Last close As at 05/08/2026
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Market capitalisation
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Research: Industrials
With a share price that has been under pressure this year, an in-line trading performance should provide some reassurance to investors. A lack of improvement in Tyman’s underlying markets should come as no surprise but, with steps being taken in each division, overall group progress is anticipated for the year as a whole. This provides grounds for greater confidence in the company’s prospects, in our view.
Written by
Tyman |
Meeting market expectations |
Trading update |
Construction & materials |
6 November 2019 |
Share price performance
Business description
Next events
Analyst
Tyman is a research client of Edison Investment Research Limited |
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With a share price that has been under pressure this year, an in-line trading performance should provide some reassurance to investors. A lack of improvement in Tyman’s underlying markets should come as no surprise but, with steps being taken in each division, overall group progress is anticipated for the year as a whole. This provides grounds for greater confidence in the company’s prospects, in our view.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/17 |
522.7 |
68.3 |
26.7 |
11.3 |
7.7 |
5.5 |
12/18 |
591.5 |
72.7 |
27.5 |
12.0 |
7.5 |
5.8 |
12/19e |
621.0 |
70.0 |
26.1 |
12.3 |
7.9 |
6.0 |
12/20e |
629.1 |
74.3 |
27.7 |
12.9 |
7.4 |
6.2 |
Note: *PBT and EPS (fully diluted) are normalised, as defined by Tyman, excluding intangible amortisation and exceptional items.
US stabilises, group progress expectation confirmed
Tyman’s trading update points to flattish US markets and some weakening in the UK and RoW markets that it serves since the half year. Nevertheless, management expects to report small y-o-y progress in revenue and operating profit for the year as a whole, performing in line with consensus EBIT of £84.8m (slightly above our £83.9m estimate and versus the c £83.6m reported for FY18). As at the half year, favourable FX and full year acquisition effects contribute to this expected outturn, although to a lesser extent than seen in H1, we believe. There is some way to go to the year end, but management expects year-end gearing (frozen GAAP/pre-IFRS 16 basis) to be below 2x EBITDA. We believe a downward trend in core net debt will be well received as Tyman progresses towards its stated medium term 1–1.5x target.
In the US, AmesburyTruth (AT) customer service levels appear to have stabilised following factory move-related inefficiencies and are now said to be improving, but there is further to go. Options for problematic door seals line production (ie make or buy) are still under review. Otherwise, AT is seeing normal seasonal trading patterns in the group’s largest market. Elsewhere, new next-generation smartware product launches by ERA in the UK and general cost reduction steps at SchlegelGiesse (RoW) operations are noted actions in mixed but generally soft market conditions.
Valuation: Unchanged estimates, low valuation
Tyman’s share price has recovered somewhat from a 196p low following the interim results, but is yet to regain pre-results levels. The trading update – and our unchanged estimates – suggests grounds for further recovery with valuation multiples having compressed too far. A current year P/E and EV/EBITDA (adjusted for pensions cash) of 7.9x and 5.9x respectively are low historically and a prospective dividend yield of 6% reinforces this view.
Exhibit 1: Financial summary
£m |
2014 |
2015 |
2016 |
2017 |
2018 |
2019e |
2020e |
2021e |
|||
December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
|||
PROFIT & LOSS |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
350.9 |
353.4 |
457.6 |
522.7 |
591.5 |
621.0 |
629.1 |
637.3 |
|
Cost of Sales |
|
|
(236.1) |
(234.0) |
(290.4) |
(331.8) |
(383.3) |
(388.9) |
(385.9) |
(387.6) |
|
Gross Profit |
|
|
114.8 |
119.4 |
167.3 |
190.9 |
208.3 |
232.1 |
243.2 |
249.8 |
|
EBITDA* |
|
|
54.6 |
60.9 |
82.5 |
91.7 |
98.5 |
101.1 |
105.5 |
113.4 |
|
Operating Profit (Edison) |
|
|
46.9 |
52.9 |
70.9 |
78.8 |
84.7 |
85.1 |
89.0 |
96.4 |
|
Net Interest |
|
|
(4.5) |
(6.0) |
(6.9) |
(8.0) |
(10.1) |
(10.8) |
(10.3) |
(9.8) |
|
Other Finance |
|
|
(2.2) |
(0.6) |
(0.4) |
(0.8) |
(1.3) |
(3.5) |
(3.5) |
(3.5) |
|
Share Based Payments |
|
|
(0.9) |
(1.0) |
(1.0) |
(2.0) |
(1.1) |
(1.2) |
(1.2) |
(1.2) |
|
Intangible Amortisation |
|
|
(17.8) |
(19.6) |
(21.7) |
(22.9) |
(25.8) |
(28.2) |
(28.2) |
(28.2) |
|
Exceptionals |
|
|
(9.3) |
(9.4) |
(10.9) |
(10.0) |
(7.3) |
(15.0) |
(1.8) |
0.0 |
|
Other |
|
|
(0.3) |
(0.4) |
(0.5) |
(0.6) |
(0.2) |
(0.2) |
(0.2) |
(0.2) |
|
Profit Before Tax (Edison norm) |
|
39.3 |
45.4 |
62.5 |
68.0 |
72.2 |
69.7 |
74.0 |
81.9 |
||
Profit Before Tax (Company norm) |
|
41.6 |
45.4 |
62.1 |
68.3 |
72.7 |
70.0 |
74.3 |
82.2 |
||
Profit Before Tax (statutory) |
|
|
11.9 |
16.1 |
29.4 |
34.5 |
38.9 |
26.3 |
43.9 |
53.5 |
|
Tax |
|
|
(2.6) |
(8.0) |
(8.6) |
(3.3) |
(12.5) |
(10.5) |
(11.7) |
(13.9) |
|
Profit After Tax (norm) |
|
|
36.8 |
37.3 |
53.8 |
64.7 |
59.7 |
59.1 |
62.3 |
68.0 |
|
Profit After Tax (statutory) |
|
|
9.3 |
8.1 |
20.7 |
31.2 |
26.3 |
15.8 |
32.1 |
39.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Number of Shares Outstanding (m) |
|
167.8 |
168.2 |
173.0 |
177.2 |
191.4 |
194.9 |
194.9 |
194.9 |
||
EPS - Edison norm (p) FD |
|
|
17.1 |
19.3 |
25.5 |
26.6 |
27.2 |
25.9 |
27.6 |
30.5 |
|
EPS - Company norm (p) FD |
|
|
18.4 |
19.4 |
25.3 |
26.7 |
27.5 |
26.1 |
27.7 |
30.6 |
|
EPS - statutory (p) |
|
|
5.6 |
4.8 |
12.0 |
17.6 |
13.8 |
8.1 |
16.5 |
20.4 |
|
Dividend per share (p) |
|
|
8.0 |
8.8 |
10.5 |
11.3 |
12.0 |
12.3 |
12.9 |
13.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin (%) |
|
|
32.7 |
33.8 |
36.5 |
36.5 |
35.2 |
37.4 |
38.7 |
39.2 |
|
EBITDA Margin (%) |
|
|
15.6 |
17.2 |
18.0 |
17.5 |
16.7 |
16.3 |
16.8 |
17.8 |
|
Operating Margin (before GW and except.) (%) |
13.4 |
15.0 |
15.5 |
15.1 |
14.3 |
13.7 |
14.1 |
15.1 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets |
|
|
410.6 |
398.4 |
564.7 |
509.9 |
612.5 |
640.4 |
604.7 |
568.5 |
|
Intangible Assets |
|
|
355.7 |
340.5 |
480.0 |
427.2 |
516.9 |
494.5 |
465.9 |
437.3 |
|
Tangible Assets |
|
|
42.9 |
42.8 |
71.7 |
68.4 |
77.0 |
127.6 |
120.5 |
112.9 |
|
Investments |
|
|
12.1 |
15.0 |
12.9 |
14.2 |
18.6 |
18.3 |
18.3 |
18.3 |
|
Current Assets |
|
|
124.0 |
111.0 |
180.6 |
188.1 |
244.8 |
288.1 |
322.9 |
366.3 |
|
Stocks |
|
|
47.6 |
46.0 |
70.7 |
75.3 |
105.3 |
104.8 |
104.0 |
104.5 |
|
Debtors |
|
|
37.1 |
35.0 |
69.0 |
70.2 |
87.7 |
87.8 |
88.7 |
89.7 |
|
Cash |
|
|
39.3 |
30.0 |
40.9 |
42.6 |
51.9 |
95.5 |
130.2 |
172.2 |
|
Current Liabilities |
|
|
(52.3) |
(44.4) |
(86.4) |
(82.0) |
(102.9) |
(108.8) |
(109.2) |
(111.4) |
|
Creditors |
|
|
(52.3) |
(44.4) |
(86.4) |
(80.9) |
(101.4) |
(108.8) |
(109.2) |
(111.4) |
|
Short term borrowings |
|
|
0.0 |
0.0 |
0.0 |
(1.1) |
(1.5) |
0.0 |
0.0 |
0.0 |
|
Long Term Liabilities |
|
|
(176.2) |
(156.7) |
(285.3) |
(251.4) |
(320.5) |
(392.8) |
(385.9) |
(379.0) |
|
Long term borrowings |
|
|
(128.0) |
(111.6) |
(216.5) |
(204.3) |
(259.2) |
(277.6) |
(277.6) |
(277.6) |
|
Other long term liabilities |
|
|
(48.2) |
(45.1) |
(68.8) |
(47.0) |
(61.3) |
(115.2) |
(108.3) |
(101.4) |
|
Net Assets |
|
|
306.1 |
308.3 |
373.6 |
364.5 |
433.8 |
427.0 |
432.5 |
444.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW |
|
|
|
|
|
|
|
|
|
|
|
Operating Cash Flow |
|
|
40.1 |
49.4 |
79.9 |
67.0 |
85.0 |
96.8 |
109.1 |
117.8 |
|
Net Interest |
|
|
(4.6) |
(6.2) |
(7.0) |
(7.6) |
(9.1) |
(13.8) |
(13.3) |
(12.8) |
|
Tax |
|
|
(6.3) |
(8.9) |
(12.7) |
(15.1) |
(12.3) |
(10.0) |
(11.2) |
(13.4) |
|
Capex |
|
|
(10.2) |
(10.9) |
(15.3) |
(12.6) |
(12.0) |
(12.3) |
(16.0) |
(16.0) |
|
Acquisitions/disposals |
|
|
(6.5) |
6.8 |
(96.1) |
(6.3) |
(106.4) |
(1.0) |
(1.5) |
0.0 |
|
Financing |
|
|
(4.3) |
(2.6) |
16.7 |
(0.8) |
47.2 |
(2.0) |
(2.0) |
(2.0) |
|
Dividends |
|
|
(10.9) |
(14.6) |
(15.6) |
(19.5) |
(22.4) |
(23.8) |
(24.6) |
(25.8) |
|
Net Cash Flow |
|
|
(2.8) |
13.0 |
(50.0) |
5.1 |
(30.1) |
33.9 |
40.6 |
47.9 |
|
Opening net debt/(cash) |
|
|
78.7 |
88.7 |
81.6 |
175.6 |
162.9 |
208.8 |
182.1 |
147.4 |
|
Finance leases initiated |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
(2.0) |
0.0 |
0.0 |
0.0 |
|
Other |
|
|
(7.2) |
(5.9) |
(44.0) |
7.6 |
(13.9) |
(7.2) |
(5.9) |
(5.9) |
|
Closing net debt/(cash)* |
|
|
88.7 |
81.6 |
175.6 |
162.9 |
208.8 |
182.1 |
147.4 |
105.4 |
|
Lease finance (under IFRS 16) |
|
|
|
|
|
59.1 |
53.2 |
47.3 |
|||
Source: Company accounts, Edison Investment Research. Note: *EBITDA and net debt both shown on a pre-IFRS 16 basis.
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Acarix has competed a rights issue of 28.67m shares at SEK1.50/share to raise SEK43m before expenses. The proceeds will fund a programme of market development and clinical trials. The process for German public reimbursement is underway. In the UK, NICE has carried out a technical assessment enabling a dialogue to start. Acarix is now developing a US market entry strategy and assessing the likely FDA trial needs.