Last close As at 06/08/2026
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Market capitalisation
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Research: Industrials
After COVID-19 affected Q2/H1 trading, recovering market conditions in Q3 led to Tyman achieving +3% like-for-like revenue growth in the quarter (and flat in reported terms). In addition, net debt continues to track down. With improved momentum going into Q4, we have reintroduced earnings estimates, which show a c 13% y-o-y reduction in FY20 EPS followed by a 9% rebound in FY21. We have factored in dividends resuming next year, although management is to consider a modest FY20 final payout depending on prospects at the turn of the year.
Written by
Tyman |
Momentum accelerates in Q3 |
Q3 trading update |
Construction & materials |
16 October 2020 |
Share price performance
Business description
Next events
Analyst
Tyman is a research client of Edison Investment Research Limited |
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After COVID-19 affected Q2/H1 trading, recovering market conditions in Q3 led to Tyman achieving +3% like-for-like revenue growth in the quarter (and flat in reported terms). In addition, net debt continues to track down. With improved momentum going into Q4, we have reintroduced earnings estimates, which show a c 13% y-o-y reduction in FY20 EPS followed by a 9% rebound in FY21. We have factored in dividends resuming next year, although management is to consider a modest FY20 final payout depending on prospects at the turn of the year.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/18 |
591.5 |
72.7 |
27.5 |
12.0 |
10.2 |
4.3 |
12/19 |
613.7 |
71.0 |
27.4 |
3.9 |
10.3 |
1.4 |
12/20e |
561.3 |
62.5 |
23.9 |
0.0 |
11.7 |
N/A |
12/21e |
587.4 |
68.1 |
26.1 |
10.0 |
10.8 |
3.6 |
Note: *PBT and EPS (fully diluted) are normalised, as defined by Tyman, excluding intangible amortisation and exceptional items. FY19 DPS is the interim dividend only as no final dividend payment was paid.
Strong end to Q3 results in y-o-y revenue growth
Q3 trading has been ‘significantly’ better than previous management expectations, with a 3% uplift in l-f-l revenues over this period. This comprised two flat months at group level and ended with good progress across all three geographic reporting divisions in September, resulting in a +9% l-f-l group revenue increase in that month. By region, the Q3 (ytd) revenue l-f-ls are now: North America +1% (-8%), UK/Ireland +3% (-17%) and International +9% (-12%). Improved operational performance and incremental new business wins in the US are both positive indicators and, with a pick-up in single-family occupancy housing starts, AmesburyTruth participated in an apparent acceleration in demand as Q3 progressed. ERA has seen stronger demand through e-commerce channels and SchlegelGiesse operated throughout its normal shutdown period during August.
Net debt trending down
Net debt (pre-IFRS 16) was £161m at the interim stage; an updated figure was not provided but the multiple to EBITDA has improved from 1.8x at the end of June to 1.4x at the end of Q3 (on a trailing 12month basis). Underlying profit improvement, further working capital inflows and deferred capex are all consistent with a sharp business acceleration during Q3. Moreover, management anticipates a further reduction in this multiple by year end. Our updated model projects end-FY20 net debt of £119m (or c 1.3x EBITDA for the year).
Valuation: Rebuilding after share price rally
Management comments now infer reported FY20 revenue of c £560m (versus c £416m for the first nine months) and, on our reinstated estimates, Tyman is trading on FY21e P/E and EV/EBITDA (adjusted for pensions cash) multiples of 10.8x and 6.8x, respectively. The share price has responded well to the latest newsflow and has substantially regained levels seen at the beginning of the year.
Exhibit 1: Financial summary
£'m |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020e |
2021e |
2022e |
||
December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
350.9 |
353.4 |
457.6 |
522.7 |
591.5 |
613.7 |
561.3 |
587.4 |
602.0 |
Cost of Sales |
|
|
(236.1) |
(234.0) |
(290.4) |
(331.8) |
(383.3) |
(408.1) |
(375.3) |
(378.9) |
(387.0) |
Gross Profit |
|
|
114.8 |
119.4 |
167.3 |
190.9 |
208.3 |
205.6 |
186.0 |
208.5 |
215.0 |
EBITDA (pre-IFRS16) |
|
|
54.6 |
60.9 |
82.5 |
91.7 |
98.5 |
100.8 |
91.2 |
96.3 |
102.0 |
Operating Profit (Edison) |
|
|
46.9 |
52.9 |
70.9 |
78.8 |
84.7 |
86.2 |
76.3 |
81.2 |
86.6 |
Net Interest |
|
|
(4.5) |
(6.0) |
(6.9) |
(8.0) |
(10.0) |
(11.9) |
(9.7) |
(9.0) |
(8.5) |
Other Finance |
|
|
(2.2) |
(0.6) |
(0.4) |
(0.8) |
(1.3) |
(3.5) |
(2.7) |
(3.0) |
(3.0) |
Share Based Payments |
|
|
(0.9) |
(1.0) |
(1.0) |
(2.0) |
(1.1) |
(0.8) |
(0.8) |
(0.8) |
(0.8) |
Intangible Amortisation |
|
|
(17.8) |
(19.6) |
(21.7) |
(22.9) |
(25.8) |
(23.5) |
(23.5) |
(23.5) |
(23.5) |
Exceptionals |
|
|
(9.3) |
(9.4) |
(10.9) |
(10.0) |
(7.3) |
(21.4) |
(3.0) |
(3.0) |
0.0 |
Other |
|
|
(0.3) |
(0.4) |
(0.5) |
(0.6) |
(0.3) |
(0.3) |
(0.3) |
(0.3) |
(0.3) |
Profit Before Tax (Edison norm) |
|
39.3 |
45.4 |
62.5 |
68.0 |
72.3 |
70.0 |
63.1 |
68.4 |
74.3 |
|
Profit Before Tax (Company norm) |
|
41.6 |
45.4 |
62.1 |
68.3 |
72.7 |
71.0 |
62.5 |
68.1 |
74.0 |
|
Profit Before Tax (statutory) |
|
|
11.9 |
16.1 |
29.4 |
34.5 |
38.9 |
24.8 |
36.3 |
41.6 |
50.5 |
Tax |
|
|
(2.6) |
(8.0) |
(8.6) |
(3.3) |
(12.5) |
(7.1) |
(8.7) |
(10.0) |
(11.5) |
Profit After Tax (norm) |
|
|
36.8 |
37.3 |
53.8 |
64.7 |
59.8 |
62.9 |
54.4 |
58.3 |
62.8 |
Profit After Tax (statutory) |
|
|
9.3 |
8.1 |
20.7 |
31.2 |
26.3 |
17.7 |
27.6 |
31.5 |
39.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Average Number of Shares Outstanding (m) |
|
167.8 |
168.2 |
173.0 |
177.2 |
191.4 |
194.9 |
195.0 |
195.0 |
195.0 |
|
EPS - Edison norm (p) FD |
|
|
17.1 |
19.3 |
25.5 |
26.6 |
27.3 |
26.8 |
24.2 |
26.2 |
28.5 |
EPS - Company norm (p) FD |
|
|
18.4 |
19.4 |
25.3 |
26.7 |
27.5 |
27.4 |
23.9 |
26.1 |
28.4 |
EPS - statutory (p) |
|
|
5.6 |
4.8 |
12.0 |
17.6 |
13.8 |
9.1 |
14.2 |
16.2 |
20.0 |
Dividend per share (p) |
|
|
8.0 |
8.8 |
10.5 |
11.3 |
12.0 |
3.9 |
0.0 |
10.0 |
12.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin (%) |
|
|
32.7 |
33.8 |
36.5 |
36.5 |
35.2 |
33.5 |
33.1 |
35.5 |
35.7 |
EBITDA Margin (%) |
|
|
15.6 |
17.2 |
18.0 |
17.5 |
16.7 |
16.4 |
16.2 |
16.4 |
16.9 |
Operating Margin (before GW and except.) (%) |
13.4 |
15.0 |
15.5 |
15.1 |
14.3 |
14.1 |
13.6 |
13.8 |
14.4 |
||
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets |
|
|
410.6 |
398.4 |
564.7 |
509.9 |
612.5 |
618.8 |
623.0 |
602.7 |
579.6 |
Intangible Assets |
|
|
355.7 |
340.5 |
480.0 |
427.2 |
516.9 |
475.3 |
479.2 |
455.0 |
430.8 |
Tangible Assets |
|
|
42.9 |
42.8 |
71.7 |
68.4 |
77.0 |
125.2 |
125.5 |
129.4 |
130.5 |
Investments |
|
|
12.1 |
15.0 |
12.9 |
14.2 |
18.6 |
18.3 |
18.3 |
18.3 |
18.3 |
Current Assets |
|
|
124.0 |
111.0 |
180.6 |
188.1 |
244.8 |
213.9 |
272.7 |
318.6 |
360.1 |
Stocks |
|
|
47.6 |
46.0 |
70.7 |
75.3 |
105.3 |
88.6 |
81.5 |
97.3 |
99.3 |
Debtors |
|
|
37.1 |
35.0 |
69.0 |
70.2 |
87.7 |
76.3 |
71.1 |
73.7 |
75.1 |
Cash |
|
|
39.3 |
30.0 |
40.9 |
42.6 |
51.9 |
49.0 |
120.1 |
147.7 |
185.6 |
Current Liabilities |
|
|
(52.3) |
(44.4) |
(86.4) |
(82.0) |
(102.9) |
(100.9) |
(82.6) |
(86.1) |
(90.1) |
Creditors |
|
|
(52.3) |
(44.4) |
(86.4) |
(80.9) |
(101.4) |
(100.6) |
(82.6) |
(86.1) |
(90.1) |
Short term borrowings |
|
|
0.0 |
0.0 |
0.0 |
(1.1) |
(1.5) |
(0.3) |
0.0 |
0.0 |
0.0 |
Long Term Liabilities |
|
|
(176.2) |
(156.7) |
(285.3) |
(251.4) |
(320.5) |
(315.5) |
(345.5) |
(344.5) |
(343.5) |
Long term borrowings |
|
|
(128.0) |
(111.6) |
(216.5) |
(204.3) |
(259.2) |
(211.5) |
(238.9) |
(238.9) |
(238.9) |
Other long term liabilities |
|
|
(48.2) |
(45.1) |
(68.8) |
(47.0) |
(61.3) |
(104.0) |
(106.6) |
(105.6) |
(104.6) |
Net Assets |
|
|
306.1 |
308.3 |
373.6 |
364.5 |
433.8 |
416.3 |
467.5 |
490.7 |
506.0 |
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW |
|
|
|
|
|
|
|
|
|
|
|
Operating Cash Flow |
|
|
40.1 |
49.4 |
79.9 |
67.0 |
85.0 |
111.3 |
94.9 |
81.4 |
105.5 |
Net Interest |
|
|
(4.6) |
(6.2) |
(7.0) |
(7.6) |
(9.1) |
(15.0) |
(12.7) |
(12.0) |
(11.5) |
Tax |
|
|
(6.3) |
(8.9) |
(12.7) |
(15.1) |
(12.3) |
(14.2) |
(8.2) |
(9.5) |
(11.0) |
Capex |
|
|
(10.2) |
(10.9) |
(15.3) |
(12.6) |
(12.0) |
(10.7) |
(10.8) |
(18.3) |
(15.8) |
Acquisitions/disposals |
|
|
(6.5) |
6.8 |
(96.1) |
(6.3) |
(106.4) |
(0.9) |
(1.5) |
0.0 |
0.0 |
Financing |
|
|
(4.3) |
(2.6) |
16.7 |
(0.8) |
47.2 |
(2.0) |
(2.0) |
(2.0) |
(2.0) |
Dividends |
|
|
(10.9) |
(14.6) |
(15.6) |
(19.5) |
(22.4) |
(23.6) |
0.0 |
(6.4) |
(21.6) |
Net Cash Flow |
|
|
(2.8) |
13.0 |
(50.0) |
5.1 |
(30.1) |
44.9 |
59.7 |
33.2 |
43.5 |
Opening net debt/(cash) |
|
|
78.7 |
88.7 |
81.6 |
175.6 |
162.9 |
208.8 |
162.8 |
118.8 |
91.2 |
Finance leases initiated |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
(2.0) |
(0.3) |
0.0 |
0.0 |
0.0 |
Other |
|
|
(7.2) |
(5.9) |
(44.0) |
7.6 |
(13.9) |
1.4 |
(15.7) |
(5.6) |
(5.6) |
Closing net debt/(cash) |
|
|
88.7 |
81.6 |
175.6 |
162.9 |
208.8 |
162.8 |
118.8 |
91.2 |
53.3 |
Lease finance (under IFRS16) |
|
|
|
|
|
|
|
60.0 |
60.8 |
60.8 |
60.8 |
Source: Company, Edison Investment Research
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Research: TMT
Nanoco is now focused on generating value from three core areas: nanomaterials for the sensor market, where it has a framework agreement with STMicroelectronics; quantum dots for TV displays where a number of development projects are underway; and pursuit of the patent infringement litigation against Samsung. Noting that net cash consumption is now c £0.3m per month, which management, led by Brian Tenner, estimates gives a cash runway to December 2022, we have reinstated our estimates.