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Consumers are fully back in Wereldhave’s shopping malls in Q2 22. The company has reconnected to pre-crisis levels. This hasn’t lead to consumers’ pre-crisis spending.
Companies: Wereldhave N.V.
The Q1 22 performance was decent. However, the accumulation of risks looks to be a concern: construction costs, energy costs, inflation, interest rates.
Improving occupancy coupled with both stabilising rents and a better rent collection rate have led to beating the company’s FY 21 guidance. A further improvement is awaited in FY 22.
Wereldhave’s tenants are now paying rents on time. The underlying business wasn’t that dynamic but Q3 21 provided additional proof of stabilisation.
On top of its H1 21 figures, Wereldhave disposed four out of six of its French malls for a cash consideration of €305m. The latter book value was €504m. Such a cash-in will rebalance the LTV ratio to a much affordable level of 42% pro forma.
Guidance wasn’t lowered but FY 21 will come in at the lower end of it (€1.80 – €2.00 FFO per share) due to the H1 21 lockdowns. Net Rental Income was down 21% yoy. With the LTV standing at 46%, it is too high in our view, but disposals are on track.
Consolidated vacancy was up by only 50bp from 5.4% to 5.9% yoy. It was down 10bp (improvement) in Q4 20 alone. This confirmed URW’s behaviour in Continental Europe, with low additional vacancy attributable to the very low number of retailers’ bankruptcies.
Following Mercialys, Wereldhave has confirmed some early signs of stabilisation in Q3 20. Local units have proven more resilient than bigger or in-town ones. Wereldhave didn’t pass the pass anyway but, following the negative Q2 20, Q3 20 looks to be something of a respite.
Our FY 20 EPS is too high and we will have to cut it. However, our valuation still accounts for the contribution of a capital increase in FY 21 and our target price should stay broadly stable. We maintain our Sell rating.
Wereldhave will be impacted by the “low” footfall of Q1 20, or “no” footfall of Q2 20. Progressive de-containment measures will probably lead to a long and slow recovery. The big issue will be the forward balance sheet. We stay negative.
Following its Finnish disposal in October 2018, Wereldhave will exit the French market. The strong negative revaluations of €450m in FY 19, or 13% of the full portfolio’s value, pushed the LTV ratio to 45%. The strategic plan will focus the company on both the Netherlands and Belgium. Should it fail, the risk of a right issue in the coming years will become much clearer.
We observed sequential decreasing rents in Q3 19. As H2 19 should be impacted by low occupancy rates, we keep away from Wereldhave and stick to our negative opinion.
Wereldhave’s negative revaluation (GAV lost 3.7%) was much higher than Klepierre’s and Mercialys’ in relative terms (c. -1% lfl). Here is confirmation of the beginning of a negative sequence in the Continental shopping malls’ universe.
Wereldhave posted nice Q1 19 lfl figures at first glance. From Q2 19, the performance should revert to an underlying less positive trend after the momentary positive impact of the pipeline’s full completion.
Wereldhave’s trading statement for Q3 18 shows a decreasing rental income for the first three quarters of FY18 to €167.4m (-1% yoy), due to lower rental income in France. The negative impact of gross rental income from disposals in 2017 has been offset by income growth in the Netherlands and Belgium. The occupancy rate increased by 0.1% in Q3 18, to reach 96.2% at September 2018 (+0.7% yoy), pushed by an improvement of 20bp in the Netherlands and 10bp in the other countries. Overall footfall inc
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The group posted a strong set of results showing faster and stronger-than-expected net interest margin expansion and no signs of a deterioration and above all anxiety on the asset quality front. It remains to be seen if the UK government will allow banks to hold on to the benefit of interest rate increases and if the UK economy proves as resilient as expected.
Companies: Lloyds Banking Group plc
Revolution Beauty has announced a downgrade to the outlook for FY23 driven by retailer challenges and the unprecedented macroeconomic backdrop. It has confirmed it will now report FY22 results on 30 August 2022.
Companies: Revolution Beauty Group plc
Last week, the UK government published the consultation paper on its Review of Electricity Market Arrangements (REMA). Any change potentially represents uncertainty in a market that has been wary of changes with a number of shares falling after early details of possible reforms were flagged in the press. We review the possible changes and conclude that while there is some risk, from what we can see at present the likely outcomes could be either minimal or beneficial for investors in clean energy
Companies: EQT IES DRX NESF PHE SAE
Cenkos:Duke Royalty Ltd -Record revenues keep on rolling
Companies: Duke Royalty Limited
Management’s reluctance to commit to precise short-term guidance signals that the strong first-half operating performance cannot be taken for granted. The return to a sustainable decent profitability level (above 10%) remains a distant objective as reminded by the management itself.
Companies: Barclays PLC
Companies: Renewables Infrastructure Group (TRIG:LON)Oakley Capital Investments Limited (OCI:LON)
Market performance washed over Liontrust and was the primary detractor as AuM fell by 11% organically (+2% incl. Majedie completion). There were net outflows (£541m) which are never ideal, but exploring this further we see that these are distributed across products/channels, making them relatively near-negligible despite prevailing caution. The AuM outturn was lower than our £35.7bn estimate, driving a 5-6% reduction to our earnings estimates. We think the current 8x PER is pricing in “worst cas
Companies: Liontrust Asset Management PLC
Singer Capital Markets
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Unigel Group, intends to join the Aquis Growth Market. Unigel Group is a pioneer in the field of thixotropic gels for the fibre optic cable industry. The Company is also a supplier of laminated steel tapes to the fibre optic cable industry in the US. Thixotropic gels and laminated steel tapes are essential components to the rapidly growing global fibre optic cable market. The Group export
Companies: SDI FUL PURP OSI IXI BSE BRSD ATM
A year on from the end of lockdown on July 19 2021, celebrations at the UK's economic bounce-back in H2-21 have long lost their fizz. Two intertwined themes have remained salient / gathered pace over the past six months since our mid-year sector review: exchange rates and inflation. As we write today, press speculation is focussing on the possibility of a 0.5% rise in UK interest rates in August, billed as the biggest move in 27 years. Looking further afield, economists are looking to the F
Companies: FOUR JIM JIM CODE PEN PTD WATR SPSY
This quarter’s key observations
• Subsector performance: Marketplaces was by far the best performing subsector from an aggregate share price perspective (up 19.9%) vs. an average –5.2% for the other five subsectors. UK Digital Media was the worst performing subsector with a -12.4% aggregate share price move.
• Valuation trends: UK Managed Services saw the largest EV/ EBITDA derating (-2.1x) and is now on the lowest EV/Sales multiple (1.5x FY1) and second lowest average EV/EBITDA (11.3x FY1
Companies: CNIC BIG DEVO LBG OTMP SYS
NESF has boosted its effective electricity price hedging with the winning of 86W under the UK’s CfD renewable support scheme. This provides an index-linked 15-year income stream providing a strong underpinning to the fund’s earnings.
Companies: NextEnergy Solar Fund Ltd
Trident Royalties Plc (AIM: TRR) has, this morning, provided an update on its activities undertaken during the quarter ended 30 June 2022. Most of the elements of the update had already been announced in another busy quarter for the company as management finessed existing contracts. Momentum remains powerful with a 155% QoQ (15x YoY) increase in net revenue to $5.7m. The contributory components of this were varied with Koolyanobbing comfortably ahead of our forecasts whilst the gold offtake port
Companies: Trident Royalties Plc
Enclosed is our weekly round-up of news and updates from the professional services sector.
Companies: Personal Group Holdings Plc
The global provider of cloud-based secure payment solutions for business communications has given a positive post-YE update for FY22. We had expected a good year after the strong interims, but sales rose a stunning +60% yoy, while TACV and ARR at YE both jumped c.40% yoy. The financials will beat current market expectations, leading us to upgrade our forecast revenue by 3% and reduce our forecast Adj. LBT by 7%. Cashflow seems to have been particularly positive, with YE net cash £0.7m ahead of e
Companies: PCI-PAL PLC
Foxtons is the best known estate and lettings agent in London. Whilst its track record since the 2013 IPO has been turbulent, the turnaround is well underway, with a return to profitability delivered in 2021 and today’s interims confirming continued momentum (PBT +16%; guidance unchanged). We believe the Group has very strong foundations to build from in terms of its brand and infrastructure and we expect strong earnings growth across the forecast period. We believe the strategy to expand the Le
Companies: Foxtons Group Plc