Q1 2022 - Good momentum and strong cash flow

Neinor's Q1''s results looks good to us. Key highlights are the stable margins and the strong cash-flow generation. On the flip side co. has slowed down the pace of pre-sales to maximize prices. On-track for 2022 targets Neinor has delivered 866 homes during the quarter (up 2.5x yoy) with revenues up 2.8x year-on-year to EUR284m. EBITDA is also up 2.7x yoy to EUR50m beating consensus and BNPPE by 32% and 3% respectively. Though we anticipate a slowdown in deliveries to 300-400 units in Q2, Nei

Business as usual (for the moment)

We expect Q1 to be solid. So what of the medium and long term? We consider Neinor''s dilemma on Rental - crystallise value or drive future EBITDA? - plus the company''s resilience to a squeeze in both supply (construction costs) and demand (low affordability). Q1 2022: stable margins, in line with 2021 Neinor Homes will publish Q1 2022 next Tuesday, 10 May (aftermarket). We expect c.700 units delivered (vs. 345 units in Q1 2021), consistent with EUR288m revenues, EUR48m EBITDA and EUR25m net

The million-home opportunity

If you want to build one million homes over the next decade, where do you start? One choice might be Neinor, not only the leading house builder in Spain but also an entrant to the high-end build-to-rent segment. Neinor is aiming to tap into reigniting demand, market consolidation and a newly flourishing private rental market. We initiate with a valuation range of EUR11.4-14.9 per share. Rent or buy, Spain needs more homes The excess stock from the GFC has finally been absorbed and a new wave

Argos attempts a comeback

Home Retail Group (HRG) posted Q4 (8-week period ending 27 February 2016) and FY16 results slightly better than our estimates. In Q4, lfl revenue of Argos (core retail business) decreased by 1.1% and total revenue was up 1.9%, with a 3% contribution from new space. The non-electrical products (particularly furniture and general sports) and mobiles posted healthy growth, while jewellery and electrical products (gaming, tablets and white goods) witnessed a decline. Internet sales grew by 13% durin

Late Christmas for Home Retail

UK-based retail group Home Retail Group (HRG) has become flavour of the season, getting multiple acquisition bids in recent months. On one hand, it has just sold its stake in the DIY business ‘Homebase’ to Australian retail group, Wesfarmers (owner of supermarket chain ‘Coles’) for £340m (17x FY14EBIT), and on the other, two retailers (Sainsbury’s and Steinhoff) have shown interest in acquiring the remaining business ‘Argos’. - Sainsbury’s: The UK-based food retailer had reached an agreement wi

Q3 hamstrung by rickety Argos, while Homebase bids adieu

Home Retail posted Q3 FY15-16 results lagging market expectations as well as our estimates, pinned down once again by a bleeding Argos and the negative impact of Homebase store closures. Although Argos (c.72% of total revenue) clocked its highest-ever sales on Black Friday (+41% y-o-y), the subpar revenue growth in the rest of the quarter and depleted gross margins led the company to issue yet another profit warning (second in four months). As per the revised guidance, the benchmark PBT in FY15-

PBT guidance lowered; gross margin erosion amidst weak markets

Subdued performance in Argos in H1 16 (ending August) and uncertainty on Argos's Christmas season performance in H2 16 led the company to issue a profit warning. As for the new guidance, FY16 PBT (pre-exceptionals) is likely to be below the consensus range of £115-140m as further slippage of 50bp in the gross margin is expected in both businesses (Argos: down 75bp to 30.3% and Homebase: down 100bp to 47.5%). Total sales in H1 declined 2% to £2,628.5m; Argos was down 1.5% to £1,743m and Homeba

Uncertain outlook comes as no surprise

We take a positive view of Legal & General’s FY 22 results. Despite the tough environment, the Group managed to outperform expectations – something which was hardly a given for such a large asset manager. With L&G being widely exposed to the UK economy, it might be a call one does not want to make but the firm’s business remains one of spreads – as long as a default does not occur. We remain positive but concede that L&G embeds more risk than we had assumed.

Ambitious winds of change

M&G’s FY 22 results were strong. It was also the opportunity for new CEO Andrea Rossi to depict clearly his strategy for the upcoming months. While the impetus is clear and the objectives are ambitious, we rather believe in a structural improvement of the business (driven by the higher rates environment) than a commercial one.

Hybridan Small Cap Feast - 06 Mar 23

6 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objective

LIBERUM: Alpha Group International* - Highly attractive global growth opportunity

Critical Metals Plc - Initiating Coverage - 20th March 2023

Critical Metals is a British company that has acquired a 70% interest in a producing Molulu copper mine in the Katanga region of the DRC. The focus of the company is in the natural resources sector in Africa focused on the strategic or critical metals as defined by the United States Government Survey list in Open-File Report 2018-1021 and the Critical Raw Minerals as defined by the European Commission. The main catalysts for 2023 will be the announcement of the first sales of copper ore. This i

Hybridan Small Cap Feast - 14 Mar 23

14 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Positive update - EPS upgraded by 5% p.a.

H&T (initiation of coverage): Pawnbroking royalty, with strong, profitable growth

Founded in 1897, H&T is the UK’s leading pawnbroker, with 269 stores, and it has gained a strong pawnbroking market share in recent years. While it is growing ancillary gold buying and forex products, its core is pawnbroking and related retail services. As other small-sum, short-term lenders have withdrawn, H&T’s well-capitalised, low-risk proposition has unique growth opportunities, with the pledge book up over 50% in 2022. The lessening of legitimate competition at a time of heightened demand

Oakley Capital Investments Ltd (OCI): 2022: NAV returns driven by EBITDA growth

The January trading statement announced NAV (662p per share), total NAV return (24%), NAV growth driven by EBITDA growth (65%), modest multiple expansion (35%), investments (£271m), realisations (£244m), available finance, including cash (£210m), and commitments (£929m). The detailed results announcement highlighted i) 2022 exits, on average, 70% above carrying value, ii) 22% investee company average earnings growth, iii) weighted average EV/EBITDA of 15.9x, below listed market levels, iii) a PE

Interims in line, undervalued high quality income stream

Income quality stands out here: lfl rental growth continues, occupancy is full and rental collection is strong. The asset class is demonstrating the ability to perform in challenging conditions, reflecting the structural undersupply of high quality PRS homes in the UK. Pre-announced, EPRA NAV was largely unchanged at 117p in H1 with no yield compression and all rental earnings distributed. We make no changes to forecasts at this stage. We see an attractive total return with the shares trading at

NAHL Group - Finals

NAHL generated growth in both its Personal Injury (PI) and Critical Care divisions, the former despite a continuation of subdued market conditions – hence market share gains. Results were in line with our forecasts but with a significant reduction in net debt which is especially welcome in the current high interest rate environment. Group strategy remains intact and in PI that means building the embedded value of future cash flows in NAL while flexing enquiry placements to maximise cash generati

HgCapital Trust - Improving its commitment coverage ratio

HgCapital Trust (HGT) posted a 5.4% NAV total return (TR) in FY22, mostly assisted by continued good earnings momentum (revenue and EBITDA across the top 20 holdings increased in 2022 by 30% and 25%, respectively) and the average 28% uplift to end-2021 carrying value achieved on exits. This was only partly offset by lower multiples and higher net debt across HGT’s portfolio (with net debt to last 12-month EBITDA for the top 20 holdings at 8.0x at end-2022). HGT’s recent balance sheet measures st

Net interest margin warning

The quarterly underlying operating performance proved better than expected. However, the group’s updated guidance is, at best, in line with consensus forecasts as management expects net interest margin pressure as soon as this year.

LXi REIT - Stronger, leaner and fitter

LXi REIT’s (LXi’s) well-executed merger with Secure Income REIT (SIR) brought together two complementary businesses, adding scale at low cost and retaining LXi’s successful diversified, inflation-protected, long-income strategy. We expect this approach to deliver visible income and DPS growth, including merger cost savings, and mitigate market-wide pressure on capital values. Meanwhile, good progress is being made with the near-term priorities of debt refinancing, capital recycling, and lease re

India Capital Growth – Don’t Stop Believin’

India Capital Growth’s (IGC’s) adviser, Gaurav Narain, says that at a time when many economies and equity markets are struggling, there are many reasons to be optimistic about the outlook for the Indian economy. Although down in sterling absolute terms during the last 12 months, the Indian market made progress in local currency terms and has performed well relative to its emerging market peers, benefitting from a good run in the second half of 2022 from which IGC also benefitted. Despite the rec