Claranova — Strong finish to the year

Claranova (PAR: CLA)

Last close As at 27/03/2024

EUR2.60

0.07 (2.77%)

Market capitalisation

EUR145m

More on this equity

Research: TMT

Claranova — Strong finish to the year

COVID-19 lockdowns were a positive driver of demand for FreePrints photo printing services and also boosted demand for Avanquest’s proprietary software products. With FY20 revenues (€409m unaudited) coming in 7% ahead of our expectations, we have revised our FY20 forecasts resulting in a 47% upgrade to EBITDA and a 120% upgrade to our normalised EPS forecast. Our FY21 forecasts remain essentially unchanged. The company will report FY20 results on 30 September

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Claranova

Strong finish to the year

Q4 revenue update

Software & comp services

13 August 2020

Price

€6.52

Market cap

€256m

$1.17:€1

Net cash (€m) at end H120

27.5

Shares in issue (basic)

39.2m

Free float

91%

Code

CLA

Primary exchange

Euronext Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

23.8

12.5

(18.6)

Rel (local)

20.8

-0.6

(14.8)

52-week high/low

€9.30

€2.96

Business description

Claranova consists of three businesses focused on mobile and internet technologies: Printing & Gifting (digital photo printing; personalised gifts), Software and Internet of Things (IoT). Its headquarters are in Paris, and it has operations in Europe, the US and Canada.

Next events

FY20 results

30 September 2020

Analyst

Katherine Thompson

+44 (0)20 3077 5730

Claranova is a research client of Edison Investment Research Limited

COVID-19 lockdowns were a positive driver of demand for FreePrints photo printing services and also boosted demand for Avanquest’s proprietary software products. With FY20 revenues (€409m unaudited) coming in 7% ahead of our expectations, we have revised our FY20 forecasts resulting in a 47% upgrade to EBITDA and a 120% upgrade to our normalised EPS forecast. Our FY21 forecasts remain essentially unchanged. The company will report FY20 results on 30 September.

Year end

Revenue (€m)

EBITDA**
(€m)

PBT*
(€m)

Diluted EPS*
(€)

DPS
(€)

P/E
(x)

06/18

161.5

3.9

3.1

0.06

0.0

103.3

06/19

262.3

16.0

12.0

0.25

0.0

26.4

06/20e

408.6

16.0

11.1

0.20

0.0

33.0

06/21e

459.3

29.3

24.1

0.35

0.0

18.6

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Pre-IFRS 16

Organic Q4 revenues +34% y-o-y

Claranova has reported Q420 revenue growth of 52%, or 34% on an organic constant currency (cc) basis. By division, PlanetArt was 80% higher (53% organic cc), Avanquest was down 3% (-5% cc) and myDevices was up 149% (+145% cc). The company had already highlighted in May that it had seen a higher volume of FreePrints app downloads as well as existing users ordering more via the app. This continued through the remainder of Q4. In addition, resumption of production at the Personal Creations facility was faster than expected. Software for productivity, electronic signatures and photo editing also proved popular during Q4.

Upgrading FY20 estimates

We have revised our FY20 revenue forecast to reflect actuals, and considering in particular the revenue upside for PlanetArt in Q4, we have upgraded our EBITDA forecast. For FY20 this increases from €13.1m to €19.2m (or from €9.9m to €16.0m on a pre-IFRS 16 basis, the company’s basis for reporting). This results in a 120% increase in our normalised EPS forecast. Full FY20 profitability will be disclosed when the company reports results on 30 September. Our FY21 forecasts remain essentially unchanged as at this point as it is not clear whether the pick-up in demand was solely lockdown-related.

Valuation: Sum-of-parts suggests material upside

Reflecting the different business models and minority interests for each division, we continue to use a sum-of-the-parts approach to valuation. Based purely on peer group averages per division, we calculate a fair value of €15.42 per share. However, once multiples are adjusted to reflect our views on the growth and profitability of each division, we calculate what we believe to be a more realistic valuation of €11.52 per share (up from €11.42). Factors that could provide upside to our estimates would be sustained high demand for photo printing and software and successful adoption of the FreePrints Gift app in the US.

Review of Q4 revenue update

The group achieved revenues in excess of €400m for FY20, with constant currency organic growth of 22% for the year. This was 6.8% ahead of our FY20 forecast (see Exhibit 3). In Q420, the group reported revenue growth of 52% y-o-y, or 34% on a constant currency organic basis.

Exhibit 1: Divisional revenue, Q420 and FY20 (€m)

Q420

Q419

y-o-y

y-o-y

y-o-y

Reported

Organic

Constant currency organic

PlanetArt

78

43

80%

54%

53%

Avanquest

22

23

-3%

-3%

-5%

myDevices

1

1

149%

149%

145%

Total

101

67

52%

35%

34%

FY20

FY19

PlanetArt

314

176

78%

29%

26%

Avanquest

90

83

8%

8%

6%

myDevices

5

3

51%

51%

46%

Total

409

262

56%

22%

20%

Source: Claranova

PlanetArt – lockdown drives demand for photo printing

The original photo printing business generated 29% revenue growth for FY20 and 54% growth for Q420. Annual growth was driven by geographical expansion and the introduction of new products such as Photo Tiles and FreePrints Cards in existing countries. Growth in Q4 was boosted by the fact that so many people were at home during lockdown. The gifting business, Personal Creations (acquired 2 August 2019), contributed revenue of €88m for FY20 and €10m for Q420 (no prior year comparatives are available, but this was 16% lower than in Q320).

In July in the US, PlanetArt launched the FreePrints Gifts app, a mobile app for personalised gifts. This is the first time that Personal Creations products have been available via a mobile app.

Avanquest – strong demand for InPixio and SodaPDF

This division reported 8% year-on-year revenue growth for FY20 and a 3% decline for Q420. Over the last year, the business has been focused on shifting customers from one-off software purchases to subscription licensing, which has a lower initial price but generates recurring revenues. This continued through Q4, with recurring revenues now making up 46% of the division’s revenue, compared to 35% a year ago. The division saw particularly strong sales of InPixio photo software (+83% y-o-y) and SodaPDF software (+42% y-o-y) – both of which are 75% sold via subscription – as consumers made greater use of e-commerce, and productivity, electronic signature and photo-editing software during lockdown.

Roughly 10% of the division’s revenues are generated from the sale of software in physical stores. During lockdown these stores were not able to operate thus contributing to the Q4 revenue decline.

The division has continued to invest in R&D during FY20, launching InPixio Studio Photo 10 in March and Adaware Antivirus and SodaPDF 12 last week. In the coming weeks, Avanquest will launch Adaware Protect, a new tool to protect users’ online identity and habits.

myDevices – continuing to commercialise the platform

Despite COVID-19 slowing the physical roll-out of myDevices, the division grew 149% y-o-y in Q420 and 51% for FY20. By the end of FY20, myDevices was in use by c 500 clients at more than 5,000 sites. The division has worked on creating vertical sites for clients and partners:

Exhibit 2: myDevices vertical sites

Application

Site

Cold chain management

SimplySense.com

Security

PushandProtect.com, PushandCall.com, LockdownAlert.com

Occupancy & space utilisation

Countario.com

Predictive maintenance

PredictAlert.com

Water conservation

WaterSaveSensor.com

Application

Cold chain management

Security

Occupancy & space utilisation

Predictive maintenance

Water conservation

Site

SimplySense.com

PushandProtect.com, PushandCall.com, LockdownAlert.com

Countario.com

PredictAlert.com

WaterSaveSensor.com

Source: Claranova

myDevices has worked with Sprint in the US for a number of years and now that the Sprint/T-Mobile merger has been finalised, both entities now offer myDevices to their clients.

During Q4, the company announced that it was collaborating with four other companies to bring IoT to Spanish hospitals, providing emergency buttons that signal when a patient needs an immediate intervention. Staff can then locate and identify where the call has come from in real time. myDevices is supplying its software platform, Everynet is supplying the network infrastructure, Redexia is co-ordinating the integration and logistical deployment of the project, Abeeway supplies the buttons containing long-life batteries and Semtech provides the underlying LoRa IP.

Management changes

During Q4, the company made some changes to the management team. Sébastien Martin has moved from the CFO role to be appointed executive vice-president responsible for development projects; he will also retain investor relations responsibilities. A new CFO, Jean-Yves Quentel, has been appointed. The company has also appointed three new non-executive directors: Joanna Gordon, Francis Meston and Jérôme Bichut.

Changes to forecasts

As Q4 revenues came in substantially higher than expected, particularly for PlanetArt, we have revised our FY20 forecasts to reflect a 47% upgrade to EBITDA – this assume a c 25% drop-through of PlanetArt revenue upside. We leave our estimates for FY21 essentially unchanged as at this point, it is unclear how sustainable the strong demand for photo printing will be.

Exhibit 3: Changes to estimates

€'m

FY20e

FY20e

FY21e

FY21e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

382.6

408.6

6.8%

55.8%

459.3

459.3

0.0%

12.4%

EBITDA

13.1

19.2

46.9%

20.3%

32.5

32.5

(0.0%)

68.9%

EBITDA margin

3.4%

4.7%

1.3%

(1.4%)

7.1%

7.1%

(0.0%)

2.4%

EBITDA – pre IFRS 16

9.9

16.0

62.1%

0.2%

29.3

29.3

0.0%

82.6%

EBITDA margin – pre IFRS 16

2.6%

3.9%

1.3%

(2.2%)

6.4%

6.4%

(0.0%)

2.5%

Normalised operating profit

9.4

15.5

65.4%

0.3%

28.8

28.8

(0.0%)

85.3%

Normalised operating profit margin

2.5%

3.8%

1.3%

(2.1%)

6.3%

6.3%

(0.0%)

2.5%

Reported operating profit

4.1

10.2

149.8%

(10.1%)

26.5

26.5

(0.0%)

158.7%

Reported operating margin

1.1%

2.5%

1.4%

(1.8%)

5.8%

5.8%

(0.0%)

3.3%

Normalised PBT

4.9

11.1

124.9%

(7.8%)

24.1

24.1

(0.0%)

117.5%

Reported PBT

(.4)

5.8

N/A

(115.3%)

21.8

21.8

(0.0%)

277.6%

Normalised net income

3.6

7.9

120.1%

(19.9%)

14.0

14.0

0.1%

77.7%

Reported net income

(2.4)

1.9

(179.4%)

(104.7%)

12.2

12.2

0.1%

542.7%

Normalised basic EPS (€)

0.09

0.20

120.1%

(19.9%)

0.36

0.36

0.1%

77.7%

Normalised diluted EPS (€)

0.09

0.20

120.1%

(19.9%)

0.35

0.35

0.1%

77.7%

Reported basic EPS (€)

-0.06

0.05

(179.4%)

(104.7%)

0.31

0.31

0.1%

542.7%

Net debt/(cash)

(8.7)

(15.3)

75.0%

(35.2%)

(35.7)

(40.4)

13.3%

164.2%

Divisional revenues

Printing & Gifting

290.0

313.8

8.2%

78.2%

356.5

354.3

(0.6%)

12.9%

Software

87.9

89.9

2.3%

8.3%

97.2

99.4

2.2%

10.6%

IoT

4.7

4.9

5.2%

54.5%

5.6

5.6

0.0%

13.3%

Total

382.6

408.6

6.8%

55.8%

459.3

459.3

0.0%

12.4%

Source: Edison Investment Research

Exhibit 4: Financial summary

€'m

2015

2016

2017

2018

2019

2020e

2021e

30-June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

93.1

117.4

130.2

161.5

262.3

408.6

459.3

EBITDA

 

 

(6.8)

(9.2)

(5.0)

3.9

16.0

19.2

32.5

Normalised operating profit

 

 

(11.4)

(16.0)

(5.8)

3.4

15.5

15.5

28.8

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

(1.5)

(2.3)

(2.3)

Exceptionals

15.6

(10.0)

0.4

(2.4)

(2.9)

(3.0)

0.0

Share-based payments

(0.0)

(0.1)

(4.8)

(7.1)

0.3

0.0

0.0

Reported operating profit

4.2

(26.1)

(10.1)

(6.1)

11.4

10.2

26.5

Net Interest

1.1

(1.7)

(0.9)

(0.3)

(3.5)

(4.5)

(4.7)

Joint ventures & associates (post tax)

0.0

(0.0)

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

(45.6)

0.0

0.0

Profit Before Tax (norm)

 

 

(10.3)

(17.7)

(6.6)

3.1

12.0

11.1

24.1

Profit Before Tax (reported)

 

 

5.3

(27.8)

(11.0)

(6.4)

(37.7)

5.8

21.8

Reported tax

(0.6)

(0.8)

(0.4)

(1.8)

(3.7)

(3.2)

(5.0)

Profit After Tax (norm)

(10.9)

(18.5)

(7.0)

2.4

9.2

8.5

18.5

Profit After Tax (reported)

4.7

(28.6)

(11.4)

(8.2)

(41.4)

2.5

16.8

Minority interests

(8.1)

0.0

0.3

0.2

0.6

(0.6)

(4.5)

Discontinued operations

(3.2)

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(18.9)

(18.5)

(6.7)

2.6

9.8

7.9

14.0

Net income (reported)

(6.5)

(28.6)

(11.0)

(7.9)

(40.8)

1.9

12.2

Basic ave. number of shares outstanding (m)

6

38

38

39

39

39

39

EPS - basic normalised (€)

 

 

(3.27)

(0.49)

(0.18)

0.07

0.25

0.20

0.36

EPS - diluted normalised (€)

 

 

(3.27)

(0.49)

(0.18)

0.06

0.25

0.20

0.35

EPS - basic reported (€)

 

 

(1.13)

(0.76)

(0.29)

(0.20)

(1.04)

0.05

0.31

Dividend (€)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

N/A

26.1

10.9

24.0

62.4

55.8

12.4

EBITDA Margin (%)

-7.3

-7.9

-3.8

2.4

6.1

4.7

7.1

Normalised Operating Margin

-12.3

-13.7

-4.4

2.1

5.9

3.8

6.3

BALANCE SHEET

Fixed Assets

 

 

15.7

3.0

2.0

1.3

75.1

98.2

93.2

Intangible Assets

12.0

1.5

0.9

0.5

69.9

84.0

81.6

Tangible Assets

0.6

0.5

0.3

0.2

1.4

10.4

7.8

Investments & other

3.1

1.1

0.7

0.6

3.8

3.8

3.8

Current Assets

 

 

48.0

25.5

28.1

79.1

100.9

112.8

140.7

Stocks

5.9

5.0

3.7

3.7

4.8

9.0

10.1

Debtors

4.8

4.7

4.3

4.9

11.6

13.4

15.1

Cash & cash equivalents

30.5

11.1

17.1

65.7

75.4

81.3

106.4

Other

6.9

4.7

2.9

4.8

9.1

9.1

9.1

Current Liabilities

 

 

(32.0)

(25.3)

(28.1)

(37.2)

(60.5)

(72.7)

(78.9)

Creditors

(26.9)

(24.5)

(26.6)

(35.4)

(54.8)

(64.2)

(70.4)

Tax and social security

(0.3)

(0.0)

(0.3)

(1.7)

(3.0)

(3.0)

(3.0)

Short term borrowings

(4.8)

(0.7)

(1.1)

(0.1)

(2.7)

(2.7)

(2.7)

Other

0.0

0.0

0.0

0.0

0.0

(2.8)

(2.8)

Long Term Liabilities

 

 

(2.4)

(1.1)

(0.7)

(29.0)

(52.0)

(72.2)

(72.2)

Long term borrowings

(1.8)

(0.6)

0.0

(28.1)

(49.1)

(63.3)

(63.3)

Other long term liabilities

(0.7)

(0.5)

(0.7)

(0.9)

(2.9)

(8.9)

(8.9)

Net Assets

 

 

29.3

2.1

1.3

14.2

63.6

66.1

82.8

Minority interests

0.0

0.0

(0.1)

(1.8)

(11.0)

(11.6)

(16.2)

Shareholders' equity

 

 

29.3

2.1

1.2

12.5

52.6

54.5

66.7

CASH FLOW

Op Cash Flow before WC and tax

(6.8)

(9.2)

(5.0)

3.9

16.0

19.2

32.5

Working capital

0.4

2.5

6.8

7.9

(4.1)

17.9

3.3

Exceptional & other

(3.8)

(4.3)

(2.2)

(5.7)

(5.2)

(3.0)

0.0

Tax

0.3

(0.3)

(0.0)

(1.2)

(3.8)

(3.2)

(5.0)

Net operating cash flow

 

 

(9.8)

(11.3)

(0.4)

5.0

3.0

31.0

30.8

Capex

(4.4)

(0.9)

(0.2)

(0.1)

(2.5)

(1.0)

(1.0)

Acquisitions/disposals

10.8

(0.4)

3.6

14.2

(13.3)

(31.6)

0.0

Net interest

(0.9)

(0.1)

(0.0)

(0.3)

0.0

(4.5)

(4.7)

Equity financing

33.2

(5.1)

1.9

2.0

(1.4)

0.0

0.0

Dividends

0.0

2.0

0.0

0.0

0.0

0.0

0.0

Other

0.1

0.1

0.1

(0.6)

0.0

(2.7)

0.0

Net Cash Flow

29.0

(15.7)

5.0

20.1

(14.2)

(8.8)

25.1

Opening net debt/(cash)

 

 

18.0

(23.9)

(9.8)

(16.0)

(37.5)

(23.6)

(15.3)

FX

0.1

(0.1)

(0.6)

0.4

0.3

0.5

0.0

Other non-cash movements

12.6

1.7

1.8

1.1

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(23.9)

(9.8)

(16.0)

(37.5)

(23.6)

(15.3)

(40.4)

Source: Claranova, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Claranova and prepared and issued by Edison, in consideration of a fee payable by Claranova. 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 2020 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

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

General disclaimer and copyright

This report has been commissioned by Claranova and prepared and issued by Edison, in consideration of a fee payable by Claranova. 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 2020 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

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

More on Claranova

View All

Latest from the TMT sector

View All TMT content

Research: Financials

S&U — Still in profit and tentative positive trends

S&U motor finance sales are recovering even as credit criteria have been tightened. There is still uncertainty about the impact of the wind down of employment support schemes and how collections will recover following repayment holidays, but S&U expresses cautious optimism on the latter point. The current year results will be significantly affected by lower sales and higher arrears but management indicates the group is still profitable, is maintaining its high customer service levels and has liquidity headroom to respond once it is sensible to target stronger growth.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free