Reaction – small upgrade, fully valued

PET has reported good progress at Underlying PBT level driven by 7.6% Group LFL growth. 1H PBT growth of 18.9% will moderate in 2H as the full effect of changes in billing Joint Venture Vets impacts the business. But this, like the resetting of food prices over the last two years, is by way of a one-time adjustment. Full year PBT guidance has been raised by 3-4% on the back of the better than expected Retail performance. Overall we believe the shares already discount successful implementation of

Pets at Home

After consensus-beating Prelims we present revised numbers and our updated view of the risk/reward position here. The trajectory of our forecasts has gone from down to flat over the next three years. The swing back into more positive profit delivery in Retail needs in our view to be gauged for longevity as delivery on the services side is likely to be constrained by re-setting the JV part of the business. Buying on Retail prospects is effectively partly a bet against Amazon it should be remember

Store experimentation and vet progress

PET is doing an IR-Sell-side round up. Our view of our meeting was broadly positive but with little of significance news-wise likely to emerge at the Prelims. There were some interesting insights into in-store experimentation. Our view is that the financials are still vulnerable to downward pressure in the short term but that new senior management will start to pivot the story here back towards the fundamentals and away from financial engineering in due course – which is encouraging.

In-line performance along same shape as recently, no change to estimates, no big news

Company has reported LFL sales change of +4.7% in Retail (WHE +3%) and +9.1% in the Vet Group (WHE +10%) resulting in a Group 3Q LFL of +5.1%. Full year 2018/19 PBT guidance has been re-confirmed in the £80-85m range previously guided. There has been no update on previous guidance of a slight decline in 2019/20. Omni-channel revenues grew by 41.5% to 9% of retail revenues.

Vet practice reorganisation

While full year profit guidance has been held broadly in line with consensus (adjusted for lost Vet JV fees) at £80-85m the decisions on restructuring the Vet Practice business mean a fundamental re-balancing of the investment characteristics here, with online pressure on pet food pricing set to continues but without as much offset from growth of the Vet business. This is clearly an unfavourable combination but one which is already reflected to some extent in the de-rating of the shares to aroun

Small Cap Breakfast

Jadestone Energy (JSE.TO)—an independent oil and gas production and development company focused on the Asia-Pacific region. Pro-forma production of 13.9 mboe/d, 2P reserves of 45.3 MMboe, and a 2P NPV10 of US$563.7 million . Offer TBA. Current mkt cap C$135m. Due early August. Ovoca Gold (to be renamed Ovoca Bio PLC) - RTO of IVIX, a Russian company developing a drug candidate for the treatment of female sexual dysfunctions. No monies to be raised, market cap of £8.5m, due 30 July Kropz PLC-I

Unsettling signs in the Vet Business

PET may be characterised as a Service and Merchandise business. Merchandise is predominantly Food (mainly Dog and Cat, within that mainly Dog) and Accessories while the most important part of the Service business is its various Veterinary Surgeon activities. These are mainly First Opinion Practices which are owned by Joint Ventures between PET and the practitioner. In the enhanced disclosures provided with these Prelims PET showed that they accounted for around one third of EBIT in 2017/18.

Encouraging on sales as price re-positioning (down) spreads

Merchandise LFLs of +6.8% slightly ahead of 2Q rate against weaker comparative benefiting from price investment and 77% growth of online (c half of the merchandise LFL), Services LFL +10.1%. Full year guidance elements unchanged. We expect small (1-2%) upward revisions to 3/18E PBT consensus today.

Running Hard to Stand Still

PAH has a variety of strategies which were discussed at the September Capital Markets Day. We believe that the most significant for investors are its current re-pricing actions in the Pet Food markets (seen as negative) and the economics of its largely Joint Venture Vets operation (seen as positive). This note looks at the pricing strategy in some depth.

Interims beat slightly

Interims beat slightly, FY guidance held, some major compositional changes, retirement of Group CEO.

N+1 Singer - All creatures great and small - An overview of the animal health sector

Animal Health is a vast market with multiple long-term growth characteristics and opportunities. In this report we have outlined valuations, M&A activity and the key growth drivers in two animal health subsectors: companion animal health and livestock health. Although the commercial positioning of the eight companies covered in this report (Animalcare, Anpario, Benchmark Holdings, CVS Group, Dechra, ECO Animal Health, Genus and Pets at Home) differ significantly, all have exposure to positive ma

Top Picks for 2023 - 2022 review and outlook for 2023

On 10 January last year, we set out our ten top stock picks for 2022, in what turned out to be a very poor twelve months for global equities, due to war, accelerating inflation, political instability and recession fears. Between 7 January 2022 and 31 December 2022, the AIM All-Share Index declined 30.0%, whilst the average performance of our ten top picks was -24.7%, a modest relative outperformance. In this note we discuss the performance of our 2022 top picks, equities trends in 2022, and our

LIBERUM: Vertu Motors - Helston acquisition an excellent strategic fit

Morning Note – 26 January 2023

SHORE CAPITAL - XP Factory+ (XPF, House Stock at 16p)

Hybridan Small Cap Feast - 23 Jan 23

23 January 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 object

YE update – another positive staging post for new team

The YE update shows that strong LFL and operational momentum was sustained in H2. Overall FY22 system sales grew by 20% and LFLs by 21%, led by volume/mix as the new CEOs actions begin to take effect. We make no forecast changes, but the positive H2 profitability trend cited is an important inflection point in the context of DPP now moving to sustainable profits. A well-capitalised balance sheet also means expansion is firmly on the agenda. The key point is that international evidence shows once

Hybridan Small Cap Feast - 19 Jan 23

19 January 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 object

SHORE CAPITAL - Motorpoint Group+ (MOTR) - House Stock at 145p

Hybridan Small Cap Feast - 24 Jan 23

24 January 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 object

Spring is finally coming

The market reacted positively to easyJet’s Q1 trading update as the meaningful pricing tailwind and the continued restoration of load factors allowed for consensus-beating results and guidance. The buoyancy was further fuelled by the low-cost rivals’ promising stance on summer activities. We expect an upgrade in the consensus and to our valuation.

Cenkos: Consumer Q1/23

Key Observations Despite a second successive decline in CPI during the quarter, inflation remained at one of the highest levels in 40 years (10.5% in December) contributing to a winter of discontent, with each day in December facing some form of industrial action. The industrial action materially impacted the consumer sector and provided an insight into the simmering frustration around the decline in real wages of the UK population. There were multiple examples of consumer corporate failures d

FY22 beat but FY23/24 growth trajectory moderated

SHORE CAPITAL - Rank Group^ (RNK, Buy at 91p) H1: Guidance unchanged but signs of life

Hybridan Small Cap Feast 11-10-2022

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Cooks Coffee Company ltd, an international coffee focused café chain which currently owns the Esquires Coffee and Triple Two Coffee Brands, intends to join the AQSE Growth Market. The Company is the 4th largest coffee focused café chain in the UK. Cooks Coffee is currently listed on the New Zealand Stock Exchange. Raising £1.5m through a rights issue in New Zealand and a private placeme

ZOO Digital (ZOO LN) - Initiation: Dominant species

ZOO Digital is a leading provider of end-to-end localisation and media services, for TV and film content, to streaming platforms such as Disney+. We expect the Group’s scalable technology to take market share in the large, underpenetrated dubbing market. ZOO should also benefit from increasing competition between streaming platforms and their aggressive international expansion plans. We forecast ZOO’s revenue jumps 76% from $70.4m in FY22 to $123.6m in FY25 with EBITDA margins expanding from 11.