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.

11 Jul 19

FY19e trading in line with June guidance

Somero’s trading update confirms that performance is in line with June guidance ($87m revenues, $28m EBITDA and net cash of $18m). We leave our forecasts unchanged on the back of this, though we highlight that we remain 6% below guidance/consensus at the EBITDA level, reflecting our cautious view surrounding the extent to which further cost savings can be materialised, particularly following recent success in delivering a lean operating structure. We remain Neutral on a short-term horizon as we see limited negative earnings catalysts in coming months, though we maintain our fundamental view that ongoing signs of industry and economic headwinds facing the US non-residential construction industry could have a material impact on FY20e earnings.

Companies: Somero Enterprises

16 Jul 19

LIBERUM: Staffline* - Dilution results in EPS reduction

We expect an H1 FD EPS weighting of 27%, vs 43% in FY18. The significant H2 weighting leaves a lot of work to do in a difficult trading environment.

Companies: Staffline Group

12 Jul 19

Half-year end trading update

The half-year trading update was satisfactory, indicating trading in line with expectations. A new revenue split between components and services was previously flagged and highlights revenue growth of 5.7%, of which 2.9% is organic. The net debt position at £18.8m is better than expected and points to good underlying cash generation from trading, with a further debt reduction in H2. No change to forecasts. We retain our 200p price target, with the shares currently trading at very attractive levels and at a significant discount to its peer group. The dividend yield remains attractive at 4.9%.

Companies: Flowtech Fluidpower

16 Jul 19

Upgrading forecasts after strong H1

“Don’t fight the Fed” is a tried and tested Wall Street strategy that has worked a treat over the past decade. Basically it states that when US interest rates fall, global equities should rise thanks to lower borrowing costs for consumers and corporates alike. Similarly after last week’s dovish testimony to Congress by FOMC Chair, Jerome Powell, we believe this bias towards more monetary easing should keep the economy ticking along, and places a ‘Put’ under valuations

Companies: Mpac

16 Jul 19

Small Cap Feast

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 the IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m. Uniphar, a diversified healthcare services business with a workforce of over 2,000, is looking to join AIM. Raising EUR135m with market cap on admission of EUR309.6m, expected 17 July 2019. Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year.

Companies: CALL BIRD ABC KDR EMAN BST SCE ZEG SAG FUL

16 Jul 19

Facebook to use Libra to become utility, Slack not worried about Microsoft, Symantec ends talks with Broadcom

The Senate Banking Committee on Monday released the testimony of David Marcus, the head of Facebook's cryptocurrency projects ahead of his testimony Tuesday. In his prepared remarks, Marcus perfectly outlines the business model behind the social network’s upcoming Libra digital currency and its Calibra digital wallet. Microsoft might be the primary competitor for Slack, but the widespread adoption of Microsoft's software is not a major problem for Stewart Butterfield, co-founder and CEO of the messaging app. Last week, Microsoft said Teams had more daily active users than Slack. Cybersecurity company Symantec Corp has walked away from negotiations to sell itself to chipmaker Broadcom over price disagreements, people familiar with the matter said on Monday. Symantec's decision raises new questions over the future of the US antivirus software provider, which is looking for a new CEO and has been struggling to grow its business serving companies.

Companies: KAPE AVST CNS DFX ECSC FLX IGP NCC OSI SWG SOPH

16 Jul 19

Strong momentum and investment for growth

Gateley continued its strong growth track record in FY 2019 with adj. EPS up +18% driven by organic sales growth of +10% and acquisitions (total sales +20%). The balance sheet remains strong with net debt of only £3.2m, and the dividend was raised by 14% to 8.0p. The outlook is positive, with the group continuing to attract high quality staff and acquisitions at least meeting expectations, growing the range of services offered. We make no major changes to our forecasts but upgrade our target price from 193p to 210p as we roll forward a year and update the market FCF yield that supports our model from 5.5% to 5.1%.

Companies: Gateley

12 Jul 19

Q2 trading update indicates a positive H1 performance

Trading remains in line with FY19 expectations with Group revenue increasing 5.7% to £59.6m (HY18: £56.4m) in H1 19. This consisted of 6.5% in Components to £50.0m (HY18: £46.9m) and 1.4% in Services to £9.6m (HY18: £9.5m). Group organic growth of 2.9% was supplemented by the acquisition of Beaumanor and Derek Lane in March of last year. The slight slowdown in organic growth from the 4% reported in Q1 is not a surprise and the Q2 like for like performance is in line with FY expectations. The net debt position of £18.8m is encouraging showing a decline of £1.1m from the £19.9m reported at the end of FY18, despite £1.6m deferred consideration in the period. We leave forecasts unchanged, awaiting interim results for further guidance on the improved cash position. Flowtech is undervalued relative to peers, trading on 8.0x FY19 earnings forecasts.

Companies: Flowtech Fluidpower

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

16 Jul 19

FY’19 results – delivery and opportunity

As foreshadowed by the trading update in May, Gateley has delivered results in line with expectations. This continues a pattern of organic growth (pre- and post-IPO) on a broad front supplemented by acquisitions of complementary professional services businesses. A focus on long term projects and cross-selling with a diverse client base, coupled with some counter-cyclic business lines lends considerable confidence and we suggest the FY’20 PER discount of nearly 40% to the generally similar Knights Group (not rated) looks very overdone.

Companies: Gateley

17 Jul 19

Strong H1 progress and further upgrades

Management has delivered a very strong set of interims and anticipates results ahead of market expectations for the full year. Including today’s 10% upgrade, FY2019E PBT forecasts have now risen by 45% so far this year as momentum has built. Cost savings now exceed expectation at £6m p.a. and market drivers remain strong in key segments within the Treatment & Disposal and North Sea divisions, where H1 revenues were ahead 39% and 43% respectively. We still see forecasts as conservatively framed and would highlight that net cash is now at £22.8m, up £14.6m in the first half

Companies: Augean

11 Jul 19

Renewi - Start to FY20 as expected

Year to date trading has been in line with management’s expectations, which are also unchanged for the year as a whole. Forward momentum in the important Commercial division is continuing and we see other noted actions as positive, logical moves. Investor sentiment appears to have waned since the FY19 results announcement, but the investment case is gradually strengthening in our view and from a single-digit P/E base.

Companies: Renewi

15 Jul 19

Eddie Stobart Logistics - Forecasts reduced, material value upside remains

We prudently cut our FY19 and FY20 EBIT forecasts for Eddie Stobart Logistics (ESL) by 5% and 6% respectively post the H1 trading update highlighting solid revenue growth, but EBIT at the low end of management expectations and a 4% downward revision to the last reported adjusted EBIT. Despite this, our forecast FY19 EBIT margin remains at the top end of logistics peers and, even on our revised numbers, the stock is trading at a significant discount to peers, offering an attractive c 9% dividend yield.

Companies: Eddie Stobart Logistics

17 Jul 19

Flash Update: Q2 and H1 Trading Update

Capital reiterated it is on track to achieve full year revenue guidance of US$110-120 million, and whilst the headline revenue number for the half year is slightly below our expectations, we are confident that the company will be able to achieve guidance. The newly announced contract wins (described below), and some H1 seasonal effects in West Africa, imply a stronger H2 for the company. We are assuming an EBITDA margin of 24.2% for the half year, implying H1/2019 EBITDA of US$13.2 million, or 3.0x current EV on an annualised basis. We estimate US$5.5 million of free cash flow generated for the half year, equivalent to a 12.1% yield, which well covered the US$2.0 million dividend payment in May.

Companies: Capital Drilling

04 Jul 19

Australian banks to digitize bank guarantees, US Gov reviewing license requests for Huawei, Broadcom to acquire Symantec

Australia's top three banks said on Thursday they have agreed to partner with IBM and shopping mall owner Scentre Group to test blockchain technology to digitize bank guarantees. The companies are exploring how to move away from paper-based bank guarantees to cut processing time and the risk of fraud, Australia and New Zealand Banking Group, Westpac Banking Corp and Commonwealth Bank of Australia said in a statement. The US government said on Wednesday it was reviewing licence requests from US companies seeking to export products to China's Huawei "Under the highest national security scrutiny" since the company is still blacklisted. In an email to Reuters, the Commerce Department said that as it reviewed applications, it was applying the "Presumption of denial" standard associated with Entity Listed companies, meaning applications are unlikely to be approved. Symantec shares surged more than 20% in extended trading on Tuesday after Bloomberg reported that Broadcom is in advanced talks to acquire the security software vendor. The deal is reported to be worth more than $16bn, implying an EV/Sales multiple of 3.40x (Bloomberg). Agreement on a deal was close but could be delayed until after the July 4 holiday, according to people briefed on the move.

Companies: KAPE AVST CNS DFX ECSC FLX IGP NCC OSI SWG SOPH TECH AMO IQE

02 Apr 19

Volex

09 Jul 19

Knights plc - Full Year Results 2018/19

19 May 17

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

11 Jun 19

Malvern International (MLVN) Presentation at Mello May 2019

12 Jun 18

Staffline Group Plc 'one of the big growth plays in the staffing sector'

10 Jun 19

National Milk Records (NMRP) Presentation at Mello May 2019

02 Jul 19

Trackwise Designs (TWD) Presentation at Mello May 2019

29 May 19

Stobart Group (STOB) Full year results May 2019

11 Jun 19

Trifast - Final results

16 Apr 19

Flowtech Fluidpower - Market overview and 2018 highlights

26 Mar 19

Executive interview - Boku

16 Apr 19

Flowtech Fluidpower - Trading Statement

20 Sep 18

Somero Enterprises (SOM) H1 results - September 2018

10 Apr 19

Judges Scientific enjoying solid revenue growth and improved demand

29 Mar 19

Strix - New manufacturing facility in China

Latest Content

AMTRUST FINANCIAL SERVICES Bollore

ASX Listed Managed Investments Monthly Report

Capital Continues to Flow Into LMIs Through April and May we have seen three more listed managed investment vehicles (LMIs) start trading on the ASX including two fixed income focused listed investment trusts (LITs), Perpetual Credit Income Trust (ASX:PCI) and MCP Wholesale Income Opportunities Trust (ASX:MOT). Refer to our LMI Monthly Update of 18 March 2019 for more details on these LITs. Pengana Private Equity Trust (ASX:PE1) units listed in April after it raised $205m, at the lower end of its $100m to $600m target range. PE1 is a unique offering in that it is the only LMI that will provide exposure to a well-diversified portfolio of global private equity investments. Although the PE1 raising was towards the lower end of expectations we remain comfortable that it will still be able to achieve its objective of building a well-diversified portfolio and maintain our Recommended Plus rating. The listing of PCI and MOT continues the recent trend of fixed income managers tapping the LMI sector for funds. Given the domestic and global low interest rate environment and the potential for further interest rate cuts, it is not hard to see why these offerings are attracting strong demand. These fixed income trusts are offering investors higher yields than available on bank deposits, which are the traditional avenue for retail investors looking for a reliable income stream. However, with rates now so low and even negative factoring in inflation, yield hungry investors have gone in search of yield in alternative fixed income products which were once on the periphery of the retail market and only generally accessed by institutional investors. These products are now being increasingly accessed by retail investors through LMI products and unlisted unit trust structures. However, investors need to be aware that while the underlying assets can produce a higher yield and pay regular, stable income, the risks are higher than traditional bank deposits. Investors should always ensure that they understand the risks associated with any new fixed income offerings and are comfortable including these in their portfolios. These products don’t come with any guarantees, unlike bank deposits, and a significant deterioration in global credit conditions could have an impact on returns. The addition of PCI and MOT takes the total number of fixed income LMIs to six and we are aware of two more offerings in the pipeline, including one from Partners Group, a global private markets investment manager which is planning to launch a listed investment trust later this year. The Partners Group LMI will invest in a portfolio of global debt instruments in a segment of the market that is not generally accessible to retail investors. We will provide more information on the proposed LMIs as it comes to hand. In addition to funds flowing into new LMIs, there have also been a number of secondary market raisings in recent months. In May/ June VGI Partners Global Investments (ASX:VG1) successfully raised $300m via a placement and entitlements offer. VG1 shareholders also stumped up $75m for shares in the Manager as part of an IPO offer for VGI Partners (ASX:VGI). There have also been a number of secondary market raisings by fixed income LMIs with NBI Global Corporate Income Trust (ASX:NBI) raising $476m via entitlement and shortfall offers. This was the maximum under the offer and funds will be invested in accordance with NBI’s strategy to invest in global, high yield, liquid corporate bonds. In June, Qualitas Real Estate Income Fund (ASX:QRI) raised $34.7m via a placement to wholesale investors and in July Gryphon Capital Income Trust (ASX:GCI) announced entitlement and shortfall offers to raise up to $108m. These offers show that the fixed income LMIs are having no trouble finding new assets for their investment portfolios and there is no shortage of investors willing to provide the funds. This sector had a market cap of $3bn at the end of May and with the new offerings yet to come to market and secondary market raisings we expect this to be well over $4bn by the end of 2019. Spotlight on DUI and Rating Upgrade Diversified United Investment (ASX:DUI) is one of the older style internally managed LICs. Listed on the ASX in 1991, the company invests in a portfolio of ASX-listed securities to generate income and capital appreciation over the long-term. Whilst the portfolio is predominantly invested in Australian large caps, up to 5% can be held in small-caps via an allocation to small cap fund managers and up to 20% (currently 15%) can be held in international shares via ETFs and international fund managers. The portfolio has performed well with DUI at the top of our performance table (see above) for LICs with an Australian shares focus. It has outperformed the S&P/ASX 200 Accumulation Index over 1, 3, 5 & 10-year periods. The outperformance can perhaps partly be attributable to the small international holding, but individual Australian stocks, such as an overweight position in CSL, have played a large part. The portfolio is managed by the Board which meets on a monthly basis to review the portfolio. All four directors have significant market experience. Like the other internally managed LICs, DUI is low cost with a management expense ratio of just 0.12% p.a. The fully franked dividend yield of around 3.5% is a little lower than some other Australian share focused LICs. Given the strong and consistent portfolio performance we are upgrading our rating for DUI from Recommended to Recommended Plus. At the time of writing the shares are trading at a 6.5% discount to pre-tax NTA. We believe this is a good entry point for long-term investors seeking exposure to a well-managed portfolio of Australian shares with some modest international exposure. Bailador has a Good Year Technology focused LIC, Bailador Technology Investments (ASX:BTI) had a good FY2019 with pre-tax NTA per share at 30 June 2019 up 18.2% for the 12 months. The increase in NTA was driven by sizable upwards revaluations in a number of its key portfolio companies including SiteMinder (+30.4%), DocsCorp (+19.3%) and Straker Translations (+25.7%). We shone the spotlight on BTI 12 months ago in our June 2018 Monthly LMI Update when the shares were trading at $0.74. This was after write-downs in a couple of its portfolio companies, including iPRO which was completely written off in 2017. At the time we wrote “Overall, the portfolio now appears to be in relatively good shape and with the underlying portfolio of businesses growing revenue at an annual rate of 35% there appears to be good valuation upside. At current prices we think BTI probably offers good value given the large discount to pre-tax NTA and the potential for valuation uplifts over coming months.” We did remind investors that “private equity style investing is more suited to higher risk, patient investors and that it should form only a relatively small portion of a well-diversified portfolio.” We note that returns from this style of investment can be lumpy and take time to emerge. Investors who acquired BTI at the time have done well with the shares now trading at $1.07. Despite the strong share price performance the shares are still at a discount to the June 2019 pre-tax NTA of $1.31 per share and also the post-tax NTA of $1.21 per share. We will take a closer look at BTI and its prospects in our next Monthly LMI Update. Our rating for BTI is Recommended Plus.

View

17 Jul 19
-
-

Sandvik

Decent Q2, but orders plateauing

Q2 results are very decent, and margins remain high However, the order intake was a bit weak in the quarter, due to SMT and SMS The balance sheet remains very clean, which is not a surprise At the end of the day, the stock is likely to be capped before visibility improves on the macro front

View

17 Jul 19
-
-

Alfa Laval

Weaker orders on lower scrubbers

Alfa Laval reported a mixed set of results, with declining orders due to both pumping systems and scrubbers, a better than expected development in Energy and Marine, while Food and Water underperformed and affected the whole group’s performance. The Marine division continues to drive growth thanks to good deliveries and execution. Management remains confident and expects demand to be “somewhat higher” in Q3 compared to Q2.

View

17 Jul 19
-
-

SARINE TECHNOLOGIES

Sarine Technologies - Termination of coverage

Edison Investment Research is terminating coverage on Sarine Technologies. Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

View

17 Jul 19
-
-

Experian

Despite a soft start, the full-year guidance remains unchanged

Experian’s top-line growth moderated in Q1, largely due to the tough comparable in the‘Decisioning’ segment. Despite this soft start, management remains confident about the business prospects, maintaining its full-year guidance. We will tweak our estimates slightly, but do not expect a material change in the target price.

View

17 Jul 19
-
-

Augean

Strong H1 progress and further upgrades

View

17 Jul 19
-
-

Capital Drilling

Flash Update: Q2 and H1 Trading Update

View

17 Jul 19
-
-

BGO BOKU FFX TECH BOOM D4T4 EYE

Spotify falls after Apple podcast plans, Amazon offers credit for data, London based Curve valued at $250m

Spotify stock dropped over 1% on a Bloomberg report that Apple plans to fund its own original podcasts. Apple executives have reached out to media companies to buy exclusive rights to podcasts, according to the report. Amazon has a promotion for US shoppers on Prime Day, the 48-hour marketing blitz that started Monday: Earn $10 of credit if you let Amazon track the websites you visit. The catch, as Amazon explains in the fine print, is the company can use this data to improve its general marketing, products and services, unrelated to the shopping assistant. Curve, the London-based “over-the-top banking platform,” has raised $55 million in new funding. The start-up lets you consolidate all your bank cards into a single Curve card and app to make it easier to manage your spending and access other benefits. The new round of funding values Curve at $250 million and will be used by the company to continue adding more features to its platform and for further European expansion.