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Safestyle UK

AGM Trading Update

Safestyle has announced a trading statement ahead of its Annual General Meeting to be held today. Top-line sales continue to recover and the orderbook is rebuilding following a period of significant operational disruption during FY18. However, a slower than anticipated recovery in profitability means FY19 earnings guidance moves lower. Beyond this, we take encouragement from the momentum seen in the Group’s order book, management’s commitment to the clearly defined turnaround plan, and the ‘cautious optimism’ for a step up in profitability in FY20, leaving our FY20 forecasts unchanged.

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  • 16 May 19
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Centralnic Group

FY18 ahead of expectations

CentralNic has delivered a solid set of FY18 results this morning that are 3.8% ahead of our forecasts and up 66% YoY at the adj. EBITDA level (excluding the one off domain name sales business discontinued in 2017). This has been a transformative year for the group following a number of acquisitions including KeyDrive which effectively doubled the size of the group and significantly improved earnings quality. Recurring revenues are now at 90% and cash conversion in 2018A approaching 100%, highlighting this quality. We leave trading assumptions unchanged for 2019E and 2020E but update our working capital assumptions to reflect the cash outperformance and negative working capital cycle in the business. We now expect net debt at the end of 2019E of £2.9m growing to £3.0m in 2020E. At the current share price, the group trades on a 2019E EV/EBITDA of 5.9x and a P/E of 11.7x with a FCF yield of 7.6% based on 2019E forecasts.

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  • 13 May 19
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Cambria Automobiles

EPS upgrades

Cambria has delivered robust H1 2019 performance, which was ahead of our forecast at the adjusted PBT level (£5.5m vs. ZC £5.3m). We update our forecasts to reflect this outperformance and now expect adj. PBT for the full year of £11.0m (vs. £9.9m previously). Organic earnings upgrades in this sector are rare at present, and we believe this is down to the strong execution in reshaping the portfolio towards the premium/luxury brands. We remain confident in Cambria’s ability to deliver strong shareholder value from here.

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  • 09 May 19
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Vertu Motors

Compelling foundations

Vertu has delivered a respectable set of FY2019A results, which are 7.3% ahead of our forecasts at the adjusted PBT level. We tweak our headline forecasts at this juncture, to reflect higher levels of revenue, with growth in gross profits despite margin pressure coming through in new and used and continued cost pressure across the business, albeit we expect these are beginning to stabilise. We also note the significant cash beat in 2019A and our net debt forecasts for 2020E and 2021E are lower as a result, with a cash pile building in 2021E. We believe the asset backing in this Group remains compelling (NAV per share 44.9p) and it remains well positioned to deliver strong levels of shareholder value across a number of different fronts.

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  • 08 May 19
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Elegant Hotels Group

Robust performance despite rate environment

Elegant has this morning announced H1 results that should position it well to deliver market expectations. There was a marginal decline in ADR offset by slightly higher levels of occupancy, delivering a 1.0% increase in RevPAR. We are tweaking down our forecasts to move in line with the lower end of the consensus range to reflect a tougher rate environment driven by increased competition in the all-inclusive segment of the market as well as increased VAT. That said, we believe the shares represent good long-term value, trading at a 54% discount to NAV, with a yield of 5.7%.

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  • 08 May 19
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Purplebricks Group

Trading and strategic update

Purplebricks has released a trading update, which confirms group revenue for the year to 30 April 2019 will be within the £130m to £140m range guided on 21 February, and also reveals: Purplebricks UK “continues to out-perform” in “challenging” market conditions and in 2019 it will focus on “further profitable growth”; The “Canadian business continues to perform well and [meet] … expectations”; The Australian business has not delivered the “progress the Board expected” and so “has been put into an orderly run down … pending closure”; In the US, “investment in marketing and other overheads” has been “materially scaled back” and a “strategic review” to assess “opportunities and risks” begun; Vic Darvey (previously MD of Moneysupermarket.com Group plc), who joined Purplebricks in January as COO, has been appointed Group CEO; Net cash on 30 April 2019 was at least £62.0m (31/1/19: £71.0m).

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  • 07 May 19
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