Sureserve Group

LN: SUR

£45.8m market cap

29p last close

Sureserve Group (previously Lakehouse) is engaged in asset and energy support services, focused on customers in the outsourced public and regulated services sectors in the UK. The group comprises two divisions: compliance and energy services.

Investment summary

Given the pre-restructuring history of Sureserve, the absence of any surprises or exceptionals in this set of interims is a cause for celebration. The more streamlined group is now focused on compliance and energy services, where growth is underpinned by regulatory drivers. H119 results showed revenues expanding by 13% y-o-y and EBITDA growing by 17%. The current FY19e P/E of c 7.3x is in marked contrast to the 15.5x recently offered by Macquarie for PTSG, one of Sureserve’s peers, and highlights the relative attraction of the business.

Y/E Sep
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 181.5 9.0 5.4 2.8 10.3 N/A
2018A 190.8 9.2 6.6 3.4 8.5 N/A
2019E 205.2 11.6 7.7 4.0 7.2 N/A
2020E 215.6 10.9 8.3 4.3 6.7 N/A
Last updated on 10/09/2019
Industry outlook

Growing corporate and government awareness around safety and energy efficiency create an attractive backdrop to Sureserve’s compliance and energy services business, where strong regulatory drivers have the potential to deliver substantial medium-term EBITA growth. The management team appointed in July 2016 to reverse the decline in performance is taking bold decisions.

Last updated on 10/09/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 7.4
Forecast gearing ratio (%) 16
Price performance
%
1m
3m
12m
Actual (0.7) 6.7 (23.2)
Relative* (2.6) 5.9 (22.4)
52-week high/low 37.2p/20.0p
*% relative to local index
Key management
Robert Holt Executive Chairman