AAC Clyde Space — Strong progress despite supplier delays

AAC Clyde Space (OMX: AAC)

Last close As at 20/06/2024

SEK39.95

−0.45 (−1.11%)

Market capitalisation

SEK228m

More on this equity

Research: Industrials

AAC Clyde Space — Strong progress despite supplier delays

AAC Clyde Space (AAC) made good progress in FY21 with sales up 83% to SEK180m, driven by the strong initial contributions of recent acquisitions. Continued supplier issues delayed project execution mainly at Clyde Space in Glasgow and led to a c SEK20m shortfall, leaving group sales 11% below our expectations. However, the adjusted EBITDA loss was better than we anticipated at SEK12.3m. In addition, the order backlog remained close to record levels at SEK407m and the year-end adjusted net cash balance was SEK96m. As the company starts to increase investment in FY22 to support its growth strategy, we expect a return to strong growth in Space Missions sales as space data as a service (SDaaS) revenues start to grow rapidly.

Andy Chambers

Written by

Andy Chambers

Director, Industrials

Industrials

AAC Clyde Space

Strong progress despite supplier delays

FY21 preliminary results

Aerospace & defence

24 February 2022

Price

SEK2.06

Market cap

SEK396m

SEK12.82/£, SEK9.51/$

Adjusted net cash (SEKm) at 31 Dec 2021 (excluding lease liabilities)

96.1

Shares in issue

192.2m

Free float

87%

Code

AAC

Primary exchange

Nasdaq First Growth Market

Secondary exchange

OTCQX

Share price performance

%

1m

3m

12m

Abs

(18.9)

(40.8)

(33.5)

Rel (local)

(10.6)

(30.8)

(37.6)

52-week high/low

SEK3.76

SEK2.18

Business description

Headquartered in Sweden, AAC Clyde Space is a world leader in nanosatellite end-to-end solutions, subsystems, platforms, services and components, including supply to third parties. It has production and development operations in Sweden, Scotland, the Netherlands and the United States as well as a start up in Africa.

Next events

FY21 annual report

28 April 2022

AGM and Q122 results

19 May 2022

Q222 results

25 August 2022

Analyst

Andy Chambers

+44 (0)20 3077 5700

AAC Clyde Space is a research client of Edison Investment Research Limited

AAC Clyde Space (AAC) made good progress in FY21 with sales up 83% to SEK180m, driven by the strong initial contributions of recent acquisitions. Continued supplier issues delayed project execution mainly at Clyde Space in Glasgow and led to a c SEK20m shortfall, leaving group sales 11% below our expectations. However, the adjusted EBITDA loss was better than we anticipated at SEK12.3m. In addition, the order backlog remained close to record levels at SEK407m and the year-end adjusted net cash balance was SEK96m. As the company starts to increase investment in FY22 to support its growth strategy, we expect a return to strong growth in Space Missions sales as space data as a service (SDaaS) revenues start to grow rapidly.

Year end

Revenue (SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/20

98.4

(26.7)

(0.26)

0.0

N/A

N/A

12/21

180.0

(31.8)

(0.17)

0.0

N/A

N/A

12/22e

270.1

(10.5)

(0.05)

0.0

N/A

N/A

12/23e

377.1

7.2

0.03

0.0

68.7

N/A

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

FY21 progress in a challenging period

Supply chain issues continued in FY21 while AAC invested in the group’s operational and management infrastructure to support future growth. While the primary shortfall in revenues was at Clyde Space, as the Q421 catch up in project revenues failed to materialise, the acquisitions also developed at different rates. Sales at Hyperion and SpaceQuest were sequentially flat in Q421, but this was offset by a very strong contribution from Omnisys. Overall, the adjusted FY21 EBITDA loss improved to SEK12.3m (FY20 loss of SEK17.5m) despite the investment in headcount in advance of revenues. We expect a positive EBITDA in FY22 as AAC executes the increasing number of projects and higher-margin SDaaS revenues increase. Year-end net cash balances before leases remained healthy at SEK96m although we expect to see increasing investment requirements as the company implements the growth strategy.

Strong growth targets retained

Management expects FY24 net sales of SEK500m, of which the emerging SDaaS activity should account for c 25%. Space Mission, Space Products and Advanced Sensors are also expected to show strong growth. As the company’s plan to deploy its own satellite constellations to acquire data is executed over the remainder of the decade, the rate of growth should accelerate towards management’s 2030 target for c SEK2.3bn of revenue with SEK1.3bn provided by SDaaS.

Valuation: increasing investment for growth

Space remains an area of focus for investors with a record $12bn invested in the sector in 2021. AAC should be an interesting opportunity as growth accelerates although the level of investment to support development is also increasing. Our capped DCF valuation returns a value of SEK7.0 per share (from SEK7.3) with the decrease reflecting higher near-term investment levels.

FY21 results summary

AAC once again achieved strong growth in revenues in FY21, despite the ongoing supply chain issues that delayed some projects and the investment in the group to support the anticipated future growth. Performance was boosted by the first full year contribution from Hyperion Technologies and SpaceQuest and the initial eight-month contribution from Omnisys. The main highlights of the results were:

Revenues were up 83% at SEK180.0m (FY20 SEK98.4m), with the acquisitions accounting for all except SEK6.9m of the increase. For the ongoing businesses, AAC Clyde in Sweden made good progress increasing revenues 48% to SEK 41.m while Clyde Space in Glasgow was affected by supplier issues and project delays, with revenues falling 9% and the catch up we anticipated in Q421 failing to materialise. The shortfall at Clyde Space was primarily responsible for the miss of management’s FY21 guidance for revenues of c SEK200m and our own estimates.

While in aggregate the SEK77.0m revenue contribution from acquisitions was close to our forecast of SEK79.2m, the mix was significantly different. Omnisys had a much stronger Q421 than we anticipated, while both SpaceQuest and Hyperion showed little progress.

However, the adjusted EBITDA loss was reduced to SEK12.3m (FY20 loss SEK17.5m) and the reported EBITDA loss fell to SEK14.9m (FY20 loss SEK26.8m). The FY21 adjustment comprises the acquisition cost for Omnisys of SEK1.7m and the non-recurring personnel costs of SEK1.0m (FY20 aggregate SEK9.3m). The better-than-expected adjusted EBITDA loss was achieved despite significant investment in personnel costs and infrastructure to support future growth.

Exhibit 1: AAC Clyde Space FY21 results summary

Year to December (SEKm)

FY19

FY20

FY21

% change
FY21 vs FY20

By business

 

AAC

26.4

28.0

41.4

48%

Clyde

40.1

68.0

61.5

-10%

Hyperion

 

2.4

13.9

n.m.

SpaceQuest

 

0.0

19.2

 

Omnisys

 

 

43.8

 

Total group net sales

66.4

98.4

180.0

83%

By activity

 

 

 

 

SDaaS

 

3.1

12.8

 

Space Missions

20.4

51.6

57.5

12%

Space Products

45.9

43.7

108.2

147%

Licence and royalties’ income

0.1

0.0

1.4

 

Total group net sales

66.4

98.4

180.0

83%

Other operating income

11.2

12.7

17.2

35%

Own work capitalised

3.0

8.3

13.6

64%

Total group income

80.6

119.5

210.8

76%

Raw materials and subcontractors

(27.4)

(50.3)

(83.2)

66%

Personnel costs

(51.8)

(59.4)

(106.0)

78%

Other external expenses

(23.7)

(19.5)

(30.4)

56%

Other operating expenses

(5.0)

(7.8)

(3.5)

-55%

EBITDA (company adjusted)

(27.3)

(17.5)

(12.3)

-30%

EBIT (pre amortisation of acquired intangibles)

(37.4)

(25.5)

(27.7)

9%

Underlying PBT

(38.2)

(26.7)

(31.8)

19%

EPS – underlying continuing (SEK)

(0.45)

(0.26)

(0.17)

-35%

Adjusted net cash / (debt)

51.6

62.2

96.1

55%

Source: AAC accounts, Edison Investment Research adjustments

AAC Clyde in Sweden made a reported EBITDA loss of SEK14.3m (FY20 loss SEK21.6m), which includes all the non-recurring costs in both years. The adjusted loss was SEK11.7m versus EBITDA losses of SEK12.3m in FY20 and SEK13.7m for FY19.

Clyde Space saw its EBITDA loss increase to SEK10.7m (FY20 EBITDA loss SEK5.6m) as a result of the project delays, although it once again reported a small positive EBITDA contribution of almost SEK1.6m in Q421 (Q420 SEK2.0m). The performance highlights the lumpy nature of project work.

Among the acquisitions, Omnisys made a strong initial EBITDA contribution of SEK5.4m including a Q421 profit of SEK1.7m. Hyperion improved its FY21 EBITDA contribution to SEK0.8m (FY20 SEK0.4m for seven weeks) despite a Q420 loss of SEK1.8m. SpaceQuest generated SEK5.3m for the year with a small positive EBITDA in Q421 of SEK0.4m (FY20 nil). The AAC Space Africa Q321 start up did not generate any revenue but incurred losses at the EBITDA level of SEK1.3m, mainly in Q421.

The underlying loss before tax, which also excludes intangible amortisation, increased to SEK31.8m from SEK26.2m in FY20, reflecting high levels of depreciation and amortisation due to continued investment in project development work and the acquisitions.

Year-end adjusted net cash (excluding lease liabilities) improved SEK96.1m (FY20 SEK62.2m). the movement reflected the SEK100m fund-raising made at the time of the Omnisys acquisition less the initial cash consideration, an operating cash outflow of SEK35.5m (FY20 outflow SEK17.4m) and capital expenditure totalling SEK29.2m (FY20 SEK20.3m).

The order backlog at the year end was SEK407m, more than double the SEK156m at FY20. The backlog increased marginally in Q421 reflecting a good level of intake during the period. At the year end the backlog for Space Missions increased to a record c SEK105m versus c SEK79m at the previous year end. The SDaaS backlog remained at the record high level of around SEK158m, which was first achieved following the Wyvern contract award in H121. We expect growth to continue in FY22 as more clients are signed up for the various projects in development. Although slightly reduced during H221, the Space Products year-end backlog of c SEK144m was still approximately 4x the level of FY20, largely due to the acquisitions.

Exhibit 2: AAC order backlog development by activity (FY21 SEK407.2m)

Exhibit 3: Revenue development by activity to reach SEK500m target in FY24

Source: AAC reports

Source AAC

Exhibit 2: AAC order backlog development by activity (FY21 SEK407.2m)

Source: AAC reports

Exhibit 3: Revenue development by activity to reach SEK500m target in FY24

Source AAC

As at the start of FY22, AAC is working on 10 confirmed satellite launches. It is also preparing to start development of its own constellation of satellites with the initial 12 in the project pipeline. We expect this to grow toward 100 in operation by 2030.

Earnings revisions

Despite the record backlog for Space Missions, we are taking a more cautious approach to revenue development at Clyde Space as we had expected some of the delays would be recovered in FY22. We have also reduced our outlook for SpaceQuest given the lower than anticipated FY21 revenue base, although we do expect good growth as SDaaS revenues improve and new project work recovers. Omnisys will make a full year contribution, which will add another four months of revenues. Both Hyperion and AAC Clyde in Sweden are expected to make good progress.

We also anticipate a significant increase in capitalised development work as the company starts to invest more heavily in its own constellation projects alongside third-party projects.

We introduce FY23 forecasts, where we expect to see continued strong revenue growth and an improvement in EBITDA margin as the proportion of services activity and higher volumes across the group’s activities drive positive operational gearing. Our estimates should be considered against management’s revenue targets of SEK500m for FY24 and SEK2.3bn by 2030.

Exhibit 4: AAC Clyde Space earnings revisions

Year to Dec (SEKm)

2021

2022e

2023e

 

Prior

Prelim

% change

Prior

New

% change

New

By business

 

 

 

 

 

 

 

AAC

41.3

41.4

48%

50.2

56.9

13.5%

82.4

Clyde

81.6

61.5

-10%

130.5

100.8

(22.8%)

151.1

Hyperion

19.2

13.9

n.m.

23.1

24.4

5.8%

29.3

SpaceQuest

30.0

19.2

 

49.0

28.8

(41.1%)

40.4

Omnisys

30.0

43.8

 

40.0

59.2

48.0%

74.0

Total group net sales

202.1

180.0

83%

292.7

270.1

(7.7%)

377.1

By activity

 

 

 

 

 

 

 

SDaaS

18.3

12.8

 

39.6

30.3

(23.6%)

70.1

Space Missions

62.9

57.5

12%

106.2

95.6

(10.0%)

129.0

Space Products

119.6

108.2

147%

144.9

142.2

(1.8%)

176.0

Licence and royalties’ income

1.4

1.4

 

2.0

2.0

0.0%

2.0

Total group net sales

202.1

180.0

83%

292.7

270.4

(7.7%)

377.1

Other operating income

7.3

17.2

35%

7.3

7.3

 

7.3

Own work capitalised

15.1

13.6

64%

14.8

34.5

 

37.9

Total group income

224.5

210.8

76%

314.9

311.9

(0.9%)

422.4

 

 

 

 

 

 

 

Raw materials and subcontractors

(91.0)

(83.2)

66%

(111.2)

(121.6)

9.3%

(162.2)

Personnel costs

(107.2)

(106.0)

78%

(131.1)

(137.8)

5.1%

(163.0)

Other external expenses

(34.4)

(30.4)

56%

(49.0)

(45.2)

(7.7%)

(62.2)

Other operating expenses

(7.3)

(3.5)

-55%

0.0

0.0

 

0.0

EBITDA (company adjusted)

(15.3)

(12.3)

-30%

23.5

7.3

(69.0%)

35.0

EBIT (pre PPA amortisation)

(26.9)

(27.7)

9%

10.6

(7.3)

n.m.

10.9

Underlying PBT

(31.9)

(31.8)

19%

8.2

(10.5)

n.m.

7.2

 

 

 

 

 

 

 

EPS – underlying continuing (SEK)

(0.17)

(0.17)

-34%

0.04

(0.05)

n.m.

0.03

DPS (SEK)

0.0

0.0

 

0.0

0.0

 

0.0

Adjusted net cash / (debt)

102.6

96.1

55%

108.5

22.5

(79.2%)

(16.7)

Source: Company reports, Edison Investment Research estimates

Exhibit 5: Financial summary

SEKm

2019

2020

2021

2022e

2023e

Year end December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Net sales

 

 

66.4

98.4

180.0

270.1

377.1

Own work capitalised and other operating income

14.1

21.1

30.9

41.8

45.2

Group income

80.6

119.5

210.8

311.9

422.4

EBITDA

 

 

(27.3)

(17.5)

(12.3)

7.3

35.0

Operating Profit (before amort. and except).

(32.7)

(22.2)

(21.8)

0.5

27.5

Intangible Amortisation

(4.6)

(3.3)

(5.9)

(7.8)

(16.6)

Exceptionals

(2.9)

(12.1)

(10.9)

(10.0)

(10.0)

Other

0.0

0.0

0.0

0.0

0.0

Operating Profit

(40.2)

(37.5)

(38.6)

(17.3)

0.9

Net Interest

(0.8)

(1.3)

(4.2)

(3.2)

(3.7)

Profit Before Tax (norm)

 

 

(38.2)

(26.7)

(31.8)

(10.5)

7.2

Profit Before Tax (FRS 3)

 

 

(41.0)

(38.8)

(42.8)

(20.5)

(2.8)

Tax

0.5

0.5

3.3

1.0

0.1

Profit After Tax (norm)

(37.8)

(26.4)

(29.4)

(10.0)

6.8

Profit After Tax (FRS 3)

(40.6)

(38.3)

(39.5)

(19.5)

(2.7)

Average Number of Shares Outstanding (m)

84.8

102.3

173.8

196.1

203.8

EPS - fully diluted (SEK)

 

 

(0.45)

(0.26)

(0.17)

(0.05)

0.03

EPS - normalised (SEK)

 

 

(0.44)

(0.26)

(0.17)

(0.05)

0.03

EPS - (IFRS) (SEK)

 

 

(0.48)

(0.37)

(0.23)

(0.10)

(0.01)

Dividend per share (SEK)

0.0

0.0

0.0

0.0

0.0

EBITDA Margin (%)

-41.1

-17.8

-6.8

2.7

9.3

Operating Margin (before GW and except.) (%)

-49.3

-22.5

-12.1

0.2

7.3

BALANCE SHEET

Fixed Assets

 

 

436.9

523.0

681.0

739.0

761.5

Intangible Assets

418.6

494.3

639.5

689.5

700.8

Tangible Assets

4.1

16.2

29.2

40.6

55.1

Right of use asset

14.2

12.5

12.2

8.9

5.6

Investments

0.0

0.0

0.0

0.0

0.0

Current Assets

 

 

108.5

113.3

199.4

138.8

138.0

Stocks

13.1

12.8

13.2

45.9

64.1

Debtors

17.7

9.5

23.0

43.2

60.3

Cash

52.4

62.4

96.1

22.5

(16.7)

Other

25.2

28.5

67.0

27.1

30.3

Current Liabilities

 

 

(60.5)

(56.1)

(131.3)

(117.5)

(144.5)

Creditors

(60.5)

(56.1)

(131.3)

(117.5)

(144.5)

Short term borrowings

0.0

0.0

0.0

0.0

0.0

Long Term Liabilities

 

 

(16.0)

(14.4)

(11.9)

(9.7)

(7.0)

Long term borrowings

(0.8)

(0.3)

0.0

(0.0)

(0.0)

Lease liabilities

(14.1)

(12.9)

(10.3)

(7.8)

(5.2)

Other long-term liabilities

(1.1)

(1.2)

(1.6)

(1.9)

(1.8)

Net Assets

 

 

468.9

565.8

737.1

750.7

748.1

CASH FLOW

Operating Cash Flow

 

 

(15.3)

(14.2)

(34.5)

(23.1)

19.9

Net Interest

(0.8)

(0.7)

(3.4)

(2.4)

(3.0)

Tax

0.4

0.4

2.4

0.5

(0.4)

Capex

(13.9)

(17.2)

(26.9)

(49.3)

(56.6)

Acquisitions/disposals

(3.0)

(6.2)

(27.7)

(32.6)

0.8

Financing

73.3

49.2

122.7

33.3

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

Net Cash Flow

40.7

11.4

32.7

(73.6)

(39.3)

Opening net debt/(cash) excluding lease liabilities

(10.9)

(51.6)

(62.2)

(96.1)

(22.5)

HP finance leases initiated

0.0

0.0

0.0

0.0

0.0

Other

0.1

(0.8)

1.3

0.0

0.0

Closing net debt/(cash) excluding lease liabilities

(51.6)

(62.2)

(96.1)

(22.5)

16.7

Net financial liabilities including lease liabilities

(37.5)

(49.3)

(85.8)

(14.8)

21.9

Source: Company reports, Edison Investment Research estimates


General disclaimer and copyright

This report has been commissioned by AAC Clyde Space and prepared and issued by Edison, in consideration of a fee payable by AAC Clyde Space. 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 2022 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.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by AAC Clyde Space and prepared and issued by Edison, in consideration of a fee payable by AAC Clyde Space. 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 2022 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.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on AAC Clyde Space

View All

Latest from the Industrials sector

View All Industrials content

Research: Metals & Mining

Wheaton Precious Metals — Refining forecasts ahead of results

On 7 February, Wheaton announced attributable production and sales statistics for FY21 plus guidance for FY22 and beyond to FY31. While (implied) production for Q421 was within 1% of our prior expectations, sales lagged production by c 12%. This is quite normal for a ‘typical’ quarter, but is slightly unusual for a fourth quarter, in which a ‘flush through’ effect is often observed as underlying operators look to clear out their sales pipelines. This under-sale of metal in Q4 has caused us to reduce our basic EPS forecast for FY21 by 2.9% to US$1.31/share, albeit we note that the consensus forecast has remained at US$1.34/share.

Continue Reading

Subscribe to Edison

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

Sign up for free