Household Goods & DIY

Household Goods & DIY equity research

Explore the most viewed and latest equity research and media content for companies within the Household Goods & DIY sector. Stocks in this sector include those who specialise in: decoration, furnishing, durable & non-durable home products, and DIY.

Household Goods & DIY equity research

02 Jul 19

Where’s the Value?

Warren Buffett once said that as an investor, it is wise to be ‘fearful when others are greedy and greedy when others are fearful’. Fear is not in short supply right now.

Companies: OPM ALU ANCR BLV CONN CRC FDL GATC HAT LEK MMH MCB MWE NXR NTBR NOG PAF PEG RFX SRC TEF TEG TPT VTU WYN XLM

05 Jul 19

UK Housebuilding Sector in 2Q 2019

Dwight Barkley PhD is a Professor of Mathematics at the University of Warwick. He studies waves in excitable media such as the Belousov-Zhabotinsky reaction, heart tissue and neurons. In 1997, Dr Barkley and Dr Laurette Tuckerman, a Paris-based mathematical physicist, developed ‘bifurcation analysis for time steppers’, which is a technique for modifying computer codes to perform bifurcation analysis. More lyrical, perhaps, Dwight is also known for formulating an equation to estimate how long it will be until a child in a car asks the question “are we there yet?” And, it is shown on the image on page 3 of this report. Herein, there are three factors which decide the timing of this wearisome question i.e. one plus the number of activities, divided by the number of children in the car squared. That figure is then added to the time it took the family to get into the car and set off on its journey. Crucial in putting off the first query as to the proximity of the destination are onboard activities for children i.e. no activities equals a question before leaving the driveway. Dr Barkley says: “Mathematics can help answer many of life’s questions”. If only the Brexit journey were that simple. It is not. We are all children now stuck in the back seat; and, maybe, we are still on the driveway with a dearth of on-board activities. Yes, three years on Brexit-resolution-fatigue is making itself felt across the board, including the UK Housebuilding Sector, where the fall in value in 2Q’19 was 7%. Berkeley said something similarin its final results, on 20 June, when it lamented an uncertain operating environment and “a lack of visibility in the political outlook”; and its PBT is expected to fall by a further third this fiscal year. The daily Sector value chart is also lurching from top-left to bottom-right (as is the British Pound versus the Euro). Yes, there were two palpable positives in 2Q from the NHBC and UK Finance about building activity and mortgages; plus, on the third day of 3Q, CBRE’s bid for Telford Homes. Nonetheless, prospective earnings growth for the Sector is now flat in both 2019 and 2020. This is about the journey.

Companies: MCS TW/ PSN BDEV ABBY CSP WJG BVS TEF INL GLV GLE CRST BWY BKG

11 Apr 19

Quarterly Research Outlook

We’re just over three months in to 2019 and we’ve seen a 10% UK market rally, retracing much of the Q4 decline, such is the nature of fickle market sentiment. That said, many of the issues we wrote about three months ago that were impacting markets remain: notably Brexit, trade wars, geopolitics and global monetary policy. The 2019 rally thus far feels somewhat fragile, with competing forces of optimism on a potential trade deal which could underpin the rally, against the deterioration in underlying economic data that could ultimately undermine the recent market gains. In this context, we look at what the lead indicators and the market are telling us about the industrial cycle and the stocks most exposed to various industrial trends. The Q4 derating in short cycle industrials and autos had been vicious and while these sectors have seen a more solid footing in 2019, with earnings downgrades being priced in, it will likely take a trough in lead indicators before short cycle stocks can start to perform again and re-rate relative to the market.

Companies: ARS CYAN HYR LIT SOM ABBY AMS AMER ANX ATYM AVON BLVN PIER BUR CGS CAML CALL CSRT TIDE DTG DEMG EMR FPO FST GTLY GENL GOR GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO INDI JHD JOG KEYS KCT KGH LAM LOK MACF MNO MANO MOD MKLW OXIG PCA PANR PARK PGM PHC PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TRAK TRI VNET VTC ZOO ZTF

29 Apr 19

Good reasons for optimism

UPGS’s half-year results included a 47.3% rise in underlying pre-tax profits, bolstered significantly by a 21% normalised increase in sales revenue. An optimistic tone on H2 sales prompts us to raise our full year forecasts and that has positive implications for both the group’s financial strength and valuation.

Companies: Up Global Sourcing

03 Jul 19

Telford Homes - Suspension of estimates

For the purposes of the Takeover Code, Edison Investment Research is deemed to be connected with BCA Marketplace. Under Rule 20.1 Edison must not include any profit forecast, quantified financial benefits statement, asset valuation or estimate of other figures key to the offer, except to the extent that such forecasts, statements, valuations or estimates have been published prior to the offer period (as defined in the Takeover Code) by an offeror or the offeree company (as appropriate) in accordance with the requirements of the Code. Consequently we have removed our estimates until the Offer Period ends.

Companies: Telford Homes

04 Jun 19

Telford Homes - Executing the Build to Rent strategy

FY19 results were in line with February guidance and the year ended with lower net debt than we had anticipated. The migration to a dominant Build to Rent (BTR)-led pipeline is well underway. The first developments of this type were handed over in the year and, together with the announced strategic partnerships, other live projects indicate good momentum in this sub-sector. As before, FY20 will reflect other project and open-market effects before earnings start to rebuild from FY21, consistent with our estimates. Telford’s valuation looks conservative if the company is able to sustain or exceed our projected FY22 EBIT over the long term.

Companies: Telford Homes

20 Jun 19

Walker Greenbank - Year to date trading as expected

An in line AGM update is to be welcomed after a tough trading year in FY19. Market conditions have yet to show any marked improvement, but UK cost savings and some international progress support our existing estimates. The new management team expects to deliver a strategy update in the Autumn and this should provide insight regarding future growth prospects. The rating has increased in recent months though FY20 should represent trough earnings in our view.

Companies: Walker Greenbank

05 Jul 19

Strong H1 update helps drive further upgrades

Churchill China has had another strong trading period and this is articulated in today’s H1 trading update. The business continued to sustain good export momentum, led by Europe, whilst UK Hospitality also moved forward despite Brexit uncertainty. We are lifting our 3 year EPS forecasts by 3.5%-4.0% this morning and see the risk on the upside as the year progresses. The shares currently trade on a 2019 P/E of 20x falling to 18x. On a 12m view we see fair value >1850p (22.5x FY20 P/E). Overall, today’s news further reinforces Churchill’s ongoing value creation and growth attributes. Non holders should take a close look at this high quality small-cap stock operating in an attractive global market with secular growth features.

Companies: Churchill China

09 Jun 16

Building a strong foundation

Today’s HY16 results indicate that the business has continued to move forward since the IPO (23rd March). Earnings visibility out to FY18 is high and on the back of today’s results we are confident that FY16 expectations of £39.5m PBT will, at the very least be met. In addition, sites are beginning to be secured for FY19 and beyond, underpinning Watkin Jones’ forward sales model. Revenue growth in the important core student accommodation development division in H116 grew 25.9% with the gross margin increasing 310bps to 17.9% (HY15: 14.8%). At the group level, revenue increased 40.6% with Student Development growth supplemented by an increase in Residential and Commercial revenue. The gross margin of 16.1% is a 140bp improvement yoy, providing additional evidence of the natural progression in margin, as legacy low margin construction contracts are exited. The current valuation of 9.3x FY16 earnings and 5.5% prospective FY17 dividend yield is not reflective of the strong visibility on the c.20% growth in profit, and remains a material, c.35%, discount to peers. Forecasts remain unchanged on today’s results but the outlook for the FY remains favourable.

Companies: Watkin Jones

26 Feb 16

A successful and differentiated consumer play

Churchill is a strong operating business offering an indirect play on the domestic and international secular growth of the hospitality/eating out market. The business is cyclical and in the near-term a FY16 P/E of 19x suggests the shares are broadly up with events. However, we see Churchill as a solid 8-10% EPS compounder with a progressive DPS policy.

Companies: Churchill China

19 Sep 17

Restless

eve Sleep’s (eve) disruptive model is seeing positive traction and management is pressing the pedal to grow the brand. While carrying execution risk, indications after this short first period are at least equal to expectations at IPO and the valuation on a sales basis appears undemanding.

Companies: Eve Sleep

13 Apr 18

Accentuating the positives

There were a number of headwinds and tailwinds in FY18, in which good growth was delivered, but lower earnings expectations have dominated sentiment. Walker Greenbank has some strong and unique market positions and is becoming increasingly active in broadening its revenue mix into faster-growing segments. Success here and greater stability in UK demand will translate to rating expansion in our view.

Companies: Walker Greenbank

23 Apr 18

Value screen refresh and 10 focus stocks

We have completed another refresh of our value style screen, first established as of 12 May 2015. As usual the screen selected the 25 stocks exhibiting the most extreme value characteristics from our universe, and we have chosen 10 stocks to focus on. Since the last refresh, two days before the last general election, which resulted in a hung parliament, the screen has performed a little better than the small-cap index with our focus stocks outperforming by about 500bps. The weighting to UK consumer stocks noted last time detracted from performance, which came as little surprise given our cautious stance, much discussed in our other strategy work this year. One might have expected more consumer exposure in the refreshed screen given this year’s severe underperformance, but it appears forecasts have been similarly downgraded, keeping much of the sector outside our value criteria

Companies: AUG EHG GOAL MMH RTHM SDY TEF VANL

17 May 18

Revisiting the investment case

We see Churchill as a highly attractive long-term growth story. Its international dimension, NPD credentials and multi-channel customer strategy should continue to give it greater avenues for growth and investment. In this note we lay out the case for investing in this reliable small-cap stock. The company has today released a positive AGM update, highlighting a good start to the year and further progress against strategic objectives. It is too early in the year to be adjusting numbers but we feel the risk remains on the upside. We see short-term intrinsic value towards 1200p.

Companies: Churchill China

14 Jan 19

Opportunity knocks

We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.

Companies: BCA CLIN CLG CBP DNLM EAH FDL FCRM FUTR GTLY INS GLE NICL SDL SPR TRI

17 Jun 19

IG Design Group (IGR) FY19 results presentation June 2019

05 Feb 19

Consumer Staples: Our Best Ideas We expect sector rotation into defensives: Buy ABI, Imperial, Reckitt

Premium

29 May 19

Telford Homes - Final Results

30 May 18

Telford Homes - Full Year Results

18 Apr 18

Telford Homes - Trading Update

20 Dec 17

Telford Homes - Acquisition of prominent site in Walthamstow

13 Jul 16

Watkin Jones at Mello 13.7.16

29 Nov 17

Telford Homes - Interim Results 2017

02 Feb 17

Telford Homes Plc - Acquisition of Cambridge Heath Road for £30.2m

28 Nov 17

IG Design Group (IGR) H1 results November 2017

30 Nov 18

Design Group (IGR) H1 results November 2018

11 Oct 17

Telford Homes - Trading update

19 Feb 19

Telford Homes - Sale of significant build to rent development for £105.5M

05 Jun 17

Telford Homes - Significant build to rent development in partnership with Greystar

28 Nov 18

Telford Homes - Interim Results 2018

Latest Content

MMX PHTM SDI SRT NAH EVE

Morning Note – 18 July 2019

eve Sleep (EVE): Corp H1 FY19 pre-close: Good broad-based progress | Minds + Machines (MMX): Corp Positive H1 trading update with new buyback announced | NAHL (NAH): Corp On track, evidence of success building gently | Photo-Me (PHTM): Corp Laundry remains the core growth driver | Scientific Digital Imaging (SDI): Corp FY results; acquisitions to fully benefit FY 2020 | SRT Marine Systems (SRT): Corp FY 2019 confirms step change from projects business

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18 Jul 19
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Electrolux

Weak organic sales but resilient operating margin

Organic sales were weak in Q2 19 (-2.6% vs +1.9% in Q1 19) due to a drop in North America (-10.8%) on the back of lower sales of products under private label essentially, in Australia and a deep slowdown in Europe (+0.8% vs +4.4% in Q1 19). Conversely, Electrolux was rather successful in defending its operating margin (5.1% of sales, -0.1pt based on a restated figure in Q2 18) in a context of higher tariffs and raw material costs.

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18 Jul 19
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Husqvarna

A quarter of pale hue

Husqvarna had weak organic sales in Q2 19 (-3%) due to the slow sell-out start in the quarter in the Husqvarna division (-6%) and the tough comparative at the Gardena division (+1% vs +10% in Q2 18). However, the group’s operating income improved significantly in Q2 19 (+1.9pt to 15.4% of sales) thanks to price increases, cost savings and the exit of non-profitable Consumer Brands’ products and a positive currency effect that offset higher tariffs and raw material costs.

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16 Jul 19
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Churchill China

Strong H1 update helps drive further upgrades

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05 Jul 19
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SRT CHH VELA CREO ASH MIRA ECO AQX ARCM DRV

Small Cap Feast

ReAssure Group plc - The Group is a leading closed book life insurance consolidator in the United Kingdom with 4.3m policies, £68.7 billion of assets under administration on a Post-L&G Illustrative Basis. It is considering a premium listing segment of the main market. Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited he IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m· IMC Exploration Group (NEX: IMCP), focused on acquiring and exploring prospecting licence areas which have high potential for natural resource, is looking to admit its shares to the standard list and will withdraw for the NEX Exchange. TBC Uniphar, a diversified healthcare services business with a workforce of over 2,000, is looking to join AIM. Raise TBC, expected mid-July 2019

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05 Jul 19
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MCS TW/ PSN BDEV ABBY CSP WJG BVS TEF INL GLV GLE CRST BWY BKG

UK Housebuilding Sector in 2Q 2019

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05 Jul 19
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MJ Gleeson

LIBERUM: MJ Gleeson* - Accelerating volume growth

Gleeson has announced that Homes achieved 25% volume growth in 2019, giving a five year CAGR of 22% p.a.. Management is confident that 2019 results will be "comfortably" in line with expectations and that Homes remains on track to double volumes by 2022.

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04 Jul 19
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MJ Gleeson

A record year for both divisions

MJ Gleeson has concluded FY19 strongly, with continuing momentum and comfortably in line with expectations. This is the type of statement we have become accustomed to over recent years, suggesting it is business as usual after the recent change of CEO. Gleeson Homes remains well on track to achieve its stated target of doubling volumes to 2,000 new homes by 2022. The division anticipates an acceleration in new site openings in the current year to 80+ from 69 currently. Gleeson Strategic Land has commenced the current year in a strong position, and there is as yet no further news on the strategic review of this business. The Group is in excellent shape with a strong balance sheet, ambitious growth plans and a positive demand environment. We remain firm supporters of the Gleeson model and expect the shares to recover lost ground ahead of the results (16th September).

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04 Jul 19
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Telford Homes

Telford Homes - Suspension of estimates

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03 Jul 19
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OPM ALU ANCR BLV CONN CRC FDL GATC HAT LEK MMH MCB MWE NXR NTBR NOG PAF PEG RFX SRC TEF TEG TPT VTU WYN XLM

Where’s the Value?

Warren Buffett once said that as an investor, it is wise to be ‘fearful when others are greedy and greedy when others are fearful’. Fear is not in short supply right now.

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