Pebble Group — Good progress and a maiden dividend

The Pebble Group (LSE: PEBB)

Last close As at 28/02/2024

GBP0.59

0.00 (0.00%)

Market capitalisation

GBP96m

More on this equity

Research: TMT

Pebble Group — Good progress and a maiden dividend

The Pebble Group’s FY22 results show strong progress on revenue (+16% on FY21) and adjusted EBITDA, +17%. Facilisgroup, its North American SaaS business, is making particularly good progress with revenues up 31%. It is still early days but the opportunity is substantial. This inevitably requires investment to take full advantage, restraining short-term earnings growth, but should drive recurring revenues and build value, in our view. The more established part of the group, Brand Addition, lifted revenues 15% on the prior year to £117.4m, well ahead of market growth (ASI: +11%), building its base with major global brands. Pebble’s good share price performance has narrowed the valuation gap with peers, but momentum remains good, and we see further upside potential.

Fiona Orford-Williams

Written by

Fiona Orford-Williams

Director, TMT

TMT

The Pebble Group

Good progress and a maiden dividend

FY22 results

Media

21 March 2023

Price

109p

Market cap

£183m

Net cash at end December 2022 (excluding leases)

£15.1m

Shares in issue

167.5m

Free float

93.2%

Code

PEBB

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

4.3

31.3

17.8

Rel (local)

13.0

30.9

20.6

52-week high/low

121.5p

78.0p

Business description

The Pebble Group provides digital commerce, products and related services to the global promotional products industry through two focused, complementary and differentiated businesses: Facilisgroup and Brand Addition.

Next events

AGM

May 2023

Analysts

Fiona Orford-Williams

+44 (0)20 3077 5739

Milo Bussell

+44 (0)20 3077 5700

The Pebble Group is a research client of Edison Investment Research Limited

The Pebble Group’s FY22 results show strong progress on revenue (+16% on FY21) and adjusted EBITDA, +17%. Facilisgroup, its North American SaaS business, is making particularly good progress with revenues up 31%. It is still early days but the opportunity is substantial. This inevitably requires investment to take full advantage, restraining short-term earnings growth, but should drive recurring revenues and build value, in our view. The more established part of the group, Brand Addition, lifted revenues 15% on the prior year to £117.4m, well ahead of market growth (ASI: +11%), building its base with major global brands. Pebble’s good share price performance has narrowed the valuation gap with peers, but momentum remains good, and we see further upside potential.

Year

end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/21

115.1

10.9

5.1

0.0

21.3

N/A

12/22

134.0

12.4

5.8

0.6

18.9

0.6

12/23e

143.0

12.9

5.8

1.3

18.9

1.2

12/24e

148.0

14.0

6.3

1.9

17.5

1.7

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

Facilisgroup and Brand Addition both increase reach

Facilisgroup increased its Partner base for its core Syncore product by 9% to 225 at the year-end, with eight more added since. Gross merchandise value (GMV) transacted was up 22% at $1.40bn, demonstrating increasing Partner confidence. The proportion of that GMV spent with preferred suppliers grew from 30% in FY21 to 33% for FY22. Commercio was launched in June 2022 and by the year-end had already signed up 130 Partners, expanding further since to 151. Facilisgroup is developing an order workflow product for distributors transacting revenues of under $2m, to be launched later in the year. The ambition remains to build towards $50m of recurring revenues. Brand Addition benefited from business won in FY21 and FY22, which will also contribute to earnings growth in FY23. Brand Addition’s commitment to ESG is an important element of its commercial differentiation.

Cash positive balance sheet and maiden dividend

Despite the step up in capital investment from £5.0m in FY21 to £7.4m in FY22 (excluding sums capitalised under IFRS 16), the group ended the year with net cash of £15.1m on the balance sheet (and has lease debt only, of £9.1m). This healthy cash position is more than is needed to fund continuing investment and expansion plans, so management is recommending a final dividend of 0.6p/share.

Valuation: Narrowing discount

Based on a sum-of-the-parts using peer group EV/EBITDA multiples of US SaaS companies for Facilisgroup and marketing services companies for Brand Addition, we derive an implied value of 125p/share. This is a little below the 133p at the time of our November initiation, reflecting weaker peer share price performance. Interest in the shares may be boosted by the intended registration on the OTCQX trading platform, giving easier access to the group’s AIM-listed shares for US investors.

FY22 results and prospects

The Pebble Group issued a year-end trading update in January that outlined the key elements of the results, which we commented on in our Flash note at the time. The preliminary results now published are very slightly better, with revenue of £134m, rather than the £133m indicated previously, and adjusted EBITDA of £18.0m, earlier described as ‘approaching’ £18.0m.

Exhibit 1: Summary performance and projections

£m

2022

% growth

2023e

% growth

2024e

% growth

Facilisgroup revenue

16.6

31%

18.9

14%

20.2

7%

Brand Addition revenue

117.4

15%

124.1

6%

127.8

3%

Group revenue

134.0

15%

143.0

7%

148.0

3%

Facilisgroup EBITDA

9.0

1%

9.6

7%

10.7

11%

Brand Addition EBITDA

11.5

19%

12.2

6%

12.5

3%

Group costs

(2.4)

14%

(2.6)

5%

(2.8)

10%

Group adjusted EBITDA

18.0

1%

19.2

7%

20.4

6%

Facilisgroup EBITDA margin

54%

51%

53%

Brand Addition EBITDA margin

10%

10%

10%

Group adjusted EBITDA margin

13.5%

13.5%

13.8%

Source: The Pebble Group, Edison Investment Research

Facilisgroup demonstrated the faster growth of the two parts of the business, but off an obviously smaller revenue base. Its Syncore product, described in our initiation report, still has plenty of growth potential. It is targeted at distributors of promotional products generating revenues of over $2m, of which management estimates that there are around 1,600 in the North American market. With a current (March 2023) customer base of 233, market share is not yet a significant limiting factor. It is still too early to make a meaningful comment on the financial impact of the e-commerce offering, Commercio, launched in H222, but the initial numbers of Partners and new customers signed up are very encouraging.

The launch of Orders, scheduled for the back end of FY23 and targeted at smaller distributors, will mean that Facilisgroup has an offering for each strand of the large promotional product distribution market, estimated by industry body the Advertising Specialty Institute (ASI) to have been worth $25.8bn in North America in FY22. In this context, management’s ambition to build to $50m of recurring revenue for Facilisgroup looks demanding but achievable.

The ongoing investment in platform and product development will constrain the expansion of the adjusted EBITDA margin in the short term, but provides the backdrop for building a larger, sustainable enterprise.

As anticipated, Brand Addition had a slower H222, having posted a particularly buoyant first half as the market rebounded post the impact of COVID-19 lockdowns. It continues to build its client base in its target market of large corporates headquartered in Europe or North America, of which management reckon there are around 800, with c 100 currently on the books. Once recruited, these relationships tend to be long-standing (the top 20 clients in FY22 have been working with Brand Addition for over 10 years).

Clients won in FY22 will contribute to anticipated growth in FY23, but we have remained relatively cautious on revenue growth in view of the high levels of macro uncertainty.

Overall, management states that FY23 has started well and performance to date is in line with its expectations.

Cash generation accelerates the path to dividend payment

Year-end net cash was £15.1m, with the group only carrying debt in the form of leases, totalling £9.1m. With the operating cash conversion inherently positive, this figure is set to build in the absence of M&A. While there may be opportunities on this front, there is sufficient potential in the existing group to generate good growth in the medium term based on the current offering and those in development.

The intended registration on the OTCQX platform has no associated fund-raising.

Management is now recommending a final dividend for FY22 of 0.6p per share. At the time of the initial public offering, a distribution policy was indicated of 30% of normalised net income. We have assumed that this level of distribution is reached in FY24 and that the current year’s payment will be set at around 23%.

Valuation

Pebble is two complementary businesses in one, so it is appropriate to value them separately and then combine them, making an adjustment for central costs. We look at Facilisgroup, which operates in North America, with the US SaaS sector capitalised below $1.5bn and at Brand Addition in comparison with other small- and mid-sized marketing services companies. The US SaaS companies are currently valued at 15.0x current year EV/EBITDA and 12.7x next (using the median values), while the marketing services companies are on significantly lower multiples of 7.5x followed by 6.0x.

Using these EV/EBITDA multiples averaged across FY23 and FY24 implies a group value of 125p, a little below the 133p calculated in November and based on FY22 and FY23 multiples.

Exhibit 2: Peer-based valuation

Based on

EV/sales Yr 1

EV/EBITDA Yr 1

EV/EBITDA Yr 2

EV Facilisgroup (£m)

46.7

144.4

135.3

EV Brand Addition (£m)

112.9

90.7

82.4

Total (£m)

159.6

235.2

217.8

Central cost multiple (x)

12.0

11.0

Less central costs (£m)

(30.6)

(33.7)

The Pebble Group implied EV (£m)

159.6

204.5

184.1

The Pebble Group implied market cap (£m)

174.7

219.6

199.2

Implied share price (p)

104.3

131.2

118.9

Source: Refinitiv, Edison Investment Research

The poor relative share price performance of the comparator peers in marketing services has accelerated the swing towards Facilisgroup in the weighting of contribution of value. In November, and based on FY23 multiples, the split was 55% Facilisgroup, 45% Brand Addition. This ratio is now 61%:39%.

Repeating the DCF exercise that we carried out in our initiation, using a WACC of 10% and a terminal growth rate of 2%, now derives a value of 138.6p (was 133.1p in November 2022), a little ahead of the peer-based methodology.

Exhibit 3: Financial summary

£000s

2020

2021

2022

2023e

2024e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

82,374

115,101

134,025

143,000

148,000

Cost of Sales

(51,382)

(73,128)

(81,279)

(85,910)

(88,199)

Gross Profit

30,992

41,973

52,746

57,090

59,801

Adj. EBITDA

 

 

9,755

15,378

18,042

19,250

20,400

Operating profit (before amort. and excepts.)

 

 

6,225

11,475

12,896

13,350

14,250

Amortisation of acquired intangibles

0

(894)

(1,420)

(1,400)

(106)

Exceptionals

(542)

0

0

0

0

Share-based payments

(14)

(715)

(1,253)

(1,500)

(1,500)

Reported operating profit

5,669

9,866

10,223

10,450

12,644

Net Interest

(700)

(549)

(520)

(450)

(300)

Profit Before Tax (norm)

 

 

5,525

10,926

12,376

12,900

13,950

Profit Before Tax (reported)

 

 

4,969

9,317

9,703

10,000

12,344

Reported tax

(889)

(1,970)

(2,448)

(2,150)

(3,059)

Profit After Tax (norm)

4,951

8,599

9,675

9,675

10,462

Profit After Tax (reported)

4,080

7,347

7,255

7,850

9,284

Minority interests

0

0

0

0

0

Discontinued operations

0

0

0

0

0

Net income (normalised)

4,951

8,599

9,675

9,675

10,462

Net income (reported)

4,080

7,347

7,254

7,850

9,284

Average Number of Shares Outstanding (m)

167

167

167

167

167

EPS - basic normalised (p)

 

 

2.96

5.14

5.78

5.78

6.25

EPS - normalised fully diluted (p)

 

 

2.96

5.12

5.77

5.77

6.23

EPS - basic reported (p)

 

 

2.44

4.39

4.33

4.69

5.54

Dividend (p)

0.00

0.00

0.60

1.30

1.87

Revenue growth (%)

(23.1)

39.7

16.4

6.7

3.5

Gross Margin (%)

37.6

36.5

39.4

39.9

40.4

EBITDA Margin (%)

11.8

13.4

13.5

13.5

13.8

Normalised Operating Margin

7.6

10.0

9.6

9.3

9.6

BALANCE SHEET

Fixed Assets

 

 

63,611

63,901

69,786

73,908

80,689

Intangible Assets

54,016

55,674

60,002

61,587

65,731

Tangible Assets

9,102

7,927

9,492

12,029

14,666

Investments & other

493

300

292

292

292

Current Assets

 

 

40,992

51,566

65,198

69,616

73,563

Stocks

12,109

10,093

15,447

16,481

17,058

Debtors

20,988

29,422

34,693

37,016

38,310

Cash & cash equivalents

7,066

12,051

15,058

16,118

18,195

Other

829

0

0

0

0

Current Liabilities

 

 

27,109

31,469

39,045

41,120

42,145

Creditors

25,775

30,065

36,413

38,488

39,513

Tax and social security

0

20

1,063

1,063

1,063

Short term borrowings / leases

1,334

1,384

1,569

1,569

1,569

Long Term Liabilities

 

 

11,212

9,423

10,350

10,350

10,350

Long term borrowings / leases

7,645

6,388

7,490

7,490

7,490

Other long term liabilities

3,567

3,035

2,860

2,860

2,860

Net Assets

 

 

66,282

74,575

85,589

92,054

101,757

Minority interests

0

0

0

0

0

Shareholders' equity

 

 

66,282

74,575

85,589

92,054

101,757

CASH FLOW

Operating Cash Flow

9,212

15,378

18,061

19,250

20,400

Working capital

(1,747)

(2,861)

(3,362)

(1,283)

(845)

Exceptional & other

0

(13)

19

0

0

Tax

(1,313)

(521)

(1,712)

(2,150)

(3,059)

Net operating cash flow

 

 

6,152

11,983

13,006

15,817

16,495

Capex

(5,677)

(5,282)

(8,379)

(9,200)

(9,300)

Acquisitions/disposals

0

0

0

0

0

Net interest

(700)

(549)

(520)

(450)

(300)

Equity financing

0

0

0

0

0

Dividends

0

0

0

(1,730)

(2,495)

Other

(1,141)

(1,360)

(1,737)

(1,737)

(1,737)

Net Cash Flow

(1,366)

3,898

2,370

2,700

2,663

Opening net debt/(cash)

 

 

(2,521)

1,913

(4,279)

(5,999)

(8,699)

FX

(429)

193

655

0

0

Other non-cash movements

(2,639)

1,207

(1,305)

0

0

Closing net debt/(cash)

 

 

1,913

(4,279)

(5,999)

(8,699)

(11,362)

Closing net debt/(cash) excluding leases

 

 

(7,066)

(12,051)

(15,058)

(16,358)

(18,915)

Source: Company accounts, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by The Pebble Group and prepared and issued by Edison, in consideration of a fee payable by The Pebble Group. 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 The Pebble Group and prepared and issued by Edison, in consideration of a fee payable by The Pebble Group. 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 The Pebble Group

View All

Latest from the TMT sector

View All TMT content

Research: Industrials

Mytilineos — Renewables to drive EBITDA above €1bn/year

We are raising our earnings estimates for Mytilineos and increasing our valuation 29% from €28/share to €36/share. Cyclical factors helped earnings acceleration in 2022, but we see underlying organic growth (particularly in Energy) resetting earnings to €1bn/year from FY24. Mytilineos is simplifying its story around two key activities in a roughly 70/30 earnings mix: Energy (renewables, generation and natural gas supply) and Metallurgy (aluminium smelting). Its renewables business is particularly well positioned to benefit from European policy initiatives.

Continue Reading
Mytilineos_resized

Subscribe to Edison

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

Sign up for free