LIBERUM: RPS Group* - C-19 impact, but government spending positive long term
Unscheduled trading statement indicates an adverse impact from C-19 on the business. In the absence of guidance, we reduce our FY20 FD EPS by 52% from 12.0p to 5.8p. The high public sector exposure around the world is positive.
24 Mar 20
LIBERUM: CEO Video: John Douglas, RPS Group*
In these five short videos, RPS Group CEO John Douglas discusses the main features of the 2019 results, whether the trading background has stabilised, the progress in delivering the group’s strategic priorities, the benefits from the investment that has been made in the business and what the future holds for the group.
20 Feb 20
LIBERUM: Support Services & Special Situations - The Outliers – Charts that speak a 1,000 words
For our coverage we have compiled a chart book to help investors identify companies for which the share price performance diverges from the main factors that influence the stock. To help us identify these opportunities, we have created a composite index, or basket, for each company.
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04 Feb 20
LIBERUM: The 4S’s: Support Services & Special Situations - Loosening the purse strings
The UK election on 12th December could result in a Conservative majority, a Corbyn government or something in between. Voters cannot claim a lack of choice, with the Conservative manifesto offering One Nation Conservatism and Labour offering to ‘rewrite the rules of the economy’.
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29 Nov 19
LIBERUM: RPS Group* - Interims ahead but dividend rebased
Interim FD EPS was 9.8% ahead of our estimate at 6.1p, but down 30.3% vs H1 18. DPS was 21.1% below our estimate at 2.4p as the dividend policy was rebased to 2.5x dividend cover. We leave our earnings estimates unchanged for FY19 but cut our dividend estimate from 9.9p to 4.8p.
05 Sep 19
LIBERUM: Morning Comment
Support Services - The 4 S's Video, Origin Enterprises, Asiamet Resources, Futura Medical, Nokia, Whitbread, Berkeley, CapCo, Market Highlights
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19 Jun 19
LIBERUM: UK Small & Mid Cap Dispatches
Support Services - The 4 S's Video, Asiamet Resources, Futura Medical, Berkeley, CapCo, SMID Market Highlights
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19 Jun 19
LIBERUM: VIDEO: The 4 S’s: Support Services & Special Situations - Diamonds in the rough
In these three short videos, Support Services & Special Situations Analyst, Joe Brent, discusses the in depth research piece - The 4 S’s: Support Services & Special Situations Diamonds in the rough. With a particular focus on the big themes, which stocks have been performing and stock recommendations.
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18 Jun 19
LIBERUM: UK Small & Mid Cap Dispatches
Support Services - The 4 S's, DMGT, Galliford Try, CapCo, Spirent, Lookers, Equiniti, SMID Market Highlights
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31 May 19
LIBERUM: Morning Comment
Support Services - The 4 S's, Outdoor Agencies Video, DMGT, Galliford Try, Mining Update, CapCo, Spirent, Lookers, Equiniti, Market Highlights
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31 May 19
LIBERUM: The 4 S’s: Support Services & Special Situations - Diamonds in the rough
These have been challenging times for many companies in Support Services & Special Situations (The 4Ss), with Contractors, Financial Services and Constructors down 17%, 20% and 35% over the last twelve months. Ongoing Brexit uncertainty is making for a difficult environment where the private sector is not making investments and the public sector is not making decisions.
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31 May 19
LIBERUM: Morning Comment
Computer Games In-Depth, RPS Group, Mining: Restocking Indicator Update, IAG, Land Securities, National Express, Aixtron, Volution, Vertu Motors, Market Highlights
RPS FDEV CDM KWS TM17 SUMO AAL GLEN RIO S32 IAG NEX AIXA FAN VTU REN REL WPP IMI SPT RWA WIN AFHP BHP RMV LAND
01 Mar 19
LIBERUM: RPS Group* - Reasons for optimism
2018 PBT was in line with expectations, but FD EPS beat our estimates by 2.2% due to a lower effective tax rate. Lock-up days reduced from 72 days at H1 to 65 in H2. Cash conversion came in at 94%, with 147% cash conversion in H2 due to the unwind of working capital.
01 Mar 19
Small Cap Feast
United Oil & Gas (UOG.L) an oil and gas exploration and development company brought to the Official List (Standard Segment) in July 2017 by way of a reverse takeover of Senterra Energy plc. No capital to be raised, expected market cap of £17m and expected 1 March 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. Polemos, to be renamed Digitalbox plc, has agreed to acquire Digitalbox Publishing Holdings Limited for c.£10m through a share for share exchange. The acquisition constitutes a RTO. Polemos has also agreed to acquire the entire issued share capital of Mashed Productions Limited, a digital media business which owns the online satirical news website "The Daily Mash", for a maximum total consideration of up to £1.2m. Market cap on admission £12.4m, expected 28 February
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21 Feb 19
LIBERUM: The 4S’s - The negative working capital model in Construction is changing
Four measures are being considered to protect the supply chains in the wake of the Carillion collapse, a year or so ago; 1) Project Bank Accounts, 2) The Prompt Payment Code; 3) Retentions Reform; and 4) Assigning non-executives for the supply chain. (Read here). This means that in most cases, Costain is an exception, working capital will become less negative, which has a negative impact on cash flows, while Construction companies grow.
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21 Jan 19
LIBERUM: RPS Group* - AGM indicates that New Regional Structure Delivering
The new organisational structure is already yielding benefits. AGM guides to strong Q1 and we increase FY 2017 EPS by 3% to 17.1p. 51% weighting to H2 seems prudent. The improvement is evenly spread between AAP and Europe.
02 May 17
N+1 Singer - T2 Trend spotting - Strategy update
In our second edition of “Trend spotting” we note how in the last three weeks the defensive rotation trend has gathered pace and further evidence has emerged of the “relative fading” in the UK economy. However we now see early signs of the “risk on” trend starting to reassert itself in equity markets and we look at small cap laggards plus European exposure as ways to play this.
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31 Mar 17
LIBERUM: RPS* - Another upgrade from RPS, with improvement in Energy and net debt
Pre-close guides to better PBT, and we increase 2016 EPS by 13% to 15.9p, helped by a provision release and despite higher than expected re-org costs. We increase 2017 EPS by a more modest 9%, as the provision release will not repeat.
02 Feb 17
LIBERUM: RPS* - Estimates increased due to fx and UK resilience
FY 2016 and FY 2017 FD ES increased 7% and 11% respectively due to better BNE Europe. Net debt estimates nudged down to reflect better profits. Management change and restructuring should yield benefits. At Energy, self-help should increase profits in 2017 and markets have stopped deteriorating.
29 Nov 16
LIBERUM: RPS* - New Chairman at RPS should be well received
RPS have announced the appointment of Ken Lever as Group Chairman, effective from 1 November 2016. Ken is well known to UK Mid Cap investors, having been CEO of XChanging from 2010-2015, and before that, FD of McAlpine, Albright & Wilson and Tomkins.
31 Oct 16
LIBERUM: RPS Group – Energy bad, non-Energy good
Interim results were weak as expected. However, the Energy outlook has stabilised, and estimates are premised on a better Q4, but no return to historic levels of profitability. We already assume an impact of Brexit on Europe. AAP should benefit from strength in the East.
09 Aug 16
LIBERUM: RPS – In line H1 and EPS unchanged, despite awful Energy
H1 in line with our estimates, and no dividend growth as expected. No change to post Brexit headline EPS and net debt reduced. Changing mix with better AAP and central costs and lower Energy. Net debt increased as expected and the board are more cautious on acquisitions.
04 Aug 16
FY results in line and net debt much better
FY results in line, with 15% DPS growth but £20m Energy impairment as expected. FY 2016 and 2017 FD EPS reduced 4-5% only for tax but debt estimates materially reduced. Net debt increases due to acquisitions and write-offs but much better than expected. Weakness at Energy as expected given tough market conditions, but now only 11% of EBIT. BNE Europe benefits from cyclical recovery and H2 is 12% better than H1. BNE North America is restrained by Energy infrastructure. AAP benefits from lower restructuring costs and non-resource business grows. Recent acquisitions integrating well with more expected. Revised CY 16 P/E of 11x and dividend yield of 5.5% look cheap, BUY.
03 Mar 16
Estimates cut to reflect Energy and despite stability elsewhere
FY 15 EPS reduced 13% mainly to reflect £7.0m bad debt provision. 2016 EPS cut 11% to reflect Energy sales & margins, and despite solid trading elsewhere. £20m non-cash impairment in respect of Oil & Gas intangibles. FY 15 net debt maintained at £96.3m, despite £7m bad debt write-off. AAP is a game of two halves, but recent EIG acquisition helps diversification from resources. Broadly positive outlook BNE Europe. North America solid despite Energy weakness and Acardis warning. Revised CY 16 P/E of 12x and dividend yield of 4.9% look cheap, TP from 280p to 240p, BUY.
27 Jan 16
Weakness in Energy off-set elsewhere
RPS operates in the Planning, Environmental and Energy Consultancy markets. It operates principally in Europe, Australasia and North America. Our analysis shows that it has strong positions in its various markets. It has been battered by the financial crisis, weak mining markets and now by Energy. However, Energy now only represents 20% of 2016E EBIT. There is structural growth in many of the other markets. CY 2016 P/E of 11x or recovered P/E of 8x.
11 Nov 15
EPS cut 10% mainly due to weaker Energy outlook
Cautious statement from Schlumberger highlights Energy industry gloom. RPS is likely to be affected by many of the same volume and price pressures. We cut 2016 Energy revenue from -5% to -10%. We cut 2016 the Energy margin from 17% to 13%. We also assume £0.8m of FX head-winds in FY 2016. 2015 group estimates largely unchanged but 2016 and 2017 EPS cut 10%. In 2016, we now expect Energy EBITA to be 53% lower than 2014, and it is only 22% of estimated group EBITA. The overall group is trading on a revised CY 2016 P/E of 12.0x. Target price unchanged at 280p, despite the downgrade. BUY.
19 Oct 15
Through the worst
H1 results repeated the recent pattern of greater than expected weakness in Energy, but stability elsewhere. We reduced EPS by 7% to reflect the weakness. However, we expect all divisions to be stronger in H2, which should increase confidence on 2016. Our front page chart shows that Energy estimates for 2016 have now been cut 50% in the last 18 months, and that Energy is no longer the largest business. We now expect a 43% fall in EBIT in 2015 and Energy is only expected to be 27% of 2016 estimates.
03 Aug 15
H1 results below our expectations and estimates reduced
Interim results a little below our expectations due to Energy. FY 2015 and 2016 FD EPS reduced by 7%, but sequential improvement in each division. Net debt stable at £73m despite H1 acquisitions due to exceptional cash generation. Weakness at Energy as expected given tough market conditions, but now only 28% of EBIT Energy revenues and margins should have relatively defensive elements. BNE Europe is showing signs of cyclical recovery and H2 should be better than H1. BNE North America is restrained by Energy infrastructure. Improvements in AAP as margins benefit from lower restructuring costs and non-resource business grows. Recent acquisitions integrating well with more expected in H2. RPS trades on a CY 16 P/E of 10x. TP 280p (was 300p), BUY.
30 Jul 15