Hostmore - Reassuring AGM trading update

Hostmore’s AGM trading update was reassuring, with L4L sales for the first 22 weeks of -3%, being broadly consistent with the first 16 weeks (-1%). Guest opinion scores are improving, the cost reduction initiatives are coming through as expected, and the decline in energy spot prices is helpful. The focus remains on cashflow to reduce borrowings. It is too early in the year to consider any changes to forecasts, and we reiterate our 55p target price, implying 152% upside.

Hostmore - Refocused on recovery – a new cocktail

Hostmore has delivered FY22 results in line with expectations, successfully revised its banking facilities, negotiated with the master franchisor a deferral of all new openings to at least FY25 and right-sized the business through a cost-reduction programme, which is complete, with a clear focus on cash generation. We are reinstating forecasts and have changed our EPS (Dil. Adj.) to -0.4p from -0.6p for FY23E, to 1.6p from 1.8p for FY24E and we introduce a new forecast of 4.2p for FY25E. We have

Morning Note – 15 May 2023

Morning Note – 2 May 2023

Shopping Trolley - finnCap Consumer quarterly sector note

Better than expected to date: The January trading update season has been better than expected, with the ratio of upgrades to downgrades running at 26:16 out of the 101 trading updates that we have analysed. It’s a surprisingly positive start to the New Year which reflects (1) realistic expectations captured in consensus forecasts, (2) consumers’ determination to enjoy Christmas and protect important areas of personal expenditure and (3) a reduction in supply as competitors exit.

Morning Note – 10 January 2023

Shopping Trolley - finnCap Consumer quarterly sector note

Fulham Shore’s Franco Manca value-for-money brand is perfect for current market conditions in our view, despite pizza being a crowded segment. Pizza travels well, allowing the business to flex to delivery and take-out according to market conditions. The combination of high gross margins, net cash on the balance sheet and excellent FCF generation should allow it to cope with tougher market conditions AND still protect its expansion capex plans to increase EBITDA by +55% over the next three years.

Hostmore - Better than expected H1; cold reality on the menu

Hostmore delivered a marginally better than expected H1, but it’s not been a great start to H2 and the cold reality is that the consumer environment has worsened, putting pressure on revenue, with cost inflation – especially energy – also rippling through the P&L. Sensibly, Hostmore is slowing its opening programme to protect cash; it’s highly cash generative with plenty of financial headroom, and this should put it in a good position to exploit market opportunities when the time is right. We ar

Morning Note – 21 September 2022

Hostmore - Back on track

Hostmore has reassured with confirmation that, despite sector operating challenges, its like-for-like (l-f-l) revenues since 23 May are as expected in its May update, which assumed up to 8% lower l-f-l dine-in volumes on 2019 for the rest of 2022, mitigated by pricing. Organic expansion is also on track with the new 63rd+1st in Edinburgh part of five openings planned this year, while newly enhanced banking facilities reinforce a strong balance sheet. Despite the downward revision to our current

Morning Note – 11 July 2022

Morning Note – 22 June 2022

Assessing the key investment & valuation dynamics

We view XP Factory as a genuine growth stock. In this detailed note we show how it is capitalising on the secular themes driving the competitive socialising sector and generating superior site returns, organic growth and customer reviews. This is further enhanced by a strong set of interims, with an acceleration of LFL over the summer and no change to FY Dec’23 expectations. Prospects of a healthy future is backed by our base case 3-year EBITDA CAGR of 44% on steady state expansion, which rises

Kitchen-sinking forecasts…and cash is still ok

ZOO today provides an update on H1 trading and as well, the full-year outlook the result being material changes to FY24 forecasts, while we withdraw FY25 estimates. The driving force behind these changes is a combination of factors; more cautionary customer spend (as SVOD platforms are placing greater emphasis on balancing growth and profit) while more recently, protracted industrial action has introduced yet further disruption. As such, H1 revenue is set to be materially down at c.$21m vs. $51m

Morning Note – 27 September 2023

Growing up fast

Interims to June are very encouraging, with sales +12% organic (and +68% stated) to £18.1m - reflecting material market outperformance, as Zinc’s strategy and execution is clearly bearing fruit. Further, with The Edge now embedded (and performing well) the Group now also carries significant greater scale, sector and geographic diversification and better margins too (at 41% vs. 33% in 1H22). Together, these provide competitive advantages in our view. With FY23 revenue visibility now £35m (as well

Cornerstone FS+ (CSFS, House Stock at 12.5p) - Disposal of another non-trading subsidiary

Hybridan Small Cap Feast - 27 Sep 23

27th September 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 ob

SP Angel Technology: Cornerstone FS (CSFS.LN) - H1 2023 Strong Performance YTD

CSFS reported its financial results for the period ended 30 June 2023 with revenue of £3.6m and Adj. EBITDA of £0.2m, and profit before tax of £0.023m, in line with the trading update provided in May 2023, but well ahead of what our full year forecasts would indicate.

Morning Note – 25 September 2023

Hybridan Small Cap Feast 15-09-2023

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Announced ITF 12 July: Substrate Artificial Intelligence, an artificial intelligence company based in Spain that creates, buys and scales companies around AI in diverse sectors such as fintech, agritech, energy, human resources, and health, intends to join the Access Segment of the AQSE Growth Market. Admission delayed. Announced ITF 6 July: Blackpoint Biotech plc, a medical cannabinoids co

Big upgrades a function of non-cash lease accounting

There were no surprises in terms of FY23 EBITDA and net cash, both pre-reported. Non-cash treatment after IFRS16 right-of-use asset impairments has led to a substantial PBT/EPS beat, though, much of which feeds into FY24/FY25 forecasts with 78%/33% upgrades. This disguises a drop in underlying DPS cover and, as part of a capital distribution policy update, the final is reduced to 1.6p. This may disappoint some but has nothing to do with confidence in future prospects, and current trading is posi

LIBERUM: Safestay: Strong organic growth, acquisitions back on the horizon

Despite decent sales performance, profit warning spooks investors!

Kingfisher’s H1 FY23/24 lfl sales was 40bp ahead of market expectations but the PBT was 5.4% weaker. Although UK&I sales remained in the black, the performances in France and Poland were the pain-points. The Q3 lfl performance (to date) of -2.4% yoy is also below market expectations. We expect the pressure on earnings to continue during H2. Management has lowered FY23/24 PBT guidance to £590m (vs £634m earlier). We will reduce the target price by 7-8% but maintain our positive recommendation.

FY23 on track with further strategic progress

Interims show DPP is in good shape and responding positively to the new CEO’s actions. Order count is up (despite a soft macro backdrop), LFLs are strong and the proportion of stores transitioning to profitability is materially higher vs 12m ago. Strong summer trading in Poland and an easing of cost pressures underpin our decision to make no forecast changes FY23 being an inflection point in terms of moving into positive EBITDA (pre-IFRS16 basis). Overall, these interims are positive and support

Robust interims - on track for FY23

Tasty - Interim Results

Well-documented cost-of-living pressures continue to have a material impact on the casual dining sector, and Tasty is no exception. LFL sales rose +1.4% YoY in H1 to £21.7m, which was offset by material cost inflation (food, labour, utilities etc), leading to Adj EBITDA reducing to £1.1m (H1/22 £2.7m). Whilst trading conditions are likely to remain challenging in the near-term, we see grounds for optimism in FY24 – inflation is falling steadily and the Bank of England recently held interest rate