What a difference a year makes - 12 months ago, the focus, quite understandably, was on the course of the pandemic and the lifting of the Lockdown (1) measures. For investors, it was the sustainability of the rally in markets seen since March 2020. Today, while we are still thinking about the lifting of lockdown measures, we are also concerned about two “old favourites” from previous decades. Inflation and the parlous state of public finances. The BoE has said that although CPI inflation rose to
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As midsummer’s day looms (where has this year gone?), there is greater optimism, in general, than may have been anticipated a few months ago. A post-pandemic, ‘vaccine-driven’ recovery demonstrated by increased consumer spending as lockdown measures are lifted has been one of the catalysts. The FTSE 100 has been range-bound in the last month 6,900-7,100. We have seen a combination of broadly positive company results across a range of sectors, further examples of M&A activity and a sequence of ne
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During the challenges of Covid, N Brown has taken the opportunity to accelerate its transformation programme. Strategic change was augmented by the FY2021 £100m equity raise, which alongside strong underlying cash generation sees the Group with a now comfortable balance sheet, with £80.8m of core net cash and all debt securitised against customer receivables. Management has again reiterated medium term targets for 7% annual Product sales growth and a 14% Group EBITDA margin, from which we take c
Companies: N Brown Group plc
The Budget offered a clear picture of the state of the economy. Put simply, the economy will be 3% smaller in three years’ time than it would have been without the impact of the pandemic. However, it is forecast to return to pre-pandemic levels by mid-2022, six months earlier than previously thought. The OBR forecasts that the UK economy will grow by 4.1% in 2021, (lower than the 5.5% outlined in November 2020). It has set its GDP forecasts in 2022, 2023 and 2024 at 7.3%, 1.7% and 1.6%. Positive
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tinyBuild— a leading video games publisher and developer with global operations. tinyBuild's strategic focus is in creating longlasting IP by partnering with video games developers, establishing a stable platform on which to build multi-game and multimedia franchises is to join AIM. Offer details TBC. Due mid-March. AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to ta
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In the last fortnight, we have surrendered some of the notable progress made over the last three months. That said, the optimism displayed by markets, driven by progress with vaccines and their rollout, persists. The recent direction of markets has been set by volatility in US markets, driven by specific retail market developments. Domestically, we have seen a broadly upbeat procession of results and trading updates/outlooks have, generally, been at least in line. The share price reactions have
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N Brown’s Q3 2021 period may prove to be pivotal to its long history, with a £100m capital raise and the move to the AIM market both completed in December 2020. Trading remains constrained, with product sales down 8.9%, and FS income falling 8.3%. However, in areas of focus trading was more resilient, with sales across the five strategic brands down by a more modest 1.4%. We reintroduce FY2021 forecasts in this report and will look to reintroduce estimates for further out in short-order, noting
We highlighted last month the (first) Santa Rally arrived early (unlike some other festive gifts). The second Claus(e) relief rally was prompted by the agreement between the European Commission and the UK on its future cooperation with the EU. Markets also reacted positively to the $900bn stimulus package agreed in the US. While the FTSE 100 and FTSE 250 indices rose by 1.6% and 1.7% respectively on the first trading day after the holiday and the FTSE 100 has recovered 28% from its low point in
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2020 has so far been a very challenging year for many UK retailers, with the tough economic conditions on the exit of CY2019 more than compounded by the ongoing Covid-19 crisis – visibility on sector profitability has been very low for some months. For N Brown, with its significant Financial Services (FS) business, the lack of earnings visibility is even greater given legislation that further tightens lending criteria and the impact of IFRS-9 on bad debt provisioning. We continue to feel that it
N Brown Group ('N Brown') has been through an extended mill, facing challenge after challenge topped off by COVID-19, which has taken a toll on its share price. FY2020 results confirm the well-flagged difficulties but also something much more virtuous, interesting and potentially enduring, in our view. The Group has to some degree channelled a couple of years restructuring into three months, doing so in a capital light manner, to make for a refocused Product proposition, a top-10 UK clothing & f
N Brown Group ('N Brown'), the increasingly digital clothing business supported by a credit offering, has issued a surprise announcement that Rachel Izzard will be joining the business as Group Chief Financial Officer (CFO) at a date yet to be determined.
N Brown’s 18-week trading statement to the 4th January 2020 surprises us with notably lower guidance on gross margins in both Product and Financial Services (FS), only partially offset by lower operating costs, leading us to downgrade FY2020 and FY2021 CPTP estimates (the cash flow impact is lesser than that on the P&L). Accordingly, we cut our FY2020 CPTP estimate by 16% to £70.2m and our FY2021 forecast by 20% to a similar level. The Product sales performance was resilient in a highly promotio
N Brown Group (N Brown) outlined a new strategy under CEO Steve Johnson in spring 2019 and we are pleased with the progress made against the priorities set. In H1 FY2019 the Group has, as expected, recorded lower product sales (-9.3%) in a weak and promotional UK apparel market whilst driving qualitative and quantitative results in Financial Services (FS). H1 digital revenues increased by 1.5% with EBITDA 4.0% higher year-on-year (yoy) leading to a small beat to both our and consensus interim ex
With the PPI deadline recently passed (29th August 2019), N Brown, in line with the wider industry, has confirmed it experienced a “significant increase” in PPI information requests and complaints (PIRs) through August. Whilst management continues to work through said PIRs, the Group believe it will be necessary to make an additional provision in the range of £20-£30m (over and above the £108m already paid or provided). As such, management is guiding to year end net debt of £460m-£490m (previous
N Brown’s Q1 trading update contains no surprises in our view and represents a solid start to the year. A decline in Product sales of -5.4% is broadly as expected (SC -4.8%, consensus -3.7%) and reflective of a strategic focus on profitable sales, with the acceleration of the customer migration to online evident in digital Product growth of +3.0%. Income from Financial Services increased by a more than robust 8.0% (SC +5.2%, consensus 4.6%). Guidance for FY2020 remains unchanged (provided 2 May)
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Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz. Offer TBA. Due early Nov.
Life Science REIT to join AIM raising up to £100m. This will be the first London listed real estate investment trust (REIT) focused on UK life science properties providing investors with exposure
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Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz.
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Softline the global solutions and services provider in digital transformation and cybersecurity, with its headquarters in London, is considering proceeding with a potential initial public offering of global depositary receipts representing its ordinary shares. The Company is considering applying for admission of the GDRs to the standard listing segm
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Brighton Pier Group Plc (BPG) has traded remarkably well during the first 13 weeks of its financial year, with net sales up 44% versus the same period (pre-Covid) in 2019. BPG also successfully settled its business interruption insurance claims in full, meaning it will now receive £2m more in FY21E than we had forecasted (£5m in total). We update our FY21E forecasts to account for this, as well as materially upgrading our FY22E projections (Adj EPS raised 85% to 11.9p) to reflect the very positi
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H1 trading was slightly ahead of expectations from a sales and margin perspective, with UK sales positive in Q2 after annualising very tough Q1 comps. Despite exceptional comps, a good proportion of the gross margin uplift has also been retained. G4M continues to minimise the impact of various global supply chain headwinds. and has good visibility of stock/availability for peak. It is therefore confident of hitting full year expectations. Recent de-rating looks unjustified, particularly given a
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Netflix surged past the target price from our last report as the company reported an exceptionally good result with strong subscriber growth and earnings. The company added as many as 4.38 million subscribers in the quarter, well above the 2.2 million in the corresponding quarter of the previous year on account of the huge success of many of its originals such as Squid Game, Lupin and Money Heist’s latest season. Its 213.56 million paid subscribers across the globe have grown by 9.4% year over y
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PensionBee, the online pensions provider, with a mission to make pensions simple, so that everyone can look forward to a happy retirement, considering an IPO on the High Growth Segment of the Main Market of the London Stock Exchange. PensionBee is a leading online pensions provider in the UK, with approximately 130,000 Active Customers and £1.5 billion of assets under administration , in each case as at 28 February 2020. Cornerstone FS to join AIM, an SME focused, cloud-based provider of inter
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Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51mm) will be used to fund
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Guild Esports provided an encouraging operational update and published H1 results yesterday. H1 financial results do not reflect the company’s substantial progress on sponsorships signings, tournament wins and fanbase growth:
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Dixons Carphone’s FY20/21 results were in line with our expectations. The adjusted PBT came in at £156m, led by a strong show in the UK&I electrical business. The turnaround of the mobile business remains on track. The current trading has been positive in both UK&I and international segments. We believe DC will be able to achieve the guidance of 4% EBIT margin in the forecast years. No change in the stock recommendation.
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The restaurant industry has started its journey of recovery over the past couple of quarters and Darden Restaurants is riding the recovery wave as well. The company had a solid performance in the recent quarter and reported a humungous year-on-year growth of 80% after the management added 14 new restaurants to make the most out of the increasing customer footfalls. The company has an excellent portfolio of brands including Olive Garden, LongHorn Steakhouse, The Capital Grille and Eddie V's. The
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Home Depot delivered yet another outstanding quarter and crossed the $40 billion threshold in quarterly sales for the first time in their history. The company was also able to expand its profitability despite the inflationary pressures. As the consumers are returning to pre-pandemic activities, the management continues to respond to the strong home improvement demand that has refused to decline despite the changing macro-economic landscape. The company delivered positive comps every single week
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