Industrial Equipment, Goods & Services

Industrial Equipment, Goods & Services equity research

Explore the latest equity research for companies who manufacture industrial equipment, goods, or related services. Sectors include Defense & Aerospace, Electrical & Electronic Equipment, Transport & Logistics, Industrial & Construction Supplies, and Waste Services.

Industrial Goods & Services

Explore the latest equity research for companies who manufacture industrial goods, or related services. Sectors include Defense & Aerospace, Electrical Equipment, Transport & Logistics, Industrial & Construction Supplies, and Waste Services.

13 Mar 19

Full-year results – eye-catching dividend pay-out

Results were slightly above recently upgraded expectations, with a stronger than expected H2. Strong sales growth was gained in the US, with ongoing demand in its construction customer base. New products provided a boost to sales, while the recently launched SkyScreed®25 will accelerate sales prospects in the medium term. A strong cash performance supports the exceptionally strong underlying and supplemental dividend growth. No change to 2019 PBT forecasts, with the year having started well, a higher tax charge results in a 2.6% EPS reduction to 40.8ȼ giving YoY growth of 8.1%. We introduce conservative 2020 forecasts pointing to YoY EPS growth of 5.6%. Our 465p price target continues to offer good upside, with an eye-catching 6.6% forecast dividend yield.

Companies: Somero Enterprises

12 Mar 19

LIBERUM: Staffline* - Suspension lifted – most allegations ill-founded

Independent legal advisers have investigated the concerns raised on the eve of the results. There have been no issues identified on invoice practices.

Companies: Staffline Group

12 Mar 19

Strong update, +14% beat to forecasts; technology-led service offering

WATR is a leading and geographically diversified specialist in precision, minimally-invasive leak detection and remediation in both drinking and waste water. Technology-led, the business uses solutions such as infra-red and acoustics and continues to expand its technology offering – a key differentiator against typical support services companies. The business has been a consistent performer with a history of delivering and exceeding expectations, although the share price, latterly, has marked time. WATR has today reported an FY18A PBTA result which is a 14% beat to expectations; and while the rating could be seen as high in the context of Support Services, the valuation should be seen in the light of similar franchise businesses and technology-led companies, reinforced by strong structural growth characteristics (see below). Strong results disclosed this morning show FY sales growing 44%, demonstrating growing momentum and ahead of the already strong Q1-3. No one-off, this continues an accelerating and compounding trend over the past three years, which we expect to be maintained. Insurance channel sales have nearly doubled and this momentum notably shows every sign of carrying on, opening up a very large US market in which WATR remains the only national player. The differentiated model – advanced technology integrated into multiple and efficient delivery channels – offers meaningful opportunities, while selective franchisee reacquisitions are also adding to the growth momentum and optimising the group’s capital structure.

Companies: Water Intelligence

13 Mar 19

LIBERUM: Charles Taylor* - Building a platform for growth

2018 was a busy year for the group. In addition to acquisitions which helped transform the scale of the InsureTech business, the group has built a truly global platform within Claims Services.

Companies: Charles Taylor

14 Mar 19

LIBERUM: Clarkson* - Flooding the digital moat

Research with unrivalled breadth, depth and resources has been a key part of what differentiates Clarkson from its competitors. It has also been a key part of the barriers to entry protecting the group.

Companies: Clarkson

05 Mar 19

XP Power - Driving share gains with expanded product range

In FY18 XP reported strong organic growth and operating margins, generating EPS growth of 18%. After a series of acquisitions, it has a full portfolio of power solutions to meet all voltage and power requirements, and management is now focused on increasing its market share at key accounts. In our view, the stock is trading at close to trough multiples with a dividend yield above 4%.

Companies: XP Power

10 Mar 19

THE MONTHLY March 2019

In the investment world, before MiFID II, essentially every institution talked to every broker, and the whole, professional market could see every research note and the forecasts in detail. This was the ‘Age of Consensus’. Everyone had the same information (well, everyone except retail investors), and this transparency helped share price formation and liquidity

Companies: OPM AVO AJB AGY ARBB AVCT CMH CSH DNL GTLY GDR KOOV MCL OXB RE/ REDX STX SCE SIXH TRX TON VAL VTA W7L

12 Mar 19

LIBERUM: Equiniti* - Delay is disappointing but fundamentals remain overly discounted

Although there are fewer positives than negatives with the FY18 results, on balance we still believe in the strength of Equiniti’s underlying business. This view is supported by the impressive organic revenue growth delivered in year (7.3%), and the 5% beat to our net debt forecasts.

Companies: Equiniti Group

13 Mar 19

LIBERUM: Equiniti* - Presentations highlight the strength of the franchise

In their presentations to the analyst community and our sales force, Equiniti’s management talked to the number of opportunities within the business. As a result of these they remain confident in the business’ ability to deliver 3-7% organic revenue growth and an improving trend in margins, despite the headwinds created by current market uncertainties.

Companies: Equiniti Group

15 Mar 19

Increased focus and strategic investment to support brand development and organic growth

With two of its major markets being impacted by significant legislative changes to employment law, Empresaria still delivered record profits, an achievement which validates the diversity of its portfolio companies and the competency of its management team. During 2018 the Group made key investments in strengthening the central management team and supporting its brands through additional training, marketing and IT. This focused strategy is designed to increase scale, improve productivity and stimulate organic growth. We believe that the emphasis on organic growth rather than external investment will generate strong cash flow and a corresponding decline in net debt. While there are macro challenges ahead, Empresaria’s financial strength, diversity and strong management puts the Company in a strong position for FY2019 and beyond. (Ian Jermin)

Companies: Empresaria Group

18 Mar 19

HCM UPDATE - 18.03.19 (EMR.L; IPEL.L; STHR.L)

Empresaria Group plc* (EMR.L, 72.5p/£35.5m) - Full year results to 31.12.18 (13.03.19) | Impellam Group plc (IPEL.L, 470p/£231m) - Full year results to 31.12.18 (14.03.19) | SThree plc (STHR.L, 300p/£392m) - Q1 trading update to 28.02.19 (15.03.19)

Companies: EMR IPEL STHR

18 Mar 19

Prelims

Maintel has delivered prelims in line with the positive trading update of January 28th, detailing EBITDA of £12.7m (£12.4mE) from revenue of £136.5m (£133.9mE). A challenging year included a 2H slowing of sales cycles and postponed client implementation plans, which have however since begun, underwriting FY19 expectations. With an increase in momentum in 4Q18, and some high-profile contract wins on the ICON platform for 2 NHS Trusts, representing the group’s largest cloud implementations yet, it is evident that prospects remain strong. The current valuation of a business with 70% recurring revenue, expanding EBITDA margins, and a return to strong cash conversion, delivers an FY19 free cash flow yield of an almighty 12.9% – our 80% target price upside to the share price is highly reasonable. With a 7.3% dividend yield for FY19 (FY20: 7.6%), we reiterate our 900p target price and look forward to continuing momentum in contract wins.

Companies: Maintel

31 Jan 19

Quarterly Research Outlook

The market has not faced quite so many conflicting challenges for a number of years, whether related to global geopolitics, trade wars, ongoing Eurozone issues or the “will they, won’t they” saga of Brexit. In our Best Ideas, we sought to highlight stocks that present investors with interesting opportunities following recent market moves. Those stocks, we believe, warrant investor attention, in many cases for uncorrelated or stockspecific reasons, regardless of the near-to-medium term market direction. These stocks, in general, represent attractive and well-managed businesses or assets, with share price catalysts and where valuations or recent stock performance provide investors with a good entry point.

Companies: 7DIG ABBY AMS ANX ARS ATYM AVON BLVN PIER CGS CAML CALL CSRT TIDE DTG DEMG ELM EMR FPO FST GTLY GENL GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KEYS KCT KGH LAM MACF MOD MKLW OXIG PCA PARK PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TWD TRAK TRI VNET VTC ZTF

12 Mar 19

First Light

WATR is a leading and geographically-diversified specialist in precision, minimally-invasive leak detection and remediation in both drinking and waste water. Technology-led, the business uses solutions such as infra-red and acoustics and continues to expand its offering – a key differentiator against typical support services companies. The business has been a consistent performer with a history of delivering and exceeding expectations, although the share price, latterly, has marked time. WATR has today reported an FY18A PBTA result which is a 14% beat to expectations; and while the rating could be seen as high in the context of Support Services, the valuation should be seen in the light of similar franchise businesses and technology-led companies, reinforced by strong structural growth characteristics.

Companies: Water Intelligence

13 Mar 19

FY18 results in-line; Dividend raised 52%

The Group has reported a solid set of results in line with expectations; NFI and Adjusted PBT grew 4% as reported in the January trading statement. Strong cash generation, a diversified model and a renewed focus on organic growth and margin improvement is not currently reflected in a highly modest FY19 P/E of 5.6x. We believe that the Group is well positioned for a re-rating once it demonstrates effective implementation of its strategy to provide additional central support to its niche brands. We re-iterate our Buy rating.

Companies: Empresaria Group

22 Aug 18

Grafton Group - Interim Results 2018

29 Jan 19

SThree CEO – Gary Elden*

Premium

19 May 17

Leading UK fund manager, Gervais Williams, discusses investing, his outlook and two companies he's excited about

25 Jan 19

Capital Goods Value trap – 2019 Outlook

Premium

19 Feb 19

RA International Group (RAI) Presentation at MELLO London November 2018

15 Jan 19

Knights plc interim results 2017/18 - Interview with David Beech

04 Mar 19

Executive interview - XP Power FY18 results

10 Dec 18

Executive interview - paragon

28 Feb 19

Grafton Group - Full year results 2018

27 Nov 18

VP

13 Mar 19

Empresaria Group plc (EMR) 2018 results

20 Nov 18

redT Energy - Australia's largest C&I energy system goes live

29 Jan 19

NWF Group (NWF) – Half year results to 30th November 2018

15 Nov 18

Speedy Hire CEO - Russell Down*

Premium

25 Jan 19

Petards Group (PEG) Presentation at MELLO London November 2018

Latest Content

CUI GLOBAL

CUI Global - Preparing to step on the gas

CUI Global (NASDAQ:CUI) has reported strong results for the full year (FY) 2018, with revenues of US$96.8mln versus our forecast of US$92.8mln. The FY order backlog stood at US$37.5mln versus US$32.8mln at the end of 2017. The company reported an underlying loss (statutory LBITDA) of USS$14.0mln ver

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19 Mar 19
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Fraport AG Frankfurt Arprt Svcs Wrldwde

2018 numbers clearly ahead of our expectations

The group’s revenue increased by 19% to €3.48bn. EBITDA and EBIT were up by 13% to €1.13bn and 14% to €731m, respectively, while net earnings increased by 44% to €474m. Finally, the dividend was increased from €1.50 to €2.00. We had projected revenue of €3.32bn, EBITDA, EBIT, and net earnings of €1.09bn, €700m, and €456m, respectively. Simultaneously, we had not assumed any dividend increase.

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19 Mar 19
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Mears Group

LIBERUM: Mears Group* - Focus on the balance sheet reduces profits

FY 18 FD EPS 6% lower than our estimate, as bid and mobilisation costs are written off. For FY 2019, we reduce our low FD EPS by 21% due to a loss in Developments as capital is re-allocated and an IFRS 16 change.

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19 Mar 19
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Judges Scientific

Morning Comment

Judges Scientific, is a group involved in the buy and build of scientific instrument businesses. Although no deals were completed in 2018, the trading environment for Judges through 2018 was exceptional allowing healthy growth in revenue and earnings. Revenue increased 9% to a record £77.9m (vs our rather ambitious £84.6m estimate), but with adjusted PTP increasing a hefty 37% to £14.3m (FY2017: £10.4m), in line with our expectation and aided by a favourable fx environment and rebounding margins at 18.9% (FY2017: 15.3%). With organic order intake increasing 6% in FY 2018, 2019 benefited from a healthy opening position with order intake for the first ten weeks ‘ahead of last year’. Fx and Brexit remain the main concerns for 2019, and the reason for a cautious approach to FY2019 estimates. Our revised FY2019 PTP expectations (+3% to £14.8m from £14.4m) place the shares on 15.5x FY2019 earnings, a 37% discount to peers. This remains too wide, notwithstanding prudence in our estimates and the strength of the balance sheet. We see fair value closer to 3,300p (from 3,000p).

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19 Mar 19
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Maintel

Morning Note – 18 March 2019

Maintel (MAI): Corp Prelims

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18 Mar 19
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Spectra Systems

Morning Comment

Spectra is a global leader in machine-readable high-speed banknote authentication, brand protection technologies, and gaming security software. This morning’s positive news relates to a signed basic research contract for a G7 bank, the margin profile of which is better than our model FY 2019 model had estimated. As such, our FY2019E revenue expectation is unchanged at $12.2m; however, our adjusted profit forecast is raised by 11% to $4.0m (from $3.6m), yielding adjusted EPS of 8.8c. FY2018 estimates are unchanged – with Spectra reporting its FY2018 results a week today (25 March). The shares trade on FY2019E EV/EBITDA and cash adjusted PER (given the cash-rich balance sheet) multiples of 12.4x and 14.0x respectively, both very undemanding when set against other IP-led businesses. Given the continued quality of earnings, we see near-term fair value at 145p.

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18 Mar 19
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EMR IPEL STHR

HCM UPDATE - 18.03.19 (EMR.L; IPEL.L; STHR.L)

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18 Mar 19
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Maintel

Prelims

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18 Mar 19
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SThree

LIBERUM: SThree* - An encouraging start to FY19

With growth in Continental Europe continuing to exceed our expectations, underlying gross profit growth of 9% in 1Q19 was marginally better than we had hoped. Whilst the UK performance was weaker, the strength in the group's core STEM markets suggests that the outlook for FY19 remains encouraging.

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