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.

19 Jun 17

Support Group

In light of the UK election, we highlight our favoured overseas earners, operators in defensive markets and those capable of taking market share, but our main topic is the structure of the UK employment market. The UK has the lowest unemployment rate since 1975 at 4.6%, and there are, consequently, fewer and fewer candidates to fill vacancies. This suggests recruitment companies may struggle to grow, but there are structural changes in the UK labour force that offer growth opportunities. Temporary labour continues to expand relative to the point in the economic cycle, its importance accelerating since 2008, and part-time labour has grown at twice the rate of full-time labour throughout both the last cycle and over the long term. There are, of course, specialist temporary recruiters, but the part-time market appears relatively untapped (at least by the quoted companies) despite being c.5x the size of the temporary segment in terms of numbers.

Companies: FOUR ACL BOOT CLL CMS CNCT FCRM LOK PPH RNWH SVCA STAF UTW WATR

27 Jun 17

Transformational sale of tobacco interests

There are typically only a few key events in a company’s life that can truly be described as ‘transformational’ – such as the launch of Apple’s 1st iPhone a decade ago, or Google’s $50m acquisition of Android in 2005. Likewise (albeit on a smaller scale) we think that Molins’ £30m disposal of its Instrumentation and Tobacco Machinery (I&TM) arm to GD Spa (part of packaging giant Coesia Spa) falls into the same camp. Why?

Companies: Molins

23 Jun 17

Acquisition of Hi-Power Limited

Flowtech has announced that it has acquired Hi-Power Limited, a distributor of hydraulic equipment components and systems design and build, serving the mobile and transport sectors across Eire and Northern Ireland. The acquisition strengthens the group’s Power Motion Control (PMC) division, deepens technical expertise and expands its core product offering, as well as establishing relationships with key European suppliers. This deal is the first acquisition since the Group’s £9.6m fund raise in March and comprises of an initial £1.9m consideration, representing 1.0x NAV, with a further £0.5m subject to an earn out over the 18 months to December 2018. We upgrade our forecasts for the Hi-Power acquisition with FY17 EPS +2.8%, reflecting six months trading contribution, and a 5.4% upgrade to FY18 EPS. On a PER of 10.4x the shares trade at a sizable 45% discount to sector peers. We expect the company to deploy its remaining financial firepower on further earningsaccretive deals, bringing into focus this valuation discrepancy. At current levels the shares also offer an attractive 4.3% dividend yield.

Companies: Flowtech Fluidpower

29 Jun 17

AGM update prompting further upgrades

Harvey Nash, the specialist technology recruiter, has announced that trading in the first four months of FY18 is progressing well. Fee trends are improving in key areas (notably in UK and on the contractor side of the business). Conversion ratios across the three divisions are strengthening. This reflects the on-going streamlining of the group, a process which started +18 months ago. Cost savings of £1.0m should be achieved in the current financial year. As a consequence, we are increasing our FY18E PBT forecasts to £10.1m (+11.0% upgrade) and increasing our TP to 125p from 110p.

Companies: Harvey Nash Group

27 Jun 17

Transformation

With two divestments announced in the space of two months, the fortunes of Molins have been transformed. Investors no longer have to fear contracting Tobacco markets, and there is more certainty on future pension deficit payments. With a strong balance sheet (£28.2m net cash at end-2017), the management can now focus on becoming a fast-growing and high-margin Packaging Machinery business. We have revised our forecasts on the basis that the Instrumentation & Tobacco Machinery (I&TM) business will be divested in July and that the sale of the Ontario facility will complete in November. We forecast continuing EPS to increase four-fold over the 2016-2019 period which is conservative as it assumes no acquisitions. Based on the UK Engineering sector rating of 16.9x 2018 EPS, we have increased our target price to 176p.

Companies: Molins

26 Jun 17

Upgrade to forecasts post Hi-Power acquisition

Last week the group acquired Hi-Power, a complementary bolt on acquisition, for a total consideration of up to a maximum £3.5m. Hi-Power offers additional hydraulic products, wider geographic coverage and medium-term synergies and wider collaboration opportunities. This acquisition is in line with existing strategy and we expect management to achieve further acquisitions over the coming year as it deploys cash raised through its recent placing. This potentially offers future upside to forecasts. We increase our EPS forecasts by 2.4% in 2017 and 4.7% in 2018. The shares remain attractively rated on a P/E of 10x and offer good upside.

Companies: Flowtech Fluidpower

20 Jun 17

Good momentum in fasteners

As already announced, record FY17 profits have exceeded management expectations and growth was delivered with a strong cash performance and a sharp rise in the dividend. We have increased our EPS estimates marginally for 2018 with restrained growth expectations. As Trifast continues to deliver on its strategy, the 10% rating discount to peers should moderate.

Companies: Trifast

22 Jun 17

Northland Capital Partners Morning Report

LATHAM (JAMES) (LTHM.L)

Companies: James Latham

29 Jun 17

Estimates corrected

Utilitywise has been informed by a major energy client that it believes certain contracts are under-consuming energy against estimates. Negotiations and checks are on-going but Utilitywise has agreed to repay £7.6m between June 2017 and December 2020. The repayment will be funded by operating cash flow and available banking facilities and offset by the tax impact and working capital management. Consequently, there is no change to management’s expectations for net debt in FY17E (despite a £4.8m repayment), and £1m will be repaid in each of the three years FY19E-21E. With confidence in historic controls taking a knock today and a potential impact on profit recognition from IFRS 15 to come, we use cash flow to value the shares. We set a calendar 2018E free cash flow yield target of 8.7% equating to 150p (previously 222p).

Companies: Utilitywise

22 Jun 17

Progress in Q1 though end markets still tough

Today’s AGM update reflects an improvement in Q1 over a disappointing comparable period. Trading profit has improved, benefitting from cost savings undertaken. Shipbroking has performed well in Q1 and Technical has seen a modest improvement, helped by cost savings. Regarding the outlook, the improvement in Q1 is encouraging, although end markets remain challenging. Full year expectations remain unchanged. We are forecasting FY2018E PBT of £7.9m, EPS of 21.7p and a 15p dividend. We retain our Buy and 400p TP.

Companies: Braemar Shipping Services

22 Jun 17

Panmure Morning Note 22-06-2017

In recent years, Chemring has been a graveyard for reputations. Today’s interims show that the new FD is leaving nothing to chance but at the same time offering a glimpse of what is possible. For instance, the £20m investment in working capital to improve supplier payments looks like a sensible move if the management wants to achieve operational excellence. There are still shortterm risks to FY2017 such as the requirement to extend the funding on the letter of credit for the 40mm ammunition contract offers. However, we believe that the management has a reasonable chance to become consistently predictable in an "under promise over deliver" way. We raise our TP to 216p reflecting the re-rating of the Aerospace and Defence sector.

Companies: Chemring Group

28 Jun 17

Embracing change

FY17 results were broadly in line with year-end guidance. UK activity is increasing but, for now, we have reduced its expected contribution to our estimates. Organisational change under an updated strategy should improve the quality of earnings and, following Paul Hamer’s departure, a new management team is in place to execute this. Earnings growth prospects are somewhat greater than the current rating appears to suggest.

Companies: WYG

27 Jun 17

Two-speed recovery

The asset and support services group maintained its full year guidance at the half year stage. It delivered double digit growth in underlying profits in the core Compliance, Energy Services and Construction divisions. However, the troubled Property Services stayed in loss, resulting in a 49% fall in underlying group EBITA. We are maintaining our earnings forecasts, but have changed the mix, principally with increases in Compliance revenue and profits offsetting the loss in Property Services.

Companies: Lakehouse

18 May 17

N+1 Singer - Speedy Hire - Focused on restoring profitability

FY’17 was focused on stabilising the business after a difficult trading period. Trading has improved, with all metrics ahead of expectations in FY’17. Accordingly, we have upgraded our forecasts (PBT up 8% in FY’18 and 4% in FY’19). Now, the focus turns to the Group’s ability to drive sustainable, profitable growth. Our revenue forecasts imply growth of 2.0%-2.5% across the forecast period. Growth is already said to be coming through after a good start to the year. Management has introduced a mid-teens (c.15%) medium term ROCE target (FY’17: 7.7%), a sign of confidence in Speedy’s prospects. With net debt/EBITDA falling towards 1x, we expect earnings enhancing M&A opportunities to form part of the ongoing strategy. Overall, we believe the risk remain to the upside, with potential for further upgrades as the year progresses. We therefore move from Hold to Buy and increase our target price from 56p to 63p.

Companies: Speedy Hire

08 Jun 17

N+1 Singer - Small-cap quantitative research - Value screen periodic refresh and 9 focus stocks

We have completed another refresh of the 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 9 stocks to focus on. Since the last refresh as of 8 November 2016, the day before the US presidential election result was known, the screen has performed strongly (outperforming the small-cap index by 12.9pp on a weighted basis) with our focus stocks doing even better. The indication is that smaller value stocks perform well in a steady “risk on” environment. The new basket contains many UK consumer demand and emerging market plays. We find the latter exposure interesting at this juncture.

Companies: RUS GOAL VTU BILN INL AEP MAYA IPF OPM

19 May 17

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

23 May 17

De la Rue - Full Year Results 2017

10 May 17

Capital Network's Helaine Kang on Judges Scientific PLC

18 May 17

Hayward Tyler - New Order Wins and R&D Update

29 Dec 15

2015 Highlights: Stadium Group - Innovators & Investors Forum

24 Apr 17

Results Presentation

12 Feb 16

EMR Capital - Update at 121 Mining Investment

20 Apr 17

Hayward Tyler - Trading update

16 Dec 16

Executive Interview - Gooch & Housego

12 Apr 17

Hayward Tyler Group - Contract wins

03 May 17

Executive Interview - Dialight

11 Apr 17

Charles Taylor (CTR) interview at Redleaf breaking the mould capital markets day

15 Dec 16

Executive Interview - Paragon

11 Apr 17

Charles Taylor (CTR) Presentation at Redleaf breaking the mould capital markets day

14 Sep 15

Sprue Aegis Plc - Half Year Results 2015

Latest Content

Harvey Nash Group

AGM update prompting further upgrades

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29 Jun 17
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UTW RCN RGD ESV

Morning Note

Utilitywise* (UTW): Estimates corrected (CORP) | Redcentric* (RCN): Prelims set the base line (CORP) | Real Good Food* (RGD): New expansion capital (CORP) | eServGlobal* (ESG): HomeSend looking ever more exciting (CORP)

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29 Jun 17
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Utilitywise

Estimates corrected

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29 Jun 17
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WSG VNET ZIOC OPP MLVN CHRT AFC SPE HCM RENE

Small Cap Breakfast

AnimalCare—RTO of Ecuphar NV, a European animal health company. £30m raise. Ecuphar FY16 rev £68.4m, underlying EBITDA £8.9m. Due 13 July. | Angling Direct -Schedule 1 from the specialist fishing tackle retailer in the UK . Offer TBA. Expected mid July. | NEXUS Infrastructure—Offer TBA. Provider of essential infrastructure services to the UK housebuilding and commercial sectors. Expected 11 July. FYSep16 rev £135.7m. | Tatton Asset Management –Sch 1. Provider if services to FCA authorized financial advisers. Raising £10m at 156p. Secondary offer £41.6m. Due 6 July. | GYG—Intention to float by the superyacht painting, supply and maintenance company. Due 5 July. Raising £6.9m new plus vendor sale of £21.5m at 100p. Mkt Cap c. £47m. Revenue of €54.6m in FY16 and adjusted EBITDA of €6.7m. | Greencoat Renewables - Schedule 1. Targeting a portfolio of operating renewable electricity generation assets, initially investing in wind generation assets in Ireland. Offer TBC. Due Mid July. | FFI Holdings— Specialist in the provision of completion contracts to the entertainment industry for films, television, mini-series and streaming product. Raising £59m at 150p. Expected 30 June.| QUIZ— Omni-channel fast fashion womenswear Company intention to float. Due July 2017. Offer TBA | I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK. Offer TBC, 7 June admission. | Verditek— Sch 1 update. The Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission late June | Rockpool Acquisitions—Northern Ireland based Company seeking strong NI acquisition with an international outlook. Raising £1.5m at 10p. Due 5 July. | Hipgnosis Songs Fund investment company offering pure-play exposure to Songs and associated musical intellectual property rights. Prospectus yet to be published. | Impact Investment Trust—Exposure to a diversified portfolio of funds providing SMEs across developing economies with the growth capital they need to have a positive impact on the lives of the world's poorer populations. Raising up to $150m at $1.00 Residential Secure Income - social housing REIT raising up to £300m Admission due c.12 July. | Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. | NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. | Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe |Supermarket Income REIT– Up to £200m raise to acquire a diversified portfolio of supermarket real estate assets in the UK, providing long-term RPI-linked income. Due 21 July.

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29 Jun 17
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Utilitywise

Another profit warning

We try to form a valuation methodology – and it’s not easy

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29 Jun 17
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KIE PDL RECI CNS 7DIG AMP SLNG

Small Cap Breakfast

AnimalCare—RTO of Ecuphar NV, a European animal health company. £30m raise. Ecuphar FY16 rev £68.4m, underlying EBITDA £8.9m. Due 13 July.| Angling Direct -Schedule 1 from the specialist fishing tackle retailer in the UK . Offer TBA. Expected mid July. | NEXUS Infrastructure—Offer TBA. Provider of essential infrastructure services to the UK housebuilding and commercial sectors. Expected 11 July. FYSep16 rev £135.7m. | Tatton Asset Management –Sch 1. Provider if services to FCA authorized financial advisers. Raising £10m at 156p. Secondary offer £41.6m. Due 6 July. | GYG—Intention to float by the superyacht painting, supply and maintenance company. Due 5 July. Raising £6.9m new plus vendor sale of £21.5m at 100p. Mkt Cap c. £47m. Revenue of €54.6m in FY16 and adjusted EBITDA of €6.7m. | Greencoat Renewables - Schedule 1. Targeting a portfolio of operating renewable electricity generation assets, initially investing in wind generation assets in Ireland. Offer TBC. Due Mid July. | FFI Holdings— Specialist in the provision of completion contracts to the entertainment industry for films, television, mini-series and streaming product. Raising £59m at 150p. Expected 30 June. | QUIZ— Omni-channel fast fashion womenswear Company intention to float. Due July 2017. Offer TBA | Ethernity Networks—Schedule 1 from Israeli based specialist in data processing technology used in high end carrier ethernet applications across the telecom, mobile, security and data centre markets. Expected 29 June. Raising £15m at 140p. Mkt Cap £45.5m. | Jangada Mines—Sch 1 advanced stage PGM exploration project containing what the Directors understand to be the largest PGM resource, and only pre-development PGM project, in South America. Raising £2.25m. Mkt Cap £9.9m. Expected 29 June. | Phoenix Global Mining— US Brown field copper play. Expected late June. Offer TBA | I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK. Offer TBC, 7 June admission. | Verditek— Sch 1 update. The Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission late June | Hipgnosis Songs Fund investment company offering pure-play exposure to Songs and associated musical intellectual property rights. Prospectus yet to be published. | Impact Investment Trust—Exposure to a diversified portfolio of funds providing SMEs across developing economies with the growth capital they need to have a positive impact on the lives of the world's poorer populations. Raising up to $150m at $1.00 | Residential Secure Income - social housing REIT raising up to £300m Admission due c.12 July. | Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. | NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. | Kuwait Energy— $150m raise plus vendor offer. Admission due June. 2p reserves 810.0 mmboe | Supermarket Income REIT– Up to £200m raise to acquire a diversified portfolio of supermarket real estate assets in the UK, providing long-term RPI-linked income. Due 21 July.

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28 Jun 17
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KUKA

Excellent start in 2017!

In Q1 17, revenues jumped 25.7% to €790.8m and the order intake 29.6% to €967.3m. The book-to-bill ratio reached 1.22x. Although all three divisions contributed to increase in order intake, Swisslog experienced the strongest increase of 83.1% to €230.2m (book-to-bill ratio of 1.44x). The order backlog reached €2.26bn (+30.6%). The gross margin declined from 28.1% to 26%. EBITDA increased 14.3% to €56.7m and the EBITDA margin, however, declined from 7.9% to 7.2%. The EBIT margin also declined from 6.4% to 5.9%. The operating performance was mainly driven by higher costs of goods sold (+31.6%) and higher selling expenses (+16%).

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28 Jun 17
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WYG

Embracing change

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28 Jun 17
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BMS CRPR ECSC EUSP FDM PCF PPIX QRT SNX SPRP SQS TCN TRI W7L

Still making progress although some recent retreats

In the last fortnight most of the below indices have retreated, surrendering some of the gains achieved in the year to date. However, the outperformance of the various smaller companies markets compared to the leaders remains both encouraging and notable. Clearly corporate activity has continued apace. As we await some clearer indicators regarding Brexit and the state of the UK economy, we may well mark time. The seasonal lull may take over at some point. In Share News & Views we comment on Braemar Shipping*, Cropper*, EU Supply*, Lakehouse* Norcros, Sprue Aegis*, Warpaint* and Wynnstay.