FY 22: The rebound comes from overseas

Fraport has announced FY22 results which were better than our estimates, the difference arising from a one-time effect related to governmental compensations and disposals. However, the company provided a conservative outlook for FY23. Due to the ongoing expansion projects the Net Debt/EBITDA ratio has reached 6.9x and leverage is expected to remain stable in 2023.

Q3 22: FCF breakeven could be beyond FY24

Fraport released its Q3 results above market expectations, supported by a one-off compensation at the Greek airports for the losses made in H1 21. There was good traffic recovery, especially in Greece where it was above 2019’s level. Due to strong cost-cutting measures, Q3 22 EBITDA was at ~96% of Q3 19’s level, demonstrating the strong performance at international airports. Fraport’s Q3 22 FCF was clearly positive at €125m but the FY FCF is most likely to be positive territory after FY24.

H1 22: higher traffic yet lower profit due to one-offs

Fraport reported H1 results above market expectations. However, the bottom-line figures were negatively impacted by the write-down related to the assets in Russia (one-off), only partially offset by the gains from the exit from China and higher income from the traffic recovery. Following these results, we will increase our EBITDA (in-line with the upgraded guidance) but lower our EPS estimates for 2022.

Q1 22: turbulence due to one-offs

Fraport released its Q1 results below market expectations. The bottom-line figures were negatively impacted by the write-down related to assets in Russia, lower income from equity-accounted assets due to the exit from China and the absence of governmental aid, which were positive one-offs in 2021. Following this result, we will slightly lower our EBITDA and EPS estimates for 2022.

Guidance for 2022 too cautious

Fraport has announced FY21 results which were better than our expectations, the difference arising from higher cost savings and governmental compensations, but it has provided a conservative outlook for FY22. Due to the ongoing expansion projects that cannot be entirely delayed, capex is expected to remain at an elevated level of ~€1.1bn until 2024 (up to the termination of Frankfurt T3’s construction work). The group has not proposed any dividend for FY20.

9M 21: optimisation at home paying off

Fraport published its 9M results, outperforming our and market expectations. Traffic recovery is strong and the group’s restructuring efforts are already visible in the Aviation and Ground Handling segments in particular. Following this result and guidance update, we will update our estimates upwards, which will positively impact our target price.

H1 21: positive net income possible for FY21

Fraport’s H1 21 performance was largely driven by one-offs, but the group’s structural improvement was visible through positive EBITDA contribution from all its airports. The group currently sees a positive trend in the traffic, especially in Russia and China where the Q2 traffic was almost at the level of 2019. However, the group’s operational improvement is overshadowed by low FCF due to severance payments and high capex.

Q1 21: government aid to boost EBITDA

Fraport released its Q1 results which were above market expectations. It managed to keep its EBITDA in positive territory. Traffic on its assets continued to be under pressure except in China and Russia. Its restructuring programme is almost complete and the €250m p.a. savings may kick in from 2022. Fraport is in talks with government authorities about some relief and the ~€160m aid from the German government (almost finalised) could significantly boost EBITDA this year.

Entering 2021 cautiously

Fraport has announced FY20 results which were better than our expectations mainly due to higher cost savings, but it has provided a conservative outlook for FY21. Due to the ongoing expansion projects that cannot be entirely delayed, Fraport saw capex of €1.1bn which is expected to remain at this high level at least until 2024 (until the termination of Frankfurt T3’s construction work). The group has not proposed any dividend for FY20.

9M 20: EBITDA landing in the negative zone

Traffic at its international airports improved significantly better than at Frankfurt airport, yet the 9M revenue is down by 54%. Provisions of €280m dragged down EBITDA significantly, which in turn brought down net income to €-515m. Fraport has sufficient cost-saving initiatives in place and liquidity to survive the pandemic. Following today’s result, we will revise our earnings downwards, resulting in a slight drop in the target price.

H1 20: preparing for the new normal

Fraport has announced H1 results which were better than consensus expectations. Management expects significant traffic reduction going forward, with traffic still remaining 15-20% below the 2019 level by 2022. Hence, it has announced various opex- and capex-reducing measures to adjust to the new outlook.

Q1 20: capable of bypassing government aid

Fraport released its Q1 results with profits in the negative domain for the first time in a decade. As expected, traffic in April was down by 97%. The company has taken major steps to reduce expenses and has limited the cash burn to ~€150m/month which makes the group capable enough to survive for more than a year based on its current revenues, current financial position and without any government aid.

Management gives a very bleak outlook for 2020

Before COVID-19 started to spread, management expected the passenger number in Frankfurt to remain unchanged but rising numbers (mid single-digits) at the Brazilian and Greek airports as well as in Lima. This picture has changed and it now sees a considerably negative impact from the virus. It sees a negative EBITDA impact of €10-14 for every passenger lost in Frankfurt. Assuming the passenger number will fall by 10% (or c. 7m), Aviation EBITDA will be down by €70-98m).

March and April will be a disaster for Fraport

February was a catastrophe for Xi’an where Fraport holds a 24.5% minority stake. The passenger number there fell by 88% to 464k. Now that the USA is prohibiting passengers from Europe (excluding the UK) to enter its shores for one month, this will take its toll from now on, hopefully for only one month.

Lufthansa reduces its offer by up to 50%

COVID-19 has a much harsher impact on ticket demand than anticipated only one or two weeks ago. Management has now decided, as demand to almost all destinations has collapsed, to reduce the number of flights by up to 50% in the coming weeks. This will obviously also have an impact on Fraport’s passenger number, at least in Frankfurt.

LIBERUM: Luceco* - Margin momentum coming into view

LIBERUM: Yü Group* - Strong momentum and cash flow

LIBERUM: SigmaRoc* - Critical mass demonstrated

Invinity Energy Systems - First Sale In Hungary

Invinity has followed the Hungarian reseller agreement announced on 10 March with a first sale of VS3 flow batteries for an EU funded solar plus storage project in the country. This is in line with the company’s other recent reseller agreements providing strategic access to new energy storage markets. We think it is good to see Invinity securing battery sales at the outset of new reseller agreements as this provides further confirmation of the company’s growing commercial momentum in our view.

LIBERUM: Costain Group* - Free cash more than 50% market cap

LIBERUM: Judges Scientific* - FY22 ahead of expectations

Strix (KETL LN) - FY22 results in line; early signs of recovery in Controls

Strix has reported adjusted post tax profit in line with guidance, provided back in November, at £23.0m. Revenue of £106.9m is down 10.5% yoy and broadly in line with the Zeus estimate of £110.0m. The decline in revenue is a consequence of destocking across the supply chain in the Controls division. Both the Appliance (+1%) and Water (+8%) divisions showed organic growth yoy whilst benefitting from the addition of the Billi acquisition that completed at the end of November. Importantly, in terms

Judges Scientific FY Results – Outstanding results, Steady organic, M&A delivers in spades

Judges Scientific is a group involved in the buy and build of scientific instrumentation businesses. Testament to the strength of its highly engineered offer and global diversified customer base (offsetting Covid-induced earlier weaker order intake from China, although rebounding in December 2022), total revenue increased an impressive 24% to £113.2m (organic basis 8%), buoyed by Geotek, with adjusted PBT increasing a substantial 56.7% to £28.3m (FY2021: £18.1m), 4% ahead of our estimate of £27

Hybridan Small Cap Feast - 21 Mar 23

21 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 24 Mar 23

24 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

SHORE CAPITAL - Ultimate Products+ (UPGS, House Stock at 140p)

Promising second half

SHORE CAPITAL - Mpac Group (MPAC) - House Stock at 280p

Hybridan Small Cap Feast - 14 Mar 23

14 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 16 Mar 23

16 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv