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.

06 Nov 18

THE MONTHLY November 2018

In addition to Hardman’s monthly analysis of client stocks, the thorny issue of market disruption – a popular theme currently - is also addressed. In a wide-ranging article, Hardman’s utilities analyst, Nigel Hawkins, assesses the impact that market disruption has already made. In some sectors, notably telecoms and aviation, market disruption has been apparent for many years, as the rise of Vodafone, Ryanair and easyJet demonstrates. However, in some sectors, such as oil and housebuilding, structural changes have been modest – the dominance of the big players endures. For investors, there is real interest in those sectors where changes are underway. The UK groceries market, which may shortly become a duopoly, is a case in point. And, intriguingly, who knows if there is a company currently languishing in AIM, which will attain a £50bn market valuation within the next decade?

Companies: OPM AVO AGY APH ARBB AVCT DISH BNO BUR CMH CLIG CSH DNL DPP GTLY GDR HAYD KOOV MCL MUR NSF OXB PHP RE/ REDX SCE SIXH TON VAL VTA W7L

23 Oct 18

Quarterly Research Outlook

The June IPO of Knights Group Holdings, a Top-100 regional law firm, marked the fifth entrant to the burgeoning UK-listed legal sector. Following recent expansion of our coverage across all five listed legal firms, complemented by coverage of three broader support services peers with exposure to the sector, we revisit and build upon our views on this rapidly evolving sector.

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

08 Nov 18

Getting its ‘Mojo’ back

As with any walk of life, the occasional setback is inevitable when tackling complex new challenges. The key is recognising when difficulties arise, responding quickly, learning from the experience and ultimately reaching one’s goals - perhaps via a different route. It’s no different in the corporate world.

Companies: Gattaca

09 Nov 18

LIBERUM: Volex* - Strong H1 drives 7% earnings upgrade

We upgrade our FY19 underlying operating profit estimates by 7%, due to a strong first half and a step-up in the group’s margin mix. Power Cords delivered an impressive 7.7% margin, up 280bps y/y due to price increases, mix and automation-driven efficiency improvements.

Companies: Volex

13 Nov 18

Interim results – good value at these levels

Half-year results were in line with expectations, placing the group on track to achieve FY forecasts. While some caution remains about the UK, the 70% of the group revenue that is generated overseas has performed well, is growing and continues to gain market share. Project Atlas is a short-term cost in order to provide a world-class operator. The shares have significantly derated over the past quarter, with previous comments about raw material cost pressure and diesel production weighing on sentiment in a weak market. We see the current valuation as attractive and well below its usual level. Our 270p price target offers good upside.

Companies: Trifast

09 Nov 18

Acquisition of Pacer – entering optoelectronics

The company has announced the acquisition of Pacer, a specialist added-value distributor, for £3.7m. The business is complementary, with a number of positive attributes, including a premium gross margin, a new added-value facility, strong specialist niches with access to new markets including optoelectronics products, medical sector customers, with 40% of sales overseas, and a US facility. Pacer is expected to be 3% EPS enhancing in its first full year. The shares continue to look good value and our 400p price target offers plenty of upside.

Companies: Solid State

01 Aug 18

Share price reaction overdone

The FY18 results were disappointing, with profits coming in below forecasts. Guidance has been reduced, with headwinds in the retail sector prompting management to take a more prudent view on the pipeline conversion rate and the time taken for contracts to go live. Our EPS forecasts are reduced by 13% and 15% in FY19 and FY20. Despite these reductions, we expect the Group to continue to grow rapidly, driven by the ongoing growth trend in online retail. Near term forecasts should also benefit from FY18 contract wins reaching full run rate and cost savings (the Group incurred a number of non-recurring costs in FY18). Our new EPS forecasts imply growth of 16% and 13% and 15% (new forecast year in FY21). We set our target price at 395p (implied FY1 P/E rating of 22x, falling to 20x) and re-introduce a Buy recommendation.

Companies: Clipper Logistics

01 Nov 18

Share & share alike

Global equity markets in October reverted to a pattern that seen in the past – sharp falls and increased volatility. The usual reasons of Brexit uncertainty, the impact of global trade tariffs and heightened geo-political worries and a raft of disappointing Q3 results in the US & UK punctured some of the market optimism. Both countries’ markets have now surrendered their progress year to date. The UK Budget helped things to stabilise here but continuing volatility seems likely. In Share News & View we comment upon Bloomsbury, Braemar*, Location Sciences*, Nektan*, PCF*, Tricorn* and Warpaint*.

Companies: AOR APC BONH BMS CTG CRPR DMTR ESC EUSP FDM FA/ LSAI NKTN PCF SNX TCN W7L

12 Nov 18

HCM UPDATE -12.11.18 (GATC.L; HYDG.L)

Gattaca plc (GATC.L, 111.25p/£35.8m) Final results | Hydrogen Group plc (HYDG.L, 56p/£18.4m) Trading update

Companies: Gattaca Hydrogen Group

14 Nov 18

Strong FY 2018 performance

AB Dynamics has reported FY 2018 revenue and Adjusted PBT in line with our estimates, which were revised in October when the Group announced that it would significantly exceed market expectations. Both numbers are at record levels. The Group has delivered strong performances across a number of global geographies in the ADAS (Advanced Driver Assistance System) targets and steering robot businesses, and won its first simulator order (for delivery in FY19). As ADAS complexity is increasing, further customer demand is anticipated. The announcement also notes the tailwind of a ‘healthy’ order book at the start of FY2019. Given this strong outlook, and the prospect of another year of ‘solid progress’, AB Dynamics is to make further investment in supporting the significant growth opportunity, constraining near-term operating margin. We have upgraded our FY19 and FY20 estimates materially, while assuming an increased level of investment and upgrading EBITDA at a lower rate.

Companies: AB Dynamics

19 Sep 18

Cenkos: RA International Group Plc - Interim results

RA International has announced interim results for the period to 30 June 2018. The strategy of pursuing larger and longer duration contracts has started to deliver, with RA successfully winning a 5-year contract with UNICEF and a further 5-year US$30m contract with the UN in Somalia in August. The bid pipeline has increased significantly since the June flotation and, in total, contracts worth US$63m have been won in 2018. Accordingly, management expects a stronger H2/18. Trading at a 2018E PER of 11.4x and EV/EBITDA of 8.9x, falling to 10.7 and 6.8x 2019E respectively, we believe RA offers significant upside potential from the current level. RA also provides a prospective yield of 0.5% with dividend payments commencing in the current year.

Companies: RA International

08 Oct 18

XP Power - Q3 trading supports FY18 outlook

XP Power’s Q3 trading update confirms strong revenue growth, despite currency headwinds, and good progress in design wins across all end markets. Q3 bookings growth has moderated slightly, partially reflecting uncertainty in the semiconductor sector over capex plans, but management is confident of achieving expectations set at its recent interim results; we leave our forecasts unchanged.

Companies: XP Power

08 Nov 18

LIBERUM: Speedy Hire* - Expo strengthens customer relationships

Last week, we attended Speedy’s annual Expo in Liverpool. The event, which is the largest private hire show in the UK, brought together over 1,500 delegates including members of the Speedy team, its key suppliers and around 300 customers.

Companies: Speedy Hire

08 Nov 18

BAE's trading update

BAE Systems issued today a trading update. This comes with only qualitative comments on the advancement of its commercial programmes. As a summary, BAE’s FY18 outlook remained unchanged and the company sees its EPS in line with 2017. The company sees strong commitments in defence budgets in both the UK and the US which will support its activities in these countries. Also, BAE reminded that Brexit would only have a limited impact on its activities as there is a relatively limited UK-EU trading movement of EU nationals into and out of BAE Systems’ UK businesses. In terms of specific programmes, the F-35 one is well on track and the UK-managed Applied Intelligence business will achieve its breakeven by year-end. As for the international markets, the company remains active in the big Typhoon and Hawk contract won with Qatar which enables an extension to the Hawk programme and gives great visibility for the Typhoon over the next decade. For the latter, BAE indicated that there is still some opportunities for this programme in both partners’ countries and through exports. Negotiations are continuing with Australia and Canada in the Maritime segments. The next interim dividend of 9p will be paid on 30 November.

Companies: BAE Systems

25 Sep 18

Interims – capture then convert

Interims highlight the substantial progress in the development of the distributor and supplier base of the ChannlPro platform. Members processing orders increased to 164 (Feb: 24; May: 57), of which 120 had placed multiple orders. The development of gross transaction revenue on the platform ($9.9m in the past 16 weeks) has advanced in anticipation of the margin Altitude takes from those suppliers, with the current focus on growing the scale and making ChannlPro the go-to platform for leading industry participant, distributors and suppliers. We review forecasts to accommodate lower near-term revenue, albeit all the operational KPIs are progressing in line with expectations as the scale of the platform develops. Twelve-month target price remains 105p, equivalent to an unchallenging 9x FY19 EBITDA, 13x P/E and a 5.4% free cash flow yield, target parameters which can be easily lifted with demonstration of execution credibility.

Companies: Altitude Group

19 May 17

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

13 Nov 18

Capital Network's Ed Stacey talks over CUI Global's new numbers

22 Aug 18

Grafton Group - Interim Results 2018

02 Oct 18

Judges Scientific Plc hits new records in latest set of interim results

27 Apr 18

Boku - Agreement with Paysafe Group

26 Sep 18

Malvern International (MLVN) ShareSoc presentation September 2018

19 Sep 18

Strix - Interim results 2018

24 Sep 18

Boku - Agreement with Rakuten

11 Dec 17

Capital Network's Ed stacey on Diploma PLC

24 Sep 18

Executive interview - Genesis Energy

20 Sep 18

Somero Enterprises (SOM) H1 results - September 2018

18 Sep 18

redT energy - Update on German Grid Project Funding

23 Oct 18

Flowtech Fluidpower - Trading Update

18 Sep 18

Keywords Studios (KWS) H1 results September 2018

20 Sep 18

Flowtech Fluidpower - Half year results

Latest Content

Equiniti Group

LIBERUM: Equiniti* - Trading update to confirm virtues of the model

We expect next week’s trading update to confirm virtues of Equiniti’s model. Its resilient Registration business combined with attractive high margin ancillary revenue streams should help the group deliver 5% organic revenue growth in FY18, despite the challenging environment.

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14 Nov 18
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Speedy Hire

LIBERUM: Speedy Hire* - Delivering on multiple fronts

A strong set of 1H19 results provide evidence that the group continues to deliver on its strategic aims. Improving asset utilisation and significant share gains with SME clients suggest an encouraging outlook.

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14 Nov 18
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Rexel

Sluggish Q3

Q3 results came in below our estimates as well as market consensus. Growth momentum in Europe was halted primarily by Germany’s underperformance (resulting from its turnaround efforts), France’s lower than expected growth (led by difficult comparables) and the UK’s continuing contraction (on the back of Brexit-led uncertainty). Offsetting this, the US remained upbeat, benefiting from strong underlying demand. We have lowered our estimates. No change in the stock recommendation.

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14 Nov 18
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AB Dynamics

Strong FY 2018 performance

View

14 Nov 18
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Trifast

Trifast - Half year results

View

13 Nov 18

Trifast

Interim results – good value at these levels

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13 Nov 18
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ASO IDEA ORCH TRI PPC

Morning Note – 13 November 2018

Avesoro Resources (ASO): Corp Q3 operating and financial results | Ideagen (IDEA): Corp Strength in consistency, boost in activity | Orchard Funding Group (ORCH): Corp Low risk 15% growth with a strategy poised to deliver | President Energy (PPC): Corp Development drilling progress ahead of expectations | Trifast (TRI): Corp Interim results – good value at these levels

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13 Nov 18
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Hamburger Hafen und Logistik

Good 9M numbers

HHLA’s revenue increased by 2.2% to €964m while the EBITDA number was down by 1.7% to €241m, whereas both EBIT and net earnings were up (+0.6% to €156m and +6.1% to €84m, respectively). Revenue was exactly in line with our projections while EBITDA and EBIT were marginally lower, whereas the net profit number is clearly higher than what we had expected. Compared to the group’s consensus numbers, all reported numbers were at the upper end of expectations.

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13 Nov 18
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Fraport AG Frankfurt Arprt Svcs Wrldwde

Passenger growth moderated in October

The number reached 6.37m (+5.2%) in the last month in Frankfurt which has brought the ytd number to 59.3m (+8.0%). Our full-year projection sees the number rising to 69.7m which requires growth rates of just above 8% in the remaining two months. This seems slightly ambitious. As the number of passengers flying from/to European destinations continued rising strongly (+7.4%) in October, the number of passengers per flight was down by 1.2% to just below 146 pax and the number of flight movements (+6.3%) increased more strongly than the number of passengers. At the same time, the cargo volume fell by 1.0% to 193k tons in October and 0.8% to 1.83m tons ytd. The strong recovery continued in Antalya (+29% to 3.75m in October and +23% to 30.2m ytd) and St Petersburg (+15% to 1.55m and +12% to 15.6m, respectively) whereas Xi’an experienced continuously strong passenger growth (+7% to 3.97m and +7.4% to 37.5m). Fraport continues to have controlling stakes in terminals and these airports of 51%, 25%, and 24.5%. Fully-consolidated Greek (14) and Brazilian (2) airports saw their passenger numbers rising by 5% and 6% in the last month and by 9% and 6% ytd.

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13 Nov 18
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Solid State

Solid State - Acquisition of Pacer Technologies

Solid State has announced the acquisition of Pacer Technologies, a value-added distributor of opto-electronic components and displays, for c £3.7m cash. Although the transaction is earnings enhancing, triggering a 4.0% uplift in the FY20 consensus EPS, the share price has not moved materially in response to the news and we believe the shares continue to trade at a significant discount to peers.