Over the past few weeks, we spoke with various business unit leaders across UDG. This note details what we learned. In brief, we believe that investors are underestimating both the quality of UDG’s growth, and the duration of that growth. For example, we now estimate that UDG has strong visibility over >70% of revenues at the start of every year while the key drivers of growth are far more structural and mix driven than first appreciated. Simply put, the more we dig, the stronger the business fu
Companies: UDG Healthcare Plc
UDG is on the front foot with good earnings momentum, a very strong balance sheet and relatively low consensus expectations. Added to this, its Sharp business (c.36% of EBIT) is in the middle of another boom cycle and we think this could be more sustainable than investors believe and analysts model. UDG is a better business than before COVID-19 and simply holding its current 20x PE multiple would generate double-digit compound returns with M&A to add to this. Reiterate BUY on raised £9.50 TP (wa
UDG released a very positive Q1 trading update this morning. Whilst detail on the current financial performance was as always light, management did provide guidance for FY2021 expecting adjusted EPS growth of 9-11%. We estimate that this implies a 2-4% upgrade to consensus, only 1% of which is due to a newly announced acquisition. In sum, with strong organic momentum in the business (particularly at Sharp), further scope for M&A and the shares on just 21x forward EPS for a double digit CAGR to 2
UDG reported blow-out H2 2020 results this morning beating revenue expectations by 10%, adjusted EBIT by 19% and adjusted EPS by 18%. The beat was largely, but not entirely driven by the packaging business, Sharp. Cash generation was also much better even after stripping out exceptional gains, and leaves the business now just 0.1x net debt/EBITDA allowing for 2% growth to the full year dividend. In terms of outlook, COVID will still be a headwind for parts of Ashfield in 2021, but the group now
UDG provided a Q3 2020 trading update this morning in which it reinstated guidance and its interim dividend. New guidance is for EPS of $0.43-0.45 applies for the year to the end of September 2020 which covers consensus ($0.436) at the mid-point and hence should provide some assurance to the market.
Cello's announcement yesterday that US based PE (private equity) firm Arsenal has bid £1.61 per share bodes well on two counts for UDG in our view. Firstly, such a significant transaction on the back of the recent CDR acquisition of Hunstworth in March shows how strong the PE appetite is for assets in healthcare communications and consultancy.
UDG suspended guidance in April, but we believe that Street forecasts for a 4-12% EPS decline in 2020 and investor expectations fairly reflect the likely outturn. In fact, we think the focus is shifting to the longer-term outlook and management’s investments in recent years have positioned UDG for faster growth, something we saw in H1 2020. We forecast a 10% organic EPS CAGR to 2024 and think UDG's improved earnings mix, financial discipline and M&A optionality will allow it to hold its multiple
UDG delivered strong H1 2020 results this morning with net revenues of $596m up 4% organic, adjusted EBIT up 10% organic and adjusted EPS up 16% in constant currency - with each line item meeting our expectations. Ashfield organic EBIT growth of 5% was held back by pressures on its Clinical & Commercial business during March and while staffing shortages likely impacted Sharp during the same period, it still managed to deliver 24% organic EBIT growth.
UDG has released an unscheduled trading update this morning in which it has withdrawn full-year guidance and suspended the dividend pending further review. While withdrawing guidance is not ideal, we think it’s worth bearing in mind that demand remains strong for most of its services and this measure has likely been taken due to uncertainty around supply.
UDG released a Q1 2020 trading update this morning which as usual was light on numbers but featured positive commentary on trading with all divisions ahead of last year and in-line with management's expectations. It also provided guidance for constant currency EPS growth of 7-9% which covers consensus at the top end of the range (we estimate Bloomberg consensus implies 9% cc EPS growth).
Ahead of the Q1 trading update on 28 January we update our forecasts to reflect the changes in accounting standards from the implementation of both IFRS15 and IFRS16. Our estimates would be unchanged under the previous standards but as a result of the new rules our adjusted EPS forecasts fall by 3-4%.
UDG released strong H2 2019 results this morning with Group revenues 1% ahead of consensus, Group adjusted EBIT 4% ahead and Group EPS 2% ahead. The beats were driven evenly by both divisions with Communications and Advisory (C&A) very strong at Ashfield and the US business at Sharp also performing well.
IQE (IQE LN) Momentum good heading into pivotal H2 | Surgical Innovations Group (SUN LN) CE mark validation indicated for Cellis range | UDG Healthcare (UDG LN) Acquisitions/disposal a wash, but Ashfield Clinical & Commercial drags
Companies: IQE SUN UDG
Gooch & Housego (GHH LN) Earnings enhancing acquisition of VITL | Hill & Smith Holdings (HILS LN) H1 revenue shortfall not expected to be recovered in H2 | UDG Healthcare (UDG LN) In line Q3 update and disposal of Aquilant
Companies: GHH HILS UDG
1Spatial (SPA LN) Focusing on key USP | accesso Technology (ACSO LN) Positive AGM statement | Applied Graphene Materials (AGM LN) James Briggs taking graphene to market in Q4’18 | Carador Income Fund (CIFU LN) CLO refinancing activity increases post risk retention ruling finalisation | First Derivatives (FDP LN) Strong growth in all markets | Halfords Group (HFD LN) Further investment + restraint on price rises = 5-6% consensus d/grades | Scapa Group (SCPA LN) Strategic progress and opportunitie
Companies: ACSO AGM FDP HFD SCPA UDG SPA
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OptiBiotix has reported its final results for the year to December 2020, which are largely in-line with the financials reported with the recent ‘Strategy and commercial update'. 2020 was a strong year for the company as its two operational divisions achieved EBITDA profitability supported by increased commercialisation of the group's product range. This commercial moment has continued into 2021, as the company looks to scale its first-generation product sales with new product lines and new terri
Companies: OptiBiotix Health PLC
Venture Life has announced it has entered into a Revolving Credit Facility (RCF) with Santander UK and Silicon Valley Bank. The funds, of up to £50m, provide leverage to the company's existing cash resources, and will support management's M&A ambitions, following the recent acquisition of BBI Healthcare for c£36m. We remain encouraged by Venture Life actively progressing its overall M&A strategy, which we expect to scale the company and provide operational leverage opportunities to maximise the
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Companies: NetScientific plc
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Companies: SDI Group plc
Trading has strengthened significantly since restrictions eased in April, especially in the UK. UK brand sales are now up 64% YTD (+18% vs 2019). Further distribution gains are being made, including in the USA and online sales have tripled, albeit off a small base. Net cash has increased to £6.6m (Dec’20, £4.9m). Risk appears to lie to the upside vs prudent forecasts. The re-rating looks well supported to us, and we look forward to the H1 update in July
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There has been a safety halt to the lead human retinal progenitor cell (hRPC) project. The issue was an eye infection in one patient following a successful surgical implantation of the hRPC. The cause is under investigation. If, as we assume, the trial restarts in the next few months, data should be available by Q421, a delay of perhaps three months. This is not significant within the overall developmental pathway and good data are needed to secure any future partnership from mid-2022. The valua
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SDL delivered a better than forecast H1, outperforming sales and AOP estimates. Revenues moderated by just 1% to £180.7m, with AOP up 1% to £16.3m. Increased demand from strongly performing verticals (Online Retail, Technology) has offset declining volumes from CV19 impacted sectors (Leisure, Travel, Automotive). KPIs continue to move in the right direction, with ARCV rising 7% y/y, and Linguistic Productive Utilisation stable at 67%. The Group delivered 60 new technology customer wins in H1, an
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In what the company describe as an “unprecedented year”, Cake Box’s trading update for the year ended 31st March has once again confirmed the potency of the Group’s format and franchise model to us. Total revenues are reported ahead by c16%, supported by an attractive combination of strong organic franchisee growth (24 new sites) and very positive LFL growth (when trading was permitted). Balance sheet strength is also a major virtue, with period end net cash at £3.6m, which is expected to build
Companies: Cake Box Holdings Plc
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