Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on PENDRAGON PLC. We currently have 28 research reports from 3 professional analysts.
Frequency of research reports
Research reports on
Looking into 2017/18
16 Nov 16
Sector sentiment is at a low point with clear uncertainty around 2017/18 earnings. We are attempting to cut through this, and believe the share price falls more than price in the earnings risk. Following a robust September, we would expect a strong 2016 performance, which has been confirmed by all dealers, but do expect conditions to get more difficult from here. We continue to favour stocks with flexible balance sheets at this stage of the cycle.
Trading update – no change to forecasts
25 Oct 16
Today’s trading update seeks to reassure on Q316 trading with like for like sales 6.3% and PBT growth of 5.7% against a strong comparable period and management comment “we have not experienced any noticeable change in our customers’ behaviour”. Used sales continue to outperform the market increasing by 8.3% in Q316 and new, used and aftersales segments all achieved profit growth in the period..
N+1 Singer - Motor Retail - Low gearing, asset backed, strategically placed
26 Sep 16
After unprecedented amounts of acquisition activity in 2015 and 2016, with c£450m spent by the 4 listed consolidators, we have refreshed our analysis of financial gearing. Contrary to popular belief, gearing in FY17 is forecast at 0.3x ND/EBITDA so well below FY14 (0.7x) and target thresholds (1.0-1.5x). We have also identified that property backing has risen c£175m to c£775m with several retailers now only leasing half their portfolio. Operationally and strategically, the key players appear well positioned to continue outperforming their weaker counterparts, taking market share and forcing more accretive consolidation. This is a virtuous circle which should continue to improve profitability. FCF will also step up in 2 years as the heightened OEM-led capex cycle concludes. Notwithstanding uncertainties around Brexit, trading has remained stable near term. These factors are not priced in, with the subsector trading on a 45% discount to the General Retail sector and on just 1.75x EV/EBITDA on a (purely theoretical) ex property basis.
N+1 Singer - Motor Retail - A compilation of recent snippets
11 Aug 16
After our interesting conference at the start of July (featuring Vertu, Lookers, Marshall, Cambria, ASE and Tesla), Motor Retail shares have generally bounced from their lows, but remain below previous levels. In this note we summarise the recent sector snippets and reiterate some key positive conclusions from our conference, plus provide a link to the video of the event. Brexit, economic uncertainties and SMMT stats are weighing on the sector in sentiment terms, but it is noticeable how the quoted companies continue to actively pursue their growth and consolidation strategies and give reassuring updates. Interims next week from Lookers and Marshall Motors should provide further insight.
H1 results slightly ahead
02 Aug 16
Pendragon has delivered a robust set of H1 results, which are 1% ahead of our forecasts at the adjusted PBT level and 5% ahead at the adjusted EPS level. Cash generation was once again very strong, and the dividend was bang in line with our forecast and +17% YOY. We are maintaining our forecasts on the back of these results, and believe the shares have been oversold to date.
H1 results due 2nd August
26 Jul 16
We anticipate a robust set of H1 results from Pendragon next week, which follows a positive Q1 IMS announced at the end of April. It will be interesting to note any change in sentiment within each of its key divisions during Q2 when consumer confidence was falling along with private new car registrations according to data from the SMMT. Our current forecast assumptions imply a modest H2 slowdown YOY, and we are at the lower end of the consensus range.
05 Dec 16
These interims show LPEs by is ahead of its plan to recruit 360 LPEs by April 2017 and is making impressive progress in Australia. The statement (and we expect the results presentation) provide considerable evidence of Purplebricks’ progress in building its brand, increasing its LPE footprint, developing its technology, creating engaging marketing and selling properties. We leave our forecasts unchanged. Investor confidence in Purplebricks’ ability to deliver sustainable profitable growth should result in share price appreciation towards a valuation based on its results for the year ended April 2019.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
Successfully engaging players
06 Dec 16
Stride has a clear focus on online bingo and soft gaming and is growing rapidly, with FY16 l-f-l revenue up 22%. The acquisitions of Tarco and 8Ball at the end of FY16 doubled its share of the UK bingo-led market from 5% to 10% and should deliver material synergies from FY17. Our unchanged FY17 estimates are for 11% EPS growth and strong cash generation. We expect organic growth to be augmented by further accretive acquisitions in due course. Stride’s FY17 P/E is 10.3x and the calendarised EV/EBITDA is only 7.1x, implying considerable share price upside potential.
Small Cap Breakfast
07 Dec 16
Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December. ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m. RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m
Upping its game
21 Sep 16
32Red’s brand punches above its weight in the UK online casino market. Management has adopted a more aggressive stance since mid-2015, both in terms of marketing and with the highly accretive £8.4m Roxy Palace acquisition. Interims show H116 EBITDA rising to £4.5m (H115: £1.2m) and we initiate with forecast EPS more than doubling in 2016 and growing by over 65% between 2016 and 2018. Yet the 2016e P/E is only 13.5x and our peer group comparison and DCF suggest a value of 193-247p per share, 46-86% above the current share price.