Building & Construction

Building & Construction equity research

Explore the most viewed and latest equity research and media content for companies within the Building & Construction sector. Stocks in this sector provide goods such as construction materials and offer services from contractors.

Building & Construction equity research

16 Aug 17

Pre close update

Epwin, the low maintenance building products manufacturer, has issued a mixed pre-close trading update. First half revenues and earnings were “in-line” with management expectations (slightly ahead of PG forecasts). Revenues up (principally due to M&A) and adjusted EBIT (modestly down). Overall a solid performance. However, management are mindful that input cost inflation and issues at two of its larger customers present certain headwinds. As a consequence of the weak RMI market and inflationary pressures we are flexing our full year forecasts (FY17 revenue forecasts unchanged, EBIT forecasts reduced by 8%).

Companies: Epwin Group

16 Aug 17

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.

Companies: Epwin Group

08 Aug 17

N+1 Singer - T. Clarke - Good organic progress alongside Eton upgrades

T Clarke’s interims confirm good organic progress, which will be bolstered by the acquisition of Eton Associates, announced yesterday. Revenue increased by 17% and PBT by 8%, driven by a particularly impressive performance from the dominant London & South East division. Profit growth would have been greater still were it not for a loss making half from Central & South West (a profitable H2 is expected). Overall, the Group is well positioned for the full year and we upgrade 2018 EPS by 6.5%, principally to reflect the contribution from Eton. Further upgrades may yet follow and we believe the shares are undervalued on a P/E rating of 7x with a 4% yield.

Companies: T Clarke

27 Jun 17

Machinations

We recently hosted our annual Industrial Technology dinner with 14 companies, many of which are active in the materials science arena; having focused previously on composite materials in the aerospace sector, in this edition of Machinations we focus on graphene, with its unique and potentially game-changing qualities and potential applications. Investments in this area remain fairly early stage, but could potentially reap huge rewards. Graphene is well represented in the UK small-cap market by several players.

Companies: SIXH ACL AXS AMPH ALU AEP AVG CAPD CAR FENR FLO RAD GHH HDD HAYT IOF MPE RE/ RED RNO RBN SOM SCE TRT TRI VANL ZAM

01 Aug 17

Solid H1 earnings and cash flow bode well for FY

Strong demand in the newbuild housing market helped towards a good first half result, in terms of meeting our FY 17 EBITDA and another strong cash performance. Although company guidance for the FY is unchanged, we sense there is scope for slight outperformance, since the H1 result represents 53% of our FY estimate. Net debt was c. £10m below our estimates, before the Bison acquisition, which we thought was a positive move

Companies: Forterra

26 May 17

Meeting management growth expectations

The latest trading update shows that all three reporting divisions are continuing to progress well and management expectations for the year are unchanged. Polypipe is a well-positioned business and management succession indicates continuity of the strategic approach. A premium rating to the sector is warranted, in our view.

Companies: Polypipe Group

06 Apr 17

FY16 in line; small cuts to FY17 and FY18

Revenue of £293.2m (FY15: £256.0m) was 14.5% ahead yoy and in line with ZC estimate of £298.7m. Adj profit before tax of £24.6m was also in line with estimates and showed c. 26% growth yoy leading to a 31% increase in earnings. The positive performance in FY16 has been driven by the acquisitions of Ecodek (Oct 2015), Stormking (Dec 2015) and National Plastics (June 2016) as well as good organic growth from the Extrusion and Moulding and Distribution parts of the business. Solid growth in these areas and operating efficiencies drove an 80bp improvement in EBITA margin to 8.7%. The only area that did not outperform the RMI market was Fabrication that continues to face operational issues and a tough end market. Despite the good performance in FY16 we lower FY17 and FY18 PBT by c.5% due to challenging end markets and cost input pressures. The current rating of 7.5x is discounting further cuts which we believe are unlikely. We believe the yield of 6.3% is attractive and well covered by both earnings and cash. At c.44% we believe the discount to the sector is unwarranted for a company that has executed ahead of its stated intentions over the last three years.

Companies: Epwin Group

23 May 17

Reassuringly in line with expectations

The trading update in today’s AGM statement indicates that the business remains on course to meet FY17 expectations. FY16 results (April 6th) met expectations despite difficult end markets, operational issues in the fabrication division and increased cost pressures stemming from the devaluation of Sterling post the Brexit referendum. Since the results, anecdotal indications suggest that the important RMI market has remained broadly flat yoy. The change to forecasts made in April discount the current operating environment and we leave forecasts unchanged on the back of today’s statement. Epwin continues to offer long term value with the shares trading on 8.2x FY17 earnings and 5.4x EV/EBITDA. The yield remains a very attractive 5.8%, well covered by both earnings and free cash flow.

Companies: Epwin Group

01 Feb 17

FY16 in line with expectations, delivering c.19% earnings growth

Epwin’s year-end trading update states that results are in line with expectations which we take to be in line with consensus PBT forecasts of £24.4m, marginally above our £24.3m estimate. We would highlight that forecasts increased at the time of interim results (14th September) on the back of the acquisition of National Plastics. That FY results are in line with consensus expectations is reassuring, particularly as we have seen several high profile profit warnings from the sector on the back of cost input pressures and the RMI market remaining moribund. We leave FY17 and FY18 forecasts unchanged following today’s statement. Since listing (July 2014), Epwin has executed on its stated strategy of growing the business through acquisition, maintaining a progressive dividend policy and driving through efficiencies in the business. Despite executing in a difficult market the valuation looks anomalous, with the FY17 PER multiple of 6.7x almost at the same level as the prospective yield of 6.6%.

Companies: Epwin Group

01 Apr 16

Return to profitability; Results in line with previous guidance

North Midland’s results are in line with the previous guidance given at the time of the February trading update. FY’15 marked a return to full year profitability for the Group. North Midland has been held back by a number of legacy contracts, but now only one problematic contract remains. The business is de-risked and management can now focus its efforts on further improving the Group’s underlying trading performance. The secured order book for the current financial year (c.£181m) and a solid pipeline of potential orders under existing frameworks underpin cautious optimism in the Group’s medium term outlook.

Companies: North Midland Construction

14 Jun 17

Norcros PLC - Executive interview with CEO Nick Kelsall

17 May 17

finnCap - Henry Boot, The ultimate scarce resource - land

Premium

24 Mar 17

Henry Boot PLC - Annual Results 2016

23 Oct 15

Michelmersh Brick Holdings - Trading statement

20 Dec 12

Analyst Interview - Tyman

17 Nov 16

Norcros - Half year results

08 Mar 17

Breedon Group Plc - Full year results 2016 interview

Latest Content

Epwin Group

Epwin: trading figures in-line, cost inflation pressures cause share price drop

Panmure and Zeus have both adjusted their year-end forecasts for the Group. Shares off 17% following profit warning.

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16 Aug 17
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Epwin Group

Pre close update

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16 Aug 17
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Epwin Group

Cost inflation remains an issue

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16 Aug 17
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MYSQ PXOG THR IBST

Breakfast Today

MySQUAR Limited (MYSQ.L) | Prospex Oil & Gas (PXOG.L) | Thor Mining (THR.L) | Ibstock (IBST.L)

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11 Aug 17
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PLISQSFARNCSRTBTGCTOAMSLGENSNXSUSDPHSPRPEKFANCRIMMAGYCTHVERSPHRSCLPABCCNEKWSEVRHDNLBBSNEUSPVLGHZDFDMC4XDMTPHECSCPLUSTAPHCMMXCTPPIXQRT

FLSmidth & Co

Q2 results fall short of expectations despite good momentum in services

Highlights Order intake in Q2 increased by 5% to DKK4,580m on the back of continued strong momentum from service activities (c. 58% of total order intake vs. 56% in Q2 16). Q2 Revenue jumped by 11% to DKK4,585m, driven by all divisions except Minerals. The EBITA margin improved slightly to 7.5% (vs. 6.6% in Q2 16), despite negative one-off costs. CFFO in Q2 17 was in negative territory (-DKK44m) due to a sharp increase in NWC which is expected to reverse by the year end Net interest bearing debt slightly increased to DKK2.6bn (corresponding to a 1.5x Net debt/Ebitda ratio), due to the dividend payment and the increase in NWC. The group confirmed its FY2017 guidance for revenue of DKK17-19bn coupled with an EBITA margin of 7-9% EBITA and a ROCE of 8-10%. The EBITA guidance includes expected one-off costs of -DKK150m related to corrective actions launched in 2016 (previously -DKK200m).

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10 Aug 17
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T Clarke

N+1 Singer - T. Clarke - Good organic progress alongside Eton upgrades

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08 Aug 17
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HSP CTO VRP MPM ACT ZTF RIV

N+1 Singer - Morning Song 08-08-2017

Actual Experience (ACT LN) Open purchase order received from channel partner | Hargreaves Services (HSP LN) Property valuation highlights upside potential | mporium Group (MPM LN) H1’17 results, strong grwth and IMPACT momentum continues | River and Mercantile Group (RIV LN) Delivering optimal risk-reward solutions | T. Clarke (CTO LN) Good organic progress alongside Eton upgrades | Verona Pharma (VRP LN) Busy year to date; clinical data expected Q4 2017 | Zotefoams (ZTF LN) Record sales growth, well positioned for full year

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08 Aug 17
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VER CTO SUN EPO

N+1 Singer - Morning Song 07-08-2017

Earthport (EPO LN) Platform expansion into Nigeria | Surgical Innovations Group (SUN LN) Transformational acquisition of Elemental | T. Clarke (CTO LN) Earnings enhancing acquisition of ETON Associates | Vernalis (VER LN) Complete Response Letter for CCP-08

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07 Aug 17
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T Clarke

N+1 Singer - T. Clarke - Earnings enhancing acquisition of ETON Associates

T Clarke has announced the acquisition of Eton Associates (ETON), a London based privately owned control systems specialist offering a variety of Building Management Systems. ETON is well known to T Clarke and has worked alongside them on a number of high profile projects in London. The acquisition is expected to be earnings enhancing from 2018 (we estimate c.4% before integration costs, synergies and growth) and we will update forecasts tomorrow alongside T Clarke’s interim results. We expect these to strike a positive tone following upbeat recent reports from sector peers (notably Morgan Sindall). The acquisition looks a very sensible fit, as T Clarke’s clients are demanding ever more sophisticated systems to control their buildings. The combination enhances T Clarke’s range of services in the targeted growth area of Intelligent Buildings.

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