m at 200p with market cap of £185m, expected 29 April 2019. SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Distribution Finance Capital Holdings plc — specialist lender which builds relationships with manufacturers and then provides working capital solutions up and down their supply chains to drive their growth is looking to join AIM. No raise, secondary offering of £19.8m at 90p, expected market cap of £95.98m. Expected 09 May 2019.
Companies: DVO AIR PHTM NSCI MCON SXX SNX LOK SCLP
Chariot Oil & Gas (CHAR): Corp Changing the narrative | Photo-Me (PHTM): Corp UK more challenging
Companies: Chariot Oil & Gas Photo-Me International
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Photo-Me has announced H1 2019E results. Underlying revenue grew 2.5% and although adjusted PBT fell 7.9%, the Group maintains its strong cash generation with net cash of £32.4m. Laundry continues to perform strongly, ID saw growth through the roll-out of secure upload enabled booths, the first banking booths were launched in France and the Japanese re-structuring is proceeding as expected. The Group maintains its full year estimate of c.£44m adjusted PBT but notes that the ability to achieve this will be dependent upon consumer sentiment, the economic environment and foreign exchange movements.
PetroTal Corp is an oil and gas company whose shares are currently admitted to trading on the TSXV. The Company is focused on development of oil and gas assets in Peru and it currently has controlling interests in three onshore Peru license blocks. No new funds being raised. Due 21 Dec. Mkt cap c.£80m
Litigation Capital Management—provider of litigation financing and ancillary services, moving from ASX (ASX:LCA) to AIM. Offer TBC. Due 18 Dec. Mkt Cap A$64m.
Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is due to start trading on AIM 14 December. Raising £2m at 290p. Mkt cap at issue price £13.6m.
Manolete Partners—leading UK insolvency litigation financing business looking to join AIM raising £16.3m as a placing and £13.1 realised by the selling shareholder at 175p. Market cap £76.3m, expected 14 December
Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD. Expected early December.
Companies: PHTM CORO AVCT BST ACC PRES ING BOWL KMK SPSY
H1 results show continued strong growth in Laundry and a faster than expected recovery in Japan but slower B2B and third party sales in the UK. These later two points are expected to improve in H2 and guidance for the full year is maintained but there is clearly some risk here. We retain our target price of 183p based on a 5% FY 2019E free cash flow yield.
Avacta (AVCT): Corp Therapeutics development partnership with LG Chem | CyanConnode (CYAN): Corp Chinese deal comes with revenue recognition concerns | Hardide (HDD): Corp FY results – moving towards profitability | Mothercare (MTC): Corp On the right trajectory; early positive signs; much more to come | PCI Pal (PCIP): Corp Government contract underpins expectations | Photo-Me (PHTM): Corp Laundry continues on growth path | PPHE Hotel Group (PPH): Corp Amsterdam visit emphasises upside potential
Companies: AVCT CYAN PHTM PPH PCIP MTC HDD
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Codemasters has announced that it has signed a licence agreement for the exclusive rights to develop and publish the FIA World Rally Championship videogames and Esports tournaments. The initial 5 year annual series will be out from 2023, with the agreement ensuring a step-up in the release cycle of Codemasters’ off-road games to three games over two years rather than the current one per year. The major success of F1 highlights the potential of combining another global racing license with the company’s gaming expertise. This news, following the F1 contract extension with Liberty Media, the deal with NetEase in mobile, and the acquisition of SMS, adds to the visible growth profile of the business and increasingly underlines Codemasters’ position as the leading car racing platform in the gaming sector.
New franchise win: World Rally Championship
The phased reopening of Walker Greenbank’s two manufacturing facilities (both in the UK) is underway with Standfast & Barracks already operational and Anstey restarting this week. The company’s business model is such that near-term activity levels can be rebuilt gradually. It may also support new business development in the UK in due course compared to overseas supply sources. No new financial information was provided ahead of the company’s scheduled FY20 results announcement on 30 June, at which point activity levels during FY21 to date should also be disclosed. Our estimates remain suspended at this time.
Companies: Walker Greenbank
Fast & Furious launch date shifted to Summer
Walker Greenbank is a higher-end interior furnishings business with well-established global brand names and manufacturing facilities in the UK. This morning, the group has provided a further update on the business in relation to COVID-19 following its previous announcement on 25 March. In addition, and in line with recent FCA/FRC guidance, full year results to 31 January 2020 have been rescheduled to 30 June (previously expected 23 April).
With cash ahead of expectation in a year of transformation, PTY has reported inline results for the year to December 2019, with revenues standing at £80.4m and £0.1m adj. PBT. Net cash at £0.9m is ahead of our expectation prior to the company's pre-close update by some £1.9m, a significant beat.
Dillistone's update this morning is, on the whole, reassuring. Although the economic implications of COVID-19 will likely materially affect FY2020E results, as with many businesses seeing a significant reduction in demand for products and services, it is too early to determine the quantum. As such, we remove our FY2020 estimates that previously looked for an EBITDA contribution of £1.6m and adjusted PBT to £0.1m.
Companies: WGB DSG PTY
Walker Greenbank’s FY20 results date has been reset to 30 June (and complies with updated FCA policy guidance). Its latest update provides no new financial information though orders continue to be received despite lockdown conditions. Operational steps already taken appear to be appropriate, retaining sufficient infrastructure to service prevailing sales demand levels while additional actions aimed at preserving business liquidity are referenced, consistent with those seen elsewhere in the quoted sector. Taken together, the company appears to have quickly adjusted its business model to meet current market challenges in FY21.
History indicates that the emergence of cloud gaming and game subscription services could significantly increase investment in video game content, industry employment and the number of production companies, thereby leaving Sumo well positioned for growth.
Companies: Sumo Group
Disappointing H1 driven by NGP. Reducing investments in this category was the company’s choice, but we believe it is a bad mid-term strategy. The dividend cut has finally shown increasing weaknesses vs. peers during the crisis.
Companies: Imperial Brands
Codemasters has announced that Fast & Furious Crossroads will be launched in Q2 FY21, despite a twelve-month delay in the film’s release to April next year. This leaves FY21 forecasts unchanged but adds to the strong release line-up through this year and provides holiday season and movie release windows to further monetise the game. The shares continue to trade at a c.40% discount to peers; however, further news flow around the success of games as well as business development opportunities can continue to drive a re-rating back up towards the sector average in the coming months.
Due to a change in Analyst role, Cenkos Securities plc has suspended coverage of the following stocks (see table 1). Our previous recommendation and forecasts can no longer be relied upon.
Companies: BDEV BWY BKG VTY COST CRST BBY FERG GLE KLR KIE MSLH MER MTO NXR PSN RDW RNWH SFR SHI MGNS TW/ CTO TEF TPK GFRD
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Companies: AVAP SHI GFRD
Character Group has issued a trading update stating that while its supply side operations in the Far East have now been broadly restored following temporary disruption from COVID-19 issues, the demand side of the business is being deeply impacted by the closure of stores, shops and warehousing & distribution centres. The board is now anticipating a significant drop in H2 FY2020 revenues compared to expectations. However, given the lack of visibility on both trading activity and the eventual impact of COVID-19 on the business, which is second half weighted, we are temporarily suspending forecasts until further clarity is given – probably with the interim results scheduled for end May 2020.
Companies: Character Group
There has been much comment on the fact that equity markets in the US and Europe have been shrinking for some years now, certainly in terms of the number of quoted companies, if not in total market capitalisation (MCap). This paper has been written with the assistance of the Quoted Companies Alliance (QCA) and focuses on the evidence for such in the London market and, in particular, that for smaller and midcap companies. It assesses that evidence and considers explanations. Finally, we ask why it matters, and assuming that it does, what practical steps can be taken to reverse the trend. Successful public markets have been a key part of the United Kingdom’s economic success for generations, even centuries, and we should not allow them to wither on the vine.
Companies: AVO AGY ARBB ARIX ASAI DNL GDR HAYD NSF PCA PIN PXC PHP RE/ RECI RMDL STX SCE TRX TON SHED VTA
Acquisition of Lab42
Ubisoft’s FY19-20 revenue was hit by the bad reception of the supposed-to-be outstanding Ghost Recon Breakpoint. This led to a loss despite lower marketing costs (due to delayed games). Conversely, ‘Player Recurrent Investment’ (PRI) and Mobile gaming experienced solid progress. With 5-AAA games in the FY 20-21 pipeline, a revenue boost is expected from the hugely popular franchises that back these games.
Companies: Ubisoft Entertainment