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Elior’s turnround is gathering pace with a near doubling of target recurring annual EBITDA synergies (€56m vs €30m) by 2026 following its April 2023 integration with Derichebourg (DMS). Also, with deleveraging the priority, net debt/EBITDA is expected by management to fall from 5.4x in FY23 to 4x in the current year and below 3x in FY26. Current momentum in terms of pricing, cost control, cross-selling and voluntary contract exits as well as an easing of inflationary pressures look to justify th
Companies: Elior Group (ELIOR:EPA)Elior Group SA (ELIOR:PAR)
Edison
Elior reported in-line FY23 revenue but a consensus-beating adjusted profit. Today’s positive stock performance is also likely to have been attributable to the group’s improving debt profile and mid-term projections, along with the upgraded target of recurring DMS synergies, while the FY24 guidance cut had been expected/foreseen by the market. We will cut our estimates which are higher than the FY23 actual figures and the FY24 updated guidance.
AlphaValue
Elior reported in-line organic growth for the past quarter, while the FY23 margin guidance was again revised downwards, mainly driven by the still-high inflationary pressure and heavier-than-expected new contract launch costs. Regardless, the group is hopeful that it reap the fruit of its ongoing structural and operational restructuring. We have a lower profit estimate for FY23 and a higher one for the next FY.
Elior’s H1 23 results were in line with the market’s expectations, while the FY23 guidance was revised downwards. The withdrawal of the FY24 guidance is another negative. We have cut our estimates and expect a downgrade in the consensus.
Following the ordinary Q1 revenue report and despite the maintained guidance for the next two FYs, Elior shares have been marked down due to inflation-related concerns raised by the company’s overdue contract renegotiations. Our current estimates remain however consistent with the updated outlook. We expect no major changes to our numbers until there is more visibility.
We have gained more visibility after meeting Elior’s management regarding the acquisition of Derichebourg’s Multiservices, in particular on the governance aspect.
Elior has agreed to buy Derichebourg’s Multiservices for €450m, barely equal to its pre-rumour market cap, with an all-stock payment. The recap dilution effect will be offset by the over 100% premium and we do not expect major changes in our valuation. As of the close of the transaction, Derichebourg will hold 48.4% of Elior and Daniel Derichebourg will assume the Chair and CEO positions at Elior.
Elior’s FY22 results missed the consensus but nonetheless managed to reassure the market owing to unchanged financial targets, against the previous concerns of further downward risks following the industry leader’s discouraging forecast earlier this week. The group’s ongoing portfolio review is hoped to bring additional buoyancy to the margin rebuild. The share consequently gained 10% and we have upgraded our recommendation from reduce to add (target price +17%).
Elior’s share price soared by 14% following its supportive Q3 trading update and guidance reconfirmation, as the market had had doubts about delivery. Expect an upgrade in the consensus and our estimates.
Elior’s founder and largest shareholder, Robert Zolade, has agreed to sell 14.7% of his holding to Derichebourg. The transaction will be completed by June 30 at a price much higher than the current one, while Zolade’s exit could raise some market concerns.
Elior published in-line H1 results and resumed its FY22 guidance. However, the inflation-driven downgraded forecast for the current FY and midterm depressed the market, while its major peers had indicated the prospect of absorbing the labour/food inflationary pressure. We expect a downward adjustment in the consensus.
The market’s reaction is expected to be negative due to the CEO’s sudden departure. The nomination of an interim CEO weakens further the group’s vulnerable governance profile.
Despite the slightly better-than-expected Q1 trading performance, Elior’s guidance suspension much disappointed the market (share price dropped by more than 12%). Analysts’ consensus is expected to be revised downward.
Elior’s FY21 results were mildly above analysts’ anticipations and the FY22 outlook was broadly in line with consensus. Some inflationary pressure is expected at least until H2 22, much like its peers. Nevertheless, the group’s longer-term forecast is encouraging, especially in terms of profit generation. We believe that the FY22 consensus will not see a major deviation from the current level but the FY23-24 consensus should be more upbeat.
Elior’s Q3 revenue recovery showed a moderate upgrade from the two previous quarters, while the Q4 is not envisaged to deliver buoyant progress. Regardless, the group’s recap concern seems to have been eliminated.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Elior Group SA. We currently have 0 research reports from 5 professional analysts.
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
Companies: Topps Tiles Plc
Zeus Capital
Companies: JDW MAB MARS WTB FSTA BOWL CPG SSPG LGRS SSTY OTB HSW TMO GYM MEX
Liberum
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
Companies: Pinewood Technologies Group PLC
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.
Companies: Borussia Dortmund GmbH & Co. KGaA
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
Companies: ARS TIDE SCE SNX ECK CNS TST SPEC SSTY
Hybridan
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
Companies: HeiQ PLC
Cavendish
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.
Companies: Domino's Pizza Group plc
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
Companies: PTAL GHH IGP MSLH PINE NXQ EQLS NXR AXL
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
Companies: Vertu Motors PLC
Progressive Equity Research
Bright Pier Group’s (BPG) H1 results reflect the highly challenging operating environment, with revenue -9% YoY to £16.2m and Adj EBITDA of £1.4m (H1/22A £3.0m). This decline was driven by weaker consumer demand (falling disposable incomes and low consumer confidence), train strikes and poor weather. Trading in H2 has remained relatively subdued, and as such, we lower our FY23E Adj EBITDA forecasts to £4.2m (from £5.5m). Whilst disappointing, we note that the group remains cash generative and co
Companies: Brighton Pier Group Plc
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
Companies: GPS URBN ITX AEO AEO GES GES ITX GPS ANF 0R32 URBN
Small Cap Consumer Research LLC
An ongoing correction in used car prices has driven lower gross profit per unit for Vertu in recent months and this is expected to continue in the near term. There has been particular weakness in premium vehicle values. Additionally, higher stocking charges on increased new vehicle supply, has led to lower overall profitability. As a result, we have reduced forecast FY24 adjusted PBT by £8.0m (17%) to £39.3m and FY25 by £3.2m (6.2%) to £48.6m. This downgrade to expectations is indicative of mark
Companies: CML FDEV NRR SSPG RMV AO/ ZIN
Shore Capital
Companies: Marks and Spencer Group plc
Companies: AO World Plc (AO:LON)Marks Electrical Group Plc (MRK:LON)
Canaccord Genuity
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