Strong performance against tough market conditions

Hybridan Small Cap Feast - 10 Jan 24

10th January 2024 @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 obje

Strong sales growth momentum remains in place

Marks Electrical’s sales growth remained strong at 17.8% in Q3, and the company appears on track to match our full year expectations of an 18.7% increase following a strong 21.5% advance in the previous year. But as a company with a core strength in premium products, gross margins have come under pressure - customers’ buying patterns have been negatively impacted by the challenging trading environment. As a result, we cut our FY2024 EBITDA forecast from £8.0m to £5.0m (and reduce FY2025 expectat

Excellent top-line growth but short term product margin pressure

Market share gains and efficiency drive cash flow

Results confirm 24.8% sales growth to £53.9m in H1, and despite lower EBITDA margins, Marks Electrical converted 145% of operating profit into cash (vs. 118% for the whole of FY2023), enabling a 0.30p unchanged interim dividend. Margins, as expected, were reduced by the strategic decision to add integrated gas, electrical and television installation services to its next day delivery service, and increased wages for the company’s drivers. As a result, EBITDA margins were two percentage points lo

Marks Electrical Group - Positive outlook but plenty to do in H2

Interim results are as expected following the H1 trading update. Revenue increased +24.8% to £53.9m as the company continued to gain market share. Adj. EBITDA decreased from £2.7m in H1 FY23 to £2.3m with distribution and installation being the main source of cost pressure. It is on track to meet our reduced FY24E adj. EBITDA forecast of £8.1m, but has plenty to do in H2. It ended the period with £10.9m of cash, as previously flagged, as it continued its focus on working capital management. We r

HY results - strong growth continues

Hybridan Small Cap Feast - 12 Oct 23

12th October 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 obje

Marks Electrical Group - H1 trading update

Revenue growth remained impressive through the last two months of H1, tapering from 30.7% for the first four months to 24.8% for H1 as a whole, and could have been higher had Marks not taken the opportunity to invest in capacity ahead of the peak Black Friday trading period. Investment in its installation team leaves it well placed for H2 and beyond but, combined with higher distribution costs, it has also had an impact on margins. As a result, we have increased our FY2024E revenue forecast to £

Service uplift sparks 25% sales growth

Marks Electrical Group’s sales revenue advanced by 24.8% in the first half of its 2024 financial year, according to a trading update released today, as the company made further market share gains in its core categories. Notably strong advances by category included +71% for televisions, +74% for washer-dryers and +36% for American fridge-freezers. These gains were achieved against relatively flat domestic markets for both Major Domestic Appliances (MDAs) and Consumer Electronics (CEs). An improve

Strong sales performance but some growing pains

Hybridan Small Cap Feast 10/08/2023

Dish of the day Joiners: No joiners today. Leavers: National Milk Records plc (AQSE: NMRP) has left the AQSE Growth Market. 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

Marks Electrical Group - AGM trading update: fast start to the year

The good start to the year continued into June and July, and Marks Electrical has enjoyed impressive sales growth of 30.7% over the first four months of FY24 as it continued to gain market share in the MDA and consumer electronics markets. Sales growth to date is significantly ahead of our FY24 sales forecast of +17.5% but our forecasts are H2-weighted, and the comparator will become tougher as the year progresses (last year’s AGM statement reported revenue growth of 13.7% before Marks went on t

Sales growth exceeds 30% so far in FY2024

Marks Electrical Group (MRK) released a trading update ahead of its AGM. The company enjoyed strong trading in the first four months of its FY2024 financial year as enhanced delivery options, sustained high service quality levels and more widespread brand awareness helped the company to over 30% sales revenue growth in the period, compared with nearly 14% a year earlier. With further benefits of strong cash conversion – consistent with a proposed 0.66p final FY2023 dividend – we reiterate our fa

Topps Group (TPT LN) - Initiation: Market leader trading at cyclical lows

Topps Group is the UK’s largest specialist supplier and distributor of tiles and associated products to the UK’s domestic and commercial markets. Each of the last three years the Group has successfully achieved record revenue in a market that’s seen recent volume declines and regional peers enter administration. Following the right sizing of its business, Topps Group is now well positioned to capitalise on the economic recovery and continue taking share from competitors, supported by its global

HeiQ - Forecast update and Ecolab contract

HeiQ reported its interim results for the 12-months to December 2023, a period characterised by challenging conditions in the markets in which the company currently operates. In-line with the recent trading update, the company reported revenues of $41.7m for FY23 and closed the period with a cash balance of c$10m and a net debt position of $2.2m. We have updated our forecasts to reflect the FY23 results and HeiQ’s outlook in 2024, leaving our revenue forecast unchanged but adjusting gross margin

Morning Note – 24 April 2024

LIBERUM: Tortilla Mexican Grill: Prioritising profitability over roll-out

Hybridan Small Cap Feast - 24 April 24

24th 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

PROGRESSIVE: Gear4music: FY24 trading in-line and debt reduction ahead of market expectations

At its FY23 results in June 2023, G4M announced its intention to focus on product margins, overhead cost reduction, and efficiency ahead of revenue growth, along with further net debt reduction, in FY24. The FY24 year-end trading update confirms G4M has delivered on these rebalanced priorities, with gross margin rising and net debt almost halving compared with FY23. Cost savings achieved in FY24 and the continued development of higher-margin categories should deliver further upside in FY25E.

LIBERUM: The Liberum Leisure Digest: NLW increase - pricing power is key

Pinewood Technologies (PINE LN) - Driving growth in automotive software

Pinewood’s transition to a pure-play automotive SaaS business is now largely complete. Today we introduce summary forecasts out to FY26 and reiterate the investment case. We see significant opportunity for Pinewood to grow its user base in the UK and internationally whilst generating high EBITDA margins and cash conversion. With a 24.5p special dividend embedded in the current price (payable Q1/Q2), the effective price today is 12.3p. Based on the Group’s FY27 target of £27m EBITDA, we estimate

PROGRESSIVE: Vertu Motors: Traction control

Vertu is the fourth largest automotive retailer in the UK, with 188 sales outlets and a track record of cross-cycle growth, principally through businesses it has acquired, funded by equity, debt and most importantly cash generation. Vertu operates across the entire vehicle lifecycle, including new and used vehicle sales, and vehicle servicing, repair and parts. Service and repair is a 40+% gross margin repeating business. With economic headwinds, the transition to electric vehicles, recent overs

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div

AKA: Initiating Coverage of a.k.a. Brands with Buy and $14 PT: Upside Ahead

We are initiating coverage of a.k.a. Brands Holding Corp. ("a.k.a. Brands" or the "company"), a leading owner of primarily online apparel-based brands focused on Generation Z and Millennial consumers, with a Buy rating and $14.00 price target, or 10.9X our 2025 EBITDA projection of $20.2 million. The company's brands include: 1) Princess Polly, focusing on 15 to 25 year-old women; 2) Petal & Pup, which offers feminine styles for 25 to 34 year-old women; 3) Culture Kings, a street wear destinatio

Domino's Pizza - Growing the base

Domino’s Pizza Group’s (DOM’s) new CEO has set an ambitious long-term growth target, including an acceleration in its net store opening programme. With better alignment between the company and its franchisees, management believes DOM should be capable of generating improved profit growth, versus that achieved in recent years, and potential higher returns.

Borussia Dortmund - Helping itself

Borussia Dortmund’s progress to the semi-final of the Champions League brings a further upgrade to profit guidance for FY24. In addition to helping the financial results of the current year, the relative success of German teams against those of other nations in European competitions this season may ensure the club qualifies for the Champions League next season despite currently being outside the top four of the Bundesliga.

Hybridan Small Cap Feast - 17 April 24

17th 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

HeiQ - Acquisition, placing and trading update

HeiQ has announced the acquisition of a site in Portugal where the company intends to build a HeiQ AeoniQ production facility with a 3,000 tonne per year capacity. To support the acquisition, the company intends to raise c£2.44m via an equity placing, supported by the issue of a c£1.7m (€1.97m) convertible loan note (largely to management) that will convert upon completion of the raise. We see this as an important step in the development programme for HeiQ AeoniQ. Additionally, HeiQ has provided