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Epwin Group

Cost inflation remains an issue

The interim update indicates that, despite H117 being broadly in line with expectations, market conditions remain difficult. Cost inflation continues to be a significant issue and, with market volumes broadly flat, the benefit of price rises has been eroded. This leads us to downgrade estimates across the forecast period. This results in a 7.8% cut to PBT in FY17 followed by 9.3% in FY18. Importantly, today’s statement indicates that the dividend remains unaffected with the shares yielding 7.1% with good earnings and cash cover. The balance sheet remains un-stretched, even after the impact of today’s cut to numbers Net Debt/EBITDA remains low at 0.6x. The shares had already started to discount weaker trading conditions and the recent customer issues, declining from 125p in May to last nights close of 94p. On new forecasts Epwin trades on just 7.2x FY17 earnings.

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  • 16 Aug 17
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Lookers

Robust H1, forecasts unchanged

Lookers has delivered a solid set of interim results this morning, with adj. PBT from continuing operations (ex parts) up 18% to £50.2m (H1 2016: £42.6m). There was a good performance across all new, used and aftersales demonstrating a robust margin performance across all segments of the business. The trading outlook remains uncertain as we are currently seeing across the sector, and clearly September remains key for the full year performance. We are maintaining our forecast assumptions for now, and believe the valuation remains undemanding given the company’s long term track record of generating value.

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  • 16 Aug 17
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Marshall Motor

H1 in line, no change to forecasts

Marshall Motor Holdings (MMH) has delivered a solid set of interim results this morning which are in line with our expectations. As flagged in the company’s trading update in July, a good LFL performance together with a strong performance at Ridgeway has delivered headline adj. PBT up 32.9% YOY. We are maintaining our forecasts following this update (albeit September remains key to full year performance). While market conditions remain uncertain the valuation remains compelling and more than factors in any potential earnings risk. Based on near term multiples (2017E P/E of 5.1x) and in the context of £112.5m of property freehold/long term leases we believe the current market value is underpinned.

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  • 15 Aug 17
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EVR

Agreement signed with ARESA, licensing hundreds of thousands of musical works

MelodyVR, the leading creator of virtual reality content focused on the music industry and subsidiary of EVR Holdings, this morning announces that it has entered into a multi-year music licensing agreement with ARESA GmbH, the Anglo-American Rights European Service Agency. ARESA represents the copyright catalogues of companies such as Chrysalis, Bug, BMG, Cherry Lane, Famous, Virgin, Stage Three and Evergreen, comprising several hundreds of thousands of works from leading global artists such as Adele, David Bowie and The Rolling Stones. The agreement also covers 34 territories across Europe, and follows on from last week’s announcement that MelodyVR had signed five music licensing, collection and distribution agreements with various European rights holders.

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  • 14 Aug 17
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EVR

MelodyVR signs five music licensing agreements with European Rights Holders

MelodyVR, the leading creator of virtual reality content focused on the music industry and subsidiary of EVR Holdings, this morning announces that it has entered into five music licensing, collection and distribution agreements with various European rights holders. The agreements, which are believed to be the first deals to license a virtual reality service, cover rights in the following territories: Germany, UK, Ireland, Sweden, Greece, Belgium, The Netherlands and Switzerland. Agreements with music publishers, collection societies and performance rights organisations are vital for the exploitation of the underlying musical works (e.g. Songwriter copyrights) featured throughout MelodyVR’s substantial library of original VR music content. In advance of the launch of the MelodyVR platform, the multi-year agreements license the distribution of VR content and enhance Melody’s capabilities across strategically important European territories.

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  • 10 Aug 17
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Mi-Pay Group

Significant contract win de-risks forecasts

Mi-Pay has announced a significant new contract with an existing client. The contract is for an initial three-year period and was won in a competitive process against the joint incumbent provider. This secures existing revenues and will generate substantial growth in payment transaction value. Over the contract period it is expected to have a cumulative impact on annualised transaction volumes of c. €100m. Putting this in context, total transaction volumes in FY16 for this client amounted to €25m. We take the opportunity to de-risk forecasts, providing a much higher degree of certainty with regards FY18 and FY19 revenue estimates. However, the new financial terms of the contract, relative to the current situation with the client, mean there is a shortterm impact to profitability as volumes build during the life of the contract. Despite this, the announcement should be viewed positively as it highlights Mi-Pay’s ability to win important large competitive tenders and positions it well to win further similar contracts and the increased scale this contract brings will enable Mi-Pay to become increasing efficient in the delivery of its services to all its clients. A conservative approach has been taken to forecasts factoring in today’s contract win relative to unsecured revenue.

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  • 03 Aug 17
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