Making good progress on technology roadmap

EMIS Group 5 September 2019 Update
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EMIS Group

Making good progress on technology roadmap

H119 results

Software & comp services

5 September 2019

Price

1,122p

Market cap

£710m

Net cash (£m) at end H119*
*
Excludes £2.7m lease liabilities.

26.7

Shares in issue

63.3m

Free float

98%

Code

EMIS

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(7.4)

(4.1)

13.9

Rel (local)

(6.7)

(5.5)

16.9

52-week high/low

1242p

864p

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 UK healthcare blockchain.

Next events

FY19 trading update

January 2020

Analyst

Katherine Thompson

+44 (0)20 3077 5730

EMIS Group is a research client of Edison Investment Research Limited

EMIS reported growth in revenues (+7%), adjusted operating profit (+8%) and adjusted EPS (+11%) in H119. Management restructured the business during H1 to reflect the two key customer groups for EMIS products and, with the disposal of the Specialist & Care division, streamlined the product portfolio. Development of EMIS-X continues on track, with the first application based on the platform launched within the Patient Access app. We view the share price as likely to tread water until the outcome of the GP IT Futures procurement process is announced in the next few months.

Year end

Revenue (£m)

PBT*
(£m)

Diluted EPS*
(p)

EMIS adj. dil. EPS** (p)

DPS
(p)

P/E
(x)

12/17

160.4

35.2

43.1

47.0

25.8

26.1

12/18***

149.7

33.4

40.3

44.9

28.4

27.9

12/19e***

158.0

39.9

51.5

49.3

31.2

21.8

12/20e

165.3

43.1

55.3

52.7

32.6

20.3

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. ***Excludes discontinued operations.

H1 performance strong despite ongoing restructuring

During H1, management restructured the business to reflect the differing needs and market dynamics of its two main customer groups: the NHS and the private sector. Both divisions saw revenue growth year-on-year, although profitability for EMIS Health was slightly lower reflecting increased investment in the EMIS-X platform. Net cash was boosted by proceeds from the Specialist & Care disposal and an interim dividend of 15.6p (+10% y-o-y) was announced.

Outlook unchanged; waiting for IT Futures outcome

Management’s expectations for FY19 are unchanged, with operating profit growth in the mid- to high single digits targeted. We have revised our estimates to reflect H1 results, exceptional costs for restructuring, a higher dividend, and higher product development expenditure in FY20 and FY21. The company has submitted its bid for the IT Futures framework (which will take effect on 1 January 2020) and is now waiting for NHS Digital to review all bids. Management expects the outcome to be announced in the next few months.

Valuation: Trading in line with peers

The share price has gained 23% year to date; while it is down 4% over the last three months, it has still outperformed the FTSE AIM index. The stock is trading broadly in line with peers on a P/E basis and offers a dividend yield at the upper end of the group. We believe that uncertainty over the outcome of GP IT Futures is currently weighing on the share price; while we think it highly unlikely that EMIS would not be selected for the framework, there is still uncertainty around pricing and the future competitive environment. In the longer term, evidence that the company is making progress towards the targets set at last year’s capital markets day will be the key catalyst for share price upside.

Review of H119 results

Exhibit 1: H119 results highlights (continuing operations)

£m

H119

H118

Y-o-y

Revenues

79.8

74.4

7.2%

Gross margin

91.1%

89.0%

2.1%

EBITDA

25.8

23.2

11.2%

EBITDA margin

32.4%

31.2%

1.2%

Normalised operating profit

18.9

15.8

19.0%

EMIS adjusted* operating profit

18.2

16.8

8.3%

Reported operating profit

12.0

12.4

(3.2%)

Normalised operating margin

23.6%

21.3%

2.3%

EMIS adjusted* operating margin

22.8%

22.6%

0.2%

Reported operating margin

15.0%

16.7%

(1.6%)

Net interest income

(0.3)

(0.1)

N/A

Normalised PBT

18.9

16.0

18.1%

Reported PBT

12.1

12.6

(4.1%)

Tax

(2.2)

(2.3)

(4.1%)

Normalised net income after MI

15.6

12.3

26.0%

Reported net income after MI

10.4

10.1

2.9%

Normalised dil. EPS (p)

24.5

19.6

25.4%

EMIS adjusted* dil. EPS (p)

23.5

21.1

11.4%

Reported basic EPS (p)

16.6

16.1

3.1%

Net cash

24.0

32.3

(25.7%)

Net cash excl. lease liabilities

26.7

32.3

(17.3%)

Source: EMIS, Edison Investment Research. Note: *Cash accounts for development costs and excludes exceptional items and amortisation of acquired intangibles.

As the Specialist & Care business was sold in April, its contribution was reported in discontinued operations; the results above are for continuing operations. Group revenue increased 7.2% year-on-year and EMIS adjusted operating profit was up 8.3% y-o-y. This resulted in a 20bp improvement in the adjusted operating margin. Recurring revenue increased only 1% y-o-y; the company sold several licences on a perpetual basis, particularly for software that it views as legacy, resulting in higher non-recurring revenues in H119. Net interest expense increased as a result of the first-time application of IFRS 16 (lease accounting). At the earnings level, adjusted diluted EPS was 11.4% higher y-o-y. Normalised diluted EPS was 25.4% higher y-o-y, reflecting the combination of higher capitalised development costs and lower amortisation of development costs compared to a year ago.

Net cash before lease liabilities (recognised for the first time in H119) of £26.7m decreased from £32.3m at the end of H118 and increased from £15.6m at the end of FY18. The company generated £25.6m cash from operating activities (after paying £1.2m in exceptional costs), invested £6.7m in capex, received £6.2m net proceeds from the sale of the Specialist & Care division, paid out £9.0m in dividends and bought shares worth £3.6m for the Employee Benefit Trust.

The company announced an interim dividend of 15.6p per share (+10% y-o-y), higher than our 15.0p forecast.

Divisional performance

During H1, the company was restructured with businesses grouped into EMIS Health (businesses generating the majority of revenues from the NHS) or EMIS Enterprise (businesses generating the majority of revenues from the private sector). This resulted in exceptional charges of £2.2m during H119, and we estimate that a further £1m in related one-off costs will be incurred in H219. Total headcount reduced from 2,047 at the end of FY18 to 1,560 at the end of H119, with 366 of the reduction due to the disposal of the Specialist & Care division, and the remaining 121 reduction from the restructuring.

Management has previously spoken of its desire to grow the contribution of the Enterprise division to half of group revenues. In FY18, EMIS Enterprise made up 33.7% of group revenues, increasing to 37.0% in H119.

Exhibit 2: Divisional results

£m

H119

H118

y-o-y

Revenues

EMIS Health

50.3

48.6

3.5%

EMIS Enterprise

29.5

25.8

14.3%

Total

79.8

74.4

7.3%

Adjusted operating profit

 

 

 

EMIS Health

10.8

11.2

(3.6%)

EMIS Enterprise

8.1

6.7

20.9%

Central costs

(0.7)

(1.1)

(36.4%)

Total adjusted operating profit

18.2

16.8

8.3%

Reported operating profit

 

 

 

EMIS Health

7.2

7.6

(5.3%)

EMIS Enterprise

5.5

5.9

(6.8%)

Central costs

(0.7)

(1.1)

(36.4%)

Total reported operating profit

12.0

12.4

(3.2%)

Adjusted operating margin

 

 

 

EMIS Health

21.5%

23.0%

(1.6%)

EMIS Enterprise

27.5%

26.0%

1.5%

Total adjusted operating margin

22.8%

22.6%

0.2%

Reported operating margin

 

 

 

EMIS Health

14.3%

15.6%

(1.3%)

EMIS Enterprise

18.6%

22.9%

(4.2%)

Total reported operating margin

15.0%

16.7%

(1.6%)

Source: EMIS

EMIS Health – NHS focused

This division incorporates Primary and Community Care (excluding primary care business with partners and overseas customers), Egton and the Acute A&E business.

In H119, revenues increased 3.5% y-o-y with adjusted operating profit down 3.6% y-o-y. The business has increased the pace of spend to support the development of the EMIS-X platform, resulting in a dip in adjusted operating margins from 23.0% a year ago to 21.5% in H119.

In Primary Care, market share was maintained at 57% in the UK, with a small net gain in practices in England and Scotland. From this, we assume that there has not yet been a material decline in Welsh practices (we had assumed that share in Wales would halve this year and reach zero by the end of next year). The online triage service that was launched last year has been selected by five clinical commissioning groups (CCGs) covering 900,000 patients. The number of CCGs in which 100% of practices use EMIS Web increased from 63 at the end of FY18 to 67 by the end of H119 (35% of all CCGs in England). All practices in Northern Ireland have been upgraded to EMIS Web and the business is working with NHS Scotland (where it was selected for the NHS National Services Scotland framework earlier this year) to align its solutions with Scotland’s health and care strategy.

The Community business won 69 new contracts in H119 and slightly increased market share from 20% to 21%, maintaining its number two position.

The Acute A&E business won two new contracts for Symphony software in H1 and maintained its market share at 22%, and is now the leader in this market.

GP IT Futures outcome expected in next few months

EMIS submitted its bid for the GP IT Futures framework and is now awaiting the outcome. According to the NHS, 73 bids have been received in total. Management expects that a large number of these bids will be for the digital buying catalogue, which includes a large number of applications that can be used in primary care, with a much smaller number bidding to provide the core clinical software. EMIS has provided bids for both the core system and the catalogue. As a reminder, EMIS currently generates c 25% of its revenues from the GP Systems of Choice (GPSoC) framework, which the GP IT Futures framework is going to replace from the start of 2020.

EMIS-X development on track

All development milestones for EMIS-X have been met so far, and management expects the first version will be available in FY20. The company has increased the level of investment in the development of EMIS-X during the course of H119, and as restructuring continues, will use cost savings in other areas (for example automating certain areas of customer support through the use of ServiceNow software) to further boost development spend.

The first application based on EMIS-X, a community pharmacy booking app, has been launched and is the first app to be made available in the Patient marketplace. The app links Patient Access with EMIS Web (used in primary and community care) and ProScript Connect (used in community pharmacies). EMIS earns a commission each time a patient books an appointment via the app.

The company expects to start upgrading GPs onto EMIS-X in FY21. Until then, EMIS Web contains sufficient functionality to meet the requirements of the GP IT Futures framework. This includes the recent roll-out approval of the first phase of GP Connect, which provides access to primary care records from a variety of different care settings.

EMIS Enterprise – private sector focused

This division incorporates Patient, Medicines Management (community pharmacy plus the hospital pharmacy business that was previously reported within the Acute business) and Partners & Other (this includes primary and acute care software sold to partners and overseas customers).

In H119, revenues increased 14.3% y-o-y, helped by the sale of some perpetual licences for continuing and legacy products, and adjusted operating profit increased 20.9%.

Medicines Management maintains strong market position

In Medicines Management, community pharmacy maintained its joint leadership position and 37% market share. The roll-out of ProScript Connect to all direct customers was completed within the targeted timeframe. Hospital pharmacy maintained its number two position and saw a small decrease in share from 36% to 35%. For use in both businesses, EMIS released its Falsified Medicines Directive (FMD) authenticator.

Patient Access sees launch of marketplace

The Patient Access app provides information on medical conditions, access to GP records and the ability to make GP appointments and request repeat prescriptions. The number of registered users increased from 7.2 million at the end of FY18 to eight million by the end of H119. Volumes processed by the app increased significantly on a year-on-year basis: log-ins +68%, repeat prescriptions +64% and appointment bookings +66%. As we have written above, the first EMIS-X-based app was launched in the marketplace, to enable users to book appointments at community pharmacies for services like vaccinations. While this booking app can be used by patients whose practice does not use EMIS Web, for those patients whose GPs do use EMIS Web, the pharmacist can send a summary of the consultation back to the GP to be added to the patient’s record in EMIS Web. In H1, Patient Access also launched proxy access – this allows carers/parents to order medication or book appointments for their patients/dependents.

Partners & Other

In some areas where EMIS views solutions as no longer core to its five-year plans, it has entered into perpetual licences with customers to ensure they can continue to have access to the technology without EMIS having to commit resources to maintaining and upgrading the software. The recently acquired Dovetail business sits in this division – the company is working on plans to integrate blockchain into its technology strategy.

Outlook and changes to forecasts

Management expects to meet consensus forecasts for FY19 and continues to target medium-term revenue growth of mid- to high single-digit percentage and operating margins approaching 30%. More specifically, it expects profit growth in the mid- to high single digits for FY19. We have revised our forecasts to reflect H1 results and to incorporate exceptional costs, and we factor in higher spend on product development in FY20 and FY21. We have increased our dividend forecasts for FY19 and FY20 to reflect the higher than expected interim dividend.

Exhibit 3: Changes to estimates

£000s

FY19e

FY20e

FY21e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

157,551

157,962

0.3%

5.5%

165,112

165,324

0.1%

4.7%

172,947

172,813

(0.1%)

4.5%

Normalised operating profit

40,141

39,769

(0.9%)

20.5%

43,838

42,795

(2.4%)

7.6%

46,271

45,582

(1.5%)

6.5%

Normalised operating margin

25.5%

25.2%

(0.3%)

26.6%

25.9%

(0.7%)

26.8%

26.4%

(0.4%)

Reported operating profit

32,075

27,552

(14.1%)

(0.5%)

36,010

34,468

(4.3%)

25.1%

39,681

38,992

(1.7%)

13.1%

EMIS adjusted operating profit

38,280

38,388

0.3%

7.0%

42,064

41,143

(2.2%)

7.2%

45,648

44,270

(3.0%)

7.6%

Adjusted operating margin

24.3%

24.3%

0.0%

25.5%

24.9%

(0.6%)

26.4%

25.6%

(0.8%)

Normalised EPS (p)

52.0

51.5

(1.1%)

27.8%

56.8

55.3

(2.6%)

7.5%

59.9

59.0

(1.5%)

6.7%

Reported EPS (p)

42.0

36.7

(12.6%)

1.9%

46.9

45.6

(2.7%)

24.1%

51.6

52.0

0.7%

14.0%

EMIS adjusted EPS (p)

49.1

49.3

0.4%

9.8%

54.0

52.7

(2.4%)

6.9%

58.9

56.9

(3.4%)

8.0%

Dividend per share (p)

30.0

31.2

4.0%

9.9%

32.0

32.6

1.9%

4.5%

34.0

34.0

0.0%

4.3%

Net cash

32,186

28,256

(12.2%)

80.9%

44,508

38,732

(13.0%)

37.1%

62,578

54,818

(12.4%)

41.5%

Source: Edison Investment Research

Valuation

The stock is up 23% year to date and down 4% over the last three months. Relative to the FTSE AIM index, the stock has outperformed 25% year to date and 2% over the last three months. EMIS is trading broadly in line with its peer group on earnings-based multiples and, due to its superior profitability, at a premium on an EV/Sales basis. Its dividend yield is at the upper end of its peer group. We expect that uncertainty over the outcome of IT Futures is currently weighing on the share price; although we think it is highly unlikely the company would not be selected for the framework, there is still uncertainty around the price that can be charged as well as the future competitive environment. In the longer term, evidence that the company is making progress towards the targets set at last year’s capital markets day (revenue growth 5–9%, operating margins approaching 30%) will be the key catalysts for share price upside.

Exhibit 4: Peer group valuation multiples

 

 

EV/Sales (x)

P/E (x)

EV/EBIT (x)

EV/EBITDA (x)

Dividend yield (%)

y/e

18

19e

20e

18

19e

20e

18

19e

20e

18

19e

20e

18

19e

20e

EMIS

31-Dec

4.6

4.3

4.2

27.9

21.8

20.3

20.8

17.3

16.0

14.0

12.7

12.1

2.5%

2.8%

2.9%

EMIS (cash R&D)

4.6

4.3

4.2

25.0

22.8

21.3

19.1

17.1

16.7

 

AllScripts

31-Dec

1.3

1.2

1.2

12.6

13.4

11.9

8.3

12.5

11.5

5.6

7.3

6.7

0.0%

0.0%

0.0%

Cegedim

31-Dec

1.0

0.9

0.9

16.9

11.6

10.2

14.3

11.7

10.1

6.0

5.5

5.0

2.8%

3.9%

4.6%

Cerner

31-Dec

4.1

3.8

3.6

28.1

25.8

21.7

21.8

20.9

17.6

14.0

13.3

11.7

0.0%

0.6%

0.9%

Craneware

30-Jun

7.7

7.0

6.4

36.1

33.8

31.0

27.0

23.9

21.7

23.3

21.6

19.8

1.6%

1.8%

2.1%

CompuGroup

31-Dec

4.3

4.2

4.1

23.0

21.0

21.4

19.4

16.9

16.0

14.8

1.0%

0.9%

1.1%

Nexus

31-Dec

3.1

2.9

2.7

41.3

30.5

26.3

23.2

20.8

18.1

15.9

12.6

11.4

0.6%

0.6%

0.7%

NexGen Healthcare

31-Mar

1.7

1.6

1.5

16.7

14.3

12.5

12.5

10.1

12.2

9.5

8.2

9.3

0.0%

0.0%

0.0%

Average

3.3

3.1

2.9

25.3

21.8

19.2

17.8

17.3

15.8

13.0

12.1

11.2

0.9%

1.1%

1.3%

Median

 

3.1

2.9

2.7

22.5

23.0

21.0

18.0

20.8

17.6

14.0

12.6

11.4

0.6%

0.6%

0.9%

Premium/(discount) to average

37%

39%

42%

9%

(1%)

5%

16%

(1%)

1%

7%

5%

7%

Source: Edison Investment Research, Refinitiv (as at 2 September)

Exhibit 5: Peer group financial metrics

 

 

Market cap

EBIT margin

EBITDA margin

Rev growth

EPS growth

m

18

19e

20e

18

19e

20e

18

19e

20e

18

19e

20e

EMIS

31-Dec

£704

22.0%

25.2%

25.9%

32.7%

34.1%

34.3%

-6.6%

5.5%

4.7%

-6.5%

27.8%

7.5%

EMIS (cash R&D)

24.0%

24.3%

24.9%

-4.6%

6.9%

8.0%

AllScripts

31-Dec

$1,513

15.2%

9.9%

10.3%

22.5%

17.0%

17.8%

16.8%

2.4%

4.1%

16.1%

-5.8%

12.5%

Cegedim

31-Dec

€ 377

6.9%

8.1%

9.0%

16.4%

17.3%

18.1%

8.0%

3.9%

3.6%

76.1%

46.1%

13.4%

Cerner

31-Dec

$21,941

18.8%

18.4%

20.6%

29.3%

29.0%

31.0%

4.4%

6.6%

6.3%

2.9%

9.2%

18.9%

Craneware

30-Jun

£483

28.6%

29.4%

29.6%

33.1%

32.6%

32.5%

6.0%

9.8%

9.5%

6.1%

6.8%

8.8%

CompuGroup

31-Dec

€ 2,776

0.0%

19.7%

21.0%

25.4%

26.4%

27.5%

23.1%

1.9%

3.6%

9.8%

Nexus

31-Dec

€ 452

13.4%

13.7%

14.6%

19.6%

22.6%

23.2%

14.6%

9.0%

7.7%

11.3%

35.5%

15.8%

NexGen Healthcare

31-Mar

$929

13.4%

15.7%

12.1%

17.6%

19.3%

15.9%

2.1%

5.4%

7.1%

21.2%

17.2%

14.8%

Average

13.8%

16.4%

16.7%

23.4%

23.4%

23.7%

10.7%

5.6%

6.0%

22.3%

18.1%

13.4%

Median

 

 

13.4%

15.7%

14.6%

22.5%

22.6%

23.2%

8.0%

5.4%

6.3%

13.7%

13.2%

13.4%

Source: Edison Investment Research, Refinitiv (as at 2 September)

Exhibit 6: Financial summary

£'000s

2014

2015

2016

2017

2018

2019e

2020e

2021e

Year end 31 December

PROFIT & LOSS

Revenue

 

 

137,639

155,898

158,712

160,354

149,710

157,962

165,324

172,813

Cost of Sales

(12,782)

(12,955)

(14,151)

(14,674)

(14,236)

(14,572)

(15,582)

(16,659)

Gross Profit

124,857

142,943

144,561

145,680

135,474

143,390

149,742

156,154

EBITDA

 

 

47,645

51,964

52,288

49,222

48,919

53,889

56,747

59,176

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

34,787

37,123

38,897

34,895

32,991

39,769

42,795

45,582

EMIS adjusted operating profit

 

 

32,639

36,553

38,753

37,406

35,890

38,388

41,143

44,270

Amortisation of acquired intangibles

(6,269)

(6,509)

(6,639)

(6,717)

(6,202)

(7,566)

(6,827)

(5,090)

Exceptionals

873

(18,500)

(6,714)

(16,988)

1,657

(3,151)

0

0

Share-based payments

(270)

(684)

(473)

(550)

(766)

(1,500)

(1,500)

(1,500)

Operating Profit

29,121

11,430

25,071

10,640

27,680

27,552

34,468

38,992

Net Interest

(543)

(449)

(237)

(299)

(180)

(450)

(300)

(200)

Profit Before Tax (norm)

 

 

34,206

36,625

39,159

35,192

33,426

39,948

43,131

46,018

Profit Before Tax (FRS 3)

 

 

28,540

10,932

25,333

10,937

28,115

27,731

34,804

39,428

Tax

(5,719)

(5,558)

(5,208)

(2,074)

(5,355)

(5,269)

(6,091)

(6,703)

Profit After Tax (norm)

27,617

29,801

32,175

27,989

26,334

32,358

34,936

37,274

Profit After Tax (FRS3)

22,821

5,374

20,125

8,863

22,760

22,462

28,713

32,725

Ave. Number of Shares Outstanding (m)

62.8

62.7

62.8

62.9

63.0

63.0

63.0

63.0

EPS - normalised & diluted (p)

 

 

42.8

46.0

49.4

43.1

40.3

51.5

55.3

59.0

EPS - EMIS adjusted & diluted (p)

 

 

39.4

45.1

49.2

47.0

44.9

49.3

52.7

56.9

EPS - FRS 3 (p)

 

 

35.3

7.2

30.4

12.8

36.1

36.7

45.6

52.0

Dividend (p)

18.4

21.2

23.4

25.8

28.4

31.2

32.6

34.0

Gross Margin (%)

90.7%

91.7%

91.1%

90.8%

90.5%

90.8%

90.6%

90.4%

EBITDA Margin (%)

34.6%

33.3%

32.9%

30.7%

32.7%

34.1%

34.3%

34.2%

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

25.3%

23.8%

24.5%

21.8%

22.0%

25.2%

25.9%

26.4%

BALANCE SHEET

Fixed Assets

 

 

166,415

143,546

133,292

122,979

117,920

107,063

100,619

95,571

Intangible Assets

139,397

121,383

110,953

100,844

96,807

82,221

75,141

69,457

Tangible Assets

24,313

22,032

22,187

22,037

21,000

24,100

24,100

24,100

Other fixed assets

2,705

131

152

98

113

742

1,378

2,014

Current Assets

 

 

37,221

39,800

46,088

56,900

53,107

68,473

81,769

100,703

Stocks

1,550

1,206

1,815

1,633

1,264

1,264

1,264

1,264

Debtors

28,732

33,893

39,970

40,148

36,223

36,353

38,047

39,771

Cash

6,939

4,701

4,303

13,991

15,620

30,856

40,457

55,668

Current Liabilities

 

 

(67,665)

(63,819)

(56,158)

(65,131)

(60,169)

(63,818)

(66,727)

(68,886)

Creditors

(54,763)

(51,960)

(51,425)

(65,131)

(60,169)

(63,218)

(66,127)

(68,286)

Short term borrowings

(12,902)

(11,859)

(4,733)

0

0

(600)

(600)

(600)

Long Term Liabilities

 

 

(21,063)

(12,481)

(9,080)

(6,734)

(8,199)

(7,327)

(1,752)

(837)

Long term borrowings

(5,854)

(1,951)

0

0

0

(2,000)

(1,125)

(250)

Other long term liabilities

(15,209)

(10,530)

(9,080)

(6,734)

(8,199)

(5,327)

(627)

(587)

Net Assets

 

 

114,908

107,046

114,142

108,014

102,659

104,391

113,908

126,551

CASH FLOW

Operating Cash Flow

 

 

44,856

42,711

43,657

48,834

49,873

53,869

57,962

60,411

Net Interest

(445)

(422)

(324)

(356)

(214)

(450)

(300)

(200)

Tax

(5,247)

(6,896)

(7,655)

(8,139)

(5,830)

(7,341)

(11,990)

(8,743)

Capex

(15,161)

(14,058)

(12,084)

(11,342)

(12,767)

(13,700)

(13,700)

(13,000)

Acquisitions/disposals

(9,959)

(4,587)

(1,790)

329

(9,269)

5,086

(800)

(800)

Financing

(1,578)

492

881

571

906

(3,361)

(500)

(500)

Dividends

(10,792)

(14,532)

(14,006)

(15,476)

(21,070)

(18,867)

(20,196)

(21,083)

Net Cash Flow

1,674

2,708

8,679

14,421

1,629

15,236

10,476

16,086

Opening net debt/(cash)

 

 

13,491

11,817

9,109

430

(13,991)

(15,620)

(28,256)

(38,732)

Finance leases initiated

0

0

0

0

0

(2,600)

0

0

Other

0

0

0

0

0

0

(0)

0

Closing net debt/(cash)

 

 

11,817

9,109

430

(13,991)

(15,620)

(28,256)

(38,732)

(54,818)

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 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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

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Frankfurt +49 (0)69 78 8076 960

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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

1,185 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 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. 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

1,185 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

1,185 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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