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.

17 May 19

LIBERUM: Staffline* - Unscheduled statement: estimates reduced

We are reducing 2019 and 2020 FD EPS by 46% and 17%. We increase FY net debt from £52m to £85m (net debt /EBITDA of 3.0x) for FY 2019.

Companies: Staffline Group

15 May 19

Strategic acquisition expands software strategy

Elektron Technology has announced the acquisition of Next Control Systems Ltd (“Next”), a leader in high-end service based temperature monitoring in healthcare and life-sciences with customers including the NHS. The net £8.8m (gross: £10.5m) cash acquisition adds significant scale to the technology segment, and is strategically important for Checkit, diversifying the customer base, offering access to new verticals, and extending Checkit’s service range with complementary IP. The transaction was undertaken at a net multiple of 6.6x EV/EBITDA, and adds over £10m of revenues, 57% of which are annual repeating (Next FY’18 sales: £10.7m; Checkit: £0.5m). The deal is earnings accretive from the acquisition date, with Next having generated £1.2m of operating profit during FY’18 (December YE). The acquisition announcement has been issued alongside a Q1 trading update highlighting strong 17% y/y revenue growth for the group. Whilst management expect sales growth to moderate in Q2, H1 sales are still expected to be “significantly ahead of last year’s comparable”. As a function of the acquisition, we raise our FY’20 group revenue forecast by 18% to incorporate 8.5 months of Next, with adjusted operating profit rising 13% (ex. restructuring costs).

Companies: Elektron Technology

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

15 May 19

Taking Checkit to the ‘Next’ level

Disruption may be the most over-hyped word in the Tech lexicon, yet it is reshaping almost every walk of life. Even routine tasks - from cleaning restaurants, hospitals, food factories and public toilets, to maintaining schools, shops and leisure facilities - have been transformed by the ‘digital revolution’.

Companies: Elektron Technology

17 May 19

Upgrades to forecasts, release of FY22E numbers

Following FY19A results last week, we upgrade FY20E and FY21E forecasts to reflect an increase in business momentum. We increase FY20E revenues by 3.0% to £48.6m, and adjusted PBT 6.7% to £5.6m. For FY21E we nudge up revenues by 1.3% albeit keep earnings broadly flat. Our newly released FY22E forecasts expect £62.3m of revenues and £7.2m Adj. PBT. We increase our PT to 520p from 460p (set by DCF) on updated forecasts, yet remain Neutral.

Companies: Keystone Law

14 May 19

Understanding the deepest discounts

At Hardman and Co, we try to answer the questions of why to invest in a company and what the risks are in doing so. For many investors, simply having a deep discount to NAV is a good enough answer to the first question. However, investors need to appreciate the risks and, in particular, the reasons why the shares are at a discount. Having understood those risks, investors need to be convinced that there is a catalyst for change on the part of the manager and how long (if at all) it will take for market sentiment to reflect this in a lower discount. In this report, we examine the companies with the largest discounts and review those very issues.

Companies: ADAM BC12 BGHL CGI HAN JZCP LMS MPO MVI MHN NSI NAS OCI PSHD RSE SIHL TFG TPOU UTL VIN ELTA ELX

16 May 19

Cenkos: RA International Group Plc - Delivering contract wins

This morning, RA International announced that it has been awarded a new contract by a large humanitarian client in Central Africa. Under the terms of the contract, RA International will construct accommodation facilities for peacekeeping troops in up to 10 locations around the country. The one year US$10.7m contract commences in June 2019. Recent contract wins should have added substantially to the contracted revenue backlog, now above US$150m in our estimation. RA remains well positioned to secure further significant longer duration contracts with both existing and a broader base of new customers, including several Western governments, mining and oil & gas companies.

Companies: RA International

28 Mar 19

Litigation, litigation, litigation

Within this note we look to build upon our existing legal sector coverage of Anexo*, Gordon Dadds*, Gateley, Knights, Keystone, Rosenblatt and NAHL to include the litigation funders Burford Capital, Manolete Partners and Litigation Capital Management.

Companies: ANX BUR IMF JIL LIT MANO RBGP

13 May 19

LIBERUM: Ricardo* - Rail acquisition is 5% accretive to FY20 EPS

We estimate that Ricardo’s acquisition of Transport Engineering, one of Australia’s largest rail consultancies, will be 5% accretive to FY20E EPS: we understand the business is currently growing double digits and can sustain its impressive 20% margins, which are twice as high as Ricardo. The £28.9m maximum consideration equates to a trailing EV/EBIT multiple of 8-9x, which we view as attractive.

Companies: Ricardo

14 May 19

H1 results held back by Gaming

Zytronic’s H1 results contain no surprises, less than two weeks on from the trading update. Gaming sector weakness outweighed a stronger performance from a number of other sectors and PBT reduced to £1.4m from £2.2m in H1’18. The outlook statement strikes a cautious tone and this has already been reflected in our forecasts (as revised on 2nd May). The shares trade on a marked discount to the smaller cap goods stocks (6.6x cal’19 EV/EBITDA versus peers on 9.2x). Zytronic’s dividend yield is now striking at 8%, which is affordable (net cash £12.1m) and, we believe, sustainable although dependent on the recovery in higher margin activity over coming periods.

Companies: Zytronic

30 Apr 19

Cenkos: Rosenblatt Group Plc - A strong start to public life

Rosenblatt (“RB”) has delivered results for the 8m period post-IPO in-line with our initiation forecasts, save for a higher DPS of 2.8p p/s. We see the current valuation as incongruous with this profitable delivery and yield potential. The core Dispute Resolution division continues to perform strongly, more than offsetting recent weakness in Corporate. RB has launched a new litigation funding product which offers potential high returns on invested capital in a less contested segment of the market.

Companies: Rosenblatt Group

20 Feb 19

Refocused and primed for growth

Wey Education plc is a UK-based educational group delivering online education services in the UK and around the world. The tragic loss of its Executive Chairman towards the end of last year has necessitated a refocusing of Wey’s strategy, the details of which were announced in early February. Under the Chairmanship of Barrie Whipp, and led by CEO Jacqueline Daniell, the Group is now set to be more focused and streamlined around its existing businesses of InterHigh and Academy21. Coupled with a revised sales and marketing campaign, Wey is seeking to capitalise on the growing demand for online-based education, alongside targeted overseas opportunities to be achieved from the UK. Although there is a material rebasing of our estimates, we believe near-term forecast risk significantly reduces with potential, certainly in 2020E, towards the upside. Our DCF valuation conservatively sees fair value at 35p.

Companies: Wey Education

27 Mar 19

Defaqto: data-tech

SimplyBiz’s acquisition of the leading financial information business, Defaqto, should be immediately enhancing. Key elements of the deal are: Total consideration of £74.5m (including £3.4m cash acquired) is funded 50% by debt, 10% through Defaqto management rolling half their equity, 1% through SimplyBiz’s own cash and 39% by an institutional placing. Defaqto has a wide range of products including independent fund and product information, ratings, as well as an end-to-end financial planning tool, Engage Core, which is included in SimplyBiz’s Centra product. Defaqto adds relationships with intermediaries & financial institutions: Defaqto provides products to 2.4 thousand intermediary firms (in addition to SimplyBiz’s Member firms using Centra), as well as to over 300 financial institutions (of which 222 are new to SimplyBiz’s Distribution Channels). Defaqto 2018 revenues of £12.8m and EBITDA of £5.3m, would have enhanced Group 2018 reported revenue by 25% and adj EBITDA by 46%.  Defaqto is growing its revenue by c. 10%, and with high operational gearing should grow EBITDA by c. 15% in 2019. Defaqto has attractive financial characteristics: it has a high level of recurring or subscription income; the incremental profit margins are exceptional; is highly cash generative (“free cashflow”/EBITDA of 67%). SimplyBiz management expect the acquisition to be enhancing for 2019.

Companies: Simplybiz

16 Apr 19

Q1 2019 AIM Review

2019 started well for investors with U.S. stocks rallying on the back of trade talks between China and the U.S. resuming. Sterling rebounded in Q1 2019 as expectations built the UK would avoid a “no deal” Brexit, providing a further tailwind to more internationally focused UK companies. This sentiment spread across the globe and filtered its way down into small caps.

Companies: PRSM KMK SYS RAI MNO CCS MANO CBOX KGH

03 May 19

The Monthly May 2019

How small- and mid-cap quoted companies make a substantial contribution to markets, employment and tax revenues.

Companies: OPM AVO AJB ARBB CMH CLIG DPP FLTA GTLY GDR HAYD KOOV LWRF MCL MUR OXB PCA PHP RE/ STX SIXH TRX TON VTA W7L

02 Apr 19

Volex

08 Apr 19

Keywords Studios (KWS) FY18 results presentation

Premium

19 May 17

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

29 Mar 19

Strix - Aqua Optima - water filtration division

16 Apr 19

Flowtech Fluidpower - Market overview and 2018 highlights

29 Mar 19

Strix - Product road map

22 Aug 18

Grafton Group - Interim Results 2018

26 Mar 19

Judges Scientific (JDG) 2018 full year results presentation

29 Mar 19

Somero Enterprises (SOM) 2018 full year results presentation

13 Mar 19

Empresaria Group plc (EMR) 2018 results

26 Mar 19

Executive interview - Boku

04 Mar 19

Executive interview - XP Power FY18 results

29 Mar 19

Strix - New manufacturing facility in China

28 Feb 19

Grafton Group - Full year results 2018

16 Apr 19

Flowtech Fluidpower - Trading Statement

Latest Content

Vallourec

Q1 19 results: a mixed bag

- Q1 19 results were decent on the P&L front - Volumes, prices and savings have helped - However, cash consumption thus net debt still a worry - Management reaffirmed no issue to take place in FY19 - We are less confident and any market downturn would leave no other choice - In short: not bad but still some way to go

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17 May 19
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Staffline Group

LIBERUM: Staffline* - Unscheduled statement: estimates reduced

We are reducing 2019 and 2020 FD EPS by 46% and 17%. We increase FY net debt from £52m to £85m (net debt /EBITDA of 3.0x) for FY 2019.

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17 May 19
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Keystone Law

Upgrades to forecasts, release of FY22E numbers

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17 May 19
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SHED ACT SCHO ABM FFI PPIX AGM OSI CHH HUNT

Small Cap Feast

Essensys plc—a provider of mission-critical SaaS platforms and on-demand cloud services to the high growth flexible workspace industry, plans to join AIM. Offer TBC, expected 29 May 2019. Induction Healthcare Group plc—a healthcare technology company focused on streamlining the delivery of care by Healthcare Professionals looking to join AIM. Expected raise of £14.58m at 115p, market cap of £34.07m. Expected 22 May 2019. SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019

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17 May 19
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Speedy Hire

LIBERUM: CEO Video - Russell Down, Speedy Hire*

In these four short videos Speedy Hire’s CEO, Russell Down, runs through the key points from their full year results, including the benefits from their investment in digital, how ROCE has improved from 8% to 15% and whether it can go higher, and the outlook for the business.

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16 May 19
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RA International

Cenkos: RA International Group Plc - Delivering contract wins

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16 May 19
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Speedy Hire

LIBERUM: Speedy Hire* - Excellence in execution

Speedy has reported strong results for 2019, posting a 19% increase in PBT, 3% better than we expected. We believe that these results demonstrate successful execution of Speedy's strategy, using improved information systems to drive growth with smaller customers, improve utilisation rates and with an improved service proposition also driving market share gains.

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