Construction and engineering services company nmcn’s decision to reinstate dividends demonstrates, in our view, the Group’s confidence in prospects following a largely promising first half, which was disrupted by Covid and operational challenges on the completion of a major infrastructure scheme. We are reintroducing estimates that assume a return to revenue growth and margin recovery, fuelled by the PM’s pledge to “build, build, build” across several of nmcn’s core infrastructure and building sectors.

nmcn plc

• 07 Aug 20
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Buzzi announced a good set of results with a strong performance registered in the US due to higher demand, supportive pricing, tailwind from input costs and favourable FX. However, management has a conservative outlook for the US for H2, which largely contributes to its EBITDA outlook of -5-10% yoy. Buzzi’s results were better than expected and, hence, we will be updating our numbers upwards.

Buzzi Unicem SpA

• 06 Aug 20
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FY20A results are broadly in-line with forecasts set prior to Covid-19, evidencing a far stronger H2A delivery to the year. Fulcrum has now refocused on a number of growth opportunities based on long-term strategic priorities for the UK, including the move to a net zero economy. MoM momentum is building so far in FY21, such that pre-Covid trading levels are expected to be met in Q2/21. Given this, a record order book and strong balance sheet, we see a brighter future for Fulcrum ahead.

Fulcrum Utility Services Ltd.

• 06 Aug 20
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The FY20 results report that after a challenging H1, the Group’s performance had started to improve, with a substantial increase in order inflow. This was disrupted by the impact of COVID-19, which impeded operations towards the end of FY20. Despite this, EBITDA (postIFRS 16) of £4.6m was broadly in line with pre-COVID-19 guidance (c.£5m). Given continued economic uncertainty, guidance is still withdrawn. Whilst valuation is challenging in the absence of forecasts, if management can deliver a recovery in earnings to historic levels, we believe the current valuation looks undemanding. We see no reason why the improving trajectory of the business should not resume once the economy is on a more stable footing. Indeed, trading has started to improve, with revenue expected to return to pre-COVID-19 levels in Q2, and medium term prospects are positive.

Fulcrum Utility Services Ltd.

• 06 Aug 20
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Unlike other concessionaires, Sacyr has posted a good set of results with revenues up by 3.5% and EBITDA up by 10% despite being affected by COVID-19. It has also reiterated that its position is well hedged in Repsol and Repsol’s plummeting share prices will have no impact on Sacyr’s cash flow. The only red flag we would like to raise is its increasing gearing ratio even if management is reducing the recourse debt.

Sacyr SA

• 04 Aug 20
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FCC published its H1 20 results with revenues down by 5.7%, largely due to the construction activities and through the regions like the UK and the Americas. EBITDA dropped by 6% but net profits were down by 41% due to lower EBITDA and an unfavourable FX effect.

Fomento de Construcciones y Contratas SA

• 04 Aug 20
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While India and France boosted growth in H1 19, they were the largest contributors to the lower performance observed in H1 20. Turkey and Egypt continued to be in the same league. However, cost-cutting initiatives, lower input costs and the strong market in the Americas partly offset the impact. Since Vicat performed better than we expected, we will revise our figures upwards.

Vicat SA

• 03 Aug 20
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Vinci underperformed in H1 20 due to its significant exposure to concessions (especially airports) as well as to France which faced one of the strictest lockdowns in Europe. However, it continues to have a good order book in its contracting business and remains positive that it may even come up with 2021 margins better than last year’s in its construction activities. The group continues to have a strong balance sheet but the board has decided not to pay an interim dividend.

VINCI SA

• 02 Aug 20
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The infrastructure side is more impacted than expected, but renewables remain resilient. EBITDA was down by 29% to €499m. The impact of COVID-19 is estimated to be €144m. The group says it has seen the start of a recovery in recent months and expects a strong rebound in the second half of the year. We will lower our figures, but the change in the target price is not expected to be substantial. The post-COVID-19 FY20 guidance is confirmed.

Acciona

• 30 Jul 20
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LafargeHolcim reported a better-than-consensus set of H1 20 results although the operational performance was weaker than that of HEI (which also published its results today). We attribute this to LHN’s larger exposure to the markets having experienced strict lock-downs and due to a weaker contingency plan versus HEI. LHN did however manage to generate excellent FCF via active NWC management. The management is optimistic about H2. We maintain our BUY recommendation.

Lafargeholcim

• 30 Jul 20
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