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Good H1 figures and the turnaround plan on track make the risk/reward tilt upwards given the recent underperformance against BAT. However, we continue to believe that IMB’s combustible focus strategy is not the right one and we see much more positive catalysts when looking at BAT.
Companies: Imperial Brands PLC
We continue to believe that IMB is not necessarily a short-term strategic investment given the fact that the company is entering the second year of its “strengthening phase” with further investments which should weigh on margins, so no major improvement in the shareholder return.
IMB unveiled a five-year transformation plan that would see it increase investments in its top five cigarette markets, bolster its sales force, and take a more “disciplined” investment approach with its fledgling vaping venture. Overall, the announcements have improved the group’s credibility, but the lack of upcoming catalysts slightly disappoint. Not to mention, the disappointment also around the lack of an immediate share buy-back. The re-rating vs. tobacco peers in not for now.
Mixed feelings: the NGP beat should be welcome, as well as the transparency about FY21, but we believe that the decline in NGP investments should be a brake in the future and we are still concerned about the lower price/mix at IMB’s level.
Disappointing H1 driven by NGP. Reducing investments in this category was the company’s choice, but we believe it is a bad mid-term strategy. The dividend cut has finally shown increasing weaknesses vs. peers during the crisis.
Troubles remain during the CEO transition process, with FY20 guidance revised downwards, due mainly to the US vaping crackdown. With low visibility on future earnings, cash flow and return to shareholders, stay away from IMB for now.
Within this challenging year, the group reported a mixed set of FY19 results. While Tobacco remained resilient, the NGP disappointed as the category delivered lower than expected results, despite the group investing a lot in its development. It negatively weighed on operating profitability, which was actually -1.6% below consensus (but higher than our estimates). We see the more cautious guidance as more realistic, which is not a bad thing. The ambitions were previously too high on the NGP categ
The challenging NGP market in the USA and change in expectations of the results in Africa, Asia and Australia (AAA) has pushed IMB to warn on its next FY results. This is no major surprise, as we were already aware of the regularity issues in the US. While NGP products currently represent a small proportion of sales (between 5-10%), it is in this area that IMB focuses all its investments and sees its next growth driver.
The company posted strong H2 results with a better than expected operating margin. The results were reassuring and suggest that the company has a clear view about possible threats and opportunities in the troubled tobacco space and how to navigate round them.
The numbers are slightly better than expected. We believe that the divestment announcement will particularly please investors, as it represents a significant capital to be redeployed to maximise the company’s value.
FY update: tobacco’s net revenue was down 2.6% at constant currency (cons.-3.3%, H2: +0.1%) and +8.2% on a reported basis (FX: +10.8%) with volumes down 4.1% (cons. -4.8%, H2: -2.6%) and the price/mix +1.5% (in H2, industry volumes were down 4.5%).
Growth Brands’ volume rose by +5.5% and gained an 80bp market share.
By market and at constant FX, Growth Markets’ net revenue was flat at -0.2% (weaker H2 in Russia), whereas Return Markets recorded -4.5% (impacted by EU TPD and investments). The U
Imperial Brands (IMB LN, BUY, T/P 5100p) announced a solid set of FY2017 results. Tobacco volume fell -4.1% less than the forecast -4.8%, total adjusted operating profit was in line with consensus at £3.8bn and adjusted EPS was 267p slightly below the 271p consensus estimate. Share momentum in priority markets drove H2 volumes.
Imperial Brands (IMB LN, BUY, T/P 5100p) released a trading statement this morning, which confirmed market expectations of around £8½bn for full year sales revenue. The company is due to release preliminary FY2017 results on 7th November 2017.
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AFC has signed an agreement with another leading UK construction/infrastructure player, this time in Kier Group. We believe this further endorses our long term thesis that AFC will play an active role in encouraging the transition away from diesel-fuelled temporary power solutions. We believe its technology could help the sector make clear strides towards a net zero future, which has to commence now if they are to reach this target by 2045. The share price has been weak of late (in line with man
Companies: AFC Energy plc
Interim results from AFC contain few surprises and the group remains on track for the full year. The two main deltas versus our (unpublished) forecast were that the £2m stage payment from ABB were treated as deferred income rather than as revenue and that income from R&D tax credits was below our estimate. The first issue is an accounting issue which has no bearing on cash flow, while the second is likely a timing issue. On its own, the tax issue explains why period end cash, at £48.6m, was £1m
In an AGM trading statement today, Surface reiterated previous guidance1 that, with good progress being made in all departments, profitability should be achieved in 2022e. Further, following communication from the Group’s largest customer, OEM 8, on production and delivery schedules, Surface has now commenced high volume series production of its carbon ceramic brake discs. We expect deliveries to OEM 8 to ramp up over the next two months. Deliveries to other significant customers are also contin
Companies: Surface Transforms plc
No Joiners Today.
Raven Property Group has left the Main Market.
What’s cooking in the IPO kitchen?
Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Company is proposing to change its name to Fiinu Group plc. Fiinu intends to be a provider of a consumer banking product, the Plugin Overdraft ®, which is designed to provide customers with an overdraft facility without having to change their current account or req
Companies: TRB CWR CCS DMTR EMAN GTC JSE KIBO MDZ SYM
Moderating freight costs, rental cost savings and selective price increases have driven a 30% upgrade to our FY22E adjusted PBT forecast.
Companies: Shoe Zone PLC
No Joiners Today.
Tungsten Corp and Sensyne Health have both left AIM. Hibernia REIT has left the Main Market.
What’s cooking in the IPO kitchen?
Visum Technologies seeking admission to The AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June.
LifeSafe Holdings, a fi
Companies: SOLI REDX POS UFO GML PHC
CAP-XX has announced that it has expended its product offering to include Lithium-ion Capacitors (LICs). LICs are also called hybrid supercapacitors as they blend two different technologies; the positive electrode is like a supercapacitor, and the negative electrode is similar to a Li-ion battery. CAP-XX hybrid supercapacitors maintain key benefits of batteries, including higher operating voltage (3.8V) and increased energy density, while maintaining traditional characteristics of supercapacitor
Companies: CAP-XX Limited
Solid State is a specialist value added component supplier and design-in manufacturer of computing, power and communications products. Following the group's trading update in February, when we raised our 2-year earnings expectations by c.10%, Solid State this morning reports an exceptionally strong end for the year to 31 March 2022 as positive trends in trading continued and well-publicised semi-conductor supply chain challenges were controlled. As a result, FY 2022E group revenue is now anticip
Companies: Solid State plc
Shoe Zone’s accelerated digital strategy and defined store rationalisation programme, alongside decisive action on cost control and cash preservation, means the Group is emerging from the pandemic as a leaner, stronger and more resilient business. Robust cash generation means we expect the Group to be debt free and able to reinstate its dividend in the current year.
Autins has reported its interim results this morning, which reflect underlying market conditions. Positively, while the top line declined 32% or £4.3m, mgmt. have handled the headwinds well and undertaken offsetting actions to contain EBITDA losses to £0.35m, in line with H2’21. Despite the backdrop, AUTG has seen its enquiry pipeline increase by £17m to £31m since the turn of the year, of which £11m is for EV platforms. There are encouraging signs with customers holding record levels of order b
Companies: Autins Group Plc
Singer Capital Markets
A brief year end update this morning confirms that Gleeson has hit its 2,000 home strategic target during FY22, as planned. This is a considerable achievement, representing a doubling of home sold over the past five years, a period which included the COVID pandemic. We make no changes to forecasts this morning, with a more detailed update due on 11th July. Against a sector that has de-rated materially, we note that Gleeson has particularly underperformed peers over the past month and its previou
Companies: MJ Gleeson PLC
Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this spring. Target valuation £20m raising c. £8m “to finalise the development and launch
Companies: SYM ABDX LOAD BPM TND BRCK PRES ENET CDGP
AFC Energy hosted its maiden Capital Markets Event yesterday, giving an excellent summary of its progress in the last year and its prospects. The company is making good progress in commercialising its EV charging product alongside ABB and should be ready for market in 2022. We believe the long-term prospects for the company remain exciting.
Shoe Zone is upgrading FY21E Adjusted PBT expectations to £8.0m, a 22.7% upgrade to our previously published forecast of £6.5m, following initial work done as part of the ongoing yearend review process. The benefit of this upgrade also flows through to FY23E where we increase our forecasts by the same quantum. Despite the recent share price rally, we continue to believe Shoe Zone trades at a deep discount to its fair value, with a return to the dividend list anticipated in the current financial
Solid State is a specialist value added component supplier and design-in manufacturer of computing, power and communications products. Interim results this morning read well, illustrating both a record six-month period, including very strong performances from both Willow Technologies and Active Silicon acquisitions, and an order book as at 30 November standing at a record £70.3m. While global supply chain challenges will continue to need to be successfully managed, the Board remains confident of