Brickability has had a positive if inauspicious start to life on the quoted market; standing 9% above the issue price but distinctly lagging its Brick peers over the same period (average +40%) and its wider Materials & Merchants peers (+29%). However, post-trading update and Election, Brickability has more than held its own. As a consequence, the relative rating offers outstanding value for investors. On a 2020E basis Brickability sells on a c30% discount to the peer average EV/EBITDA and even cheaper than that on PE discount, whilst offering a premium yield (30%) and FCF yield (66%). In this report we highlight the ‘value gap' and consider a range of factors this year which could potentially narrow that differential.

Brickability Group

• 16 Jan 20
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Brickability has had a positive if inauspicious start to life on the quoted market; standing 9% above the issue price but distinctly lagging its Brick peers over the same period (average +40%) and its wider Materials & Merchants peers (+29%). However, post-trading update and Election, Brickability has more than held its own. As a consequence, the relative rating offers outstanding value for investors. On a 2020E basis Brickability sells on a c30% discount to the peer average EV/EBITDA and even cheaper than that on PE discount, whilst offering a premium yield (30%) and FCF yield (66%). In this report we highlight the ‘value gap' and consider a range of factors this year which could potentially narrow that differential.

Brickability Group

• 16 Jan 20
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Kier has issued an unscheduled trading statement that guides to trading in line and we therefore leave our estimates unchanged. We introduce estimates for H1 2020, when we assume a 40% weighting of PBT to H1.

Kier Group

• 16 Jan 20
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Kier has issued an unscheduled trading statement that guides to trading in line and we therefore leave our estimates unchanged. We introduce estimates for H1 2020, when we assume a 40% weighting of PBT to H1.

Kier Group

• 16 Jan 20
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FDEV ATQT TEG ERIS FRAN IMMO AURA AMS MBH SSTY

• 15 Jan 20
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FDEV ATQT TEG ERIS FRAN IMMO AURA AMS MBH SSTY

• 15 Jan 20
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The group has announced its FY19 sales up 14.4%, with organic growth contributing only 3.3%. All regions showed growth with APAC being the strongest. Through five acquisitions, the group has laid the foundations for continued growth. It has set Strategy 2023 where it seeks to grow by 6-8% each year upto 2023. It is also aiming a higher EBIT margin of 15-18% in 2021 while, according to our estimation, it was ~13% in 2019.

Sika

• 10 Jan 20
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The group has announced its FY19 sales up 14.4%, with organic growth contributing only 3.3%. All regions showed growth with APAC being the strongest. Through five acquisitions, the group has laid the foundations for continued growth. It has set Strategy 2023 where it seeks to grow by 6-8% each year upto 2023. It is also aiming a higher EBIT margin of 15-18% in 2021 while, according to our estimation, it was ~13% in 2019.

Sika

• 10 Jan 20
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The £178m cash acquisition of 100 active UK sites from Cemex is classic Breedon doing what it does best; buying good regional assets that currently yield poor returns that Breedon can restore to more appropriate and enhanced levels using a combination of operational, investment and strategic levers, alongside its more focussed and dedicated management supervision. It is not a ‘transformational' deal like Hope or Lagan, but is potentially more accretive long-term (especially versus the all cash consideration) and with less risk. First full year (2021E) EPS enhancement we conservatively estimate at c5% whilst by 2022E the transaction will cover its WACC and the group de-leverages to sub-1x. This ticks every box of Breedon's ‘buy & build consolidator' strategy and underpins the shares' attractiveness on value (pre-deal a 2021E EV/EBITDA of 7.5x and PER 13.8x) and strategic grounds. Acknowledging the recent strong performance of the shares, we continue to rate Breedon a Buy.

Breedon Group

• 08 Jan 20
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The £178m cash acquisition of 100 active UK sites from Cemex is classic Breedon doing what it does best; buying good regional assets that currently yield poor returns that Breedon can restore to more appropriate and enhanced levels using a combination of operational, investment and strategic levers, alongside its more focussed and dedicated management supervision. It is not a ‘transformational' deal like Hope or Lagan, but is potentially more accretive long-term (especially versus the all cash consideration) and with less risk. First full year (2021E) EPS enhancement we conservatively estimate at c5% whilst by 2022E the transaction will cover its WACC and the group de-leverages to sub-1x. This ticks every box of Breedon's ‘buy & build consolidator' strategy and underpins the shares' attractiveness on value (pre-deal a 2021E EV/EBITDA of 7.5x and PER 13.8x) and strategic grounds. Acknowledging the recent strong performance of the shares, we continue to rate Breedon a Buy.

Breedon Group

• 08 Jan 20
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For fighter pilots, it is a minimum requirement. But having 20/20 ‘visual acuity’ (correct term) does not necessarily mean you have perfect vision (as convention assumes); instead, it indicates sharpness and clarity of vision at a distance. It is measured by a Snellen Chart, which displays letters of progressively smaller size and whereby 20/20 means that the test subject sees the same line of letters at 20 feet that a person with normal vision sees at 20 feet (or 6 metres; but 6/6 simply didn’t catch on).

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

• 08 Jan 20
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For fighter pilots, it is a minimum requirement. But having 20/20 ‘visual acuity’ (correct term) does not necessarily mean you have perfect vision (as convention assumes); instead, it indicates sharpness and clarity of vision at a distance. It is measured by a Snellen Chart, which displays letters of progressively smaller size and whereby 20/20 means that the test subject sees the same line of letters at 20 feet that a person with normal vision sees at 20 feet (or 6 metres; but 6/6 simply didn’t catch on).

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

• 08 Jan 20
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2020 Outlook

ATU CNQ PXT SRX TOU TVE ENB PD K TXG FM LUN TCN AIF ATA TCS ARE ARE CCL.B SIS SIS

• 07 Jan 20
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2020 Outlook

ATU CNQ PXT SRX TOU TVE ENB PD K TXG FM LUN TCN AIF ATA TCS ARE ARE CCL.B SIS SIS

• 07 Jan 20
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Cementir has announced a €100m additional green investment, and cost-cutting strategies in the ‘Industrial Plan 2022’ during the 9M 2019 results. To promote profitable sustainability, the investment is aimed at increasing Belgian plant efficiency, expanding the district heating in Denmark, developing waste heat recovery systems in Turkey and Denmark, and improving R&D. It has also introduced a digitalisation plan to streamline the group’s operations. Our visit to the Gaurain plant confirms that the group is progressing well towards its sustainability targets for 2030.

Cementir Holding

• 20 Dec 19
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Cementir has announced a €100m additional green investment, and cost-cutting strategies in the ‘Industrial Plan 2022’ during the 9M 2019 results. To promote profitable sustainability, the investment is aimed at increasing Belgian plant efficiency, expanding the district heating in Denmark, developing waste heat recovery systems in Turkey and Denmark, and improving R&D. It has also introduced a digitalisation plan to streamline the group’s operations. Our visit to the Gaurain plant confirms that the group is progressing well towards its sustainability targets for 2030.

Cementir Holding

• 20 Dec 19
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Scotland’s only quoted housebuilder has taken a further step in growing its distinctive ‘village’ development strategy with the announcement today that its fourth example, at Durieshill, Stirling, has been granted planning consent. The company’s largest to date, it will feature Springfield’s multitenure capabilities, providing private, affordable and private rented homes.

Springfield Properties

• 18 Dec 19
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Scotland’s only quoted housebuilder has taken a further step in growing its distinctive ‘village’ development strategy with the announcement today that its fourth example, at Durieshill, Stirling, has been granted planning consent. The company’s largest to date, it will feature Springfield’s multitenure capabilities, providing private, affordable and private rented homes.

Springfield Properties

• 18 Dec 19
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Springfield has been granted planning consent for its 3,042 home Village at Durieshill, Stirling, subject to completing a Section 75 agreement with Stirling Council. This is Springfield’s largest development to receive planning permission to date and management believes it is one of the largest developments to have been approved in Scotland. We wrote at length about Springfield’s Villages concept, and Durieshill itself, within our initiation note (Click: Springboard to sustainable long term growth). These are larger sites in attractive locations in Scotland, which will be built out over 20+ years, creating new communities and accelerating the provision of new homes. The villages represent a clear differentiator for Springfield and a source of long term growth. Work at Durieshill should commence by late autumn 2020 and the first homeowners are expected to move in during calendar year 2022. Springfield continues to trade on very undemanding multiples (8.6x P/E, 1.2x P/B, 4.2% yield), which in our view does not reflect the Group’s growth prospects. Springfield was one of our Best Ideas for 2019 (Click: Unique positioning and attractive valuation) and it has delivered another year of significant progress.

Springfield Properties

• 18 Dec 19
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Springfield has been granted planning consent for its 3,042 home Village at Durieshill, Stirling, subject to completing a Section 75 agreement with Stirling Council. This is Springfield’s largest development to receive planning permission to date and management believes it is one of the largest developments to have been approved in Scotland. We wrote at length about Springfield’s Villages concept, and Durieshill itself, within our initiation note (Click: Springboard to sustainable long term growth). These are larger sites in attractive locations in Scotland, which will be built out over 20+ years, creating new communities and accelerating the provision of new homes. The villages represent a clear differentiator for Springfield and a source of long term growth. Work at Durieshill should commence by late autumn 2020 and the first homeowners are expected to move in during calendar year 2022. Springfield continues to trade on very undemanding multiples (8.6x P/E, 1.2x P/B, 4.2% yield), which in our view does not reflect the Group’s growth prospects. Springfield was one of our Best Ideas for 2019 (Click: Unique positioning and attractive valuation) and it has delivered another year of significant progress.

Springfield Properties

• 18 Dec 19
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