Strengthening its position despite NHS funding pressures

EMIS Group 20 March 2017 Update
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EMIS Group

Strengthening its position despite NHS funding pressures

FY16 results

Software & comp services

20 March 2017

Price

875p

Market cap

£554m

Net debt (£m) at end FY16

0.4

Shares in issue

63.3m

Free float

98%

Code

EMIS

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(1.96)

(8.18)

(16.83)

Rel (local)

(3.65)

(13.52)

(29.90)

52-week high/low

1062.0p

807.0p

Business description

EMIS is a clinical software supplier to the primary care market in the UK (supplying over 50% of UK GP practices), a software supplier to UK pharmacies, and through several acquisitions also supplies specialist and acute care software.

Next events

Trading update

18 July 2017

Analysts

Katherine Thompson

+44 (0)20 3077 5730

Dan Ridsdale

+44 (0)20 3077 5729

EMIS Group is a research client of Edison Investment Research Limited

EMIS reported adjusted profit in line with expectations, despite NHS funding pressures causing difficult trading conditions in certain parts of the business. Cost-cutting programmes in 2016 and a planned reorganisation in 2017 are helping to counteract some of the funding pressure. There is cause for optimism in several areas of the business, where EMIS is growing market share, and a planned expansion of the Patient business could generate material incremental revenues on a five-year view.

Year
end

Revenue (£m)

PBT*
(£m)

Dil. EPS*
(p)

EMIS adj. dil. EPS** (p)

DPS
(p)

P/E
(x)

Yield
(%)

12/15

155.9

36.6

46.0

45.1

21.2

19.0

2.4

12/16

158.7

39.2

49.4

49.2

23.4

17.7

2.7

12/17e

166.2

37.3

46.0

46.8

24.4

19.0

2.8

12/18e

175.4

40.2

49.4

51.1

25.4

17.7

2.9

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.

FY16 profits in line

Although revenues were below our forecast due to weakness in the Secondary & Specialist Care (SSC) business, the company reported adjusted operating profits in line with our forecast. Lower interest and tax charges resulted in normalised and adjusted EPS ahead of our forecasts. The company reduced net debt by £8.7m over the year to £0.4m at year-end.

Growth and restructuring plans revealed

As previously flagged, the company is pulling together the Primary, Community and Secondary Care businesses into one unit, to better reflect the way the NHS is moving to procure integrated healthcare IT, and to reduce costs. Management unveiled its plans to expand the Patient business, building out the publishing side and developing an e-commerce platform. Estimated investment of £7m over the next two years could support revenue growth from the current £2m pa to closer to £50m pa over the next five years.

Estimate changes and valuation

We have revised our forecasts to reflect weaker trading in SSC, cost reductions from the reorganisation and the costs of investing in Patient. This results in a 9.6% reduction in adjusted operating profit and 7.9% reduction in adjusted EPS in FY17. On our revised normalised forecasts, EMIS is trading on an FY17e P/E of 19.0x, which is at a small discount to its peer group. Although EMIS is more profitable than peers, the forecast decline in earnings in FY17 is weighing on the valuation. Evidence of a resumption in earnings growth will be key to share price upside – in the short term, this could include improvement in the Secondary and Specialist Care, and in the longer term, evidence that the investment in Patient is paying off. We believe the NHS’s digital agenda continues to support long-term growth for EMIS. Strong cash generation underpins the c 3% dividend yield.

Review of FY16 results

Exhibit 1: FY16 results highlights

£000s

FY16e

FY16a

Difference

y-o-y

Revenues

162,513

158,712

-2.3%

1.8%

Normalised* operating profit

39,660

38,897

-1.9%

4.8%

Reported operating profit

31,311

23,539

-24.8%

105.9%

Adjusted** operating profit

38,954

38,753

-0.5%

6.0%

Normalised EPS - p

48.6

49.4

1.8%

7.4%

Reported EPS - p

38.2

30.4

-20.3%

320.0%

Adjusted EPS - p

47.4

49.2

3.7%

9.1%

Net cash/(debt)

(55)

(430)

688.1%

-95.3%

Source: EMIS, Edison Investment Research. Note: *Normalised: excludes exceptional items, amortisation of acquired intangibles and share-based payments. **Adjusted: cash accounts for development costs and excludes exceptional items and amortisation of acquired intangibles.

In FY16, the company reported revenue growth of 2% y-o-y, with growth in recurring revenues of 4%. Adjusted operating profit of £38.8m was in line with our forecast. As the company has reduced its net debt position substantially, interest expense declined. Adjusted EPS came in 3.7% ahead of our forecast, due to lower than expected tax and interest charges and a slightly higher joint venture contribution. The final dividend of 11.7p takes full year dividend to 23.4p, as expected. Net debt finished the year above our forecast as we had not accounted for the £0.8m payment for the Intrelate acquisition in December.

Exhibit 2: Divisional revenues and adjusted operating profits

£m

FY15

FY16a

FY16e

Difference

y-o-y

Revenues

Primary & Community Care (PCC)

93.9

99.6

99.1

0.5%

6.1%

Community Pharmacy (CP)

20.0

21.4

21.4

0.3%

7.1%

Secondary & Specialist Care (SSC)

42.0

37.7

42.0

-10.4%

-10.3%

Total

155.9

158.7

162.5

-2.3%

1.8%

Adjusted operating profit

 

 

 

 

 

Primary & Community Care

29.6

32.2

32.0

0.6%

8.8%

Community Pharmacy

4.2

4.9

4.4

10.5%

14.8%

Secondary & Specialist Care

4.2

3.3

4.0

-18.4%

-21.3%

Central costs

(1.5)

(1.6)

(1.5)

7.8%

9.3%

Total adjusted operating profit

36.6

38.8

39.0

-0.5%

6.0%

Reported operating profit

 

 

 

 

 

Primary & Community Care

26.3

27.4

27.9

-2.0%

4.0%

Community Pharmacy

4.7

6.1

5.3

14.2%

29.8%

Secondary & Specialist Care

(15.8)

(8.3)

(2.0)

322.7%

N/A

Central costs

(1.5)

(1.6)

(1.5)

 

 

Exceptionals

(2.3)

0.0

1.5

 

 

Total reported operating profit

11.4

23.5

31.3

-24.8%

105.9%

Adjusted operating margin

 

 

 

 

 

Primary & Community Care

31.5%

32.3%

32.3%

0.0%

0.8%

Community Pharmacy

21.2%

22.8%

20.7%

2.1%

1.5%

Secondary & Specialist Care

10.0%

8.7%

9.6%

-0.9%

-1.2%

Total adjusted operating margin

23.4%

24.4%

24.0%

0.4%

1.0%

Source: EMIS, Edison Investment Research

Primary & Community Care (PCC) revenue and adjusted profit was in line with our forecasts. Reported operating profit includes an exceptional charge of £1.2m for the cost reduction programme. Community Pharmacy (CP) revenues were in line with our forecast and adjusted operating profit was 10% ahead of our forecast. Reported operating profit includes a £0.1m exceptional charge for the cost reduction programme. Secondary & Specialist Care (SSC) revenues declined significantly more than we expected, resulting in lower than expected adjusted operating profit. Reporting profit includes a £2.3m exceptional charge for the cost reduction programme as well as a £4.6m goodwill write-down on the Specialist Care business, reflecting a lower return than expected since acquisition. Overall, the adjusted operating margin grew one percentage point year-on-year.

Business update

Primary Care – solid performance

EMIS maintained its 55% share of the UK GP market. In Northern Ireland, the first pilot sites went live in August 2016; rollout should be complete by the end of 2017. In Scotland, the company is engaged in pre-procurement for EMIS Web, with implementation expected in 2018. In Wales, re-procurement of primary care software has started. GPs are already using EMIS Web in Wales and existing contracts will run until 2019/20.

The Community, Child and Mental Healthcare (CCMH) business increased its market share to 16% from 12% at the end of 2015, beating its 15% target. The company is targeting an increase to 20% by the end of 2017. Contracts won in 2016 have a total contract value of more than £11m. We assume that these contracts have an average life of circa six years, which implies an additional c £2m per annum in revenues. The company has secured two contract wins year-to-date: Bridgewater Community Healthcare and Central Surrey.

The number of clinical commissioning groups (CCGs) in England using entirely EMIS Web for their GP practices has risen from 46 to 51 over the year. This is important as it makes it more likely the CCG will use EMIS for other primary care applications, due to the ease of integration. In fact, at year end, 38 CCGs used solely EMIS Web for primary care and also used EMIS as a major supplier for CCMH.

The Intrelate acquisition (bought December 2016 for net £0.8m in cash) is being integrated into the Egton business. Intrelate has developed an app called Carista that helps paid and unpaid carers to plan, monitor, manage and measure social care outcomes. This is EMIS’s first entry into the social care technology market.

The business has a Partner programme with 80 participating suppliers; charging them to integrate with EMIS systems has generated revenues of £5m in 2016.

Community Pharmacy (CP) – growing market share

The CP business remains strong, with a market share of 37% at year-end (number of sites increased by 181 to 5,091 over the year). The Lloyds pharmacy contract should be fully rolled out by the end of 2018, taking the company’s market share to c 50%. The company’s next generation software, ProScript Connect, is now fully accredited in England, Wales and Scotland. It had been installed in 25 independent pharmacies by end 2016.

Post year-end, the business won a supermarket customer with an estate of c 40 pharmacies – the contract is worth £1.4m over six years.

Secondary & Specialist Care – action taken to boost profitability

As previously reported, the Secondary Care business has suffered from delays in procurement due to NHS funding issues. One-off implementation revenues in 2015 as well as the transfer of ePEX mental health software to PCC also contributed to the revenue decline in 2016. The division was restructured in H116 to reduce the cost base.

Despite the weak procurement environment, the business managed to secure a position as one of two suppliers on the NHS Scotland Hospital Electronic Prescribing and Medicines Administration framework, which could be worth up to £15m over two years. It should also benefit from central NHS funding of upgrades to its hospital pharmacy product.

The latest round of NHS initiatives includes global digital exemplars (GDEs). The NHS will fund 12 GDEs up to £10m each to fund the transition to going paperless, with funding expected to be released in H217. EMIS is working with University Hospitals of Southampton NHS Foundation Trust, one of the GDEs, while it formulates its plans, is also engaged with three other GDEs and indirectly supports another three.

EMIS Specialist (diabetic retinopathy software) maintained its leading position with 77% market share (79% in 2015).

EMIS Care (diabetic retinopathy screening services) had an 18% share of the outsourced market in 2016, down from 19% in 2015. The business won several contracts in the year, most from the NHS (ie moved from direct to outsourced provision) and a few from other service providers. With initial contract values of £19m over three years, this should take EMIS’s share to 26%. While winning new contracts has been positive, the business has incurred higher costs in implementing the services than originally anticipated when buying the business, so it has taken action to improve the profitability of the service. Some of the recent contract wins will be implemented in H117, adding further upfront costs. Over time, the company expects the profitability on these contracts to rise.

Reorganisation to integrate Primary and Secondary Care

As announced in January, the company is bringing Primary Care, CCMH and Secondary Care together as one unit under the leadership of Duane Lawrence, who previously headed up Secondary Care. This is to reflect the way that the NHS will increasingly procure IT. The reorganisation will cost £3m (treated as an exceptional charge in FY17) with a c 100 reduction in headcount. Cost savings are expected to total £3m in 2017 rising to £4m per annum from 2018.

Expansion plans for the Patient business

The company hired a new head of digital in October 2016. Jason Keane has digital media experience from senior roles at Saffron Digital, Universal Networks Interactive and Yahoo! Answers. The business has been structured into its own legal entity since 1 January 2017. Visitors to Patient.info showed substantial growth in 2016, rising from 11.5m unique monthly users at the end of 2015 to 18.3m by the end of 2016 (of which 74% were international visitors). The website earned advertising revenues of £2.1m (+24% y-o-y) and a further £1m from transactional services such as appointment booking. There are 5.1m citizens registered to use Patient Access, providing a base level of potential users of transactional services.

The company plans to invest c £7m in the business over the next two years, mainly in the form of increased internal and external headcount, to develop the existing media business and to expand into a market place e-commerce platform. We expect the company to take a flexible approach to the pace of investment, hiring more slowly if revenue progression is slower than planned, and vice versa.

Expansion of the existing media business is likely to include:

new site design,

changes to the user experience,

an improved content management system, and

improvements to the organic search position.

The vision of the Patient business is to become the leading on-demand healthcare remedy platform. This will extend from providing information on health (starting with symptom search), to accessing a diagnosis (options to include booking to see an NHS GP or a private specialist, using a community pharmacy, or if more serious, calling 999 or 111 and/or accessing A&E) to obtaining any relevant pharmaceutical items (services to include prescriptions, over-the-counter remedies, local collection, home delivery). EMIS will then be able to earn a combination of advertising revenues from publishing services and transactional revenues from the clinical and pharmacy services.

The company sees an annual revenue opportunity of £13m for the publishing side of the business and a larger £33m opportunity from the e-commerce platform. The table below shows company estimates of how this could progress over the next five years. The company is keen to prove the concept in the UK first, before expanding to the international market.

Exhibit 3: Projected revenues from new Patient strategy

£m

FY16

In 18 months

In three years

In five years

Publishing/media

2

5

9

13

Platform

0

2

13

33

Total

2

7

22

46

Source: EMIS

Outlook and changes to forecasts

The company expects to show better revenue growth in 2017 than in 2016, helped by growing share in CCMH, implementation of new diabetic retinopathy services, growth of the Patient business and growth in demand for integrated care solutions. On the cost side, we have reduced our profitability assumptions in SSC, reflecting the costs of implementing the new screening programmes. In PCC, we have increased our cost assumptions to take into account the new investment in Patient. This is not fully offset by the cost savings expected from the reorganisation. Overall this results in a reduction in our adjusted operating profit forecast from £41.5m (24.1% margin) to £37.5m (22.6% margin). We introduce a forecast for FY18 of £40.9m (23.3% margin). A reduced EBITDA forecast and the additional £3m exceptional reorganisation cost bring our net cash forecast down in FY17. Nonetheless, it is highly cash generative and moves to a net cash position by the end of FY17.

Exhibit 4: Divisional forecasts (£m)

FY17e

y-o-y

FY18e

y-o-y

Revenues

Primary & Community Care

103.8

4.2%

108.9

5.0%

Community Pharmacy

22.3

4.2%

25.1

12.3%

Secondary & Specialist Care

40.1

6.4%

41.4

3.1%

Total

166.2

4.7%

175.4

5.5%

Adjusted operating profit

 

 

 

 

Primary & Community Care

31.3

-2.8%

32.4

3.4%

Community Pharmacy

5.1

5.2%

6.2

21.4%

Secondary & Specialist Care

2.7

-17.8%

3.9

45.9%

Central costs

(1.7)

2.0%

(1.7)

1.8%

Total adjusted operating profit

37.5

-3.2%

40.9

9.0%

Reported operating profit

 

 

 

 

Primary & Community Care

28.3

3.5%

29.3

3.4%

Community Pharmacy

4.2

-31.8%

5.1

21.6%

Secondary & Specialist Care

(1.6)

81.2%

(.5)

66.8%

Central costs

(1.7)

2.0%

(1.7)

1.8%

Exceptionals

(3.0)

 

0.0

 

Total reported operating profit

26.3

11.7%

32.1

22.3%

Adjusted operating margin

 

 

 

 

Primary & Community Care

30.2%

-2.1%

29.7%

-0.5%

Community Pharmacy

23.0%

0.2%

24.8%

1.9%

Secondary & Specialist Care

6.8%

-2.0%

9.5%

2.8%

Total adjusted operating margin

22.6%

-1.9%

23.3%

0.7%

Source: Edison Investment Research

Exhibit 5: Changes to forecasts

£000s

FY17e

FY17e

Change

y-o-y

FY18e

y-o-y

Old

New

New

Revenues

172,178

166,168

-3.5%

4.7%

175,354

5.5%

Normalised operating profit

42,196

36,960

-12.4%

-5.0%

39,794

7.7%

Reported operating profit

34,499

26,263

-23.9%

11.6%

32,097

22.2%

Adjusted operating profit

41,495

37,496

-9.6%

-3.2%

40,854

9.0%

Normalised EPS - p

51.9

46.0

-11.5%

-7.0%

49.4

7.5%

Reported EPS - p

42.3

32.6

-23.1%

7.1%

39.8

22.3%

Adjusted EPS - p

50.8

46.8

-7.9%

-4.9%

51.1

9.2%

Net cash/(debt)

18,815

9,300

-50.6%

N/A

27,237

192.9%

Source: Edison Investment Research

Valuation

EMIS is trading at a small discount to its peer group on P/E, EV/EBIT and EV/EBITDA multiples. The funding situation in the NHS is delaying investment in IT, even though the strategic use of technology is likely to improve efficiency and help deliver care more cheaply. In the longer term we continue to believe EMIS Is well positioned to benefit from an increasingly integrated approach to providing care across the NHS, but in the short term, we expect that certain parts of the business will to continue to suffer from the sluggish procurement environment. There is additional uncertainty around the expansion plans for Patient, as this is taking the company out of its core area of expertise. However, we expect the company to take a flexible approach to investment, and the Patient.info website (with an already high level of visitors) provides a good base from which to build the business. With superior margins to the majority of its peers, evidence of a resumption in earnings growth should support share price upside.

Exhibit 6: Peer multiples

 

Year end

EV/sales (x)

P/E (x)

EV/EBIT (x)

EV/EBITDA (x)

2016

2017e

2018e

2016

2017e

2018e

2016

2017e

2018e

2016

2017e

2018e

EMIS

31-Dec

3.6

3.4

3.2

17.7

19.0

17.7

14.6

15.4

14.3

10.9

11.2

10.5

EMIS (cash R&D)

3.6

3.4

3.2

17.8

18.8

17.2

14.6

15.1

13.9

 

 

 

AllScripts

31-Dec

2.4

2.1

2.0

21.8

19.2

16.6

16.8

27.7

18.5

12.1

10.8

10.1

athenahealth

31-Dec

4.4

3.7

3.2

61.5

47.5

38.7

36.0

34.1

22.4

18.7

16.1

13.5

Cegedim

31-Dec

1.3

1.3

1.2

N/A

16.2

12.4

21.9

16.5

12.7

9.7

8.2

7.1

Cerner

31-Dec

3.9

3.6

3.3

24.2

22.3

20.2

16.4

15.1

13.6

12.0

11.0

10.1

Craneware

30-Jun

6.0

5.3

4.6

31.7

27.8

24.0

21.6

18.8

16.1

19.3

16.8

14.4

CompuGroup

31-Dec

4.5

4.0

3.5

20.7

17.3

22.1

22.1

17.1

19.7

16.5

13.5

Nexus

31-Dec

2.8

2.6

2.4

31.6

25.8

21.1

25.9

21.0

17.2

14.3

12.5

10.9

Quality Systems

31-Mar

1.9

1.8

1.7

18.7

18.0

17.1

12.6

11.8

9.9

9.2

9.0

Servelec

31-Dec

3.4

2.9

2.7

17.1

14.2

13.0

14.1

11.9

10.7

13.1

10.8

9.9

 

 

Average

 

3.4

3.0

2.7

29.5

23.5

20.1

20.8

19.9

16.0

14.3

12.4

10.9

Median

3.4

2.9

2.7

24.2

20.7

17.3

21.6

18.8

16.6

13.1

11.0

10.1

Source: Bloomberg, Edison Investment Research. Note: Prices as at 16 March 2017.

Exhibit 7: Peer group financial metrics

 

EBIT margin

EBITDA margin

Revenue growth

2015

2016

2017e

2018e

2015

2016

2017e

2018e

2015

2016

2017e

2018e

EMIS

23.8%

24.5%

22.2%

22.7%

33.3%

32.9%

30.4%

30.8%

13.3%

1.8%

4.7%

5.5%

EMIS (cash R&D)

23.4%

24.4%

22.6%

23.3%

 

AllScripts

10.9%

14.1%

7.7%

10.9%

17.4%

19.6%

19.8%

20.0%

0.6%

11.8%

10.8%

6.1%

athenahealth

10.3%

12.2%

10.9%

14.2%

20.4%

23.5%

23.0%

23.5%

22.9%

17.1%

18.9%

16.0%

Cegedim

9.7%

6.0%

7.6%

9.5%

19.0%

13.6%

15.4%

17.1%

-53.2%

3.5%

4.4%

4.2%

Cerner

24.3%

23.6%

23.8%

24.5%

32.7%

32.2%

32.7%

32.8%

30.0%

8.4%

7.9%

8.1%

Craneware

29.8%

27.9%

28.1%

28.3%

31.8%

31.2%

31.4%

31.7%

11.2%

15.8%

14.1%

15.9%

CompuGroup

12.5%

20.2%

17.9%

20.5%

20.7%

22.7%

23.9%

25.9%

5.4%

3.1%

12.9%

13.4%

Nexus

9.9%

11.0%

12.6%

14.1%

19.4%

19.9%

21.1%

22.2%

21.5%

8.6%

7.6%

9.1%

Quality Systems

13.1%

14.9%

15.5%

16.9%

18.9%

19.8%

19.4%

0.5%

2.8%

2.8%

4.5%

Servelec

25.6%

23.9%

24.8%

25.6%

27.1%

25.8%

27.3%

27.5%

21.9%

-3.3%

14.5%

7.4%

 

 Average

16.2%

17.1%

16.5%

18.5%

22.8%

23.0%

23.8%

24.5%

6.8%

7.5%

10.4%

9.4%

Source: Bloomberg (as at 16 March), Edison Investment Research

Exhibit 8: Financial summary

£000s

2012

2013

2014

2015

2016

2017e

2018e

Year end 31 December

PROFIT & LOSS

Revenue

 

 

86,333

105,542

137,639

155,898

158,712

166,168

175,354

Cost of Sales

(10,891)

(11,780)

(12,782)

(12,955)

(14,151)

(16,534)

(18,237)

Gross Profit

75,442

93,762

124,857

142,943

144,561

149,634

157,117

EBITDA

 

 

33,178

38,885

47,645

51,964

52,288

50,473

54,007

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

27,619

30,482

34,787

37,123

38,897

36,960

39,794

EMIS adjusted operating profit

 

 

22,910

26,260

32,639

36,553

38,753

37,496

40,854

Amortisation of acquired intangibles

(2,983)

(4,198)

(6,269)

(6,509)

(6,639)

(6,697)

(6,697)

Exceptionals

(435)

(1,144)

873

(18,500)

(6,714)

(3,000)

0

Share-based payments

(90)

(195)

(270)

(684)

(473)

(1,000)

(1,000)

Operating Profit

24,111

24,945

29,121

11,430

25,071

26,263

32,097

Net Interest

(76)

(242)

(543)

(449)

(237)

(150)

(50)

Profit Before Tax (norm)

 

 

27,567

30,172

34,206

36,625

39,159

37,309

40,243

Profit Before Tax (FRS 3)

 

 

24,059

24,635

28,540

10,932

25,333

26,612

32,546

Tax

(4,625)

(4,706)

(5,719)

(5,558)

(5,208)

(5,456)

(6,672)

Profit After Tax (norm)

23,191

25,179

27,617

29,801

32,175

29,661

31,993

Profit After Tax (FRS3)

19,434

19,929

22,821

5,374

20,125

21,157

25,874

Average Number of Shares Outstanding (m)

58.2

59.4

62.8

62.7

62.8

62.8

62.8

EPS - normalised & diluted (p)

 

 

39.0

41.4

42.8

46.0

49.4

46.0

49.4

EPS - EMIS adjusted & diluted (p)

 

 

30.7

34.0

39.4

45.1

49.2

46.8

51.1

EPS - FRS 3 (p)

 

 

32.5

32.6

35.3

7.2

30.4

32.6

39.8

Dividend (p)

14.2

16.0

18.4

21.2

23.4

24.4

25.4

Gross Margin (%)

87.4%

88.8%

90.7%

91.7%

91.1%

90.1%

89.6%

EBITDA Margin (%)

38.4%

36.8%

34.6%

33.3%

32.9%

30.4%

30.8%

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

32.0%

28.9%

25.3%

23.8%

24.5%

22.2%

22.7%

BALANCE SHEET

Fixed Assets

 

 

77,673

153,838

166,415

143,546

133,292

125,082

116,172

Intangible Assets

52,789

126,468

139,397

121,383

110,953

101,843

92,233

Tangible Assets

22,144

24,610

24,313

22,032

22,187

23,087

23,787

Other fixed assets

2,740

2,760

2,705

131

152

152

152

Current Assets

 

 

27,538

27,046

37,221

39,800

46,088

56,732

75,984

Stocks

1,243

1,431

1,550

1,206

1,815

1,815

1,815

Debtors

15,188

21,448

28,732

33,893

39,970

41,883

44,199

Cash

11,107

4,167

6,939

4,701

4,303

13,033

29,970

Current Liabilities

 

 

(30,598)

(54,530)

(67,665)

(63,819)

(56,158)

(54,658)

(56,367)

Creditors

(30,202)

(46,628)

(54,763)

(51,960)

(51,425)

(50,925)

(53,634)

Short term borrowings

(396)

(7,902)

(12,902)

(11,859)

(4,733)

(3,733)

(2,733)

Long Term Liabilities

 

 

(10,548)

(22,231)

(21,063)

(12,481)

(9,080)

(9,080)

(9,080)

Long term borrowings

(3,000)

(9,756)

(5,854)

(1,951)

0

0

0

Other long term liabilities

(7,548)

(12,475)

(15,209)

(10,530)

(9,080)

(9,080)

(9,080)

Net Assets

 

 

64,065

104,123

114,908

107,046

114,142

118,076

126,709

CASH FLOW

Operating Cash Flow

 

 

32,732

38,725

44,856

42,711

43,657

45,060

54,401

Net Interest

(60)

(580)

(445)

(422)

(324)

(50)

50

Tax

(4,566)

(5,073)

(5,247)

(6,896)

(7,655)

(7,648)

(8,250)

Capex

(18,342)

(15,025)

(15,161)

(14,058)

(12,084)

(12,000)

(12,000)

Acquisitions/disposals

(512)

(57,315)

(9,959)

(4,587)

(1,790)

0

0

Financing

(1,816)

27,212

(1,578)

492

881

(500)

(500)

Dividends

(7,735)

(9,146)

(10,792)

(14,532)

(14,006)

(15,131)

(15,764)

Net Cash Flow

(299)

(21,202)

1,674

2,708

8,679

9,730

17,937

Opening net debt/(cash)

 

 

(8,026)

(7,711)

13,491

11,817

9,109

430

(9,300)

HP finance leases initiated

0

0

0

0

0

0

0

Other

(16)

0

0

0

0

0

0

Closing net debt/(cash)

 

 

(7,711)

13,491

11,817

9,109

430

(9,300)

(27,237)

Source: EMIS accounts, Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by EMIS Group and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “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.

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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, 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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by EMIS Group and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “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.

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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, 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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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