UK 100 equity research

Explore the most viewed and latest equity research and media content for the top 100 largest listed companies in the UK.


 

UK 100 Equity Research

Broker research, valuations, & analysis on the UK 100

  • 10 Aug 17

Strong signs of a good 2017

L&G reported an operating profit of £988m, up 27% year-on-year. Except for General Insurance which recorded a 52% drop in operating profits to £15m, all business lines posted an improvement in profitability. The best performance was posted by Legal & General Retirement (LGR) which recorded a 40% increase to £566m, remaining the major contributor to operating profits (more than 50%). Legal & General Investment Management (LGIM) operating earnings saw a 13% increase to £194m. Legal & General Capital (LGC) raised its profits by 5% to £151m, while Legal & General Investment Management’s (LGIM) earnings were stable at £151m. The Solvency II surplus reached £6.7bn over its Solvency Capital Requirement, corresponding to a coverage ratio of 186% on a shareholder basis. The Board recommended an interim dividend of 4.3p/share vs. 4p a year before.

Companies: Legal & General Group
  • 09 Aug 17

Panmure Morning Note 08-09-2017

Following an update in mid-June we weren’t expecting any major surprises but we got one with L&G reporting a good set of interim figures helped by an unexpected £126m longevity reserve release. The IFRS operating profit was therefore £988m (+27%) that was 12% above consensus of £821m or 11% above at £862m excluding the release. Importantly L&G is considering a move to the newer CMI longevity tables that could see significant further longevity reserve releases over the next few years. The interim dividend has as expected under the new formulaic approach increased to 4.30p (+7.5%) driven by flat net cash released from operations of £724m. The Solvency II coverage ratio at 186% was in line with guidance in mid-June. Trading on a 2017F dividend yield of 5.6%, on a relatively low IFRS 2018F PE multiple of 11.3x and with the prospect of future reserve releases we view the shares as undervalued. We maintain our target price of 305p per share and Buy recommendation.

Companies: Legal & General Group
  • 10 Aug 17

VSA Morning Miner

Glencore (GLEN LN) has announced strong interim earnings reversing a loss of US$369m in H1 2016 to a net profit of US$2.45bn. Full year net profit for 2016 was US$1.38bn. Revenue of US$100bn was up 44% YoY whilst EBITDA of US$6.7bn was 68% YoY. The stronger earnings were primarily driven by the recovery in commodity prices, particularly base metals. Although commodity prices in dollar terms benefitted from the recent depreciation the positive earnings impact was partially offset by the consequent strength of EM currencies where GLEN’s operations are based.

Companies: Glencore
  • 11 Aug 17

H1 consensus beat and promise of a bright H2

BAE Systems reported a good looking set of H1 results, showing an improvement in revenues and EBITA margin (and the IFRS accounted operating profit margin), but also a modest increase in the order backlog versus FY16. Growth came from all divisions not only in terms of sales, but also EBITA. With increased operating cash flow in a usually-seasonally-weak half-year and higher EPS (+13.8% yoy), the group was able to increase the distributed interim dividend and has confirmed the FY guidance in an improving market environment.

Companies: BAE Systems
  • 10 Aug 17

H1 2017 Results

Prudential has delivered a solid set of interim results with headline IFRS Operating profit at £2358m (+15% or +5% at CRE) better than expected reflecting £188m of management actions suggesting an underlying beat of 1%. On an EEV basis, post-tax Operating profit was £2870m (+27%) well ahead of consensus driven by new business profitability at £1689m (+34%). The formulaic interim dividend was as expected at 14.5p/share (+12%). The surprising news is that M&G and Pru UK/Europe are to merge (£145m cost savings at a one off cost of £250m to achieve) to form ‘M&G Prudential’. Slightly odd given that the market was half expecting some announcement concerning the part sale of Pru’s UK book. We maintain our Buy recommendation and 2061p target price.

Companies: Prudential
  • 21 Jun 17

Q1 trading enough for some relief

Q1 trading is encouraging overall, with positive Costa LFL and robust Premier Inn RevPAR. FY18 consensus looks appropriately conservative, with no change expected at this early stage of the year. At c.10x FY18 EBITDA the valuation feels well poised, with upside from Costa initiatives likely to be capped by challenging UK consumer/high street dynamics. HOLD. Call 7:45am.

Companies: Whitbread
  • 15 Aug 17

Panmure Morning Note 15-08-2017

Following the better than anticipated interim results last week we have edged up our IFRS earnings and increased our target price to 2210p from 2061p previously. There has been considerable speculation concerning a possible disposal of the UK business, now including M&G and our take on it is that it would be very good news for shareholders. The disposal of the UK business should make the remaining businesses in the US and Asia look even more attractive than they are currently, particularly for Asian investors. Placing a post UK sale valuation on Pru in line with its Asian peer AIA would result in a valuation north of £28/share. Buy.

Companies: Prudential
  • 09 Aug 17

Deleveraging target exceeded, thereby helping reinstate dividends

Anglo American posted strong H1 17 results, resulting in dividends being reinstated. Higher prices (average +30% yoy) across commodities — (met) coal, iron ore, copper and PGMs (due to palladium) — and healthy volumes (in De Beers and Minas-Rio) resulted in the top-line increasing by 22% yoy (and 5.9% hoh) to $12bn. Profit improvements were stellar, with adjusted EBIT soaring 87% yoy (and 22% hoh) to $2.5bn. In addition to the top-line support, profitability also benefited from cost improvements that were partly offset by adverse forex movements and inflation. H1 net attributable profit came in at $1.4bn vs. a loss of $813m (including sizeable impairments) in H1 16 and a profit of $2.4bn (including sizeable asset disposal gains) in H2 16. Even reported OCFs improved by 45% yoy (and 31% hoh) to $3.7bn, aptly supported by a working capital release of $231m (vs. release of $498m in H1 16 and use of $107m in H2 16). Strong cashflows along with controlled capex of $800m (-27% yoy; -39% hoh) further facilitated significant deleveraging, with net debt falling (-22% vs. 2016 end) to $5.5bn. Given that Anglo overshot its deleveraging target for 2017 during the first half, management decided to resume dividends – a good six months before the earlier guidance. As a result, an interim dividend of USc48 per share was announced. 2017 production guidance across commodities remains unchanged, except for Kumba – where 41-43mt of iron ore output is being targeted (vs. 40-42mt guided earlier). In terms of capex, the guidance for 2017 has been reduced by $0.2bn to $2.3bn.

Companies: Anglo American
  • 14 Oct 16

Q3 Trading Update

Growth slows in Vanquis, but risk adjusted margins remain strong. We place our recommendation under review whist we analyse the impact of today’s statement on our estimates and the valuation.

Companies: Provident Financial
  • 02 Aug 16

Interim results; small beat and confident outlook

Revenues $838m (consensus $859m) with adjusted op profit of $345m (consensus $337m) to give EPS of 89.4c and DPS of 30.0c. RevPAR improved in Q2 to 2.5% (from 1.5% in Q1) smoothing out the Easter distortion. However, some markets are seeing subdued trading, particularly in oil related US markets, Middle East, London and Paris. 3.6% net new room growth with 17k openings (+8.0% YoY) is strong. Regionally Americas saw RevPAR growth of 2.4% (rate driven), Europe RevPAR 2.0%, within which London and Paris remain weak. AMEA RevPAR -0.4% with weakness in Middle East mitigating strong trading elsewhere. Overall Group fee margin was 48.6%, an improvement of 2.9%pts helped by cost phase and scale benefits with tight control of overheads. We do not anticipate making any significant changes to forecasts at this stage. With the stock trading on 2016E PE of 21.0x and EV/EBITDA of 12.5x we rate the stock HOLD.

Companies: Intercontinental Hotels Group
  • 11 Aug 17

Panmure Morning Note 11-08-2017

Prudential has delivered a solid set of interim results with headline IFRS Operating profit at £2358m (+15% or +5% at CRE) better than expected reflecting £188m of management actions suggesting an underlying beat of 1%. On an EEV basis, post-tax Operating profit was £2870m (+27%) well ahead of consensus driven by new business profitability at £1689m (+34%). The formulaic interim dividend was as expected at 14.5p/share (+12%). The surprising news is that M&G and Pru UK/Europe are to merge (£145m cost savings at a one off cost of £250m to achieve) to form ‘M&G Prudential’. Slightly odd given that the market was half expecting some announcement concerning the part sale of Pru’s UK book. We maintain our Buy recommendation and 2061p target price.

Companies: Prudential
  • 21 Oct 16

Panmure Morning Note 21-10-2016

IHG has reported its Q3 trading update showing slowing global RevPAR growth of +1.3% in the quarter. This is a slowdown from 2.5% in 2Q and +4.8% last year. Net system size grew 3.8% (versus 4.3% last year or 2.7% ex Kimpton). We do not expect to make changes to our forecasts ahead of the conference call this morning with the acceleration in room growth compensating for RevPAR slowdown. While the ‘fee-based’ business model makes IHG less operationally geared than other asset heavy hotel companies, the medium term outlook for the industry is deteriorating, with consumer confidence and security concerns weighing on corporate/leisure travel spending. As such, we struggle to see any upcoming catalysts (absent a bid or further $/£ movement) for further share price appreciation. With the stock trading on 2016E PE of 21.2x and EV/EBITDA of 12.5x we rate the stock HOLD.

Companies: Intercontinental Hotels Group
  • 02 Aug 17

Finally rather decent within a tough first half context

ITV’s H1 17 results were in line with expectations, within a particularly tough environment. Total external revenues declined 3% to £1,458m as ITV Family net advertising’s revenue fell by 8% to £769m (c.53% total group; Q2 was down 7% after -9% over Q1, including a tough basis of comparison due to the FY16 Euro Football Championship), in line with the guidance for an 8-9% decline for the first part of the year. This was counterbalanced by non-NAR being up by 6% with ITV Studios’ revenues rising by 7% to £697m (+0.6% at CER). As expected, the latter reported a 9% decline for its adjusted EBITA, namely reflecting the ongoing and strategic investment in the US scripted business but also due to a difficult basis of comparison (last year’s reporting of The Voice of China). Consolidated adjusted EBITA was down 8% to £403m, i.e. a 28% margin compared with 29% a year earlier. H1 17 adjusted EPS reached 7.7p, down 9% but slightly above the consensus of 6.9p, while the interim dividend was raised 5% to 2.52p. Management reiterated its FY17e guidance, expecting pressures on advertising to ease in Q3 (anticipated at -4%, with July down 5%, August -4% and September flat at -5%, due to current economic and political uncertainties) and still anticipates ITV Family NAR to outperform the market this year. At the same time, the required investments to grow the content production arm further (on a global market growing c.+5% per annum) imply that ITV Studios’ FY17e OP is likely to remain flat compared to FY16. Studios, which has already secured 85% of the expected full-year revenues, i.e. more than £100m compared to the same time last year, is however anticipated to deliver “good organic revenue growth”. Note that the group is on track to deliver £25m savings in overheads this year (£14m delivered over H1), with a £25m reduction in the programme budget (i.e. total FY17e programming budget at c.£1,025m, helped by no major sporting events).

Companies: ITV
  • 03 Aug 17

Pursuing satisfactory operational progress under its acceleration programme

Informa reported solid H1 17 results and above estimates, with revenue reaching £915.4m, up 41.3% (including forex for +12.8% and a perimeter impact – namely the Penton integration – for +26%) and up 3.7% underlying and adjusted OP at £285.1m, up 41% and 1% underlying (i.e. a 31.1% margin compared to 31.2% a year earlier; impacted by GAP depreciation and the mix from acquisitions). Adjusted diluted EPS improved by 12.7% to 24p and the interim dividend was raised by 6.2% to 6.65p. The group confirmed being on its way to deliver and even outpace the promised £14m operating synergies in FY18 (half in FY17e; to be reinvested in growth measures) following the integration of Penton. It reiterated its FY17e guidance for “good progress”, saying it remains on track for a fourth consecutive year of growth in revenue, earnings and cash flow. This will be supported by strong trading in Global Exhibitions, a steady performance in Academic Publishing and improving operating momentum in Business Intelligence.

Companies: Informa Plc Ord
  • 09 Aug 17

Rolls Royce is on the right track

Rolls Royce reported a strong set of H1 results, boosted not only by a rising gross margin level but also by foreign exchange benefits. Organic revenue growth (+6% yoy) was driven by foreign exchange benefits (+5%). Drilling down into more detail shows that revenues from services posted the strongest growth (+8%) while OE revenues grew by 5% organically. The underlying gross margin grew from 16.8% to 18.2%. Profit before financing followed the same trend, rising from €158m to €345m thanks to the Civil Aerospace, the Power Systems and to a lesser extent the Defence Aerospace divisions. On the contrary, the situation remained difficult in both the Marine and Nuclear divisions.

Companies: Rolls-Royce
  • 14 Jun 17

NHAI - Market open

nhai-market-open-14-06-2017
  • 02 Jun 15

Workshare - ELITE at London Stock Exchange

workshare-elite-at-london-stock-exchange-02-06-2015
  • 02 Jun 15

Swoon Editions - ELITE at London Stock Exchange

swoon-editions-elite-at-london-stock-exchange-02-06-2015
  • 02 Jun 15

RealityMine- ELITE at London Stock Exchange

realitymine-elite-at-london-stock-exchange-02-06-2015
  • 02 Jun 15

Independent Vetcare - ELITE at London Stock Exchange

independent-vetcare-elite-at-london-stock-exchange-02-06-2015
  • 02 Jun 15

BE-Thinking - ELITE at London Stock Exchange

be-thinking-elite-at-london-stock-exchange-02-06-2015
  • 14 Feb 17

London Stock Exchange Group - Your Guide to ESG Reporting

london-stock-exchange-group-your-guide-to-esg-reporting-14-02-2017
  • 10 Feb 17

London Stock Exchange - Highlights from Cape Town

london-stock-exchange-highlights-from-cape-town-10-02-2017
  • 03 Jun 15

Celtic Renewables - ELITE at London Stock Exchange

celtic-renewables-elite-at-london-stock-exchange-03-06-2015
  • 03 Jun 15

Guidance Marine - ELITE at London Stock Exchange

guidance-marine-elite-at-london-stock-exchange-03-06-2015
  • 02 Jun 15

Smarkets - ELITE at London Stock Exchange

smarkets-elite-at-london-stock-exchange-02-06-2015
  • 03 Jun 15

Clinova - ELITE at London Stock Exchange

clinova-elite-at-london-stock-exchange-03-06-2015
  • 13 Apr 17

London Stock Exchange - Companies to Inspire Africa

london-stock-exchange-companies-to-inspire-africa-13-04-2017
  • 04 Jul 14

Executive Interview - Rolls-Royce

executive-interview-rolls-royce-04-07-2014
  • 05 Jun 17

London Stock Exchange - 1000 Companies to Inspire Britain

london-stock-exchange-1000-companies-to-inspire-britain-05-06-2017

Latest Content

Antofagasta BHP Billiton

VSA Morning Miner

This Morning’s News Antofagasta (ANTO LN) BHP Billiton (BLT LN)

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  • 16 Aug 17
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Relx

A solid H1, slightly ahead of expectations

RELX produced slightly higher than expected H1 17 revenues at £3,718m (+£461m) and reflecting a solid +4% organic growth. Adjusted OP grew a bit faster, up +5% to £1,154m (+£151m), implying a 20bp margin improvement to 31% compared with 30.8% a year earlier. The adjusted EPS at CER rose by 8% and +19% in sterling and the interim dividend per share is raised by 14% to 11.70p. The group specified that the £500m share buy-back programme was completed and further £200m will be made in H2 (£40m completed over July), i.e. £700m for the full-year as previously announced. An update will be made on the FY18 buy-back plan (thus implying there will be another one) in February 2018. The FY17e guidance was reiterated, i.e. delivering “another year of underlying revenue, profit, and earnings growth in 2017”. This is as vague as usual but the solid H1 results and the current trends (in line with FY16) indicate that risk for disappointment remains very low at this stage for this very well-managed company.

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  • 16 Aug 17
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Prudential

Panmure Morning Note 15-08-2017

Following the better than anticipated interim results last week we have edged up our IFRS earnings and increased our target price to 2210p from 2061p previously. There has been considerable speculation concerning a possible disposal of the UK business, now including M&G and our take on it is that it would be very good news for shareholders. The disposal of the UK business should make the remaining businesses in the US and Asia look even more attractive than they are currently, particularly for Asian investors. Placing a post UK sale valuation on Pru in line with its Asian peer AIA would result in a valuation north of £28/share. Buy.

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  • 15 Aug 17
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BP/ EXI RKH TETY

GMP FirstEnergy ― UK Energy morning research package

BP (BP LN) (not covered): Juniper first gas in Trinidad | Exillon Energy (EXI LN) (not covered): July Production in Russia | Rockhopper Exploration (RKH LN) (not covered): Abu Sennan Drilling Update in Egypt | Tethys Oil (TETY SS)6; HOLD, SEK60: 2Q17 Results

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  • 15 Aug 17
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Prudential

Panmure Morning Note 11-08-2017

Prudential has delivered a solid set of interim results with headline IFRS Operating profit at £2358m (+15% or +5% at CRE) better than expected reflecting £188m of management actions suggesting an underlying beat of 1%. On an EEV basis, post-tax Operating profit was £2870m (+27%) well ahead of consensus driven by new business profitability at £1689m (+34%). The formulaic interim dividend was as expected at 14.5p/share (+12%). The surprising news is that M&G and Pru UK/Europe are to merge (£145m cost savings at a one off cost of £250m to achieve) to form ‘M&G Prudential’. Slightly odd given that the market was half expecting some announcement concerning the part sale of Pru’s UK book. We maintain our Buy recommendation and 2061p target price.

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  • 11 Aug 17
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BAE Systems

H1 consensus beat and promise of a bright H2

BAE Systems reported a good looking set of H1 results, showing an improvement in revenues and EBITA margin (and the IFRS accounted operating profit margin), but also a modest increase in the order backlog versus FY16. Growth came from all divisions not only in terms of sales, but also EBITA. With increased operating cash flow in a usually-seasonally-weak half-year and higher EPS (+13.8% yoy), the group was able to increase the distributed interim dividend and has confirmed the FY guidance in an improving market environment.

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  • 11 Aug 17
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Most popular equity research this week | 7 - 11 Aug

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  • 10 Aug 17
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Legal & General Group

Strong signs of a good 2017

L&G reported an operating profit of £988m, up 27% year-on-year. Except for General Insurance which recorded a 52% drop in operating profits to £15m, all business lines posted an improvement in profitability. The best performance was posted by Legal & General Retirement (LGR) which recorded a 40% increase to £566m, remaining the major contributor to operating profits (more than 50%). Legal & General Investment Management (LGIM) operating earnings saw a 13% increase to £194m. Legal & General Capital (LGC) raised its profits by 5% to £151m, while Legal & General Investment Management’s (LGIM) earnings were stable at £151m. The Solvency II surplus reached £6.7bn over its Solvency Capital Requirement, corresponding to a coverage ratio of 186% on a shareholder basis. The Board recommended an interim dividend of 4.3p/share vs. 4p a year before.

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  • 10 Aug 17
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Glencore

VSA Morning Miner

Glencore (GLEN LN) has announced strong interim earnings reversing a loss of US$369m in H1 2016 to a net profit of US$2.45bn. Full year net profit for 2016 was US$1.38bn. Revenue of US$100bn was up 44% YoY whilst EBITDA of US$6.7bn was 68% YoY. The stronger earnings were primarily driven by the recovery in commodity prices, particularly base metals. Although commodity prices in dollar terms benefitted from the recent depreciation the positive earnings impact was partially offset by the consequent strength of EM currencies where GLEN’s operations are based.

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  • 10 Aug 17
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Shire

Neuroscience review takes the centre-stage as results come in strong

Shire’s Q2 sales were marginally ahead of AV and the consensus estimates, showing growth of 54% (CER) to $3.7bn. Shire’s legacy products grew by 7% – genetic disease +3%, neuroscience -2% and internal medicine +16% (all at CER), while the legacy Baxalta (proforma) products rose by 8% – hematology +2% and immunology +20%. The softness in neuroscience (-2%) was expected because of flat Vyvanse – a function of $20m of destocking this quarter vs ~$10m of stocking in Q2 16; according to management, Vyvanse would have been up 6% without this impact. An increase in prescriptions for both Gattex (70%) and Natpara (+73%) drove a strong growth in internal medicine. The Baxalata integration activity has been outperforming – $400m has been achieved in the first year vs the company’s target of $300m (target of $700m by the third year on track). In effect, adjusted operating profit (as per our calculation) grew by 64% to $781.3m. The company also seemed confident of achieving the non-GAAP net debt to EBITDA ratio of 2-3x, having reduced net debt by $900m. The guidance has been revised – product sales guidance has been downgraded from $14.5-14.8bn to $14.3-14.6bn, while the non-GAAP EPS outlook has been upgraded from $14.6-15.2 to $14.8-15.2. Bigger news than the strong results was the announcement of a strategic review of the neuroscience business (23% of 2016 sales) to be completed by the year end. A separate listing has been mentioned several times, so it may be construed as the option of choice.

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  • 10 Aug 17
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