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

  • 11 Sep 18

Next beats its guidance again but stays cautious on the 2018 outlook

Next outperformed its guidance again and raised its full-price sales by 2.8% in Q2. The guidance for 2018 is unchanged. A surplus cash of £300m is expected to be generated by the year-end.

Companies: NEXT
  • 13 Sep 18

Strong full-year results, though (some) apprehensions remain

BHP Billiton reported strong FY18 results – on the back of the continuation of healthy price tailwinds and operational normalisation (at Escondida). While these improvements were largely in line with most large-cap peers, BHP is still faced with the uncertainties over Samarco and a material exposure to fossils (c.22% of gross assets) – even after the US shale asset disposal.

Companies: BHP Billiton
  • 19 Sep 18

Strategy Update probable next Spring

This morning’s results and accompanying investor/analyst conference were revealing as the latter strongly suggested that work is underway to re-calibrate the existing One Kingfisher strategy with the likelihood of a new 5-year plan emerging in early 2019 in our view.

Companies: Kingfisher
  • 07 Mar 18

Digital investments and dividend distribution

We believe concerns about the potential impacts of accelerated digital investments on dividends are misplaced. In our view, they are based on a misconception of banking where finance concepts developed for the analysis of non-financial companies do not apply, or apply differently. Hence, although we acknowledge it is hard to believe, for people not accustomed with monetary issues, in the banking world, contrary to the real economy, investments have no impact on cash flows and, consequently, on dividend distribution capacity.

Companies: Lloyds Banking Group
  • 09 Apr 18

UK Housebuilding Sector

This ominous-sounding term originated from the work of famed Swedish meteorologist, Tor Bergeron (1897-1977), but it only entered popular vernacular this year – and there have been ample opportunities in 2018 to use it.

Companies: ABBY BDEV BWY BKG BVS CRN CSP CRST GLE INL MCS PSN RDW SPR TW/ TEF WJG

  • 20 Jun 18

Cenkos: Leisure Sector -- Suspend coverage

Due to a change in sector focus Cenkos Securities plc has suspended coverage of the following stocks (see table 1). Our previous recommendation and forecasts can no longer be relied upon. Please contact Cenkos for further information.

Companies: TUI CCL CPG DOM GNK IHG JDW JE/ MARS MERL MAB PPB PTEC RTN SSPG TCG WTB WMH

  • 25 Jul 18

UBM integration looks well on track

Informa reported solid H1 18 results – including UBM from 15 June, with +4.3% revenue growth and +1.9% growth in adjusted operating profit. The operating margin was therefore a tick lower than last year’s restated accounts at 30.8% (versus 31.1%). The company is confident of the UBM integration and confirmed its target of 3.5% underlying revenue growth in 2018 and said it is on track to deliver savings targets of £50m in 2019.

Companies: Informa Plc Ord
  • 26 Jul 18

Strong results as drugs and data get priority; Nucala rejected by Adcom

GSK’s Q2 revenue came in line with our expectations, but was marginally ahead of the street. Pharma remained mediocre, consumer health was steady and vaccines robust. Guidance for the year was upgraded. Apart from reiterating the decision to keep the group intact, GSK announced some strategic decisions – a restructuring programme with annual cost savings of £400m by 2021, R&D focused on immune system and genetics and a collaboration with 23andMe for research in genetics.

Companies: GlaxoSmithKline
  • 31 Jul 18

Subdued and not yet sustainable performance

The group posted a mixed set of results in the second quarter, showing some revenue attrition but, above all, strong cost inflation, both offset by non-sustainable own debt gains and provision recoveries.

Companies: Standard Chartered
  • 01 Feb 16

Support Services, a cornucopia of companies

Support services can mean many things to many organisations but essentially the sector can be seen as a lubricant that helps the wheels of the economy continue to turn. A common thread is outsourcing activities that are most economically and effectively performed by a specialist rather than keeping in house. Companies in the sector tend to provide business critical services to their customers, thereby providing an element of stickiness. The sector benefits when the economy grows, but also offers an element of defensiveness as client companies and public sector bodies strive to keep their own fixed cost bases down. However given the broad range of businesses within the industry it is difficult to apply a broad brush description, and stock selection according to one’s investment criteria is vital.

Companies: XCH CSC CPI VP/ DSCV EQN WPG BILB PTSG PNA MACF AUK VIP MPAY UNG PEG PEN

  • 18 Jul 16

Political risk over-hang

Mixed messages from UK and EU governments already highlight a potential for on-going political risk, with any sector volatility accentuated by Solvency II. With significant value in the sector we would look to now buy shares with strong fundamentals to be confirmed by upcoming results.

Companies: ALV CS PRU LGEN PHNX

  • 03 Nov 17

More questions than answers

The quarterly results were broadly in line with expectations. Post release consensus updates are stable for 2017 and up for 2018. The post-release share price’s negative reaction (-6%), which was partly reversed the day later (+3%), probably mainly reflects the capital consumption inflation and some doubts about the group’s ability to solve its profitability issue in a context of increased competitive pressure from domestic and alternative players. We suspect the capital issue is overdone as it partly corresponds to a frontloading of pending Basel 3/ Basel 4 impacts. The risk of a delayed dividend payment resumption is a non-issue in our view as cashing out a deposit account has never made anyone richer. We are more concerned by the profitability issue but, fortunately, the current valuation does not factor in any upside on that front, on the contrary.

Companies: Standard Chartered
  • 10 May 18

Acceleration in Q1

Next has released great acceleration in Q1 and has upgraded its full-year guidance. Full-price sales increased by 6% and full-year sales are expected to grow by 2.2%.

Companies: NEXT
  • 31 May 18

Endless restructuring and no end in sight

JMAT reported preliminary FY figures, which were burdened by a set of negative effects (legal proceedings and restructuring-related issues), which were more than our expectations. Bearing in mind the amount of these effects (£-140m), the explanations look insufficient. Consequently, our profitability expectations were clearly missed, in contrast to the top-line which matched them. We have the impression that management rather likes to present the company’s performance in ‘underlying view’ and ignoring the real world.

Companies: Johnson Matthey
  • 10 Jul 17

Alphabet soup

The world is increasingly full of acronyms and there is argument for worrying about each and every one of them but the real impact on Asset Managers is, we believe, simply more of the same: revenue margins erode over time, costs move higher and the only real defence is to deliver for fund investors. But we should not lose sight of the role that asset management, active and passive, can play in addressing the obvious financial needs of ageing populations. All is not lost, whatever the siren voices may claim, but Darwinism is at play.

Companies: ADN ASHM JUP LIO EMG REC SDR ICP PFG CBG PAG

  • 04 Jul 14

Executive Interview - Rolls-Royce

executive-interview-rolls-royce-04-07-2014
  • 20 Apr 17

Geoff Drabble, Ashtead Group CEO

Premium

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  • 02 Jun 15

I Nexus - ELITE at London Stock Exchange

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  • 03 Jun 15

Guidance Marine - ELITE at London Stock Exchange

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  • 05 Jun 17

London Stock Exchange - 1000 Companies to Inspire Britain

london-stock-exchange-1000-companies-to-inspire-britain-05-06-2017
  • 02 Jun 15

Marmalade Technologies - ELITE at London Stock Exchange

marmalade-technologies-elite-at-london-stock-exchange-02-06-2015
  • 13 Apr 17

London Stock Exchange - Companies to Inspire Africa

london-stock-exchange-companies-to-inspire-africa-13-04-2017
  • 02 Jun 15

Swoon Editions - ELITE at London Stock Exchange

swoon-editions-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
  • 02 Jun 15

Workshare - ELITE at London Stock Exchange

workshare-elite-at-london-stock-exchange-02-06-2015
  • 10 Feb 17

London Stock Exchange - Highlights from Cape Town

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

RealityMine- ELITE at London Stock Exchange

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

Alkane Energy - Recommended cash offer

alkane-energy-recommended-cash-offer-16-09-2015
  • 03 Jun 15

Clinova - ELITE at London Stock Exchange

clinova-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

Latest Content

Tesco

Tesco taking the bull by the horns

As expected, Tesco has unveiled its discount store concept today. It will be called as ‘Jack’s’, named after the company’s founder Jack Cohen. The initial details are as follows: 1. This new store is touted to be cheapest in the town. 2. 10-15 new stores will be opened over the next six months. 3. 2,600 products will be sold (vs 20,000 in a typical Tesco store). Out of the total, 1,800 would be Jack’s-branded items. 4. As much as 80% of the products will be grown, reared or made in the UK. 5. Management plans to offer a cashier-less shopping experience (scan and pay using a mobile app) vs self-service machines or traditional check-outs. With this step, the UK’s largest retailer expects to take the fight back to discounters Aldi and Lidl, who jointly command a 13.1% market share today. Notably, the decade-long aggressive expansion by German discounters has long rattled the ‘Big 4’in the UK, which have lost considerable ground during the period. Although we agree that Dave Lewis needs to check the market share erosion (27.4% on 9 September 2018 vs 29.1% in January 2015) – the rampant onslaught from German discounters is the biggest pain-point – this strategy is a bold experiment by Tesco in our opinion. The UK’s largest retailer needs to ensure that this new format does not cannibalise the revenue of its existing stores. The margin of error is also higher as management needs to don multiple hats at the same time – traditional supermarkets vs discount format vs convenience stores vs e-com. The historical failures of other peers also highlights the high implementation risk with this format. Notably, Sainsbury partnered with Netto in 2014 but had to shut these discount stores after incurring losses for two years. In addition to reviving the performance of traditional stores, it is also interesting to see these large retailers treading on different paths as a competitive strategy. Despite an ambitious plan by the CEO, implementation remains the key to success.

 View

  • 19 Sep 18
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Kingfisher

Strategy Update probable next Spring

This morning’s results and accompanying investor/analyst conference were revealing as the latter strongly suggested that work is underway to re-calibrate the existing One Kingfisher strategy with the likelihood of a new 5-year plan emerging in early 2019 in our view.

 View

  • 19 Sep 18
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BHP Billiton

Strong full-year results, though (some) apprehensions remain

BHP Billiton reported strong FY18 results – on the back of the continuation of healthy price tailwinds and operational normalisation (at Escondida). While these improvements were largely in line with most large-cap peers, BHP is still faced with the uncertainties over Samarco and a material exposure to fossils (c.22% of gross assets) – even after the US shale asset disposal.

 View

  • 13 Sep 18
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Old Mutual

Coverage terminated

As Old Mutual has completed its reorganisation, the listed company now happens to be entirely focused on African operations. It has also decided to move its reporting currency to South African rand. As a result of these changes, AlphaValue has decided to end coverage of Old Mutual as it is now too far away from its European expertise.

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  • 13 Sep 18
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NEXT

Next beats its guidance again but stays cautious on the 2018 outlook

Next outperformed its guidance again and raised its full-price sales by 2.8% in Q2. The guidance for 2018 is unchanged. A surplus cash of £300m is expected to be generated by the year-end.

 View

  • 11 Sep 18
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ARCM AAL bmn MKA TLG

SP Angel – Morning View

Arc Minerals (ARCM LN) – STRONG BUY – Drill results indicate significant scale copper project at Kalaba, Zambia | Anglo American (AAL LN) 1455 pence, Mkt Cap £18.8bn – De Beers diamond sales | Bushveld Minerals (BMN LN) – Bushveld proposes return to work on basis of continuous engagement | Mkango Resources Ltd (MKA LN) – Completed major drill programme intersects further extensive zones of rare earth mineralisation | Talga Resources Ltd (TLG AU) - Talga expands industry potential for graphene products with multiple agreements

 View

  • 11 Sep 18
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GAL GLEN SML THR

SP Angel – Morning View

Galantas Gold (GAL LN) – Private placement for £1.26m | Glencore (GLEN LN) – Sale of interest in Rosneft | Strategic Minerals* (SML LN) – Focusing on mineral diversity in stable jurisdictions | Thor Mining (THR LN) – Pilot Mountain scoping study

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  • 07 Sep 18
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United Utilities

PR19 business plan's first presentation

UU released and briefly commented yesterday on its PR19 business plan covering the 2020-25 period, which will be further detailed on 27 September at an analysts meeting/conference.

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  • 05 Sep 18
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AstraZeneca

Emerging markets shine but R&D progress at a critical stage

The Q2 results did not throw up any surprises, but the generic erosion was seen as tapering down and the new products rising to the occasion. The oncology drug, Tagrisso, has been showing an excellent trajectory while the other oncology drugs are lending good support. The overhang of genericisation continued to weigh on the legacy drugs but respiratory’s resilience during the quarter was a positive development. The last six months have been mixed for R&D, which otherwise is well stocked.

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  • 05 Sep 18
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WPP

Lower margin finally expected in 2018

Although organic net revenue growth improved in Q2 18 (+0.7%) vs Q1 18 (-0.1%), it was tempered by easier comparatives in Q2 vs Q1. Furthermore, the decline in the headline PBIT margin by 0.4pt of net revenue in H1 18 is representative of the year 2018, while a flat margin was expected previously. Finally, the best news was related to contract wins which reached $3.2bn since January 2018, slightly above $2bn net of major clients’ losses.

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  • 04 Sep 18
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