Last close As at 06/08/2026
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Market capitalisation
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Research: Industrials
Tyman
Written by
Tyman |
Subdued markets, but progress expected |
Trading update |
Construction & materials |
19 November 2015 |
Share price performance
Business description
Next event
Analysts
Tyman is a research client of Edison Investment Research Limited |
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As Tyman's year end approaches, it has pointed to subdued Q3 trading in a number of regional markets but also provided grounds for improved profitability in FY16. Overall, we have trimmed our FY15 PBT estimate by 3.4% with no net change to future years at this stage. We believe that the absence of a growth premium understates market and company prospects.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/13 |
298.1 |
28.6 |
13.5 |
6.0 |
17.7 |
2.5 |
12/14 |
350.9 |
41.6 |
18.4 |
8.0 |
13.0 |
3.4 |
12/15e |
359.6 |
42.7 |
17.8 |
9.0 |
13.4 |
3.8 |
12/16e |
362.0 |
47.6 |
20.2 |
9.5 |
11.8 |
4.0 |
Note: *PBT and EPS (fully diluted) are normalised, as defined by Tyman, excluding intangible amortisation and exceptional items.
Half-year order promise not sustained in demand
Trading in H215 to date has not been as positive as end-H115 order books (in all three reporting regions) appeared to suggest. In North America, AmesburyTruth noted a Q3 lull in both newbuild and RMI sectors, while Canada remains a soft market. We believe that FX effects overall (US$ stronger, C$ weaker) have been marginally more beneficial than at the interim stage, with firmer product pricing also supporting better margins. In the UK, ERA’s order book was flat at the end of H1 and it has seen lower demand during H2; channel performance has been variable with OEM share gains positive; weaker retail/distribution sales less so. Elsewhere, Schlegel has continued to see country-by-country trading variability and intends to further consolidate pile seal production into a UK facility by closing one in Spain.
FY15 PBT estimates revised down by c 3%
Ahead of the IMS, our FY15 EBITA estimate was towards the lower end of the range and we have reduced our EBITA/PBT expectation by £2m (or 3.4%) with all three regions contributing to this. Our group profit expectations beyond this are unchanged; the US continues to be the main driver of progress in our model (and housing permits/starts have improved again here), though we see scope for some incremental improvement elsewhere. For example, ERA’s new product and masterbrand strategy should gain momentum next year, while management has flagged that Schlegel’s European site consolidation may equate to a c €2m profit swing when complete (ie not all in FY16).
Valuation: Share price decline depresses rating
Tyman’s share price had been performing in line with the FTSE All-Share index since H115 results (end July) but, consistent with many sector peers, the relative has deteriorated since the beginning of October. It now stands c 23% below the start-year level and approaching 30% lower than its 340p peak in February. While this type of sector exposure may be out of favour currently, we still believe that the cyclical housing recovery has some way to go in Tyman’s leading markets and, subject to no major reaction to gradually rising interest rate, expect to see this result in a resumption of more positive share price performance.
Exhibit 1: Financial summary
£m |
2010 |
2011 |
2012 |
2013 |
2014 |
2015e |
2016e |
2017e |
||||
Year-end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||||
PROFIT & LOSS |
|
|
Group |
Continuing |
Continuing |
|
|
|
|
|
||
Revenue |
|
|
266.2 |
216.3 |
228.8 |
298.1 |
350.9 |
359.6 |
362.0 |
375.3 |
||
Cost of Sales |
|
|
(173.4) |
(145.2) |
(154.0) |
(198.8) |
(236.1) |
(242.0) |
(243.6) |
(252.5) |
||
Gross Profit |
|
|
92.8 |
71.1 |
74.7 |
99.3 |
114.8 |
117.6 |
118.4 |
122.7 |
||
EBITDA |
|
|
40.2 |
27.7 |
28.5 |
39.4 |
54.6 |
58.5 |
63.1 |
68.0 |
||
Operating Profit (Edison) |
|
|
33.7 |
22.4 |
23.4 |
33.0 |
46.9 |
50.5 |
54.6 |
59.0 |
||
Net Interest |
|
|
(8.9) |
(5.9) |
(3.3) |
(3.4) |
(4.5) |
(6.0) |
(5.7) |
(5.2) |
||
Other Finance |
|
|
(2.9) |
(3.6) |
(0.9) |
0.2 |
(2.2) |
(1.1) |
(0.5) |
(0.5) |
||
Share Based Payments |
|
|
(0.1) |
(0.2) |
(0.5) |
(0.7) |
(0.9) |
(0.9) |
(0.9) |
(0.9) |
||
Intangible Amortisation |
|
|
(11.7) |
(10.6) |
(10.8) |
(16.6) |
(17.8) |
(18.0) |
(18.0) |
(18.0) |
||
Exceptionals |
|
|
(0.4) |
0.7 |
(33.4) |
(11.4) |
(9.3) |
(7.7) |
(4.5) |
(3.5) |
||
Other |
|
|
(0.3) |
(0.1) |
(0.4) |
(0.4) |
(0.3) |
(0.3) |
(0.3) |
(0.3) |
||
Profit Before Tax (Edison norm) |
|
21.9 |
12.7 |
18.7 |
29.2 |
39.3 |
42.5 |
47.4 |
52.4 |
|||
Profit Before Tax (Company norm) |
|
24.8 |
17.4 |
21.3 |
28.6 |
41.6 |
42.7 |
47.6 |
52.5 |
|||
Profit Before Tax (FRS 3) |
|
|
9.5 |
2.6 |
(25.8) |
0.8 |
11.9 |
16.6 |
24.6 |
30.5 |
||
Tax |
|
|
(2.5) |
6.4 |
3.7 |
0.2 |
(2.6) |
(7.1) |
(7.9) |
(9.3) |
||
Profit After Tax (norm) |
|
|
19.4 |
19.1 |
22.4 |
29.4 |
36.8 |
35.4 |
39.5 |
43.1 |
||
Profit After Tax (FRS 3) |
|
|
7.0 |
9.1 |
(22.1) |
1.0 |
9.3 |
9.5 |
16.7 |
21.2 |
||
|
|
|
|
|
|
|
|
|
|
|
||
Average Number of Shares Outstanding (m) |
|
129.8 |
129.7 |
129.7 |
152.8 |
167.8 |
167.9 |
167.9 |
167.9 |
|||
EPS - Edison normalised (p) FD |
|
|
10.7 |
6.7 |
9.6 |
13.9 |
17.1 |
17.8 |
20.1 |
22.2 |
||
EPS - Company normalised (p) FD |
|
|
11.4 |
9.4 |
10.2 |
13.5 |
18.4 |
17.8 |
20.2 |
22.3 |
||
EPS - FRS 3 (p) |
|
|
5.3 |
6.8 |
(16.7) |
0.6 |
5.6 |
5.6 |
9.9 |
12.7 |
||
Dividend per share (p) |
|
|
2.0 |
3.4 |
4.5 |
6.0 |
8.0 |
9.0 |
9.5 |
10.5 |
||
|
|
|
|
|
|
|
|
|
|
|
||
Gross Margin (%) |
|
|
34.9 |
32.9 |
32.7 |
33.3 |
32.7 |
32.7 |
32.7 |
32.7 |
||
EBITDA Margin (%) |
|
|
15.1 |
12.8 |
12.5 |
13.2 |
15.6 |
16.3 |
17.4 |
18.1 |
||
Operating Margin (before GW and except.) (%) |
12.7 |
10.4 |
10.2 |
11.1 |
13.4 |
14.1 |
15.1 |
15.7 |
||||
|
|
|
|
|
|
|
|
|
|
|
||
BALANCE SHEET |
|
|
Group |
Continuing |
Continuing |
|
|
|
|
|
||
Fixed Assets |
|
|
367.4 |
352.8 |
298.1 |
404.2 |
410.6 |
385.1 |
371.2 |
358.5 |
||
Intangible Assets |
|
|
328.2 |
312.7 |
258.7 |
354.4 |
355.7 |
333.7 |
317.8 |
301.9 |
||
Tangible Assets |
|
|
31.5 |
30.5 |
29.8 |
39.9 |
42.9 |
36.4 |
40.1 |
43.3 |
||
Investments |
|
|
7.7 |
9.6 |
9.5 |
9.8 |
12.1 |
15.0 |
13.3 |
13.3 |
||
Current Assets |
|
|
86.7 |
96.361 |
90.7 |
118.9 |
124.0 |
145.7 |
159.1 |
179.8 |
||
Stocks |
|
|
26.0 |
26.6 |
27.6 |
40.7 |
47.6 |
53.8 |
54.1 |
56.1 |
||
Debtors |
|
|
28.2 |
24.1 |
23.7 |
29.9 |
31.5 |
32.2 |
32.5 |
33.7 |
||
Cash |
|
|
27.7 |
20.4 |
35.9 |
43.6 |
39.3 |
54.1 |
66.9 |
84.4 |
||
Current Liabilities |
|
|
(51.8) |
(55.1) |
(44.2) |
(60.8) |
(52.3) |
(56.3) |
(57.7) |
(61.8) |
||
Creditors |
|
|
(46.6) |
(42.2) |
(36.7) |
(54.0) |
(52.3) |
(56.3) |
(57.7) |
(61.8) |
||
Short term borrowings |
|
|
(5.2) |
(12.9) |
(7.5) |
(6.8) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Long Term Liabilities |
|
|
(163.7) |
(144.8) |
(96.9) |
(161.7) |
(176.2) |
(178.9) |
(177.9) |
(176.9) |
||
Long term borrowings |
|
|
(114.3) |
(100.2) |
(63.6) |
(115.5) |
(128.0) |
(136.1) |
(136.1) |
(136.1) |
||
Other long term liabilities |
|
|
(49.4) |
(44.6) |
(33.3) |
(46.2) |
(48.2) |
(42.8) |
(41.8) |
(40.8) |
||
Net Assets |
|
|
238.6 |
249.2 |
247.7 |
300.6 |
306.1 |
295.6 |
294.7 |
299.6 |
||
|
|
|
|
0.000 |
|
|
|
|
|
|
||
CASH FLOW |
|
|
Group |
Continuing |
Continuing |
|
|
|
|
|
||
Operating Cash Flow |
|
|
38.6 |
32.6 |
23.6 |
38.9 |
40.1 |
40.8 |
55.0 |
61.2 |
||
Net Interest |
|
|
(9.3) |
(6.7) |
(4.2) |
(2.6) |
(4.6) |
(6.0) |
(5.7) |
(5.2) |
||
Tax |
|
|
(2.3) |
(1.9) |
(4.9) |
(6.2) |
(6.3) |
(5.6) |
(6.4) |
(7.8) |
||
Capex |
|
|
(3.5) |
(4.9) |
(6.8) |
(8.1) |
(10.2) |
(11.3) |
(14.3) |
(14.3) |
||
Acquisitions/disposals |
|
|
0.0 |
(10.3) |
51.2 |
(131.2) |
(6.5) |
7.3 |
0.0 |
0.0 |
||
Financing |
|
|
0.0 |
(0.3) |
(1.1) |
68.1 |
(4.3) |
(3.5) |
0.0 |
0.0 |
||
Dividends |
|
|
0.0 |
(2.6) |
(5.8) |
(7.0) |
(10.9) |
(14.6) |
(15.8) |
(16.4) |
||
Net Cash Flow |
|
|
23.5 |
6.0 |
51.9 |
(48.2) |
(2.8) |
7.0 |
12.8 |
17.5 |
||
Opening net debt/(cash) |
|
|
111.0 |
91.7 |
92.7 |
35.2 |
78.7 |
88.7 |
81.9 |
69.2 |
||
HP finance leases initiated |
|
|
(0.0) |
(2.7) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
|
|
(4.2) |
(4.4) |
5.6 |
4.7 |
(7.2) |
(0.3) |
(0.0) |
(0.0) |
||
Closing net debt/(cash) |
|
|
91.7 |
92.7 |
35.2 |
78.7 |
88.7 |
81.9 |
69.2 |
51.7 |
||
Source: Company accounts, Edison Investment Research
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