Resilient FY24, confident long-term outlook

Vp’s full year update highlights sector-leading results, once again benefiting from the diversity of its end markets and the quality of its specialist businesses. With results expected to be broadly in line with expectations, we trim our FY24 PBT forecast by c.5% to £39.0m, a shade below the FY23 outturn (£40.2m). We consider this an impressively resilient performance set against a mixed market backdrop. Under new leadership, a strategic refresh is underway and management is confident in long

Broadly in line FY24 outturn despite market challenges

Vp’s trading update confirms that the FY24 outturn is expected to be broadly in line with expectations. This reflects continued resilience in its infrastructure markets offset by challenges in general construction, particularly in Brandon Hire Station. Trading continues to be more resilient than peers underpinned by Vp’s specialist focus and diversified end market exposure. Improving market data and an expected strategy refresh under new management in June 2024 gives reason to be optimistic abou

Specialist focus and diversity underpins resilience

We believe Vp’s 6% share price fall yesterday (15% YTD) following Speedy Hire’s material profit warning is unjustified. Speedy’s warning (consensus downgrades of 35%/20% to FY24/FY25 PBT forecasts) is something we had flagged as likely at the time of its interims in November after Speedy’s management team guided to a fairly heroic 80% H2 weighting. We see very little read across to Vp, where numbers are sensibly positioned (52%/48% H1/H2 PBT weighting) and where trading continues to be more resi

Outperforming peers despite challenging backdrop

Vp’s H1 results were well flagged in the October update, confirming a strong H1 performance, with adj. PBT up 1.4% despite a challenging market backdrop. Vp continues to trade more resiliently than its peers (H1 adj. PBT -56% at Speedy and -30% at HSS), whilst maintaining its superior margin. We put this down to its specialist focus, its diversified end market exposure and a strong management team. There is a mixed end market picture but overall activity levels remain stable. Infrastructure is t

Delivering growth in uncertain markets

Positive interims from Vp this morning highlight another period of growth despite the mixed market backdrop. The results again illustrate the benefit of Vp’s diverse mix of specialist activities, with the quality of earnings confirmed by further growth in operating margin (now 13.9%) and ROCE (14.7%). Strategic priorities include continued progress with ESG initiatives and a greater emphasis on Digital, with more on this likely to follow later in the year. We maintain our Fair Value estimate o

Resilient H1 performance, compelling valuation

Vp traded resiliently through H1’24 against a backdrop of challenging macro-economic conditions, which impacted general construction and housebuilding activity, as previously communicated. Infrastructure demand remains supportive across water, transmission and rail, which are benefiting from long-term regulatory programmes (AMP7 for water and CP6 for rail). The Group’s overseas businesses have traded well, at levels ahead of H1 2023. Vp’s medium term prospects look bright under the leadership o

Diversity continues to underpin earnings resilience

Vp’s H1 update confirms a continued resilient trading performance despite a challenging macro backdrop. Activity levels remain stable, with a mixed picture by end market. International continues to perform well. In the UK, infrastructure continues to grow, partially offset by stability at lower activity levels in housebuilding and softer demand in general construction. This is in line with the experience of other industry peers. We prudently nudge down our forecasts to account for the continued

Hybridan Small Cap Feast 11/08/2023

Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Announced ITF 4 August: Tan Delta Systems plc, a Sheffield based Company intends to IPO on AIM. Tan Delta has developed an innovative and differentiated monitoring solution based on real time oil analysis and analytics that offers equipment operators enhanced insight into the maintenance status of their equipment and thus the ability to reduce maintenance costs, improve reliability and reduce carbon footpr

AGM update confirms in line YTD performance

Vp’s AGM update confirms an in line performance in the year to date. As reported at the June results, activity levels remain stable with a mixed picture by end market. In the UK, infrastructure continues to grow, partially offset by stability at lower activity levels in housebuilding (demand down c.10% vs. 2022 levels) and softer demand in general construction. International continues to perform well. Despite this mixed backdrop, we forecast PBT growth of 7%/5% in FY24/FY25, underpinned by Vp’s

All fine on the infrastructure front

Sharp eyed investors would have noticed the recent mixed messages from the UK’s June Construction PMI report, whereby positive output across infrastructure and commercial was offset by weakness in house building due to rising borrowing costs. Equally though, input cost inflation and supply chain bottlenecks were said to be reducing, which should help alleviate margin pressure. Similarly in today’s ‘on track’ trading statement, Chairman Jeremy Pilkington commented that Vp had also “experienced v

Quality and resilience in challenging markets

Vp’s results highlight another year of progress, underpinned by its resilient and diversified business model. Adj. PBT increased by 4% to £40.5m on a pre-IFRS 16 basis (FY22: £38.9m), which is in line expectations despite a mixed market backdrop. ROCE was maintained at 14.4% (FY22: 14.5%), as was the operating margin at 12.4% (FY22: 12.3%), and free cash flow conversion remained strong at 13% (FY22: 10%). We expect continued progress across the forecast period, supported by stable end market act

Sustainable growth & offering 65% potential upside

Vp, the specialist equipment rental business, today released ‘in line’ final FY’23 results & a positive outlook - despite experiencing softer conditions in some of its end markets (e.g. commercial real estate, HS2, rail strikes and new build housing). Indeed impressively, FY’23 revenues, adjusted PBTA, EPS & ROCE came in at £371.5m (+6% vs LY), £40.5m (+4%), 79p (+11%) & 14.4% respectively. This reflects solid performances in UK infrastructure (e.g. energy, rail & water) and RMI, augmented by a

On track to again grow profitably in FY’24

Today’s “in line” FY23 trading update from Vp reiterates that it had made “good progress within its core markets” since the interims in Nov’22. It has benefitted from strength in civil engineering (eg highways) and infrastructure (eg water, rail & energy), alongside successfully lifting prices to cover input inflation as well as rightsizing some parts of the group to further reduce costs. Elsewhere, the international energy & testing divisions also performed well, while residential housing h

Strong conclusion to FY23

Vp’s year end update confirms a positive conclusion to FY23, with earnings expected to be in line with expectations. This represents another period of growth and margin resilience despite the inflationary backdrop. Navigating current macro uncertainty is a challenge for FY24 but we believe it will continue to perform. Demand remains stable and Vp continues to manage inflation through price increases and a focus on efficiencies, with the statement highlighting some minor restructuring in order to

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

Foxtons Group (FOXT LN) - 1Q24 IMS shows real momentum

Foxtons Group plc first quarter revenue rose 9% to £35.7m (1Q23: £32.9m) with growth delivered across all business segments. Trading is in line with management's expectations.

Morning Note – 29 February 2024

Jupiter Green

Hardman & Co Insight - Asset managers had a poor 2022

Asset managers had a poor 2022: the S&P Composite 1500 Asset Management Index was down 22% and, according to the Investment Company Institute (ICI), worldwide mutual funds fell by 20%, from $76tr to $60tr. When bond and equity markets fall, the results are unlikely to be pretty: with revenues trending down and multiples contracting, there is a double whammy to contend with. So how do valuations shape up now, after a bullish start to the new year? The first chart is my favourite chart of asset m