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Last close As at 26/05/2023
GBP7.84
▲ 1.00 (0.13%)
Market capitalisation
GBP755m
Research: TMT
discoverIE (previously called Acal) reported strong interims, proving that its strategy to grow the design and manufacturing (D&M) side of the business is bearing fruit. Organic revenue growth of 9% drove improved operating margins and EPS, while growth in orders and design wins position discoverIE for sustained growth. Management continues to seek out suitable acquisitions to accelerate growth of D&M – based on a similar profile to previous deals, we estimate that using existing credit facilities to make £50m worth of acquisitions could add 20-25% to FY19e EPS.
discoverIE Group |
New name reflects ambitious growth strategy |
H118 results |
Electronic & electrical equipment |
7 December 2017 |
Share price performance
Business description
Next events
Analysts
discoverIE Group is a research client of Edison Investment Research Limited |
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discoverIE (previously called Acal) reported strong interims, proving that its strategy to grow the design and manufacturing (D&M) side of the business is bearing fruit. Organic revenue growth of 9% drove improved operating margins and EPS, while growth in orders and design wins position discoverIE for sustained growth. Management continues to seek out suitable acquisitions to accelerate growth of D&M – based on a similar profile to previous deals, we estimate that using existing credit facilities to make £50m worth of acquisitions could add 20-25% to FY19e EPS.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
03/16 |
287.7 |
15.2 |
17.8 |
8.1 |
19.9 |
2.3 |
03/17 |
338.2 |
17.8 |
19.9 |
8.5 |
17.9 |
2.4 |
03/18e |
388.0 |
21.6 |
21.6 |
9.0 |
16.4 |
2.5 |
03/19e |
402.6 |
22.9 |
22.6 |
9.5 |
15.7 |
2.7 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
H118 results reflect strong trading environment
The company generated strong organic revenue growth in H118, resulting in underlying operating profit growth of 34% y-o-y (+23% CER) and margin expansion of 0.6 percentage points to 6.2%. Underlying EPS increased 24% y-o-y and the interim dividend was 8% higher than a year ago. Strong order intake during H1 provides support to our forecasts – we make minor changes to reflect H1 results, with normalised EPS up 0.8% in FY18e and up 0.1% in FY19e.
Strategy on track – growing design & manufacturing
The company doubled revenues and EPS over the last five years and management confirmed its target to repeat this performance over the next five years to generate shareholder returns of 15-20% pa and fund a progressive dividend. As well as the strong organic growth currently being generated, the company is keen to acquire D&M businesses to accelerate growth towards the target of 75% of group revenues (57% in H118). Using average price/PBT multiples and average PBT margins from previous deals, we estimate that spending £50m on acquisitions could add 20-25% to FY19e EPS (on an annualised basis), while remaining within the company’s target net debt/EBITDA range of 1.5-2.0x.
Valuation: Discount persists despite positive outlook
On an FY18e P/E of 16.4x and FY18e EV/EBITDA of 9.8x, the stock is trading at a c 27% discount to the peer group average for both multiples. The share was recently reclassified from Industrial Support Services to the Electronic & Electrical Equipment sector, and is trading at a 37% discount to the new sector P/E. The strong order book, combined with good progress in the strategy to grow the D&M side of the business, provides confidence in both the near-term and longer-term outlook for the company. Continued growth in the proportion of revenue generated from design and manufacturing should support operating margin expansion, and should help to reduce the valuation discount. The stock is also supported by a dividend yield close to 3%.
Review of H118 results
Exhibit 1: Half-year results highlights
£m |
H117 |
H118 |
y-o-y |
Revenues |
156.7 |
190.2 |
21.4% |
Design & manufacturing |
81.8 |
108.2 |
32.3% |
Custom Supply |
74.9 |
82.0 |
9.5% |
Gross profit |
51.7 |
61.2 |
18.4% |
Gross margin |
33.0% |
32.2% |
(0.8%) |
Normalised operating profit |
|||
Design & manufacturing |
10.0 |
11.8 |
18.0% |
Custom Supply |
1.6 |
3.3 |
106.3% |
Central costs |
(2.5) |
(3.0) |
20.0% |
Total normalised operating profit |
9.1 |
12.1 |
33.0% |
Normalised operating margin |
|||
Custom distribution |
2.1% |
4.0% |
1.9% |
Design & manufacturing |
12.2% |
10.9% |
(1.3%) |
Total normalised operating margin |
5.8% |
6.4% |
0.6% |
discoverIE underlying* operating profit |
8.8 |
11.8 |
34.1% |
discoverIE underlying operating margin |
5.6% |
6.2% |
0.6% |
Reported operating profit |
3.4 |
8.5 |
150.0% |
Reported op. margin |
2.2% |
4.5% |
2.3% |
Normalised PBT |
7.6 |
10.6 |
39.5% |
Normalised net income |
5.9 |
8.0 |
35.4% |
discoverIE underlying EPS (dil) - p |
8.5 |
10.5 |
23.5% |
Normalised EPS (dil) - p |
8.8 |
10.7 |
21.5% |
Reported EPS (dil) - p |
1.8 |
6.5 |
261.1% |
Dividend - p |
2.45 |
2.65 |
8.2% |
Net debt |
41.1 |
37.6 |
(8.5%) |
Source: discoverIE, Edison Investment Research. Note: *discoverIE underlying profit includes share-based payments.
discoverIE (previously known as Acal) reported strong interims. Reported revenues grew 21% year-on-year, including a 6% benefit from currency and a further 6% contribution from the Variohm acquisition (completed January 2017), resulting in 9% organic growth at group level. Gross margin declined compared to H117, mainly due to the already flagged currency impact on UK imports. Underlying operating profit increased 34% y-o-y boosting the underlying operating margin by 0.6pp. The company saw a reported tax rate of 29% (as earnout accruals were not allowable for tax purposes), with an underlying effective tax rate of 24%. The higher tax rate combined with the higher share count from the Variohm acquisition resulted in a normalised EPS increase of 21.5% y-o-y. The company announced an interim dividend of 2.65p per share, higher than our 2.55p forecast and 8% higher than last year’s interim payout. Net debt at end H118 of £37.6m was £3.5m lower than a year ago.
Exhibit 2 details performance by division. Design & Manufacturing (D&M) grew 32% on a reported basis – excluding the Variohm contribution and positive currency effect, organic growth was 11% year-on-year. The underlying operating margin declined y-o-y, mainly due to the impact of increased import costs for UK businesses. Custom Supply (previously Custom Distribution) grew 9% on a reported basis, with organic growth of 7% y-o-y. Organic growth excludes the Spanish business, which was discontinued last year. With the benefit of recent restructuring coming through, combined with the strong volume growth, underlying operating margin increased from 2.1% to 4.0% over the year (broadly in line with the 4.1% reported for H217). Although central costs increased by £0.5m over the year (linked to the 40% share price increase in the period), underlying group operating margin increased by 0.6 percentage points y-o-y to 6.2%.
Exhibit 2: Divisional performance
£m |
H118 |
H117 |
H117 |
Reported |
CER |
Like-for-like |
Revenues |
||||||
Design & manufacturing |
108.2 |
81.8 |
86.7 |
32% |
25% |
11% |
Custom Supply |
82.0 |
74.9 |
79.1 |
9% |
4% |
7% |
Total revenues |
190.2 |
156.7 |
165.8 |
21% |
15% |
9% |
Underlying operating profit |
||||||
Design & manufacturing |
11.8 |
10.0 |
10.5 |
18.0% |
12.4% |
|
Custom Supply |
3.3 |
1.6 |
1.9 |
106.3% |
73.7% |
|
Unallocated |
(3.3) |
(2.8) |
(2.8) |
17.9% |
17.9% |
|
Total underlying operating profit |
11.8 |
8.8 |
9.6 |
34.1% |
22.9% |
|
Underlying operating margin |
||||||
Design & manufacturing |
10.9% |
12.2% |
12.2% |
(1.3%) |
(1.3%) |
|
Custom distribution |
4.0% |
2.1% |
2.4% |
1.9% |
1.6% |
|
Total underlying operating margin |
6.2% |
5.6% |
5.8% |
0.6% |
0.4% |
Source: discoverIE. Note: *CER: constant exchange rates.
Bookings intake strong
The company saw order growth of 10% y-o-y in H118, resulting in an order backlog of £111m at the end of H118 (+16% CER y-o-y, +11% organic). The company also noted that it received new design wins with a lifetime contract value of more than £90m, which was 30% higher than in H117. Whereas the company typically sees lower design win activity when sales volumes are strong, as customers concentrate on meeting demand from their end-customers for existing projects, in H118 management saw both high sales volumes and higher design win activity, which bodes well for future trading.
Business update
Name change reflects the evolution of the business
The company announced that it has changed its name from Acal to discoverIE Group. The company has made substantial progress with its strategy to shift the focus of the business from distribution of electronics to designing, manufacturing and supplying custom electronics, as evidenced by the 78% contribution to operating profit from the D&M division in H1, versus 40% in FY14. Management wanted to change the company name to better reflect the nature of the business, which enables customers to “discover innovative electronics”. At the same time, the company has changed the name of the Custom Distribution division to Custom Supply, to more accurately reflect the nature of the division’s business. For more detail on the rationale for the changes see: “DiscoverIE is the new Acal”.
Making good progress against KSIs and KPIs
The company gave an update on progress against its key strategic and performance indicators. It continues to make good progress towards its targets. To reach the target for D&M revenues would require acquisitions as well as organic growth, and the company commented that it has two potential deals in the pipeline. The growth in international sales was despite the addition of Variohm, which has only Europe-based sales – organic growth from North America and Asia was 20% in H118. Management was pleased with the strength of cross-selling in the period, with demand from across the business. Management estimates that it takes roughly three years after being acquired for a new business to start to generate revenues from cross-selling (mainly due to design win cycles) – this implies there are still five acquisitions with the potential to start contributing more materially.
Exhibit 3: Progress against key strategic and performance indicators
FY14 |
FY15 |
FY16 |
FY17 |
H118 |
Targets |
||||
Key Strategic Indicators |
Mid-term* |
||||||||
Increase Design & Manufacturing revenue |
18% |
37% |
48% |
52% |
57% |
75% |
|||
Increase underlying operating margin |
3.4% |
4.9% |
5.7% |
5.9% |
6.2% |
8.5% |
|||
Build sales beyond Europe |
5% |
12% |
17% |
19% |
20% |
30% |
|||
Key Performance Indicators |
By FY20 |
||||||||
Sales growth: CER |
17% |
36% |
14% |
6% |
15% |
||||
Sales growth: organic |
2% |
3% |
3% |
(1%) |
9% |
Well ahead of GDP |
|||
Increase cross-selling |
£0.3m |
£0.9m |
£3.0m |
£4.6m |
£8.4m** |
£10m pa |
|||
Underlying EPS growth |
20% |
31% |
10% |
13% |
24% |
>10% |
|||
Dividend growth |
10% |
11% |
6% |
6% |
8% |
Progressive |
|||
ROCE* |
15.2% |
12.0% |
11.6% |
13.0% |
14.5% |
>15% |
|||
Operating cash flow generation |
100% |
104% |
100% |
136% |
95% |
>85% of underlying profit |
|||
Source: discoverIE. Note: *Mid-term = three to five years from November 2016. **Annualised.
Investing in manufacturing capacity
discoverIE’s manufacturing strategy consists of making the majority of product in-house (c 80%) at manufacturing facilities in China, India, Poland, Sri Lanka and Thailand. The remaining products are made by third-party contractors. The preference is to have a variety of smaller facilities in order to provide flexibility and reduce currency and country risk. Capital expenditure remains low at less than 1% of revenue. The company recently expanded electromagnetic shielding production capacity in Korea and is currently investing in capacity expansion at three other sites:
■
Slovakia: increasing fibre optic production capacity – operational by end FY18.
■
India: expanding magnetics capacity – operational from the beginning of FY19.
■
China: expanding magnetics capacity – operational by end FY19.
Acquisition strategy – expect more of the same
The company reiterated its plans to acquire design and manufacturing businesses, with the goal of generating 75% of revenues from D&M in the medium term (three to five years). We have analysed acquisitions made since 2011 to arrive at an average price multiple based on trailing PBT. We have used this analysis to calculate an average trailing PBT margin. Based on the company’s credit facility and stated net debt/EBITDA targets, we have estimated the impact on group revenues, PBT, EPS and net debt of making acquisitions in the D&M space. Assumptions used include:
■
We use our revised FY19 forecasts for revenue, EBITDA, PBT and net income. For Custom Distribution this assumes 2.2% revenue growth and an operating margin of 4.0%; for Design & Manufacturing this assumes 5.0% revenue growth and an operating margin of 10.9%.
■
We use an average price/trailing PBT multiple of 6.7x, and also provide a scenario analysis based on varying this multiple.
■
We use an average PBT margin of 11.7%, and assume that the EBITDA margin would be 1% higher than this.
■
We have calculated the impact of spending £25m and £50m as if all acquisitions are made on 1 April 2018 (ie include annualised contributions from acquisitions).
■
We assume a rate of 4% on the debt used to fund the deals.
■
We use a 26% corporate tax rate (higher than the UK rate due to profits generated in higher tax jurisdictions).
Exhibit 4: Impact on valuation and EPS of potential D&M acquisitions
Amount spent |
PBT multiple |
PBT margin |
EBITDA margin |
EPS accretion FY19e |
Net debt/EBITDA end FY19e |
D&M/total revs FY19e |
New P/E FY19e |
£50m |
6.7x |
11.7% |
12.7% |
22.5% |
2.0 |
63% |
12.9 |
£25m |
6.7x |
11.7% |
12.7% |
10.7% |
1.5 |
60% |
14.2 |
Source: Edison Investment Research
Exhibit 5: Variation of FY19e EPS accretion with multiple paid for acquisitions
Value of deals |
PBT multiple (x) |
||||||||
5 |
5.5 |
6 |
6.5 |
7 |
7.5 |
8 |
8.5 |
9 |
|
£50m |
33.4% |
29.5% |
26.2% |
23.5% |
21.1% |
19.0% |
17.2% |
15.7% |
14.2% |
£25m |
16.2% |
14.2% |
12.6% |
11.2% |
10.0% |
9.0% |
8.1% |
7.3% |
6.6% |
Source: Edison Investment Research
We note that these assumptions do not factor in any uplift in margins from economies of scale or any cross-selling. As we have used trailing multiples (which in some cases were more than a year old), the calculations do not factor in any PBT growth in the acquired companies in FY19.
We also perform the same calculations excluding Noratel from the historic averages. At a cost of £73.5m, this was a platform acquisition and therefore attracted a higher multiple. If we assume that up to £50m is spent on bolt-on acquisitions at the trailing average PBT multiple of 6.4x and trailing PBT margin 11.9%, we arrive at the following outcomes.
Exhibit 6: Impact on valuation and EPS of potential D&M acquisitions
Amount spent |
PBT multiple |
PBT margin |
EBITDA margin |
EPS accretion FY19e |
Net debt/EBITDA end FY19e |
D&M/total revs FY19e |
New P/E FY19e |
£50m |
6.4x |
11.9% |
12.9% |
24.0% |
1.9 |
63% |
12.7 |
£25m |
6.4x |
11.9% |
12.9% |
11.4% |
1.5 |
60% |
14.1 |
Source: Edison Investment Research
Changes to forecasts
We have made minor changes to our estimates to reflect divisional performance and the slightly higher capex in FY18. We have also increased our dividend forecasts for both years – we estimate that this will result in dividend cover towards the lower end of the company’s target 2-3x range.
Exhibit 7: Changes to estimates
£m |
FY18e old |
FY18e new |
Change |
y-o-y |
FY19e old |
FY19e new |
Change |
y-o-y |
Revenues |
392.0 |
388.0 |
(1.0%) |
14.7% |
406.7 |
402.6 |
(1.0%) |
3.8% |
Custom supply |
172.8 |
170.8 |
(1.2%) |
5.1% |
176.7 |
174.6 |
(1.1%) |
2.2% |
Design & manufacturing |
219.1 |
217.1 |
(0.9%) |
23.7% |
230.1 |
228.0 |
(0.9%) |
5.0% |
Gross margin |
32.3% |
32.2% |
(0.0%) |
(0.6%) |
32.4% |
32.4% |
0.0% |
0.2% |
EBITDA |
28.2 |
28.6 |
1.2% |
17.6% |
29.7 |
29.9 |
0.7% |
4.6% |
EBITDA margin |
7.2% |
7.4% |
0.2% |
0.2% |
7.3% |
7.4% |
0.1% |
0.1% |
Underlying operating profit |
23.6 |
23.9 |
1.5% |
19.6% |
24.8 |
24.9 |
0.4% |
4.0% |
Underlying operating profit margin |
6.0% |
6.2% |
0.2% |
0.3% |
6.1% |
6.2% |
0.1% |
0.0% |
Normalised operating profit |
24.4 |
24.5 |
0.6% |
19.1% |
25.7 |
25.7 |
0.0% |
4.8% |
Normalised operating margin |
6.2% |
6.3% |
0.1% |
0.2% |
6.3% |
6.4% |
0.1% |
0.1% |
Normalised PBT |
21.5 |
21.6 |
0.7% |
21.5% |
22.9 |
22.9 |
0.0% |
5.9% |
Normalised net income |
16.1 |
16.2 |
0.8% |
19.5% |
17.1 |
17.1 |
0.1% |
5.8% |
Normalised EPS (p) |
21.4 |
21.6 |
0.8% |
8.7% |
22.5 |
22.6 |
0.1% |
4.4% |
Reported EPS (p) |
13.0 |
13.6 |
5.2% |
155.0% |
17.4 |
17.7 |
1.9% |
29.7% |
Net (debt)/cash |
(29.9) |
(29.9) |
(0.1%) |
(0.4%) |
(25.4) |
(24.4) |
(4.1%) |
(18.4%) |
Net debt/EBITDA (x) |
1.1 |
1.0 |
0.9 |
0.8 |
Source: Edison Investment Research
Valuation
Exhibit 8 shows valuation metrics for discoverIE’s peer group and Exhibit 9 shows their financial performances. The stock continues to trade at a discount to the peer group average on EV/EBITDA and P/E multiples. As discoverIE increases the proportion of revenues generated from D&M, we would expect to see meaningful increases in operating margins, which should flow through to the earnings level. D&M made up 52% of FY17 revenues; absent any acquisitions, we forecast that this will increase to 56% in FY18 and the company is targeting this to reach 75% over the next three to five years.
Exhibit 8: Peer group valuation metrics
|
EV/Sales (x) |
EV/EBITDA (x) |
P/E (x) |
Dividend yield |
||||||||
Last yr |
This yr |
Next yr |
Last yr |
This yr |
Next yr |
Last yr |
This yr |
Next yr |
Last yr |
This yr |
Next yr |
|
discoverIE |
0.8 |
0.7 |
0.7 |
11.6 |
9.8 |
9.4 |
17.9 |
16.4 |
15.7 |
2.4% |
2.5% |
2.7% |
Design & manufacturing |
||||||||||||
Gooch & Housego |
3.0 |
2.9 |
2.8 |
16.8 |
14.8 |
14.1 |
30.0 |
26.6 |
25.4 |
0.7% |
0.8% |
0.8% |
TT Electronics |
0.8 |
1.2 |
1.2 |
8.1 |
12.1 |
11.2 |
19.2 |
23.7 |
20.2 |
2.4% |
2.5% |
2.6% |
XP Power |
5.1 |
3.9 |
3.7 |
19.9 |
16.0 |
14.7 |
30.0 |
24.2 |
23.4 |
2.1% |
2.2% |
2.3% |
Specialist distributors |
||||||||||||
Diploma |
2.8 |
2.7 |
2.6 |
15.3 |
14.4 |
14.0 |
22.8 |
21.4 |
20.3 |
2.0% |
2.2% |
2.4% |
Solid State |
0.9 |
0.8 |
0.8 |
9.7 |
9.6 |
8.7 |
13.3 |
13.8 |
12.6 |
2.8% |
2.8% |
2.9% |
High service & commodity distributors |
||||||||||||
Electrocomponents |
1.9 |
1.7 |
1.6 |
17.9 |
14.6 |
13.4 |
29.9 |
23.7 |
21.5 |
2.0% |
2.1% |
2.2% |
Average |
2.4 |
2.2 |
2.1 |
14.6 |
13.6 |
12.7 |
24.6 |
22.6 |
20.9 |
2.0% |
2.1% |
2.2% |
Versus peer group |
(28%) |
(26%) |
(26%) |
(24%) |
||||||||
Source: Edison Investment Research, Bloomberg (as at 5 December)
Exhibit 9: Peer group financial metrics
|
Gross margin |
EBITDA margin |
EBIT margin |
Revenue growth |
EPS growth |
||||||||||||||||||
Last yr |
This yr |
Next yr |
Last yr |
This yr |
Next yr |
Last yr |
This yr |
Next yr |
Last yr |
This yr |
Next yr |
Last yr |
This yr |
Next yr |
|||||||||
discoverIE |
32.8% |
32.2% |
32.4% |
7.2% |
7.4% |
7.4% |
6.1% |
6.3% |
6.4% |
17.6% |
14.7% |
3.8% |
11.4% |
8.7% |
4.4% |
||||||||
Design & manufacturing |
|||||||||||||||||||||||
Gooch & Housego |
41.1% |
38.7% |
38.7% |
18.1% |
19.4% |
19.7% |
14.6% |
16.4% |
16.5% |
30.2% |
5.7% |
3.7% |
16.3% |
12.8% |
4.8% |
||||||||
TT Electronics |
19.0% |
N/A |
N/A |
9.6% |
10.2% |
10.7% |
5.5% |
6.7% |
6.8% |
11.8% |
(36.9%) |
2.6% |
36.4% |
(19.2%) |
17.5% |
||||||||
XP Power |
47.8% |
46.6% |
45.7% |
25.4% |
24.6% |
24.9% |
22.2% |
21.5% |
21.8% |
18.3% |
28.4% |
7.4% |
10.6% |
23.9% |
3.5% |
||||||||
Specialist distributors |
|||||||||||||||||||||||
Diploma |
35.6% |
35.8% |
35.8% |
18.3% |
18.5% |
18.2% |
17.3% |
16.4% |
16.5% |
18.1% |
5.3% |
4.4% |
18.9% |
6.2% |
5.5% |
||||||||
Solid State |
30.1% |
28.4% |
29.1% |
9.6% |
8.8% |
9.3% |
8.0% |
7.9% |
N/A |
8.7% |
10.5% |
4.4% |
2.2% |
(4.1%) |
10.1% |
||||||||
High service & commodity distributors |
|||||||||||||||||||||||
Electrocomponents |
43.4% |
35.1% |
33.8% |
10.7% |
11.8% |
12.2% |
8.8% |
9.9% |
10.4% |
17.1% |
11.3% |
5.4% |
66.7% |
26.2% |
10.2% |
||||||||
Average |
36.4% |
33.1% |
32.9% |
12.9% |
13.0% |
13.3% |
11.4% |
11.4% |
13.4% |
14.6% |
9.0% |
4.8% |
29.3% |
9.5% |
8.6% |
||||||||
Source: Edison Investment Research, Bloomberg (as at 5 December)
Exhibit 10: Financial summary
£m |
2013 |
2014 |
2015 |
2016 |
2017 |
2018e |
2019e |
||
Year end 31 March |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||||
Revenue |
|
|
177.4 |
211.6 |
271.1 |
287.7 |
338.2 |
388.0 |
402.6 |
Cost of Sales |
(123.0) |
(148.6) |
(186.7) |
(195.1) |
(227.2) |
(262.9) |
(272.2) |
||
Gross Profit |
54.4 |
63.0 |
84.4 |
92.6 |
111.0 |
125.1 |
130.5 |
||
EBITDA |
|
|
7.4 |
9.1 |
16.6 |
19.8 |
24.3 |
28.6 |
29.9 |
Operating Profit (before am, SBP and except.) |
|
6.1 |
7.7 |
14.0 |
17.0 |
20.6 |
24.5 |
25.7 |
|
Operating Profit (before am. and except.) |
|
5.5 |
7.1 |
13.4 |
16.3 |
20.0 |
23.9 |
24.9 |
|
Amortisation of acquired intangibles |
(0.7) |
(1.0) |
(2.1) |
(2.8) |
(3.9) |
(4.4) |
(4.4) |
||
Exceptionals |
(3.4) |
(0.9) |
(5.2) |
(2.1) |
(8.4) |
(2.9) |
(0.6) |
||
Share-based payments |
(0.6) |
(0.6) |
(0.6) |
(0.7) |
(0.6) |
(0.6) |
(0.8) |
||
Operating Profit |
1.4 |
5.2 |
6.1 |
11.4 |
7.7 |
16.7 |
19.9 |
||
Net Interest |
(0.5) |
(0.8) |
(1.6) |
(1.8) |
(2.8) |
(2.9) |
(2.8) |
||
Profit Before Tax (norm) |
|
|
5.6 |
6.9 |
12.4 |
15.2 |
17.8 |
21.6 |
22.9 |
Profit Before Tax (FRS 3) |
|
|
0.7 |
4.2 |
4.3 |
9.4 |
4.8 |
13.6 |
16.9 |
Tax |
1.4 |
(0.5) |
(1.4) |
(2.2) |
(1.3) |
(3.9) |
(4.4) |
||
Profit After Tax (norm) |
4.6 |
6.0 |
10.0 |
11.8 |
13.6 |
16.2 |
17.1 |
||
Profit After Tax (FRS 3) |
2.1 |
3.7 |
2.9 |
7.2 |
3.5 |
9.6 |
12.5 |
||
Average Number of Shares Outstanding (m) |
39.2 |
43.1 |
57.6 |
63.3 |
65.4 |
70.7 |
70.7 |
||
EPS - normalised & diluted (p) |
|
|
11.3 |
13.1 |
16.4 |
17.8 |
19.9 |
21.6 |
22.6 |
EPS - IFRS basic (p) |
|
|
(4.8) |
3.0 |
5.0 |
11.4 |
5.3 |
13.6 |
17.7 |
EPS - IFRS diluted (p) |
|
|
(4.7) |
2.8 |
4.8 |
10.9 |
5.1 |
12.9 |
16.5 |
Dividend per share (p) |
6.2 |
6.8 |
7.6 |
8.1 |
8.5 |
9.0 |
9.5 |
||
Gross Margin (%) |
30.7 |
29.8 |
31.1 |
32.2 |
32.8 |
32.2 |
32.4 |
||
EBITDA Margin (%) |
4.2 |
4.3 |
6.1 |
6.9 |
7.2 |
7.4 |
7.4 |
||
Operating Margin (before am, SBP and except.) (%) |
3.4 |
3.6 |
5.2 |
5.9 |
6.1 |
6.3 |
6.4 |
||
BALANCE SHEET |
|||||||||
Fixed Assets |
|
|
30.9 |
33.1 |
88.6 |
108.4 |
122.2 |
117.5 |
112.3 |
Intangible Assets |
24.2 |
25.5 |
69.9 |
88.2 |
100.7 |
96.0 |
91.1 |
||
Tangible Assets |
3.1 |
3.5 |
13.8 |
14.7 |
16.0 |
16.0 |
15.7 |
||
Deferred tax assets |
3.6 |
4.1 |
4.9 |
5.5 |
5.5 |
5.5 |
5.5 |
||
Current Assets |
|
|
81.8 |
92.7 |
127.3 |
128.3 |
149.6 |
164.8 |
170.7 |
Stocks |
19.3 |
19.4 |
39.8 |
42.9 |
50.1 |
57.4 |
59.6 |
||
Debtors |
44.7 |
48.3 |
60.2 |
65.5 |
77.3 |
86.1 |
89.4 |
||
Cash |
17.8 |
18.1 |
26.7 |
19.9 |
22.2 |
21.3 |
21.8 |
||
Current Liabilities |
|
|
(50.9) |
(58.3) |
(62.1) |
(61.7) |
(78.4) |
(94.5) |
(96.1) |
Creditors |
(46.6) |
(51.5) |
(61.9) |
(60.9) |
(77.1) |
(89.2) |
(90.8) |
||
Short term borrowings |
(4.3) |
(6.8) |
(0.2) |
(0.8) |
(1.3) |
(5.3) |
(5.3) |
||
Long Term Liabilities |
|
|
(10.3) |
(19.0) |
(61.1) |
(73.1) |
(69.6) |
(63.0) |
(58.0) |
Long term borrowings |
(1.7) |
(9.5) |
(45.5) |
(57.2) |
(50.9) |
(45.9) |
(40.9) |
||
Other long term liabilities |
(8.6) |
(9.5) |
(15.6) |
(15.9) |
(18.7) |
(17.1) |
(17.1) |
||
Net Assets |
|
|
51.5 |
48.5 |
92.7 |
101.9 |
123.8 |
124.7 |
128.8 |
CASH FLOW |
|||||||||
Operating Cash Flow |
|
|
5.7 |
6.1 |
6.6 |
14.6 |
20.3 |
20.3 |
25.9 |
Net Interest |
(0.6) |
(0.8) |
(1.6) |
(1.8) |
(2.8) |
(2.9) |
(2.8) |
||
Tax |
(1.4) |
(0.9) |
(3.3) |
(4.3) |
(3.0) |
(5.4) |
(5.8) |
||
Capex |
(1.3) |
(1.4) |
(2.5) |
(2.3) |
(3.4) |
(3.7) |
(3.4) |
||
Acquisitions/disposals |
(0.5) |
(9.2) |
(37.3) |
(19.8) |
(11.8) |
(2.0) |
(2.0) |
||
Financing |
5.7 |
0.1 |
52.7 |
0.0 |
13.6 |
0.0 |
0.0 |
||
Dividends |
(2.3) |
(2.7) |
(3.6) |
(4.9) |
(5.2) |
(6.1) |
(6.4) |
||
Net Cash Flow |
5.3 |
(8.8) |
11.0 |
(18.5) |
7.7 |
0.1 |
5.4 |
||
Opening net cash/(debt) |
|
|
6.3 |
11.8 |
1.8 |
(19.0) |
(38.1) |
(30.0) |
(29.9) |
HP finance leases initiated |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
0.2 |
(1.2) |
(31.8) |
(0.6) |
0.4 |
0.0 |
0.0 |
||
Closing net cash/(debt) |
|
|
11.8 |
1.8 |
(19.0) |
(38.1) |
(30.0) |
(29.9) |
(24.4) |
Source: discoverIE, Edison Investment Research
|
|
Standard Life Investments Property Income Trust (SLI) holds an actively managed portfolio of UK commercial property. Since September 2006, the trust has been managed by Jason Baggaley, who aims to generate an attractive level of income with the potential for income and capital growth. SLI has a strong performance track record – its NAV total return has outperformed its benchmark IPD Monthly Index Funds (quarterly version) over one, three, and five years, while its share price total return has also outperformed over 10 years. SLI regularly trades at a premium, which the board aims to manage via share issuance.
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