Global Yachting Group (GYG) has reported its first FY results since listing in July 2017. At €20.4m, the order book has reached a record level, building visibility for the group. FY17 revenue growth of 14.7% reflected a solid contribution from all business areas, while the acquisition of ACA Marine enhances the portfolio. Overall, GYG now has the financial strength to take on larger contracts, build on its market share and deliver earnings growth.
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Global Yachting Group |
Inaugural FY results show class
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Leisure boats & yacht building |
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20 April 2018 |
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Global Yachting Group (GYG) has reported its first FY results since listing in July 2017. At €20.4m, the order book has reached a record level, building visibility for the group. FY17 revenue growth of 14.7% reflected a solid contribution from all business areas, while the acquisition of ACA Marine enhances the portfolio. Overall, GYG now has the financial strength to take on larger contracts, build on its market share and deliver earnings growth.
FY17 results demonstrate strength
The reported order book of €20.4m (FY16 €17.9m) was a record high and €14.3m is scheduled for delivery in FY18. Reported revenue of €62.6m (FY16 €54.6m) reflects growth of 14.7% with contribution from all divisions. Coatings (Refit & New Build) revenue grew by 16.7% with Supply revenue up 4.2%. In Q317, Refit was affected by hurricane season on cruising patterns; however, contracts were deferred and not cancelled. The group introduced a FY17 dividend of 3.2p and the policy will be progressive. The company’s 86% customer retention rate and preferred supplier status with leading refit shipyards remains compelling.
Strategy
GYG is already the refit market leader and is looking to increase its share of the lucrative new build market from 6% today, closer to its share in refit at 30%. According the company, addressable markets are expected to grow at 6% CAGR to FY20, with expected growth in the 40m+ superyacht global fleet. GYG has also experienced a trend in average superyacht length from 54m in FY06 to 78m in FY17, thus increasing the addressable surface area for coating work. GYG is focused on improving operations. The company employs electrostatic methods to improve transfer efficiency in top-coat applications. Owning a scaffolding company brings predictability, allows more complex offshore work and a reduction in rental fees. Meanwhile, investment in systems to predict maintenance schedules identifies new business opportunities. A ‘battle bus’ tour of Northern European shipyards was also timely, informative and fruitful in new prospects. Since listing, the company has also become more visible in the M&A market.
Valuation: Scaled for growth
Listing has brought financial security and opportunity. The company is improving operations and now has the scale to take on larger contracts. The company is also well positioned to take advantage of attractive M&A opportunities. This all supports future earnings growth, with 12.3x FY18e P/E looking undemanding.
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Consensus estimates
Source: Company reports, Bloomberg estimates. Note: *Adj for IPO. **Annualised. |
EDISON QUICKVIEWS ARE NORMALLY ONE OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.
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Disclaimer
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Disclaimer
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Trifast’s pre-close trading update indicates another strong year of execution of the company’s well-developed growth strategy. The profit before tax for FY18 is slightly ahead of management expectations, with investment continuing to support growth. A strong order pipeline at the year-end serves to underpin confidence in continued organic progression. The acquisition of Precision Technology Supplies (PTS) in the UK on 4 April 2018 should also make a full-year earnings enhancing contribution, and we have raised our forecasts for FY19 accordingly.