AAC Clyde Space — Strong trading progress in H123

AAC Clyde Space (OMX: AAC)

Last close As at 23/05/2024

SEK44.70

−0.55 (−1.22%)

Market capitalisation

SEK255m

More on this equity

Research: Industrials

AAC Clyde Space — Strong trading progress in H123

AAC Clyde Space made strong progress in H123, with revenues up 65% and positive EBITDA. While the mix is not as expected due to delays to some programmes deferring the start of SDaaS revenues to H223, the recent rights issue enables the company to accelerate investment in its own SDaaS satellites for launch next year. As high-margin SDaaS revenues should accelerate from H223, we expect AAC to become increasingly profitable and cash generative.

Andy Chambers

Written by

Andy Chambers

Director, Industrials

Industrials

AAC Clyde Space

Strong trading progress in H123

H123 results

Aerospace and defence

8 September 2023

Price

SEK0.68

Market cap

SEK193m

SEK11.13/$, SEK13.86/£

Adjusted net debt (SEKm) at 30 June 2023
(excluding leases SEK18.9m)

31.8

Shares in issue

284.7

Free float

88%

Code

AAC

Primary exchange

Nasdaq First North Premier Growth Market

Secondary exchange

OTCQX

Share price performance

%

1m

3m

12m

Abs

(12.9)

(10.4)

(50.7)

Rel (local)

(11.0)

(5.1)

(54.5)

52-week high/low

SEK2.01

SEK0.56

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, the United States and Africa.

Next events

Q323 results

23 November 2023

Analysts

Andy Chambers

+44 (0)20 3077 5700

Natalya Davies

+44 (0)20 3077 5700

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

AAC Clyde Space made strong progress in H123, with revenues up 65% and positive EBITDA. While the mix is not as expected due to delays to some programmes deferring the start of SDaaS revenues to H223, the recent rights issue enables the company to accelerate investment in its own SDaaS satellites for launch next year. As high-margin SDaaS revenues should accelerate from H223, we expect AAC to become increasingly profitable and cash generative.

Year end

Revenue (SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/21

180.0

(27.0)

(0.14)

0.0

N/A

N/A

12/22

196.7

(17.7)

(0.08)

0.0

N/A

N/A

12/23e

328.4

0.8

0.00

0.0

N/A

N/A

12/24e

481.6

40.3

0.13

0.0

5.2

N/A

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

Strong start to the year despite SDaaS delays

AAC Clyde Space has made a strong start to FY23, with a 65% rise in revenues in H123 to SEK149.8m, positive first-half EBITDA (SEK4.0m) for the first time, while maintaining a robust order backlog of SEK444m. The result was achieved despite a slower performance at Clyde Space than we expected, largely caused by delays to in-orbit commissioning of satellites deployed during the period deferring the start of Clyde Space’s additional SDaaS revenues to H223. Third-party Space Missions activity also remained at a depressed level, although work on AAC’s own satellites continues to increase. However, this was more than offset by a very strong performance from Space Products across the group’s businesses, all of which saw an increase in H123, most notably at Hyperion and Omnisys.

Liquidity bolstered by rights issue

At H123 the company had drawn down SEK24.8m of its overdraft facility and secured a bridge loan of SEK20.0m, with gross cash having fallen to SEK13.0m. The subsequent receipt of the SEK35.9m rights issue proceeds and the £1m (c SEK13m) R&D tax credit, together with project milestone payments, should have alleviated the immediate liquidity issues with the bridge loan repaid in August. The announcement of the acceleration of the xSPANCION programme indicates management’s confidence. In addition, the SDaaS revenues should start to come on stream in H223 from the satellites deployed in H123, with further launches anticipated later in the year, which should bolster cash generation.

Valuation: Still on track for positive cash flow

We have reduced our FY24 EPS by around 11%, which still implies a low single-digit P/E multiple. Our capped DCF value falls to SEK5.9/share (SEK6.1/share previously). Both suggest a significant opportunity for investors if AAC Clyde Space can navigate its way to financial self-sufficiency over the next 18 months.

H123 results

Q223 saw net sales increase by 53% to SEK75.9m (Q222: SEK49.5m). The improvement reflected the start of the unwinding of project delays arising from the COVID disruptions, although there were some ongoing deferrals, notably in the commissioning of SDaaS satellites launched in H123. AAC Clyde Space in Sweden, Hyperion and Omnisys all delivered strong revenue growth in the period, while Clyde Space and SpaceQuest were flat year-on-year, with the smaller AAC Space Africa still building its business. Overall, the group delivered positive EBITDA of SEK2.3m in Q223 (Q222: loss of SEK3.2m), with positive contributions from AAC Clyde, Hyperion, SpaceQuest and Omnisys more than offsetting an increased loss at Clyde Space and start-up losses at AAC Space Africa.

Exhibit 1: AAC Clyde Space H123 results summary

SEKm

H122

H123

H123 vs H122

AAC

19.82

28.5

44%

Clyde

25.21

25.8

2%

Hyperion

6.79

30.6

351%

SpaceQuest

14.43

20.7

44%

Omnisys

22.74

43.2

90%

AAC Space Africa

1.72

1.0

(41%)

Net sales

90.70

149.8

65%

SDaaS

8.24

9.1

10%

Space Missions

22.46

14.5

(35%)

Space Products

60.01

120.1

100%

Licence income

0.00

6.1

Net sales

90.70

149.8

65%

Other operating income

9.86

12.8

30%

Development work capitalised

10.88

15.3

41%

Group income

111.45

177.9

60%

Raw materials & subcontractors

(30.78)

(65.48)

113%

Personnel costs

(68.13)

(82.48)

21%

Other external expenses

(19.58)

(22.91)

17%

Other operating expenses

(3.74)

(3.07)

(18%)

EBITDA

(10.78)

3.97

N/M

Depreciation and Amortisation

(13.35)

(14.84)

11%

EBIT

(24.13)

(10.87)

(55%)

PBT

(18.81)

(10.57)

(44%)

Net income

(17.50)

(11.13)

(36%)

EPS (SEK)

(0.09)

(0.05)

(44%)

Adjusted net cash/(debt) at period end

46.5

(31.8)

N/M

Lease liabilities

(12.7)

(18.9)

+49%

Total net financial assets

33.8

(50.7)

N/M

Source: Company reports

Key highlights of H123 were:

Group net sales rose 65% to SEK149.8m (H122: SEK90.7m). SDaaS sales were up 10% to SEK9.1m, with the anticipated Q223 acceleration deferred until H223 due to satellite commissioning delays, with further additional launches also expected before the year end. Space Products doubled to SEK120.1m (H122: SEK60.0m), reflecting strong growth at AAC Clyde Space in Sweden, Omnisys and Hyperion. Space Missions’ performance continued to be the main casualty of project delays, with sales falling 35% to SEK14.5m (H122: SEK22.5m).

The group generated positive EBITDA of SEK4.0m (H122: loss SEK10.8m), with a sequential improvement in Q223 to SEK2.3m. SpaceQuest and Hyperion both increased their contribution in H123 to SEK5.6m (H122: SEK4.2m) and SEK9.7m (H122: SEK0.8m), respectively. AAC Clyde Space in Sweden reduced its EBITDA loss to SEK0.8m (H122 loss: SEK9.5m) following a positive SEK3.1m contribution in Q223. Omnisys’s contribution fell to SEK4.3m (H122: SEK5.1m) despite the strong revenue growth. Clyde Space saw its EBITDA loss increase to SEK12.7m (H122 loss: SEK10.0m) due to the revenue deferrals.

A large part of the EBITDA improvement was due to the stabilisation of the cost base, which has changed little over the last three quarters. The leveraging of higher sales over a largely fixed cost base remains a key element of the investment proposition for AAC.

The loss before tax of SEK10.6m was 44% lower than in H122 (SEK18.8m) despite a SEK5.0m reduction in net financial income.

Adjusted net debt (excluding leases) at end H123 was SEK31.8m before the benefit of the rights issue proceeds of SEK35.9m in July. Gross cash was SEK13.0m compared to SEK52.1m at the start of the year. The operating cash outflow was SEK43.0m in Q223 (Q222: SEK32.2m), reflecting further working capital increases. For H123, the operating outflow increased to SEK52.8m compared to SEK25.3m in H122. As well as the fund-raising, we expect receipt of the R&D tax credit and milestone payments, together with the start-up of the SDaaS revenues, to boost H223 cash flow.

The order backlog remained robust at SEK443.7m with strong sales growth outpacing still healthy order intake. While some of the Space Products backlog was consumed during Q223, both Space missions and SDaaS saw moderate increases as sales did not meet earlier expectations.

Exhibit 2: Net sales split by segment, activity (H123: SEK149.8m)

Exhibit 3: Order backlog development
(H123: SEK443.7m)

Source: Company reports

Source: Company reports. Note: Split estimated by EIR.

Exhibit 2: Net sales split by segment, activity (H123: SEK149.8m)

Source: Company reports

Exhibit 3: Order backlog development
(H123: SEK443.7m)

Source: Company reports. Note: Split estimated by EIR.

Subsidiaries progression

To try and provide a better understanding of how the group is growing, we include commentary on each subsidiary.

AAC Clyde Space AB

In the original Uppsala-based business, the operations continue to focus on Space Products revenues in the form of a suite of avionics, data processing and power management systems for customers. It has started to build up its Space Mission capabilities, although at present these remain relatively small (H123 sales: SEK1.16m).

Exhibit 4: AAC Clyde Space AB quarterly development

SEKm

Q122

Q222

H122

Q123

Q223

H123

- Space Missions

1.33

0.42

1.75

0.65

0.50

1.16

- Space Products

9.51

8.56

18.07

10.72

10.52

21.25

- Licence income

0.00

0.00

0.00

0.00

6.07

6.07

Net sales

10.84

8.97

19.82

11.38

17.10

28.47

EBITDA

(2.22)

(7.26)

(9.48)

(3.83)

3.05

(0.79)

Margin (%)

-20.5%

-80.8%

-47.8%

-33.7%

17.8%

-2.8%

Source: Company reports

Q223 saw a sharp improvement in performance as avionics sales grew, thanks to recent order intake. The business also received further licence income of SEK6.1m (H122: nil), which we now expect to be an element of future revenues and is essentially a 100% margin. It boosted Q223 EBITDA to SEK3.05m, which was not enough to offset the Q123 loss, but the margin of almost 18% is encouraging and more aligned with our medium-term expectations.

Clyde Space

The Glasgow-based operations are the principal core Space Missions activity of the group, providing satellite platforms and mission solutions to third parties, as well as developing platforms for its own use as it builds up its SDaaS offering.

Exhibit 5: Clyde Space quarterly development

SEKm

Q122

Q222

H122

Q123

Q223

H123

- SDaaS

0.09

0.27

0.37

0.00

0.00

0.00

- Space Missions

10.44

8.62

19.06

6.61

6.78

13.38

- Space Products

3.59

2.19

5.79

7.77

4.65

12.42

Net sales

14.13

11.08

25.21

14.38

11.43

25.80

EBITDA

(5.94)

(4.02)

(9.96)

(5.55)

(7.11)

(12.66)

Margin (%)

-42.1%

-36.2%

-39.5%

-38.6%

-62.2%

-49.1%

Source: Company reports

Although revenues were marginally up year-on-year in H123, the performance was not as strong as anticipated. It should be noted that much of the capitalised development work, which is increasing as its own satellite development accelerates, is in Clyde Space, so activity levels are higher than net sales suggest. More satellites are to be launched over the next 18 months. The primary reason for the H123 shortfall against our expectations was the delay to commissioning launched satellites that had been expected to start generating higher-margin SDaaS revenues during Q223. These are now expected to come onstream in H223, providing a significant boost to both sales and EBITDA performance, which should accelerate into FY24 as more of its own network satellites are deployed.

Hyperion Technologies

Based in Delft in the Netherlands, Hyperion supplies reliable, high-performance miniaturised subsystems for small satellites, including electronic and mechatronic systems. It has built a strong reputation for attitude and orbit control technologies and laser communications, and is working closely with academic and industry partners on advanced technologies such as optical satellite communications and propulsion systems. Hyperion’s sales are categorised as Space Products.

Exhibit 6: Hyperion quarterly development

SEKm

Q122

Q222

H122

Q123

Q223

H123

Net sales

2.20

4.59

6.79

15.77

14.87

30.63

EBITDA

(0.54)

1.32

0.78

5.01

4.73

9.73

Margin (%)

-24.7%

28.8%

11.5%

31.7%

31.8%

31.8%

Source: Company reports

Revenues stepped up strongly in H123 and remained stable at c SEK15m in both quarters, generating a consistent and healthy margin of c 31.8%. Revenue was over four times the level of H122, with the total in FY22 only SEK15.5m. The performance was well ahead of our expectations, so we have significantly upgraded our revenue estimates for FY23, although we are assuming the strong performance is likely to ease a bit in H223. Nevertheless, Hyperion should make a strong contribution to the group EBITDA improvement.

SpaceQuest

SpaceQuest is the US arm of AAC Clyde based in Fairfax, Virginia in the United States. The business has been operating longer than the other AAC subsidiaries and already delivers SDaaS from its own constellation of four satellites and ground stations. It also supplies a range of satellite components, microsatellite subsystems, ground stations, AIS data and M2M connectivity to other commercial aerospace manufacturers and institutions.

Exhibit 7: SpaceQuest quarterly development

SEKm

Q122

Q222

H122

Q123

Q223

H123

- SDaaS

3.91

3.96

7.87

4.52

4.57

9.10

- Space Products

1.73

4.84

6.56

7.83

3.79

11.62

Net sales

5.64

8.79

14.43

12.35

8.36

20.72

EBITDA

0.90

3.26

4.15

3.50

2.11

5.61

Margin (%)

15.9%

37.1%

28.8%

28.3%

25.2%

27.1%

Source: Company reports

SpaceQuest also made strong progress compared to H122, with revenues more than doubling. However, overall, this was much as expected. There was a slight mix shift as SDaaS revenues of SEK9.1m continued to be delivered by the existing fleet of satellites at a relatively stable rate, with the deployment of newer platforms now deferred to FY24. We believe the delays were caused by supply chain issues. However, while the Space Products revenues compensated for the modest shortfall in H123, Q223 saw a sharp drop-off in sales that resulted in some overhead under-recovery, leading to a drop in the EBITDA margin to 25.2%. We expect H223 to be similar to the first-half performance with a significant improvement in SDaaS revenues in FY24.

Omnisys Instruments

Omnisys is the most recently acquired of the group businesses and is based in Gothenburg, Sweden. It develops and manufactures measuring instruments, including advanced weather data sensors for meteorological and climate research applications. The company is able to develop advanced payloads that should be available to provide space data for customers operating in a growing number of fields such as science, medical and security. All of Omnisys’s sales are categorised as Space Products.

Exhibit 8: Omnisys quarterly development

SEKm

Q122

Q222

H122

Q123

Q223

H123

Net sales

8.29

14.45

22.74

19.11

24.04

43.16

EBITDA

1.30

3.83

5.14

3.28

1.00

4.28

Margin (%)

15.7%

26.5%

22.6%

26.6%

11.9%

20.6%

Source: Company reports

Omnisys saw a further significant increase in revenues in Q223 as it continued to work through its backlog. However, while Q223 saw exceptionally high growth, the margin dropped considerably as there were excess costs incurred on one specific project. We do not expect the issue to persist and we would expect margins to return to more normal levels of more than 20% in H223.

AAC Space Africa

Based in Cape Town, South Africa, AAC Space Africa commenced operations in August 2021 to capitalise on the expected rapid growth in demand for satellites and space services in Africa. The business has been designated as AAC’s centre of excellence for advanced radio communication systems and is still in its start-up phase.

In H123, it generated modest revenues of SEK1.0m (H122: SEK1.7m), although the previous year benefited from a Space Missions project that completed in Q422. The H123 EBITDA loss was SEK2.2m compared to a loss of SEK1.4m in H122.

Outlook and earnings revisions

H223 should see the launch of additional satellites for Orbcomm and Wyvern adding to the launches in H123. In addition, AAC Clyde Space and its partners in the AOS joint venture, Orbcomm and Saab, are set to launch Ymir-1 in November, the first demonstrator satellite for the proposed VHF Data Exchange System maritime communication system. With the first xSPANCION and additional SpaceQuest satellites expected to be deployed in FY24, AAC expects to have 13 of its own satellites in operation by the end of next year. That should ensure that SDaaS revenues grow sharply over the next 18 months.

With the Space Mission backlog recently enhanced by the SEK16.1m order from Kawa Space and the shorter-cycle Space Products backlog maintained at a similar level to the start of the year, the company appears to be on track to achieve the target of SEK500m sales in FY24.

As a result of the significant difference in the sales mix in H123 compared to our expectations, we have reduced our sales estimate for FY23 by 7.5%. We significantly cut our Clyde Space revenue expectations to reflect the slower ramp-up of SDaaS and the still sluggish third-party Space Missions sales activity. However, the reduction is offset to a great degree by sharper than expected improvements at both Hyperion and Omnisys. SpaceQuest and AAC Clyde Space in Sweden are trading much as anticipated. Overall, we are not changing our PBT or EPS estimates substantially, although the percentage change is significant for small numbers.

Our aggregate adjustments for FY24 lead to a marginal decline in revenues and EBITDA, with a 10% reduction in PBT and 11% lower EPS due to a slightly higher share count (we have assumed all of the Omnisys earnout shares are issued by the end of FY24).

Exhibit 9: AAC Clyde Space earnings revisions

SEKm

2023e

2024e

 

Prior

New

% change

Prior

New

% change

By business

AAC

66.0

69.0

4.6%

89.3

89.9

0.7%

Clyde

145.9

79.6

(45.4%)

207.1

179.3

(13.4%)

Hyperion

20.2

56.6

180.8%

24.2

62.3

157.4%

SpaceQuest

40.8

40.8

0.0%

53.1

53.1

0.0%

Omnisys

67.9

78.4

15.4%

84.9

90.1

6.2%

AAC Space Africa

14.3

3.9

25.0

6.9

(72.5%)

Total group net sales

355.1

328.4

(7.5%)

483.6

481.6

(0.4%)

By activity

SDaaS

55.0

35.0

(36.4%)

101.0

101.0

0.0%

Space Missions

74.7

41.0

(45.1%)

88.0

79.8

(9.4%)

Space Products

225.4

236.3

4.8%

294.6

290.9

(1.3%)

Licence & royalties income

0.0

16.1

0.0

10.0

Total group net sales

355.1

328.4

(7.5%)

483.6

481.6

(0.4%)

Other operating income

7.3

20.3

3.0

3.0

Own work capitalised

38.0

35.3

53.3

53.2

Total group income

400.4

384.0

(4.1%)

540.0

537.8

(0.4%)

Raw materials & subcontractors

(149.1)

(142.9)

(4.2%)

(200.7)

(197.5)

(1.6%)

Personnel costs

(165.4)

(165.4)

0.0%

(190.3)

(190.3)

0.0%

Other external expenses

(60.4)

(52.5)

(13.0%)

(72.5)

(72.2)

(0.4%)

Other operating expenses

(3.6)

(6.6)

85.0%

(4.8)

(6.7)

39.4%

EBITDA (company adjusted)

21.9

16.7

(23.9%)

71.5

71.0

(0.7%)

EBIT (adjusted)

(2.5)

(0.8)

(66.5%)

42.8

40.3

(5.9%)

Underlying PBT

0.6

0.8

24.1%

44.9

40.3

(10.2%)

EPS - underlying continuing (SEK)

0.00

0.00

28.3%

0.15

0.13

(10.6%)

Adjusted net cash/(debt)

63.5

46.6

(26.6%)

99.2

78.9

(20.5%)

Source: Edison Investment Research estimates

Exhibit 10: Financial summary

SEKm

2020

2021

2022

2023e

2024e

Year-end December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Net sales

 

 

98.4

180.0

196.7

328.4

481.6

Own work capitalised and other operating income

21.1

30.9

52.5

55.6

56.2

Group income

119.5

210.8

249.2

384.0

537.8

EBITDA

 

 

(17.5)

(12.4)

(24.5)

16.7

71.0

Operating Profit (before amort. and except).

(22.2)

(21.9)

(34.9)

2.2

54.4

Intangible Amortisation

(3.3)

(0.9)

(0.7)

(3.0)

(14.1)

Exceptionals

(12.1)

(15.8)

(26.0)

(17.5)

(17.5)

Other

0.0

0.0

0.0

0.0

0.0

Operating Profit

(37.5)

(38.6)

(61.6)

(18.3)

22.8

Net Interest

(1.3)

(4.2)

17.9

1.6

0.0

Profit Before Tax (norm)

 

 

(26.7)

(27.0)

(17.7)

0.8

40.3

Profit Before Tax (FRS 3)

 

 

(38.8)

(42.8)

(43.7)

(16.7)

22.8

Tax

0.5

3.3

2.6

0.8

(1.1)

Profit After Tax (norm)

(26.4)

(24.9)

(16.4)

0.7

38.3

Profit After Tax (FRS 3)

(38.3)

(39.5)

(41.1)

(15.9)

21.7

Average Number of Shares Outstanding (m)

102.3

173.8

196.9

246.1

285.5

EPS - fully diluted (SEK)

 

 

(0.26)

(0.14)

(0.08)

0.00

0.13

EPS - normalised (SEK)

 

 

(0.26)

(0.14)

(0.08)

0.00

0.13

EPS - (IFRS) (SEK)

 

 

(0.37)

(0.23)

(0.21)

(0.06)

0.08

Dividend per share (SEK)

0.0

0.0

0.0

0.0

0.0

EBITDA Margin (%)

-17.8

-6.9

-12.5

5.1

14.8

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

-22.5

-12.2

-17.7

0.7

11.3

BALANCE SHEET

Fixed Assets

 

 

523.0

681.0

728.6

749.8

778.2

Intangible Assets

494.3

639.5

665.5

665.3

671.9

Tangible Assets

16.2

26.4

46.4

67.6

91.5

Right of use asset

12.5

15.1

16.8

16.8

14.8

Investments

0.0

0.0

0.0

0.0

0.0

Current Assets

 

 

113.3

193.4

152.8

165.6

222.7

Stocks

12.8

13.2

20.2

32.8

45.8

Debtors

9.5

23.0

24.5

36.1

50.3

Cash

62.4

96.1

52.1

57.1

92.9

Other

28.5

61.1

56.0

39.5

33.8

Current Liabilities

 

 

(56.1)

(129.2)

(170.2)

(183.5)

(244.1)

Creditors

(56.1)

(128.5)

(170.2)

(183.5)

(244.1)

Short term borrowings

0.0

(0.6)

0.0

0.0

0.0

Long Term Liabilities

 

 

(14.4)

(16.6)

(17.8)

(30.2)

(33.6)

Long term borrowings

(0.3)

0.0

0.0

(10.5)

(13.9)

Lease liabilities

(12.9)

(15.1)

(16.5)

(18.5)

(18.5)

Other long term liabilities

(1.2)

(1.5)

(1.2)

(1.2)

(1.1)

Net Assets

 

 

565.8

728.6

693.5

701.6

723.3

CASH FLOW

Operating Cash Flow

 

 

(14.6)

(37.3)

(13.2)

3.2

103.0

Net Interest

(0.2)

(0.2)

18.3

3.6

2.0

Tax

0.4

2.1

1.3

(0.0)

(2.0)

Capex

(17.2)

(29.2)

(40.9)

(50.1)

(72.7)

Acquisitions/disposals

(6.2)

2.6

(43.7)

2.0

2.0

Financing

49.2

94.1

33.4

35.9

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

Net Cash Flow

11.4

32.0

(44.7)

(5.5)

32.3

Opening net debt/(cash) excluding lease liabilities

(51.6)

(62.2)

(95.5)

(52.1)

(46.6)

HP finance leases initiated

0.0

0.0

0.0

0.0

0.0

Other

(0.8)

1.3

1.3

0.0

0.0

Closing net debt/(cash) excluding lease liabilities

(62.2)

(95.5)

(52.1)

(46.6)

(78.9)

Net financial liabilities including lease liabilities

(49.3)

(80.4)

(35.6)

(28.1)

(60.4)

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 2023 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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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 2023 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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on AAC Clyde Space

View All

Latest from the Industrials sector

View All Industrials content

Research: TMT

EMIS Group — H123 on track; 21.3p interim dividend declared

EMIS reported H123 revenue and adjusted operating profit in line with board expectations. Revenue grew 2% year-on-year and adjusted operating profit was 7% higher, with an adjusted operating margin of 26.9% (+120bp y-o-y). The company closed H123 with net cash of £48.5m. Assuming the takeover of EMIS is not effective prior to 7 October, on 23 October the company will pay an interim dividend of 21.3p to shareholders on the register on 6 October.

Continue Reading

Subscribe to Edison

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

Sign up for free