Freelancer — Delivering on cash and profit targets

Freelancer (ASX: FLN)

Last close As at 24/06/2024

AUD0.20

−0.01 (−2.44%)

Market capitalisation

AUD91m

More on this equity

Research: TMT

Freelancer — Delivering on cash and profit targets

Freelancer achieved a key profitability target in Q323 by delivering positive operating EBITDA across divisions, leading to positive operating cash flow generation and an uplift in gross cash. Despite lower group gross merchandise value (GMV), revenue likely grew given the higher take rate of the marketplace division, where GMV increased. Near-term pipeline highlights include accelerating Enterprise momentum from US expansion and a Chinese retailer partnership, Loadshift’s ongoing marketplace transition and new Escrow.com partnerships to drive diversification.

Max Hayes

Written by

Max Hayes

Associate Analyst

TMT

Freelancer

Delivering on cash and profit targets

Q323 update

Software and comp services

24 October 2023

Price

A$0.20

Market cap

A$90m

Net cash (A$m) at end H123
(including A$19.2m of lease liabilities)

23.0

Shares in issue

451.7m

Free float

16.9%

Code

FLN

Primary exchange

ASX

Secondary exchange

OTC FLNCF

Share price performance

%

1m

3m

12m

Abs

(7.1)

(23.5)

(18.8)

Rel (local)

(4.0)

(18.1)

(20.6)

52-week high/low

A$0.30

A$0.19

Business description

Freelancer is an Australian company, operating one of the world’s largest online marketplaces for freelancers. Its marketplace division has two business units: 1) its core platform, which provides services targeted at small and medium-sized companies and includes an enterprise service for large multinationals; and 2) Loadshift, which is Australia’s largest marketplace for heavy haulage freight. Separately, the company owns Escrow.com, which is a large transactions processor.

Next events

FY23 update

February 2024

Analysts

Max Hayes

+44 (0)20 3077 5700

Dan Ridsdale

+44 (0)20 3077 5700

Freelancer is a research client of Edison Investment Research Limited

Freelancer achieved a key profitability target in Q323 by delivering positive operating EBITDA across divisions, leading to positive operating cash flow generation and an uplift in gross cash. Despite lower group gross merchandise value (GMV), revenue likely grew given the higher take rate of the marketplace division, where GMV increased. Near-term pipeline highlights include accelerating Enterprise momentum from US expansion and a Chinese retailer partnership, Loadshift's ongoing marketplace transition and new Escrow.com partnerships to drive diversification.

Year end

Revenue (A$m)

EBITDA*
(A$m)

PBT**
(A$m)

EPS**
(c)

EV/EBITDA
(x)

P/E
(x)

12/21

57.4

(2.7)

(3.0)

(0.7)

N/A

N/A

12/22

55.7

(6.6)

(6.9)

(1.5)

N/A

N/A

12/23e

54.8

0.3

0.1

0.0

204.3

1911.3

12/24e

59.5

1.8

1.5

0.2

37.2

84.6

Note: *Operating EBITDA includes depreciation and interest charges associated with capitalised leases. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Positive EBITDA and operating cash flow

Freelancer reported a 3.0% y-o-y decrease in Q323 GMV to A$222.3m, with an 8.4% increase in its marketplace division not enough to offset the 4.8% decline in Escrow.com. Despite lower GMV, revenue likely grew given marketplace's higher average take rate of GMV (>30%) versus Escrow.com (<5%), although no figure was given. A key target was achieved by delivering positive operating EBITDA in each division, driving operating cash flow of A$1m in the quarter and a A$0.4m qoq increase in gross cash to A$23.5m. This demonstrates the benefits of the H1 efficiency measures, namely staff reductions, and underpins the operating leverage required to deliver our unchanged profit and cash forecasts for the year. We have updated our year-end cash forecast, reflecting the Q3 gross position and positive EBITDA.

Key milestones in the pipeline

Marketplace GMV was driven by a 1.6m increase in users and 1.9% y-o-y uplift in average project size, supported by investment in the user interface and collaboration tools. Liquidity continued to improve, aided by generative AI, enabling freelancers to expand skills and complete tasks faster. Enterprise GMV was flat but accelerated in late Q3 following the hire of a head of global sales, the lack of which had caused disruption. Momentum should continue into Q4 from US expansion and the onboarding of a major Chinese retailer. Loadshift momentum continued with 39% qoq GMV growth; transitioning to a marketplace model could further increase revenue. In Escrow.com, new partnerships, including a leading shopping cart SaaS platform launching in Q124, should drive diversification beyond domain names, typically the largest contributor to the division’s revenue, which lagged this year.

Valuation: Showing growth potential to drive upside

Our view is that Freelancer’s share price does not reflect its long-term potential, with multiple levers driving value. The company trades at an 81% discount to peers on EV/sales across FY1e and FY2e, narrowing to 44% compared to Upwork and Fiverr. Showing further growth potential in either division could be a catalyst.

Strong operational progress and positive momentum

In Q323, Freelancer made strong progress across its marketplace and Escrow.com divisions, achieving key milestones we previously identified as potential long-term value drivers; see below.

Freelancer marketplace

Freelancer reported 8.4% GMV growth to A$34.1m, driving 2% cash receipts growth and positive operating EBITDA with operating leverage. We expect the retail marketplace, comprising 94% of FY22 GMV, to grow steadily aided by investments aimed at improving the user experience and communication/collaboration to drive conversion, retention and average project size.

Management has noticed a step-change in project quality and speed from freelancers using generative AI, which could also expand a freelancer’s skillset. Further use of AI could further boost liquidity and GMV, as CEO Matt Barrie noted small businesses still find it more effective to utilise freelancer specialists on AI platforms versus doing it in-house. The combination of a global pool of freelancers, many from developing countries with lower costs, and the quality boost from AI tools is compelling for smaller businesses, especially those with tightening budgets.

Enterprise

Revenue was flat year-on-year primarily due to leadership transition, but increased by more than 30% between August and September following David Lane’s appointment as global head of sales.

Global field services: extended services to 32 cities globally, doubling work orders in the quarter. Venturing into the much larger US market in Q4, with pilots in New Mexico, Chicago and Atlanta, where the expected move into installation work, rather than the more capital-intensive hardware repair, could lead to margin expansion.

Major partnership: onboarded one of the largest online Chinese retailers (generates US$28bn in annual revenue) to create a custom platform for gaining access to a global contingent platform, similar to Deloitte MyGigs. The material impact is likely to be in the longer term, given the work required to create the platform.

Loadshift

GMV up 39% q-o-q with continuing transition from a classified membership model to a marketplace model driving revenue by increasing the take rate.

New features, such an automated proof of delivery generator, to enhance efficiency and drive the transition, where these features are not available on the classifieds model.

Escrow.com

Escrow.com GMV declined 4.8% y-o-y to A$188.2m, driven by subdued domain name transactions, which comprise the largest share of payment volumes. Domain names should remain the greatest contributor this year, though revenue can be variable as performance often follows trends like crypto in 2021. An expected rebound in venture activity for AI-related domain names did not occur in Q3 as expected by management, but the company remains hopeful for Q4 improvement. However, new partnerships in other areas should help diversify risk, as highlighted below:

Integration into a major shopping cart SaaS platform, expected to launch in Q124.

Signed with Trailers.com and SurplusRecord in automotive and construction, two key verticals where the company sees these partnerships acting as a springboard for new deals. Management expects to sign new partnerships in Q423 and Q124.

Continued month-on-month growth with existing partner Acquire.com.

Partnership agreement with a large intellectual property broker expected for Q423.

Changes to forecasts

We leave our revenue and profit forecasts unchanged but increase our year end cash expectations for FY23 reflecting Freelancer’s Q323 gross cash position of A$23.5m and positive EBITDA. The uplift to our FY23 cash forecast, based on changed working capital assumptions, has led to an increase of an equal amount in our FY24 and FY25 projections.

Exhibit 1: Changes to forecasts

FY23e

FY24e

FY25e

New

Old

% change

New

Old

% change

New

Old

% change

Revenues

54.8

54.8

0.0%

59.5

59.5

0.0%

64.7

64.7

0.0%

Gross profit

46.2

46.2

0.0%

50.2

50.2

0.0%

54.6

54.6

0.0%

Gross margin

84.3%

84.3%

0.0%

84.3%

84.3%

0.0%

84.3%

84.3%

0.0%

Operating EBITDA*

0.3

0.3

0.0%

1.8

1.8

0.0%

3.1

3.1

0.0%

Operating EBITDA margin

1%

1%

0.0%

3%

3%

0.0%

5%

5%

0.0%

Reported operating profit

2.0

2.0

0.0%

3.5

3.5

0.0%

4.7

4.7

0.0%

Reported operating margin

4%

4%

0.0%

6%

6%

0.0%

7%

7%

0.0%

Normalised net income

0.0

0.0

0.0%

1.1

1.1

0.0%

1.9

1.9

0.0%

Normalised diluted EPS (c)

0.01

0.01

0.0%

0.24

0.24

0.0%

0.43

0.43

0.0%

Net debt/(cash)

(24.1)

(19.7)

22.6%

(27.1)

(22.7)

19.5%

(31.6)

(27.1)

16.4%

Source: Edison Investment Research


Exhibit 2: Financial summary

A$'000s

2018

2019

2020

2021

2022

2023e

2024e

2025e

Year end 31 -December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

51,675

57,911

58,771

57,419

55,660

54,778

59,500

64,717

Cost of Sales

(7,651)

(9,455)

(9,786)

(9,689)

(8,740)

(8,601)

(9,343)

(10,162)

Gross Profit

44,024

48,456

48,985

47,730

46,920

46,176

50,157

54,555

EBITDA

 

 

(672)

2,044

5,793

3,972

(746)

6,615

8,091

9,344

Operating EBITDA

 

 

(705)

(1,084)

(447)

(2,690)

(6,579)

329

1,805

3,057

Normalised operating profit

 

 

(1,202)

(1,170)

1,081

(922)

(5,216)

2,176

3,640

4,890

Amortisation of acquired intangibles

0

0

0

0

0

0

0

0

Exceptionals

0

0

0

0

0

0

0

0

Share-based payments

(558)

(329)

(192)

(156)

(159)

(159)

(159)

(159)

Reported operating profit

(1,760)

(1,499)

889

(1,078)

(5,375)

2,017

3,481

4,731

Net Interest

(33)

(219)

(1,751)

(2,035)

(1,655)

(2,108)

(2,108)

(2,108)

Joint ventures & associates (post tax)

0

0

0

0

0

0

0

0

Exceptionals

0

0

0

0

0

0

0

0

Profit Before Tax (norm)

 

 

(1,235)

(1,389)

(670)

(2,957)

(6,871)

68

1,532

2,782

Profit Before Tax (reported)

 

 

(1,793)

(1,718)

(862)

(3,113)

(7,030)

(91)

1,373

2,623

Reported tax

309

127

216

856

1,617

0

(412)

(787)

Profit After Tax (norm)

(1,235)

(1,389)

(670)

(2,957)

(6,871)

47

1,073

1,948

Profit After Tax (reported)

(1,484)

(1,591)

(646)

(2,257)

(5,413)

(91)

961

1,836

Minority interests

0

0

0

0

0

0

0

0

Discontinued operations

0

0

0

0

0

0

0

0

Net income (normalised)

(1,235)

(1,389)

(670)

(2,957)

(6,871)

47

1,073

1,948

Net income (reported)

(1,484)

(1,591)

(646)

(2,257)

(5,413)

(91)

961

1,836

Basic average number of shares outstanding (m)

449

450

450

450

451

452

452

452

EPS - basic normalised (c)

 

 

(0.27)

(0.31)

(0.15)

(0.66)

(1.52)

0.01

0.24

0.43

EPS - diluted normalised (c)

 

 

(0.27)

(0.31)

(0.15)

(0.66)

(1.52)

0.01

0.24

0.43

EPS - basic reported (c)

 

 

(0.33)

(0.35)

(0.14)

(0.50)

(1.20)

(0.02)

0.21

0.41

Dividend (c)

0

0

0

0

0

0

0

0

Revenue growth (%)

0.0

12.1

1.5

(2.3)

(3.1)

(1.6)

8.6

8.8

Gross Margin (%)

85.2

83.7

83.3

83.1

84.3

84.3

84.3

84.3

EBITDA Margin (%)

-1.3

3.5

9.9

6.9

-1.3

12.1

13.6

14.4

Normalised Operating Margin

(2.3)

(2.0)

1.8

(1.6)

(9.4)

4.0

6.1

7.6

BALANCE SHEET

Fixed Assets

 

 

33,459

60,699

61,727

66,372

66,248

66,251

66,241

66,230

Intangible Assets

26,429

26,429

26,457

34,119

34,120

34,120

34,120

34,120

Tangible Assets

557

27,446

22,785

19,392

18,323

18,326

18,316

18,305

Deferred tax & other

6,473

6,824

12,485

12,861

13,805

13,805

13,805

13,805

Current Assets

 

 

37,657

37,326

41,964

38,955

30,797

31,574

35,039

39,898

Stocks

0

0

0

0

0

0

0

0

Debtors

3,474

4,003

5,593

6,448

4,825

4,749

5,158

5,610

Cash & cash equivalents

33,211

32,014

34,341

30,316

23,358

24,211

27,267

31,674

Other

972

1,309

2,030

2,191

2,614

2,614

2,614

2,614

Current Liabilities

 

 

38,628

42,984

48,170

50,849

48,831

49,543

51,878

54,730

Creditors

35,898

36,607

39,166

41,259

39,647

40,359

42,694

45,546

Tax and social security

71

57

87

43

18

18

18

18

Short term borrowings

121

121

286

121

121

121

121

121

Lease liabilities

0

3,248

5,628

5,709

5,562

5,562

5,562

5,562

Other

2,538

2,951

3,003

3,717

3,483

3,483

3,483

3,483

Long Term Liabilities

 

 

1,413

25,102

26,356

23,148

21,749

21,749

21,749

21,749

Long term borrowings

0

0

0

0

0

0

0

0

Lease liabilities

0

23,134

19,094

16,082

15,519

15,519

15,519

15,519

Other long term liabilities

1,413

1,968

7,262

7,066

6,230

6,230

6,230

6,230

Net Assets

 

 

31,075

29,939

29,165

31,330

26,465

26,533

27,653

29,648

Minority interests

(20)

(20)

(20)

(3,674)

(3,674)

(3,674)

(3,674)

(3,674)

Shareholders' equity

 

 

31,055

29,919

29,145

27,656

22,791

22,859

23,979

25,974

CASH FLOW

Op Cash Flow before WC and tax

(717)

1,623

4,066

2,637

(943)

4,348

5,412

6,290

Working capital

(660)

300

5,094

(1,463)

(3,930)

789

1,925

2,400

Exceptional & other

(160)

(196)

(1,439)

1,313

535

0

0

0

Share-based payments

558

329

192

156

159

159

159

159

Net operating cash flow

 

 

(979)

2,056

7,913

2,643

(4,179)

5,295

7,497

8,849

Capex

(135)

(227)

(221)

(429)

(149)

(264)

(264)

(264)

Acquisitions/disposals

23

0

(28)

(7,662)

0

0

0

0

Borrowings

121

0

176

0

0

0

0

0

Equity financing

57

340

0

3,987

0

0

0

0

Dividends

0

0

0

0

0

0

0

0

Other

86

(3,091)

(2,721)

(3,479)

(3,845)

(4,178)

(4,178)

(4,178)

Net Cash Flow

(827)

(922)

5,119

(4,940)

(8,173)

853

3,055

4,407

Opening net debt/(cash)

 

 

(31,908)

(33,090)

(31,893)

(34,055)

(30,195)

(23,237)

(24,090)

(27,146)

FX

2,130

(275)

(2,792)

915

1,215

0

0

0

Other non-cash movements

(121)

0

(165)

165

0

0

0

0

Closing net debt/(cash)

 

 

(33,090)

(31,893)

(34,055)

(30,195)

(23,237)

(24,090)

(27,146)

(31,553)

Source: Edison Investment Research, company accounts


General disclaimer and copyright

This report has been commissioned by Freelancer and prepared and issued by Edison, in consideration of a fee payable by Freelancer. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Freelancer and prepared and issued by Edison, in consideration of a fee payable by Freelancer. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on Freelancer

View All

Latest from the TMT sector

View All TMT content

Research: Industrials

Melrose Industries — Engine for growth

Melrose Industries’ investor event focused on the key GKN Aerospace engines business (Edison estimate 81% of FY23 profit). The industry-wide Risk and Revenue Sharing Partnerships (RRSPs) and its position as a design partner on both the next-generation engines under development are testament to the capabilities and technologies it possesses. Investment continues in order to maintain such leading positions as seen in additive fabrication and manufacturing, which includes a new £40m facility to support signed commercial contracts. This will put GKN Aerospace at the forefront of this step change technology, promoting future partnerships and commercial opportunities.

Continue Reading

Subscribe to Edison

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

Sign up for free