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EMIS Group — Back on the growth track

EMIS Group (AIM: EMIS)

Last close As at 18/04/2024

GBP19.20

— 0.00 (0.00%)

Market capitalisation

GBP1,232m

More on this equity

Research: TMT

EMIS Group — Back on the growth track

Throughout FY20, EMIS focused on helping its customer base in the fight against COVID-19, adapting its solutions to support testing and treatment of the disease and the vaccine roll-out programme. EMIS reported flat revenue and adjusted operating profit for the year and has indicated that it expects growth to resume in FY21. Development of the EMIS-X platform, started in 2018, positions the company well to meet the evolving needs of the healthcare sector, opening up opportunities in health data analytics and collaboration between the health and life sciences sectors.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

EMIS Group

Back on the growth track

FY20 results

Software & comp services

22 March 2021

Price

1,104p

Market cap

£699m

Net cash (£m) at end FY20

53.0

Shares in issue

63.3m

Free float

98%

Code

EMIS

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

1.5

4.2

35.6

Rel (local)

0

0.5

(1.1)

52-week high/low

1,188p

884p

Business description

EMIS is a software supplier to the UK healthcare market, with two divisions. EMIS Health supplies integrated care technology to the NHS, including primary, community, acute and social care. EMIS Enterprise is a business-to-business software provider to the healthcare market, including medicines management, partner businesses, patient-facing services and healthcare analytics.

Next events

AGM

6 May 2021

Analyst

Katherine Thompson

+44 (0)20 3077 5730

EMIS Group is a research client of Edison Investment Research Limited

Throughout FY20, EMIS focused on helping its customer base in the fight against COVID-19, adapting its solutions to support testing and treatment of the disease and the vaccine roll-out programme. EMIS reported flat revenue and adjusted operating profit for the year and has indicated that it expects growth to resume in FY21. Development of the EMIS-X platform, started in 2018, positions the company well to meet the evolving needs of the healthcare sector, opening up opportunities in health data analytics and collaboration between the health and life sciences sectors.

Year end

Revenue (£m)

PBT*
(£m)

Diluted EPS*
(p)

EMIS adj. dil EPS** (p)

DPS
(p)

P/E
(x)

12/19

159.5

41.0

53.5

51.1

31.2

20.6

12/20

159.5

43.4

56.4

50.4

32.0

19.6

12/21e

164.1

43.8

56.2

53.2

34.0

19.7

12/22e

172.7

46.5

59.7

57.4

35.0

18.5

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **EMIS adjusted EPS – cash accounts for development costs and excludes exceptional items and amortisation of acquired intangibles.

FY20: Stable performance despite pandemic

EMIS reported flat revenues and adjusted operating profit for FY20, helped by the Pinnacle Systems acquisition in March, with an adjusted EPS decline of 1%. EMIS Health saw revenue growth of 7% y-o-y due to stronger demand for mobile working solutions. EMIS Enterprise saw a 12% revenue decline as it was more difficult to sign new business and implementations were delayed. The company increased net cash by 70% to £53m at year-end, helped by a £7m VAT deferral.

Forecasting a return to growth

Throughout FY20, the company was focused on supporting its customers and workforce while continuing with its product development roadmap. COVID-19 has acted as a catalyst to speed up the adoption of digital healthcare, highlighting the importance of innovative and connected software. Management expects to return to growth in FY21, which should accelerate in FY22/23 as investment in product development starts to pay off. We have made minor changes to our forecasts: FY21 and FY22 adjusted EPS increase by 0.2% and 1.0% respectively and we introduce FY23 forecasts.

Valuation: At a discount to peers

Compared to a global group of healthcare software peers, EMIS trades at a discount on all valuation metrics. EMIS generates significantly higher operating profit margins but. with slightly slower revenue growth, generates lower earnings growth. Its dividend yield is significantly ahead of the group. Key to closing the discount will be evidence that revenue growth is returning to the company’s medium-term goal of mid- to high single digits, in turn driving stronger earnings growth. We note that EMIS has good visibility (recurring revenue was 82% in FY20) and a strong balance sheet with no debt.

Review of FY20 results

Exhibit 1: FY20 results highlights

£'000s

FY19a

FY20e

FY20a

Diff

y-o-y

Revenues

159,507

158,807

159,453

0.4%

(0.0%)

Normalised operating profit

40,794

42,847

43,020

0.4%

5.5%

Normalised operating margin

25.6%

27.0%

27.0%

(0.0%)

Reported operating profit

26,827

34,543

35,776

3.6%

33.4%

EMIS adjusted* operating profit

39,273

37,847

39,266

3.7%

(0.0%)

EMIS adjusted* operating margin

24.6%

23.8%

24.6%

0.8%

Normalised EPS (p)

53.5

55.7

56.4

1.1%

5.4%

Reported EPS (p)

36.0

46.2

48.1

4.1%

33.5%

EMIS adjusted* EPS (p)

51.1

49.3

50.4

2.3%

(1.2%)

Dividend per share (p)

31.2

32.0

32.0

0.0%

2.6%

Net cash/(debt)

31,099

45,061

53,008

17.6%

70.4%

Source: EMIS, Edison Investment Research. Note: *EMIS adjusted measures cash account for development costs and exclude exceptional items and amortisation of acquired intangibles.

EMIS reported flat revenues y-o-y at the group level, with 4% growth in recurring revenues which represented 82% of group revenue. Pinnacle Systems contributed revenue of £2.2m from the date of acquisition; underlying revenue declined 1.4% y-o-y. The company won £28m in new business in the year, despite the customer base being focused on dealing with COVID-19. Adjusted operating profit was also flat y-o-y, coming in 3.7% ahead of our forecast (down 1.8% once Pinnacle System’s £0.7m contribution is excluded). This translated into a 1.2% decrease in adjusted diluted EPS (due to higher diluted average share count compared to FY19). The company noted that it did not furlough any staff nor make any redundant.

The company reported two exceptional items in FY20: a £1.02m credit due to the reduction in contingent consideration for Dovetail and £0.78m income, which was the final receipt from the disposal of Specialist & Care in FY18.

Net cash grew by 70% y-o-y, helped by operating cash flow of £52.4m, which was boosted by the deferred VAT payment of £7.3m. The company reduced capex in FY20 to £2.9m (FY19: £5.8m) and benefited from the £2.5m proceeds from the old head office disposal. Capitalised development costs of £6.6m were lower than our £8.0m forecast. The company spent £2.9m to acquire Pinnacle Systems in March, paid £0.8m in final deferred contingent consideration for Dovetail and acquired the remaining 10% of Dovetail for £0.6m.

The company announced a final dividend of 16p per share to make a full year dividend of 32p per share (in line with our forecast).

Divisional performance

Exhibit 2 summarises revenues and operating profit by division.

EMIS Health: Revenue +7%, adjusted operating profit +8%

The division managed to grow revenues 6.9% y-o-y. H1 revenues were slightly stronger than H2, reflecting a boost in hardware sales as customers kitted out their staff for mobile working. This resulted in adjusted operating profit growth of 7.8% and margin expansion from 23.1% to 23.3%.

Exhibit 2: Divisional performance, FY19–20

£m

FY19a

FY20e

FY20a

Diff

y-o-y

Revenues

 

 

 

 

 

EMIS Health

100.9

105.4

107.8

2.2%

6.9%

EMIS Enterprise

58.6

53.4

51.7

-3.1%

(11.9%)

Total

159.5

158.8

159.5

0.4%

(0.0%)

Adjusted operating profit

 

 

 

 

 

EMIS Health

23.3

24.8

25.1

1.2%

7.8%

EMIS Enterprise

17.5

14.6

15.7

7.7%

(10.4%)

Central costs

(1.5)

(1.5)

(1.5)

0.7%

0.3%

Total adjusted operating profit

39.3

37.8

39.3

3.7%

(0.0%)

Reported operating profit

 

 

 

 

 

EMIS Health

16.0

25.7

23.8

-7.5%

48.6%

EMIS Enterprise

12.3

10.3

13.5

30.7%

9.5%

Central costs

(1.5)

(1.5)

(1.5)

0.7%

0.3%

Total reported operating profit

26.8

34.5

35.8

3.6%

33.4%

Adjusted operating margin

 

 

 

 

 

EMIS Health

23.1%

23.5%

23.3%

(0.2%)

0.2%

EMIS Enterprise

29.9%

27.3%

30.4%

3.1%

0.5%

Total adjusted operating margin

24.6%

23.8%

24.6%

0.8%

0.0%

Reported operating margin

 

 

 

 

 

EMIS Health

15.9%

24.4%

22.1%

(2.3%)

6.2%

EMIS Enterprise

21.0%

19.3%

26.1%

6.7%

5.1%

Total reported operating margin

16.8%

21.8%

22.4%

0.7%

5.6%

Source: EMIS, Edison Investment Research

In Primary Care, the business in England successfully transitioned to the GP IT Futures framework. In Scotland, EMIS continues to maintain its PCS system. In Northern Ireland, it secured an extension to the GP Systems of Choice framework until April 2022 and it will continue to deliver GP systems under the existing arrangements. In Wales, the company’s contract has been extended until the end of FY21 while the Welsh government undertakes a new tender for services. EMIS has not lost any practices in Wales. Overall, EMIS maintained its 57% share of the UK GP market.

EMIS made various enhancements to EMIS Web, including adding capability for Fast Healthcare Interoperability Resource (FHIR). As a standard for exchanging healthcare information, this is an important feature that will support EMIS’s strategy to both develop its own interoperable products and partner with other technology providers.

In Community Care, the company maintained its number two position with market share of 20% (FY19: 21%). The company retained its joint leadership position in Acute A&E at 21% (FY19 23%).

EMIS Enterprise: Revenue -12%, adjusted operating profit -10%

EMIS Enterprise saw an 11.9% revenue decline in FY20 – it was more difficult to sign new business and some implementations were delayed due to lockdown. Good control over costs limited the decline in adjusted operating profit to 10.4%, with the margin increasing from 29.9% to 30.4%.

Community pharmacy maintained its leading position and market share increased by 2pp to 38%. Overall demand was down as fewer patients visited pharmacies. The Outcomes4Health solution from Pinnacle Systems was selected for use in the vaccination programme in England and is being used in 1,400 vaccination centres (all venues except hospitals). As at 1 March, it had supported 14.9m vaccinations. Hospital pharmacy maintained its number two position with a market share of 36% (FY19: 35%).

EMIS launched its first cloud-based ProScript Connect module – Clinical Service Hub – which enables customers to deliver and record services they provide under the Patient Group Directions initiative.

EMIS launched EMIS-X Analytics in October 2020 and the response to date has been positive. The company has secured pilot contracts with 25 NHS organisations for the Explorer analytics product. EMIS has also supported large-scale epidemiological COVID-19 research with NHS England and researchers from Oxford University and the London School of Tropical Hygiene and Medicine. It has also contracted with Oxford University and a global biopharmaceutical business to help recruit and screen patients for a major clinical research project in the treatment of COVID-19.

EMIS is collaborating with a top five global pharmaceutical company to implement a neural network – according to EMIS, this will be the first non-image-based AI deployed in healthcare. It will be implemented in EMIS Web to help early detection of atrial fibrillation and reduce the occurrence of strokes across the UK.

Patient generally saw an increase in all metrics through the year, with the one exception being GP appointment bookings due to the lack of availability of appointment slots and an unwillingness by many patients to consult their GPs during the worst of the pandemic. Patient Access expects to launch its Smart Pharmacy service in 2021 – this will enable patients to order, track and opt for home delivery of their medications from their local pharmacy. Patient also worked with Pinnacle Systems during the year to provide Patient Access Connect, a new GP patient referral service (part of Patient Access for Professionals) that allows practice staff to triage patients and refer them to a community pharmacy in instances where they do not need to see a GP.

Exhibit 3: Patient performance statistics

FY19

FY20

y-o-y

Patient Access registered users - m

8.4

11.7

39%

Appointment bookings (digital or face-to-face) - m

6.7

2.5

-63%

Repeat prescriptions - m

20.2

23.5

16%

Private pharmacy consultations

14,000

41,415

196%

Pharmacy NHS flu vaccinations

8,700

15,356

77%

Patient.info unique users - m

42

80

90%

Patient.info pages viewed - m

109

166

52%

Source: EMIS

EMIS increased the number of partners that offer products which interoperate with EMIS systems to 143 from 113 at the end of FY19.

Outlook and changes to forecasts

Management expects a return to growth in FY21 and expects product development to drive higher growth from FY22 (within the 5–9% range projected at the capital markets day in November 2018)1. The company believes that EMIS-X offers significant potential for growth, from both the NHS and life sciences sectors in the medium term. Management also expects that EMIS’s flexible business model will enable it to adapt to the proposed changes to the NHS, which call for the integration of health and social care within Integrated Care System organisations, replacing the current system of Clinical Commissioning Groups (CCGs). M&A is a possibility, although management noted that it was not keen on buying expensive start-ups and cited the Pinnacle Systems acquisition as an example of the type of business that is attractive.

Unveiling EMIS-X, 4 December 2018

We have revised our forecasts to reflect FY20 results, with minor changes to our FY21 and FY22 forecasts. We introduce forecasts for FY23.

Exhibit 4: Changes to estimates

£'000s

FY21e

FY22e

FY23e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

New

y-o-y

Revenues

164,130

164,139

0.0%

2.9%

169,626

172,741

1.8%

5.2%

182,448

5.6%

Normalised operating profit

43,443

43,440

(0.0%)

1.0%

45,413

46,169

1.7%

6.3%

49,038

6.2%

Normalised operating margin

26.5%

26.5%

(0.0%)

26.8%

26.7%

(0.0%)

26.9%

Reported operating profit

36,417

36,443

0.1%

1.9%

39,941

40,918

2.4%

12.3%

44,330

8.3%

EMIS adjusted operating profit

40,843

41,100

0.6%

4.7%

43,813

44,429

1.4%

8.1%

47,298

6.5%

Adjusted operating margin

24.9%

25.0%

0.2%

25.8%

25.7%

(0.1%)

25.9%

Normalised EPS (p)

56.4

56.2

(0.4%)

(0.4%)

58.9

59.7

1.2%

6.2%

63.3

6.2%

Reported EPS (p)

47.5

47.3

(0.4%)

(1.6%)

52.1

53.1

2.0%

12.2%

54.3

2.3%

EMIS adjusted EPS (p)

53.1

53.2

0.2%

5.4%

56.9

57.4

1.0%

8.0%

57.7

0.5%

Dividend per share (p)

34.0

34.0

0.0%

6.3%

35.0

35.0

0.0%

2.9%

36.0

2.9%

Net cash/(debt)

55,518

53,763

(3.2%)

1.4%

69,540

68,435

(1.6%)

27.3%

84,939

24.1%

Source: Edison Investment Research

Valuation

We have widened our peer group to include companies involved in healthcare analytics and medicines management. The tables below show how EMIS compares in terms of financial performance (Exhibit 5) and valuation metrics (Exhibit 6). EMIS is at the top of its peer group in terms of EBIT margins but is at the lower end in terms of revenue growth and consequently earnings growth. It trades at a discount to the peer group average/median on all metrics, with a dividend yield at the top end of the group. Reacceleration of growth will be a key driver of upside. We note that EMIS has c £50m in net cash plus further credit lines (£30m undrawn bank facility plus £30m accordion) available to invest in growth if suitable M&A opportunities present themselves.

Exhibit 5: Peer financial metrics

Company

EBIT margin

EBITDA margin

Rev growth

EPS growth

CY

NY

NY+1

CY

NY

NY+1

CY

NY

NY+1

CY

NY

NY+1

EMIS

26.5

26.7

26.9

34.0

34.2

33.9

2.9

5.2

5.6

(0.4)

6.2

6.2

EMIS - adjusted

25.0

25.7

25.9

34.0

34.2

33.9

2.9

5.2

5.6

5.4

8.0

0.5

Allscripts Healthcare Solutions

8.9

9.4

9.0

16.3

17.3

17.8

(8.0)

1.6

1.6

(7.7)

13.9

10.1

Cegedim

6.6

7.1

7.6

20.4

20.9

21.3

-1.8

3.0

4.0

524.1

19.1

13.5

Cerner Corp

20.7

21.4

22.2

32.5

33.2

33.2

5.7

5.2

4.8

11.2

12.6

11.8

Computer Programs and Systems

N/A

N/A

N/A

17.3

18.7

20.2

4.1

5.6

7.7

11.4

14.6

12.0

Craneware

28.0

27.5

27.6

34.5

34.1

33.9

4.9

6.1

7.7

0.5

2.2

6.6

CompuGroup

14.8

16.1

17.7

21.8

23.0

24.0

19.3

5.5

4.1

3.4

13.9

10.3

Health Catalyst

(14.3)

(7.2)

(14.5)

(6.2)

0.8

6.3

20.7

20.6

20.0

N/A

N/A

N/A

Inovalon Holdings

28.4

20.9

17.6

35.9

36.6

37.8

13.3

10.3

8.6

20.3

22.8

18.9

Nexus

13.8

15.0

17.0

23.2

23.8

25.4

12.8

9.9

6.2

15.0

19.9

34.0

NextGen Healthcare

15.2

14.6

15.1

20.1

19.8

20.8

2.3

4.4

4.2

16.5

2.3

7.0

Omnicell

13.7

15.0

14.6

21.2

22.3

23.3

22.4

11.9

12.7

39.2

12.0

8.8

OPTIMIZERx Corp

N/A

N/A

N/A

8.0

19.9

27.2

28.6

32.5

55.3

121.3

83.1

111.1

Pharmagest Interactive

26.7

26.8

26.9

30.2

31.1

31.7

8.3

11.9

11.3

14.3

15.7

12.4

Tabula Rasa HealthCare

(7.2)

(5.0)

(5.0)

8.2

9.7

12.0

14.8

16.1

19.4

177.4

24.0

Average

12.9

13.5

13.0

20.2

22.2

23.9

10.5

10.3

12.0

64.1

31.5

21.6

Median

14.3

15.0

16.1

20.8

21.6

23.6

10.6

8.0

7.7

14.6

14.6

12.0

Source: Edison Investment Research, Refinitiv (at 17 March)

Exhibit 6: Peer valuation metrics

Share

Market

EV/Sales (x)

EV/EBITDA (x)

EV/EBIT (x)

P/E (x)

Div yield (%)

price

cap (m)

CY

NY

CY

NY

CY

NY

CY

NY

CY

NY

EMIS

£11.04

699

3.9

3.7

11.6

10.9

14.9

14.0

19.7

18.5

3.1

3.2

EMIS - adjusted profitability

3.9

3.7

11.6

10.9

15.7

14.5

20.8

19.2

3.1

3.2

Allscripts Healthcare Solutions

$15.37

2152

1.2

1.2

7.3

6.8

13.3

12.5

21.9

19.2

0.0

0.0

Cegedim

€ 24.70

347

1.2

1.2

5.9

5.6

18.2

16.4

19.8

16.6

0.0

0.0

Cerner Corp

$72.20

22114

3.8

3.7

11.8

11.0

18.6

17.1

22.9

20.3

1.1

0.8

Computer Programs and Systems

$32.68

479

2.0

1.9

11.4

10.0

N/A

15.9

13.3

11.6

4.9

4.9

Craneware

£22.00

590

10.3

9.7

29.9

28.6

36.9

35.4

47.2

46.2

0.0

0.0

CompuGroup

€ 71.25

3838

4.3

4.1

19.8

17.7

29.2

25.3

36.6

32.2

0.8

0.8

Health Catalyst

$47.66

2099

8.8

7.3

0.0

0.0

Inovalon Holdings

$27.41

4258

6.7

6.1

18.6

16.5

23.5

29.0

36.8

29.9

0.0

0.0

Nexus

€ 57.20

903

4.8

4.4

20.9

18.5

35.1

29.4

52.4

43.7

0.3

0.4

NextGen Healthcare

$19.35

1296

2.2

2.1

11.1

10.8

14.7

14.6

20.0

19.6

0.0

0.0

Omnicell

$140.88

6064

5.5

4.9

26.1

22.1

40.4

32.9

39.9

35.6

N/A

N/A

OPTIMIZERx Corp

$52.54

883

15.7

11.8

196.1

59.4

N/A

N/A

118.7

64.9

N/A

N/A

Pharmagest Interactive

€ 98.20

1494

8.7

7.8

29.0

25.1

32.7

29.2

45.5

39.3

1.1

1.2

Tabula Rasa HealthCare

$44.55

1100

3.9

3.4

47.7

34.9

N/A

N/A

287.4

103.6

Average

5.7

5.0

33.5

20.6

26.3

23.4

58.6

37.1

0.7

0.7

Median

4.6

4.2

19.8

17.7

26.3

25.3

36.8

32.2

0.0%

0.0%

Source: Edison Investment Research, Refinitiv (at 17 March)

Exhibit 7: Financial summary

£'000s

2016

2017

2018

2019

2020e

2021e

2022e

2023e

Year end 31 December

PROFIT & LOSS

Revenue

 

 

158,712

160,354

149,710

159,507

159,453

164,139

172,741

182,448

Cost of Sales

(14,151)

(14,674)

(14,236)

(15,407)

(20,335)

(15,387)

(16,751)

(18,549)

Gross Profit

144,561

145,680

135,474

144,100

139,118

148,752

155,990

163,899

EBITDA

 

 

52,288

49,222

48,919

55,632

53,536

55,740

59,069

61,938

Operating Profit (before amort. of acq. intang, SBP and except.)

38,897

34,895

32,991

40,794

43,020

43,440

46,169

49,038

EMIS adjusted operating profit

 

 

38,753

37,406

35,890

39,273

39,266

41,100

44,429

47,298

Amortisation of acquired intangibles

(6,639)

(6,717)

(6,202)

(7,317)

(6,824)

(5,557)

(3,812)

(3,268)

Exceptionals

(6,714)

(16,988)

1,657

(5,360)

1,802

0

0

0

Share-based payments

(473)

(550)

(766)

(1,290)

(1,440)

(1,440)

(1,440)

(1,440)

Operating Profit

25,071

10,640

27,680

26,827

36,558

36,443

40,918

44,330

Net Interest

(237)

(299)

(180)

(498)

(501)

(500)

(500)

(500)

Profit Before Tax (norm)

 

 

39,159

35,192

33,426

41,038

43,377

43,798

46,527

49,396

Profit Before Tax (FRS 3)

 

 

25,333

10,937

28,115

27,071

36,915

36,801

41,276

44,688

Tax

(5,208)

(2,074)

(5,355)

(5,022)

(6,794)

(6,992)

(7,842)

(10,502)

Profit After Tax (norm)

32,175

27,989

26,447

33,697

35,658

35,476

37,687

40,011

Profit After Tax (FRS3)

20,125

8,863

22,760

22,049

30,121

29,809

33,433

34,186

Average Number of Shares Outstanding (m)

62.8

62.9

63.0

62.9

62.9

63.0

63.0

63.0

EPS - normalised & diluted (p)

 

 

49.4

43.1

40.4

53.5

56.4

56.2

59.7

63.3

EPS - EMIS adjusted & diluted (p)

 

 

49.2

47.0

45.0

51.1

50.4

53.2

57.4

57.7

EPS - FRS 3 (p)

 

 

30.4

12.8

36.1

36.0

48.1

47.3

53.1

54.3

Dividend (p)

23.4

25.8

28.4

31.2

32.0

34.0

35.0

36.0

Gross Margin (%)

91.1%

90.8%

90.5%

90.3%

87.2%

90.6%

90.3%

89.8%

EBITDA Margin (%)

32.9%

30.7%

32.7%

34.9%

33.6%

34.0%

34.2%

33.9%

Operating Margin (before GW and except.) (%)

24.5%

21.8%

22.0%

25.6%

27.0%

26.5%

26.7%

26.9%

BALANCE SHEET

Fixed Assets

 

 

133,292

122,979

117,920

101,089

105,518

101,319

98,765

96,756

Intangible Assets

110,953

100,844

96,807

82,345

85,295

80,238

76,326

72,959

Tangible Assets

22,187

22,037

21,000

18,399

19,870

19,870

20,370

20,870

Other fixed assets

152

98

113

345

353

1,211

2,069

2,927

Current Assets

 

 

46,088

56,900

53,107

67,278

87,170

91,659

108,099

126,598

Stocks

1,815

1,633

1,264

657

613

613

613

613

Debtors

39,970

40,148

36,223

33,047

29,993

33,727

35,495

37,489

Cash

4,303

13,991

15,620

31,099

53,008

53,763

68,435

84,939

Current Liabilities

 

 

(56,158)

(65,131)

(60,169)

(55,700)

(63,370)

(55,645)

(58,509)

(61,741)

Creditors

(51,425)

(65,131)

(60,169)

(55,060)

(62,380)

(54,655)

(57,519)

(60,751)

Lease liabilities

0

0

0

(640)

(990)

(990)

(990)

(990)

Short term borrowings

(4,733)

0

0

0

0

0

0

0

Long Term Liabilities

 

 

(9,080)

(6,734)

(8,199)

(8,469)

(10,180)

(8,340)

(6,831)

(7,436)

Long term borrowings

0

0

0

0

0

0

0

0

Lease liabilities

0

0

0

(3,294)

(5,891)

(5,380)

(4,869)

(4,358)

Other long-term liabilities

(9,080)

(6,734)

(8,199)

(5,175)

(4,289)

(2,960)

(1,962)

(3,078)

Net Assets

 

 

114,142

108,014

102,659

104,198

119,138

128,994

141,525

154,176

CASH FLOW

Operating Cash Flow

 

 

43,657

48,834

49,873

50,059

64,138

46,280

60,166

63,176

Net Interest

(324)

(356)

(214)

(93)

(54)

(500)

(500)

(500)

Tax

(7,655)

(8,139)

(5,830)

(4,466)

(11,684)

(8,322)

(8,840)

(9,385)

Capex

(12,084)

(11,342)

(12,767)

(13,119)

(9,491)

(11,800)

(12,300)

(12,300)

Acquisitions/disposals

(1,790)

329

(9,269)

5,152

(953)

(2,000)

0

0

Financing

881

571

906

(2,369)

1,324

(500)

(500)

(500)

Dividends

(14,006)

(15,476)

(21,070)

(18,745)

(19,860)

(20,893)

(21,842)

(22,475)

Net Cash Flow

8,679

14,421

1,629

16,419

23,420

2,266

16,184

18,015

Opening net debt/(cash)

 

 

9,109

430

(13,991)

(15,620)

(31,099)

(53,008)

(53,763)

(68,435)

Finance leases initiated

0

0

0

(940)

(1,511)

(1,511)

(1,511)

(1,511)

Other

0

0

0

0

0

(0)

0

0

Closing net debt/(cash)

 

 

430

(13,991)

(15,620)

(31,099)

(53,008)

(53,763)

(68,435)

(84,939)

Source: EMIS, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by EMIS Group and prepared and issued by Edison, in consideration of a fee payable by EMIS Group. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by EMIS Group and prepared and issued by Edison, in consideration of a fee payable by EMIS Group. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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