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Research: TMT
We are withdrawing our estimates on Thinfilm. Our previous estimates are now out-of-date and should not be relied upon.
Written by
Thin Film Electronics |
Suspension of forecasts |
Suspension of forecasts |
Tech hardware & equipment |
19 October 2017 |
Share price performance
Business description
Analysts
Thin Film Electronics is a research client of Edison Investment Research Limited |
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We are withdrawing our estimates on Thinfilm. Our previous estimates are now out-of-date and should not be relied upon.
Year end |
Revenue ($m) |
EBITDA ($m) |
PBT* |
EPS* |
DPS |
EV/sales |
Yield |
12/15 |
4.4 |
(29.2) |
(28.3) |
(5.3) |
0.0 |
58.2 |
N/A |
12/16 |
3.8 |
(37.1) |
(43.0) |
(6.6) |
0.0 |
55.0 |
N/A |
12/17e |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
12/18e |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
Note: PBT, EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Thinfilm has made significant progress on a number of fronts over the past 12 months. The company has secured the lease on an ex Qualcomm state-of-the art clean room manufacturing plant in San Jose, Ca and is on track to start roll-to-roll manufacturing of EAS (anti-theft) tags by the end of the year, with roll-to-roll NFC production targeted by Q318. The company launched its NFC marketing platform, CNECT in March 2017. Data back from pilots with the likes of Barbadillo and Coronado Brewing have returned some very encouraging results, significantly improving sales and engagement with Mobile-First customers.
Apple’s decision to support NFC in iOS 11 should support the uptake of NFC and the company has seen increased interest in CNECT since. It should be noted that until the TTF protocol used by Thinfilm in its NFC SpeedTap tags is accepted by Apple, these tags will not connect with Apple phones, which could suppress market share of Thinfilm’s NFC SpeedTap and NFC OpenSense products, until such time as the tags are supported by Apple. Thinfilm is working to have its protocol recognised by the NFC Forum although the timescale for this approval is difficult to gauge. In the interim, Thinfilm will sell conventional silicon NFC tags alongside its printed PDPS variety. With full funding, we believe that support from Apple should be the final building block to support a rapid scaling of the business.
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Disclaimer
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Disclaimer
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Research: Consumer
The 19% growth in digital revenue is the key highlight in Rank Group’s trading update (16 weeks to 15 October). Grosvenor digital was up 34% and, encouragingly, Mecca digital has moved to double-digit growth (up 11% vs 2% in FY17). In a continuation of previous trends, Venues l-f-l revenues declined by 1%, leading to a 2% l-f-l growth in total group revenues. Notwithstanding the decline in Venues, the core business is highly cash generative, enabling progressive dividends, as well as potential M&A. Rank Group does not face any B2 FOBT risk from the triennial review and may even benefit if it is allowed more machines. Despite this, the stock trades at c 6.8x EV/EBITDA for CY18e. Management reiterated its expectations for the full year and our estimates remain unchanged.