Growth 2

Hit by markets, valuation eye-catching

Ocean Wilsons Holdings 6 September 2022 Update
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Ocean Wilsons Holdings

Hit by markets, valuation eye-catching

2022 interims

Investment companies

6 September 2022

Price

870p

Market cap

£308m

US$1.19/£, BRL5.12/US$

Net debt ($m) at H122

467.5

Shares in issue

35.4m

Free float

36%

Code

OCN

Primary exchange

LSE

Secondary exchange

Bermuda

Share price performance

%

1m

3m

12m

Abs

(1.4)

(11.1)

(16.5)

Rel (local)

1.5

(7.3)

(13.9)

52-week high/low

1050p

835p

Business description

Ocean Wilsons Holdings is an investment company based in Bermuda. It has a controlling shareholding in Wilson Sons, a quoted maritime services company in Brazil, and holds a portfolio of international investments.

Next events

Q322 trading update

November 2022

Analysts

Pedro Fonseca

+44 (0)20 3077 5700

Andrew Mitchell

+44 (0)20 3681 2500

Ocean Wilsons Holdings is a research client of Edison Investment Research Limited

Ocean Wilsons (OCN) reported a H122 loss of $34.7m (H121 profit of $39.5m), chiefly due to weak financial markets which led OCN’s international investment portfolio (OWIL) to report a $48.9m loss. Despite headwinds in the container terminal business, some good operating trends allowed Wilson Sons (PORT3) to boost OCN’s H122 revenue by 12% y-o-y and EBITDA by 2%. We are cutting our forecasts for FY22e (to a $14.8m net loss) and FY23e (22% EPS reduction). OCN is trading at 50% of the look-through value of its 56.5% PORT3 stake and OWIL portfolio. This discount seems excessive, especially as PORT3’s market valuation is undemanding. To further highlight this valuation gap, we have introduced a valuation range for PORT3; at the mid-point of the range OCN’s discount increases to 59%. OCN has a 6.8% dividend yield.

Year end

Revenue (US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/20

352.8

74.6

109.5

70.0

9.5

6.8

12/21

396.4

110.4

180.1

70.0

5.7

6.8

12/22e

432.4

33.6

(41.8)

70.0

N/A

6.8

12/23e

478.3

111.5

148.0

70.0

7.0

6.8

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

PORT3 operating trends

Container terminal handling fell by 15% y-o-y, affected by a shortage of empty containers, global logistics bottlenecks and lockdowns in China. On the plus side, the towage business was resilient and the offshore support vessels business outperformed. Looking ahead, we expect the container business to gradually start to normalise and the pickup in the other businesses to gather pace. We are forecasting 11% and 14% growth in revenue and EBITDA for PORT3 in FY23e. PORT3 remains a well-diversified Brazilian maritime services company that is highly competitive in all its key segments.

Financial markets uncertainty

The outlook for financial markets remains challenging despite some recovery in Q322. The uncertainty regarding inflation, interest rates and economic growth remains elevated. We note that OWIL’s manager (Hansa Capital Partners) has decreased its long-only equity positions in the portfolio. We are now assuming a 4% return on the portfolio in H222 (taking FY22 to negative 9.3%) and a 7% return in FY23. However, we expect there could be great variance to these assumptions.

Valuation: PORT3 fair value boosts OCN discount

We are introducing a valuation range for PORT3 based on a FY22 EV/EBITDA ratio of 7–8x (it is trading on 6.0x on our numbers), which we think is reasonable given where its peers are trading. The mid-point of this range is 37% above the PORT3 trading price (BRL9.10 per share) and increases the look-through discount to 59%. The value of the OCN stake in PORT3 by itself is currently 20% more than OCN’s market cap. At the mid-point of the PORT3 range this would rise to 65%.

H122: Financial markets hurt results

OCN reported a loss of $34.7m, mostly driven by weak and volatile financial markets during the first half of 2022. Despite OWIL containing market-neutral funds and private assets, the impact of these markets was hard to avoid. These losses were largely paper losses, and we note that markets have recovered some of the negative territory so far in the second half of 2022.

OWIL still outperformed equity indices

The OWIL portfolio declined by 14.1% (14.5% net of fees) during H122. Despite this drop, OWIL outperformed relevant equity indices such as the MSCI All Country World and Frontier Markets Index and MSCI Emerging Markets Index, which fell by 20.2% and 17.6% respectively. OWIL bases its internal absolute benchmark on the US Consumer Price Index for All Urban Consumers (not seasonally adjusted) plus 3% pa. In H122 the index rose by 7.7%. OWIL performance was helped by the private equity exposure and defensive assets

PORT3 hit by container terminal headwinds

PORT3’s contribution to OCN’s income was affected by container terminals facing continued headwinds including shortages of empty containers and global logistics bottlenecks. This has led to cancelled shipping lines especially affecting the Rio Grande terminal in Brazil. Another challenge has been rising costs, especially fuel prices, although PORT3’s good competitive position allowed it to mitigate this damage.

Offshore support vessels doing better than expected

The offshore support vessels joint venture (WSUT) business (the third-biggest pro-forma EBITDA contributor to PORT3 and OCN after container terminals and towage) is doing better than expected (even after adjusting for the stronger US dollar) with a very positive trend of new vessel contracts and higher prices. These new contracts started to kick-in in H122 and will further boost results in the second half of 2022. The towage business has remained resilient with good margins, which is another positive. We note that the US dollar’s appreciation against the Brazilian real (which began in Q222 following the start of the war in Ukraine) did lead to adjustment on the real-denominated monetary assets and deferred tax assets, which affected the equity participation in the joint venture and Q2 net profit for the company.

All of this is reflected in Exhibit 1, which shows the progression in the recent semester with the caveat that the second half of a year is usually stronger for PORT3 while OWIL numbers are by nature more influenced by financial market conditions.

The PORT3 business is the main revenue and costs generator above the EBITDA line, while OWIL’s revenue and management costs are below this line. OCN’s revenue grew 12% y-o-y in H122, while EBITDA and operating profit grew 2% and 3%, respectively. This was helped by the stronger US dollar.

The OWIL portfolio losses of $48.9m led to OCN reporting a $9.7m loss after taxes. The taxes and minority interests are from PORT3; OWIL is fully owned by OCN.

Exhibit 1: OCN semester progression

$m

H120

H220

H121

H221

H122

y-o-y %

Revenue

174.2

178.6

188.9

207.5

211.0

11.7

Cash costs

(104.0)

(113.1)

(109.3)

(128.0)

(126.7)

19.1

EBITDA

70.2

65.5

79.6

79.5

84.2

2.1

Depreciation and amortisation

(26)

(25)

(25)

(21)

(25)

(1.5)

Amortisation of right to use

(5.3)

(5.4)

(6.0)

(6.1)

(6.8)

13.8

Impairment charge (goodwill & intangibles)

0.0

0.4

0.0

(2.7)

0.0

n.m.

Profit/loss on fixed assets

0.3

(0.6)

0.0

(0.5)

0.1

n.m.

Operating profit

39.3

35.1

48.4

48.9

52.6

2.7

Share of results of JVs

(5.2)

1.1

(0.7)

(4.3)

0.5

n.m.

Investment portfolio returns

(12.4)

45.7

29.5

19.9

(48.9)

n.m.

Other investment income

(1.4)

(1.7)

(2.9)

(2.1)

(1.6)

(43.4)

Portfolio performance and mgmt fees

0.9

0.7

1.3

2.8

3.7

182.6

Finance costs

(11.4)

(11.8)

(14.6)

(15.6)

(18.1)

23.9

Exchange gains/losses on monetary items

(11.7)

4.1

2.3

(5.4)

2.0

(12.8)

Profit before tax

(1.8)

76.4

66.2

44.2

(9.7)

n.m.

Income tax

(16.6)

(10.0)

(14.4)

(13.5)

(10.7)

(25.7)

Profit before minorities

(18.4)

66.4

51.8

30.7

(20.4)

n.m.

Non-controlling interests

0.6

(9.9)

(12.3)

(6.5)

(14.2)

16.1

Net attributable profit

(17.8)

56.5

39.5

24.2

(34.7)

n.m.

Source: Ocean Wilsons Holdings

PORT3’s container terminals (34% of EBITDA in H122) saw container volumes fall by 15% y-o-y in the first six months of 2022. Rio Grande was most affected by shipping line cancellations and full container volumes fell by 22% in that period, compared with only 7% in Salvador, Brazil. Revenue grew 6%, while the EBITDA margin remained relatively resilient at 53% (56% in FY21), given the cost pressures.

Towage (43% of EBITDA) revenue grew 10% y-o-y in H122 and EBITDA rose by 1%, while harbour manoeuvres fell only 1%. Towage results were affected not only by higher fuel and staff costs, but also by the weaker US dollar since towage revenue is mostly dollar based. Despite the dollar strength in Q222, the dollar still ended H122 down compared to the end of FY21. The reported EBITDA margin was 48%.

WSUT’s (16% of EBITDA) revenue rose by 39% y-o-y and was one of the highlights of H122, with EBITDA increasing by 62% y-o-y. Although oil and gas explorations remain at relatively low levels of activity, business is picking up and the improved operating days of offshore vessels and operation of pipe-laying support vessels boosted the results, especially in Q222. 

Exhibit 2: PORT3 revenue analysis (H122)

Exhibit 3: PORT3 EBITDA analysis (H122)

Source: Wilson Sons. Note: Offshore vessels is the pro forma share of the joint venture, EBITDA adjusts for corporate centre.

Exhibit 2: PORT3 revenue analysis (H122)

Exhibit 3: PORT3 EBITDA analysis (H122)

Source: Wilson Sons. Note: Offshore vessels is the pro forma share of the joint venture, EBITDA adjusts for corporate centre.

Exhibit 4: OWIL portfolio % returns and result ($m)

Exhibit 5: OWIL analysis of portfolio (H122)

Source: Ocean Wilsons Holdings

Source: Ocean Wilsons Holdings

Exhibit 4: OWIL portfolio % returns and result ($m)

Source: Ocean Wilsons Holdings

Exhibit 5: OWIL analysis of portfolio (H122)

Source: Ocean Wilsons Holdings

Valuation

OCN’s discount to its look-through valuation is a hefty 50%. The look-through value consists of its 56.5% stake in listed PORT3 and the OWIL global investment portfolio. The discount has widened from 39% a year ago and the usual range of mid-30s to low-40s.

Exhibit 6: OCN’s share price discount to look-through valuation

 

p

£m

Value contribution

Last OWIL value per Ocean Wilsons share (30 June 2022)

695.8

246.1

40%

Wilson Sons market value per Ocean Wilsons 56.5% share

1,046.0

369.9

60%

Ocean Wilsons look-through value

1,741.8

615.9

100%

Ocean Wilsons share price and market cap

870.0

307.7

Discount (%)

(50%)

(50%)

Source: Refinitiv, Ocean Wilsons, Edison Investment Research. Note: $1.19/£.

We do accept investor concerns that OCN’s relatively small market capitalisation and the fact that three shareholders, Hansa Investment Company, Victualia and Chris Townsend, in total own 50.21% of the company, reduce liquidity. Positively, this ownership position enables both OWIL and PORT3 to maintain their long-term approaches to investment and operating the businesses. We feel, however, that the discount seems quite wide. The value of OCN’s stake in PORT3 by itself is now 17% greater than OCN’s market cap, which is not only unusual, but seems unwarranted to us. We also note the 6% dividend yield.  

PORT3 valuation range

Most of OWIL’s investments are in liquid instruments that are marked to market. However, we have introduced a valuation range for PORT3. This is driven by our opinion that PORT3’s market valuation is unreasonably lower than its peers and that the shares seem to offer decent upside potential.

Exhibit 7 compares PORT3 with a selection of Brazilian and international port and shipping companies. PORT3 is trading on an historic FY21 EV/EBITDA discount of 27% and a 26% FY22e discount versus its peers, despite the sample including some China companies with share prices that have been hit particularly hard due to the China lockdowns.

Although PORT3 shares have significantly outperformed the peer group average (see Exhibit 8) over the year to date, PORT3’s market multiples are still noticeably lower. The ratings are lower than Santos Brasil, its closest peer, whose key asset is the container terminal in the Santos port in the Brazilian state of São Paulo and whose shares have performed relatively well this year. Both companies have relevant free floats, and both are trading in the Novo Mercado segment (which requires companies to adopt additional corporate governance standards) of the Brazilian stock exchange. PORT3 is the better diversified of these two companies and, in our opinion, it deserves to trade on ratios closer to those of Santos Brasil ((EV/EBITDA FY22 of 8.3x). PORT3 is trading on a P/E premium to its peers. Its profit was exceptionally affected by exchange variations of balance sheet items, but we note that its EPS growth is quicker and the premium narrows significantly.   

Exhibit 7: PORT3 selected comparators

Company

Market cap ($m)

P/E
FY21 (x)

P/E
FY22e (x)

P/E
FY23e (x)

EV/EBITDA FY21 (x)

EV/EBITDA FY22e (x)

Price book
FY22e (x)

ROE (%)
FY22e(x)

Wilson Sons

793

19.5

14.4

11.4

7.0

6.0

1.6

11.8

Santos Brasil (BRA)

1,395

35.0

18.0

14.6

12.2

8.3

2.9

17.4

China Merchants Ports (HKG)

5,921

5.7

5.4

5.3

11.1

11.6

0.4

7.9

Cosco (CHN)

2,194

5.9

5.7

5.1

11.1

10.2

0.4

6.6

Shanghai Int'l Port (CHN)

18,230

8.5

7.2

7.4

8.4

5.7

1.1

15.0

Hamburger Hafen (GER)

884

10.4

10.1

11.7

4.4

4.3

1.4

13.5

Intl Container Term Svcs (PHI)

6,562

18.3

14.3

13.1

10.0

8.4

7.4

55.9

Average

14.0

10.1

9.6

9.5

8.1

2.3

19.4

Wilson Sons vs average (%)

39.5

42.5

19.3

(26.6)

(25.7)

(29.3)

(39.1)

Wilson Sons vs Santos Brasil (%)

(44.4)

(19.9)

(22.1)

(42.4)

(27.4)

(44.8)

(32.4)

Source: Refinitiv, Edison Investment Research. Note: Prices at 30 August 2022.

Exhibit 8: PORT3 and comparators’ absolute share price performance (%)

Company

One month

Three months

One year

Ytd

From 12-month high

Wilson Sons

10

6

(13)

(2)

(22)

Santos Brasil (BRA)

25

12

8

26

(4)

China Merchants Ports (HKG)

(7)

(21)

(10)

(17)

(27)

Cosco (CHN)

(13)

(14)

(21)

(23)

(29)

Shanghai Int'l Port (CHN)

(1)

(13)

(3)

(17)

(17)

Hamburger Hafen (GER)

(10)

(25)

(35)

(34)

(44)

Intl Container Term Svcs (PHI)

(7)

(16)

(2)

(11)

(23)

Average

(2)

(13)

(11)

(13)

(24)

Source: Refinitiv, Edison Investment Research. Note: Prices at 30 August 2022.

Given the current market conditions and its valuation versus its peers, we think that a FY22 EV/EBITDA multiple range of at least 7–8x is appropriate for PORT3 and, with potential for increases in share liquidity, could continue to improve. This would result in a valuation range for PORT3 equity of $964m to $1.2bn. This is equivalent to a PORT3 share price of BRL11.2 to BRL13.8, 23% to 51% above the current share price. The mid-point would be BRL12.5 per share.

Exhibit 9 also shows the impact on the OCN discount to its look-through value. The discount would increase from 50% to 59% (the mid-point of the range). The value of OCN’s stake in PORT3 by itself would increase from 20% above OCN’s current market value to a 65% premium.

Furthermore, although financial markets are hard to predict, we note that they recovered significantly during Q322, which is positive news for the OWIL portfolio.

Exhibit 9: PORT3 valuation range and impact on OCN look-through value

PORT3 fair value

Lower

Mid-point

Upper

Adjusted EV/EBITDA (FY22e)

7.0

7.5

8.0

Implied EV ($m)

1,530.3

1,639.6

1,748.9

Net debt, adjusted (FY22e, $m)

566.1

566.1

566.1

Equity fair value ($m)

964.2

1,073.5

1,182.8

Equity fair value (BRLm)

4,937

5,496

6,056

PORT3 share price fair value (BRL)

11.2

12.5

13.8

Potential upside to PORT3 share price (%)

23

37

51

Impact on OCN look-through value

OCN 57% stake in PORT3 FV (£m)

455.3

506.9

558.6

Ocean Wilsons look-through value with PORT3 at fair value (£m)

701.4

753.0

804.6

Ocean Wilsons look-through value with PORT3 at fair value per share (p)

1,983.4

2,129.3

2,275.3

OCN discount with PORT3 at fair value (%)

56

59

62

Source: Refinitiv, Edison Investment Research

Financials

OCN forecast changes

We have increased our revenue forecasts by 1% and 4% for FY22e and FY23e while cutting our earnings forecasts. The earnings cuts in FY22e are mostly driven by financial markets assumptions and the margin pressure at PORT3 due to costs and the lower volumes in the container businesses. We expect PORT3’s operating environment (bottlenecks, China lockdowns and costs) to improve and we assume that financial markets will be better in FY23e, although we still see some pressure and risks in both.

We estimate OCN’s pro forma net debt to EBITDA ratio to be 2.7x in FY22e (2.9x in FY21) and this seems a reasonable level of debt in our opinion.

Exhibit 10: OCN’s FY21 and FY22 forecast changes

Revenue ($m)

Normalised PBT ($m)

Normalised EPS (c)

Old

New

% chg.

Old

New

% chg.

Old

New

% chg.

2022e

426.4

432.4

1.4

99.7

33.6

(66.3)

146.2

(41.8)

N/A

2023e

458.2

478.3

4.4

123.3

111.5

(9.5)

190.3

148.0

(22.2)

Source: Ocean Wilsons Holdings, Edison Investment Research

PORT3 forecast

Exhibit 11 details our forecasts and assumptions for PORT3, which drive the revenue and operating costs for OCN. We have increased our pro forma (including the offshore vessels joint ventures) FY22 and FY23 revenue from $485m and $519m to $517m and $577m respectively. The revenue uplift is mostly due to offshore vessels (eg from $61m to $99m in FY23e) and logistics ($36m to $54m). FY22 and FY23 EBITDA was increased from $163m and $184m to $219m and $252m respectively. Offshore vessels again drive most of the upgrade from $21m and $23m to $45m and $54m respectively, reflecting the new contracts and better trading conditions.

Total revenue and EBITDA percentage growth is estimated in the teens for FY22e and FY23 with total pro forma EBITDA margins remaining good at PORT3 – at 42% and 44% for FY22 and FY23e, within the usual 40–44% range.

Exhibit 11: PORT3’s segmental revenue analysis and estimates

$m

2019

2020

2021

2022e

2023e

Divisional net revenues

Container Terminals

167.8

132.2

141.8

152.4

172.6

O&G Offshore Base Support

19.4

8.0

7.3

9.3

10.7

Towage

159.5

173.6

199.1

206.6

223.5

Shipyards

4.5

2.2

4.4

5.9

7.0

Shipping Agency

9.2

8.1

8.9

9.3

10.5

Logistics

45.7

28.7

35.2

49.2

54.0

Corporate

0.0

0.0

0.0

(0.5)

0.0

Total revenue (IFRS)

406.1

352.8

396.7

432.2

478.3

Offshore vessels*

61.2

60.9

57.8

84.8

98.5

Total revenue (pro-forma)

467.3

413.7

454.5

517.0

576.8

y-o-y (%)

(9.7)

(11.7)

9.9

13.7

11.6

Divisional EBITDA

Container Terminals

85.2

68.7

79.8

80.3

95.0

O&G Offshore Base Support

2.2*

(0.5)

(0.4)

0.4

1.1

Towage

75.8

85.8

99.0

99.5

109.5

Shipyards

(0.1)

(2.7)

0.6

1.6

1.8

Shipping Agency

1.5

2.3

2.4

2.2

2.5

Logistics

10.2

4.5

7.2

11.1

10.8

Corporate

(20.6)

(15.7)

(23.6)

(21.8)

(23.0)

Total EBITDA (IFRS)

154.2

142.4

165.0

173.3

197.6

Offshore vessels*

30.0

31.2

22.6

45.8

54.1

Total EBITDA (pro-forma)

184.3

173.6

187.6

218.6

251.7

y-o-y (%)

(1.8)

(5.8)

8.0

16.5

15.2

Divisional EBITDA margins (%)

Container Terminals

50.8

52.0

56.3

52.7

55.0

O&G Offshore Base Support

11.3

(6.3)

(5.5)

4.2

10.0

Towage

47.5

49.4

49.7

48.2

49.0

Shipyards

(1.7)

(122.7)

13.6

26.3

25.0

Shipping Agency

16.4

28.4

27.0

23.9

24.0

Logistics

22.4

15.7

20.5

22.6

20.0

Offshore vessels*

47.9

51.2

39.1

53.5

55.0

Total EBITDA margin (pro-forma)

39.3

42.0

41.3

42.3

43.6

Source: Edison Investment Research, PORT3 data. Note: Offshore vessels is PORT3’s pro forma 50% share of the joint venture. *We add back the $13m one-off asset write-down in Offshore Base Support in 2019 for better comparison purposes.

OWIL assumptions

Although the financial markets have been recovering in Q322, they remain volatile, and the macroeconomic uncertainty remains elevated. Any assumption of returns in the OWIL portfolio is subject to a good degree of deviation.

We have assumed a 4% positive portfolio return for the second half of the year. We calculate this will take the FY22 performance to a 9.3% negative return for the full 12 months. We are then assuming a 7% return for FY23e. This means a $36.6m portfolio loss for FY22e and a $21.7m positive return for FY23e, excluding fees and investment income.

OCN’s reported earnings are quite sensitive to OWIL’s performance. If we were to flex our 7% base assumption by 5% (ie 12% and 2% portfolio returns), the impact on profit before tax would be about 13% in either direction for our FY23e forecasts, for example.

The investment management noted in its report that while ‘some comfort’ could be taken from the fact that shares had already fallen so much by the end of June, there is the risk of central banks engaging ‘in more aggressive policy measures in their battle against inflation’. It sees the outcome for the rest of the year as ‘very dependent on the path of inflation and interest rates, although continued volatility in markets seems likely, whatever happens’. The report also reminds readers that the OWIL portfolio is a mix of risk-on and risk-off assets as well as a blend of growth and value sectors.

Exhibit 12: Financial summary

Year-end December

US$m

2020

2021

2022e

2023e

PROFIT & LOSS

Revenue

 

 

352.8

396.4

432.4

478.3

Cash costs

(213.9)

(234.4)

(264.2)

(285.7)

EBITDA

 

 

138.8

162.0

168.2

192.6

Depreciation and amortisation

(50.6)

(49.3)

(49.6)

(49.4)

Amortisation of right to use (IFRS 16)

(10.7)

(12.1)

(14.0)

(13.2)

Profit/loss on PPE & intangibles

0.1

(0.5)

0.1

0.0

Share of results of JVs

(4.1)

(5.0)

3.5

5.0

Investment portfolio returns

33.4

49.5

(36.6)

21.7

Other investment income

1.6

4.1

3.7

5.0

Portfolio performance and mgmt fees

(3.1)

(5.0)

(3.7)

(4.5)

Finance costs

(23.2)

(30.2)

(40.1)

(45.7)

Exchange gains/losses on monetary items

(7.6)

(3.1)

2.0

2.0

Extraordinary goodwill impairment charge

0.0

0.0

0.0

0.0

Profit Before Tax

74.6

110.4

33.6

111.5

Profit Before Tax (norm)

 

 

74.6

110.4

33.6

111.5

Income tax

(26.6)

(27.9)

(22.4)

(30.1)

Non-controlling interests

(9.3)

(18.8)

(25.9)

(29.1)

Profit After Tax (norm)

 

 

38.7

63.7

(14.8)

52.3

Average Number of Shares Outstanding (m)

35.4

35.4

35.4

35.4

EPS - normalised (c)

 

 

109.5

180.1

(41.8)

148.0

Dividend per share (c)

70.0

70.0

70.0

70.0

EBITDA Margin (%)

39.4

40.9

38.9

40.3

ROE (%)

6.9%

11.1%

(2.6%)

9.1%

BALANCE SHEET

Current Assets

 

 

492.8

518.5

439.3

464.0

Cash

63.3

28.6

13.0

15.0

Trading investments

347.5

392.9

310.5

326.0

Debtors

70.3

84.7

99.2

105.0

Stocks

11.8

12.3

16.6

18.0

Fixed Assets

 

 

861.1

861.8

914.8

924.2

Investments & other fixed assets

102.3

112.6

117.7

126.6

Tangible assets

579.1

563.1

582.9

583.5

Right to use assets

149.3

157.9

186.1

187.0

Intangible assets

30.4

28.3

28.1

27.1

Total Assets

 

 

1,353.9

1,380.3

1,354.1

1,388.2

Current Liabilities

 

 

124.3

131.3

133.6

140.0

Payables and other liabilities

47.4

66.6

58.6

65.0

Short term borrowings

58.7

45.3

55.0

55.0

Financial leases

18.2

19.4

20.0

20.0

Long Term Liabilities

 

 

485.9

465.4

468.8

455.7

Longer term borrowings

284.0

256.3

232.2

218.1

Financial leases

139.7

148.4

175.0

175.0

Other long-term liabilities

62.2

60.7

61.6

62.5

Net Assets

 

 

743.7

783.7

751.7

792.6

CASH FLOW

Operating Cash Flow

 

 

153.2

159.2

163.3

192.9

Net Interest

(22.7)

(25.2)

(21.7)

(24.2)

Tax

(29.1)

(27.9)

(9.1)

(29.7)

Capex

(62.0)

(47.4)

(77.5)

(78.0)

Acquisitions/disposals

0.0

0.0

0.0

0.0

Net acq/disposals of financial assets

(18.6)

0.3

29.0

0.0

Equity financing

0.0

0.0

0.0

0.0

Dividends

(39.7)

(43.2)

(43.2)

(43.2)

Other (including divs from JV, fx effects)

41.7

(19.4)

(86.7)

(31.5)

Net Cash Flow

22.8

(3.6)

(48.3)

(13.7)

Net debt/(cash) including leases

 

 

437.3

440.9

489.2

502.9

Source: Ocean Wilsons, Edison Investment Research


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This report has been commissioned by Ocean Wilsons Holdings and prepared and issued by Edison, in consideration of a fee payable by Ocean Wilsons Holdings. Edison Investment Research standard fees are £60,000 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.

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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 2022 Edison Investment Research Limited (Edison).

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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

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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.

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Frankfurt +49 (0)69 78 8076 960

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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 Ocean Wilsons Holdings and prepared and issued by Edison, in consideration of a fee payable by Ocean Wilsons Holdings. Edison Investment Research standard fees are £60,000 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 2022 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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