Last close As at 05/08/2026
GBP0.71
▲ −0.10 (−0.14%)
Market capitalisation
GBP176m
Research: Industrials
AGM comments point to operational progress at Arnhem and an on-track construction schedule for the new Tricoya facility at Hull. Accsys has set out a clear development plan for the group; while we are not placing undue weight on a short trading period, we are encouraged to see that growing revenues and production volumes have been achieved in the year to date.
Written by
Accsys Technologies |
Accoya volume rising, more capacity on stream |
AGM update |
General industrials |
24 September 2018 |
Share price performance
Business description
Next events
Analyst
Accsys Technologies is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||
AGM comments point to operational progress at Arnhem and an on-track construction schedule for the new Tricoya facility at Hull. Accsys has set out a clear development plan for the group; while we are not placing undue weight on a short trading period, we are encouraged to see that growing revenues and production volumes have been achieved in the year to date.
Year end |
Revenue (€m) |
EBITDA* |
PBT* |
EPS* |
P/E |
EV/EBITDA |
03/17 |
56.5 |
(1.5) |
(4.5) |
(0.06) |
N/A |
N/A |
03/18 |
60.9 |
(3.5) |
(8.8) |
(0.07) |
N/A |
N/A |
03/19e |
70.9 |
2.0 |
(6.0) |
(0.05) |
N/A |
83.3 |
03/20e |
94.9 |
7.8 |
(4.0) |
(0.05) |
N/A |
22.9 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Progress to date in FY19
In the first five months of FY19, Accoya’s solid wood production volume was 4.9% ahead of the prior year at 16,918m3. The first two reactors at Arnhem have been effectively running at capacity since H217; the third came on stream in July and has made a modest (unspecified) contribution to this outturn. It adds a further 20,000m3 annual capacity, a 50% increase on what was previously available. With revenue c 5.3% up y-o-y and taking production volume as a proxy for sales suggests average pricing is slightly up. No new profit information was included in the statement. Otherwise, references to the expected Hull Tricoya facility construction phase and aspirations for new overseas partnerships were consistent with previous comments.
Realistic FY19 estimates
In FY18, Accsys sold 42,676m3 of Accoya wood, implying c 26,500m3 of sales in the final seven months of that year. On the same basis, just over 32,000m3 volume sales are required to hit our FY19 model assumption. In the context of c 10,000m3 more capacity availability y-o-y in H2 and allowing for some ramping of output this looks achievable in our view, subject to generating increasing demand for the higher-throughput potential. Additionally, our estimates assumed unchanged pricing and, as noted above, YTD progress appears to be slightly ahead of this.
Valuation: Pricing progress supports valuation uplift
The company’s share price has made what appears to be a decisive break from its c 14-month 70–80p trading range, rising c 28% since the end of June this year. Successful execution of visible development milestones should continue to aid sentiment, in our view. Our DCF illustrated some sensitivities in support of higher valuation levels (eg price inflation, further JVs and/or a lower Tricoya WACC in due course). We note the current share price is consistent with c 3–4% price and overhead cost inflation, compared to c 2% in our earlier illustration. Using conventional multiples, Accsys is valued at 2.3x our projected FY19 sales, reducing to 1.5x by FY21, at which point the EV/EBITDA multiple would be 12.9x.
Exhibit 1: Financial summary
€ms |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019e |
2020e |
2021e |
||
March |
UK GAAP |
UK GAAP |
UK GAAP |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
15.002 |
18.822 |
33.512 |
46.077 |
52.769 |
56.529 |
60.911 |
70.943 |
94.873 |
114.500 |
Cost of Sales |
|
|
(15.050) |
(15.474) |
(25.753) |
(33.842) |
(34.597) |
(42.175) |
(47.270) |
(51.339) |
(66.887) |
(78.976) |
Gross Profit |
|
|
(0.048) |
3.348 |
7.759 |
12.235 |
18.172 |
14.354 |
13.641 |
19.604 |
27.986 |
35.524 |
EBITDA |
|
|
(10.386) |
(7.944) |
(4.111) |
(1.275) |
2.384 |
(1.484) |
(3.500) |
1.989 |
7.786 |
13.451 |
Operating Profit (before GW and except.) |
(12.545) |
(10.200) |
(6.488) |
(3.750) |
(0.288) |
(4.197) |
(6.577) |
(2.625) |
0.701 |
5.416 |
||
Intangible Amortisation |
|
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Exceptionals |
|
|
(2.281) |
0.000 |
(0.726) |
(2.670) |
0.000 |
0.033 |
(1.650) |
0.000 |
0.000 |
0.000 |
Other |
|
|
0.000 |
(0.430) |
(0.905) |
(1.098) |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Operating Profit |
|
|
(14.826) |
(10.630) |
(8.119) |
(7.518) |
(0.288) |
(4.164) |
(8.227) |
(2.625) |
0.701 |
5.416 |
Net Interest |
|
|
(0.086) |
(0.038) |
(0.071) |
(0.135) |
(0.178) |
(0.300) |
(2.174) |
(3.400) |
(4.700) |
(4.700) |
Profit Before Tax (norm) |
|
|
(12.631) |
(10.238) |
(6.559) |
(3.885) |
(0.466) |
(4.497) |
(8.751) |
(6.025) |
(3.999) |
0.716 |
Profit Before Tax (FRS 3) |
|
|
(14.912) |
(10.668) |
(8.190) |
(7.653) |
(0.466) |
(4.463) |
(10.401) |
(6.025) |
(3.999) |
0.716 |
Tax |
|
|
0.536 |
(0.355) |
(0.699) |
(0.607) |
(0.402) |
(0.666) |
0.251 |
(0.769) |
(1.231) |
(1.499) |
Profit After Tax (norm) |
|
|
(12.095) |
(11.023) |
(8.163) |
(5.590) |
(0.868) |
(5.163) |
(8.500) |
(6.794) |
(5.230) |
(0.783) |
Profit After Tax (FRS 3) |
|
|
(14.376) |
(11.023) |
(8.889) |
(8.260) |
(0.868) |
(5.129) |
(10.150) |
(6.794) |
(5.230) |
(0.783) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Number of Shares Outstanding (m) |
|
80.7 |
83.9 |
87.5 |
88.5 |
89.6 |
90.4 |
111.2 |
111.5 |
111.7 |
111.7 |
|
EPS - normalised (€) |
|
|
(0.15) |
(0.13) |
(0.09) |
(0.06) |
(0.01) |
(0.06) |
(0.07) |
(0.05) |
(0.05) |
(0.01) |
EPS - FRS 3 (€) |
|
|
(0.18) |
(0.13) |
(0.10) |
(0.09) |
(0.01) |
(0.06) |
(0.08) |
(0.05) |
(0.05) |
(0.01) |
Dividend per share (€) |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.00 |
0.00 |
0.00 |
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin (%) |
|
|
-0.32 |
17.8 |
23.2 |
26.6 |
34.4 |
25.4 |
22.4 |
27.6 |
29.5 |
31.0 |
EBITDA Margin (%) |
|
|
-69.2 |
-42.2 |
-12.3 |
-2.8 |
4.5 |
-2.6 |
-5.7 |
2.8 |
8.2 |
11.7 |
Operating Margin (before GW and except.) (%) |
-83.6 |
-54.2 |
-19.4 |
-8.1 |
-0.5 |
-7.4 |
-10.8 |
-3.7 |
0.7 |
4.7 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets |
|
|
34.715 |
31.425 |
29.413 |
29.562 |
31.252 |
32.520 |
71.488 |
112.826 |
119.659 |
117.042 |
Intangible Assets |
|
|
7.579 |
8.226 |
8.333 |
10.014 |
10.980 |
10.839 |
10.657 |
10.440 |
10.223 |
10.006 |
Tangible Assets |
|
|
25.614 |
22.271 |
20.740 |
19.548 |
20.272 |
21.681 |
60.831 |
102.386 |
109.436 |
107.036 |
Investments |
|
|
1.522 |
0.928 |
0.340 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Current Assets |
|
|
32.387 |
29.638 |
26.161 |
24.066 |
22.590 |
61.268 |
63.505 |
46.326 |
45.759 |
43.349 |
Stocks |
|
|
3.120 |
4.860 |
6.053 |
7.894 |
8.345 |
11.796 |
13.125 |
14.255 |
14.572 |
13.205 |
Debtors |
|
|
3.000 |
3.439 |
4.091 |
3.912 |
4.967 |
7.402 |
9.178 |
10.275 |
14.391 |
18.347 |
Cash |
|
|
24.574 |
20.467 |
15.185 |
10.786 |
8.186 |
41.173 |
39.698 |
19.698 |
14.698 |
9.698 |
Current Liabilities |
|
|
(3.649) |
(3.621) |
(5.821) |
(10.701) |
(9.842) |
(14.599) |
(21.414) |
(23.323) |
(27.434) |
(30.943) |
Creditors |
|
|
(3.385) |
(3.357) |
(5.557) |
(10.437) |
(9.488) |
(14.144) |
(18.029) |
(19.938) |
(24.049) |
(27.558) |
Short term borrowings |
|
|
(0.264) |
(0.264) |
(0.264) |
(0.264) |
(0.354) |
(0.455) |
(3.385) |
(3.385) |
(3.385) |
(3.385) |
Long Term Liabilities |
|
|
(1.960) |
(1.924) |
(1.871) |
(1.799) |
(1.947) |
(22.718) |
(40.084) |
(69.128) |
(76.514) |
(68.760) |
Long term borrowings |
|
|
(1.960) |
(1.924) |
(1.871) |
(1.799) |
(1.947) |
(22.718) |
(40.084) |
(69.128) |
(76.514) |
(68.760) |
Other long term liabilities |
|
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Net Assets |
|
|
61.493 |
55.518 |
47.882 |
41.128 |
42.053 |
56.471 |
73.495 |
66.701 |
61.471 |
60.688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Cash Flow |
|
|
(3.717) |
(8.938) |
(3.257) |
(3.873) |
0.452 |
(1.304) |
(1.756) |
0.877 |
7.243 |
14.149 |
Net Interest |
|
|
(0.019) |
(0.038) |
(0.102) |
(0.138) |
(0.186) |
(0.248) |
(0.671) |
(3.200) |
(4.500) |
(4.500) |
Tax |
|
|
0.000 |
0.795 |
0.344 |
0.263 |
0.229 |
(0.745) |
(2.013) |
(0.769) |
(1.231) |
(1.499) |
Capex |
|
|
0.888 |
0.501 |
(1.054) |
(1.108) |
(4.052) |
(2.608) |
(29.895) |
(59.952) |
(13.897) |
(5.397) |
Acquisitions/disposals |
|
|
0.000 |
0.000 |
0.000 |
0.000 |
0.956 |
18.317 |
0.000 |
0.000 |
0.000 |
0.000 |
Financing |
|
|
(0.178) |
3.597 |
(1.130) |
0.461 |
0.124 |
0.050 |
26.728 |
0.000 |
0.000 |
0.000 |
Dividends |
|
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Net Cash Flow |
|
|
(3.026) |
(4.083) |
(5.199) |
(4.395) |
(2.477) |
13.462 |
(7.607) |
(63.044) |
(12.386) |
2.753 |
Opening net debt/(cash) |
|
|
(27.596) |
(22.350) |
(18.279) |
(13.050) |
(8.723) |
(5.885) |
(18.000) |
3.771 |
52.815 |
65.201 |
HP finance leases initiated |
|
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Other |
|
|
(2.220) |
0.012 |
(0.030) |
0.068 |
(0.361) |
(1.347) |
(14.164) |
14.000 |
(0.000) |
(0.000) |
Closing net debt/(cash) |
|
|
(22.350) |
(18.279) |
(13.050) |
(8.723) |
(5.885) |
(18.000) |
3.771 |
52.815 |
65.201 |
62.447 |
Source: Company data, Edison Investment Research
|
|
GVC has announced a strong set of H118 results, with pro-forma net gaming revenues (NGR) increasing 8% to £1,717m, driven by an impressive 18% growth in Online. The integration of Ladbrokes Coral is on track, with an additional £30m capex synergies identified. GVC is now a leading player in the global gaming market and is well placed to continue gaining share across all its key territories. M&A are likely to remain a feature and there is significant potential upside from the US, which is not in our estimates. The stock trades appropriately towards the top of its peer group, at 10.3x EV/EBITDA and 13.5x P/E for 2018e.