reports
- Toby Thorrington
ArborGen Holdings - Mixed trading, but solid long-term growth outlook
ArborGen’s H124 results highlighted contrasting trading conditions with challenges in the US offset by a strong performance from Brazil. However, despite the short-term issues, ArborGen remains in prime position to address increasing demand for its seedlings and to continue investment in genetic improvement to drive the switch to sales of higher-value, higher-margin seedlings in both markets. While this process plays out, underlying EBIT is set to increase fivefold in the next two years as we ex...
ArborGen Holdings (ARB): Green shoots appear in the spring
Edison Investment Research Limited ArborGen Holdings (ARB): Green shoots appear in the spring 26-Jul-2023 / 21:00 GMT/BST The issuer is solely responsible for the content of this announcement. London, UK, 27 July 2023 ArborGen Holdings (ARB): Green shoots appear in the spring We believe ArborGen Holdings is in prime position, not only to address increasing demands from clients for its seedlings, but also for its ongoing investment in genetic improvement to continue to drive the switch to sales of higher-value, higher-margin seedlings to all its key markets. While this pro...
Freelancer (FLN): Building the Amazon of services
Edison Investment Research Limited Freelancer (FLN): Building the Amazon of services 26-Jul-2023 / 21:00 GMT/BST The issuer is solely responsible for the content of this announcement. London, UK, 26 July 2023 Freelancer (FLN): Building the Amazon of services. Freelancer.com is one of the world’s largest marketplaces for freelancers. Structural tailwinds such as increased digitisation, remote working and a more globalised economy are providing businesses with the opportunity to seamlessly access specialised talent at low cost. Management’s goal is to develop the Amazon of ...
- Toby Thorrington
ArborGen Holdings - Green shoots appear in the spring
We believe ArborGen Holdings is in prime position, not only to address increasing demands from clients for its seedlings, but also for its ongoing investment in genetic improvement to continue to drive the switch to sales of higher-value, higher-margin seedlings to all its key markets. While this process plays out, underlying EBIT is set to increase five-fold in the next two years as gross margins return to and then exceed historical levels. We determine a value of NZ$0.49/share, implying attrac...
- Toby Thorrington
ArborGen Holdings - Seedling supplier’s long-term future looks green
Reflecting ArborGen Holdings’ (ARB’s) strategic shift to focus on Brazil and the United States, the company reported mixed H123 results: growth from Brazil boosted overall revenues by 61% over the prior comparable period, although US challenges and a higher amortisation charge led normalised operating earnings to fall US$1.2m y-o-y to a loss of US$0.6m. ARB made investments in Brazilian and US nurseries, adding capacity for about 38m seedlings. While H223 could be affected by ongoing inflationar...
- Toby Thorrington
ArborGen Holdings - Shifting focus to US South and Brazil
ArborGen delivered solid FY22 sales growth across continuing operations, with revenues up 11% to US$47.6m. Record US advanced genetic seedling sales, up 32% y-o-y, reflect the company's focus on advanced genetics. Management also completed its strategic review, shifting focus to the high-growth US South and Brazilian markets, divesting the Australian and New Zealand business, exploring opportunities in using trees to offset carbon emissions and strategically expanding in its core markets. ArborG...
- Toby Thorrington
ArborGen Holdings - Favourable balance of risk
After delivering earnings progress in a challenging FY21 trading year, ArborGen is operationally very well positioned to deliver on its strategy of improving the volume and mix of seedling sales in its key US markets. Behind this, business resilience is improving and net debt declining, so the medium-term risk appears to be to the upside, though this is yet to be reflected in the company’s share price in our view.
- Toby Thorrington
ArborGen Holdings - US sales slow in H221, positive outlook remains
ArborGen’s underlying H1 trading performance was robust, although the H2 US selling season has been slower than previously anticipated. Our headline FY21 PBT estimate is reduced by c 1% (or c 30% underlying before COVID-19 employment support monies) with no material change for FY22. An increase in supply of higher-value seedlings in the US remains on track and is expected to drive group earnings higher from FY22.
- Toby Thorrington
ArborGen Holdings - Key US market unaffected by COVID-19 thus far
ArborGen’s US sales appear to have fared well in H220 as management has reaffirmed guidance for FY20. While we are aware of COVID-19 risks – which will continue to be monitored – the seasonal H2 bias to dominant US sales along with current customer planting intentions suggest no reason to change the FY21 outlook for now. Consequently, our estimates are unchanged and show good year-on-year progress for both FY20 and FY21, generating low earnings multiples at the current share price.
- Toby Thorrington
ArborGen Holdings - Positive actions sustaining EBIT progress
ArborGen is set to deliver good year-on-year progress in FY20 despite constrained availability of advanced seedlings due to prior year weather effects. Net opex increases cause us to trim our current year earnings expectation. However, the addition of nursery capacity suggests that management remains confident in improving medium-term seedling volume and mix in the US to drive group profitability forward.
- Toby Thorrington
Rubicon - Growth to come after FY19 challenges
FY19 represented Rubicon/ArborGen’s first full year as a unified company under single parent ownership. Some restructuring activity and extreme weather events held back in-year sales performance and the latter also have implications for mix in the next couple of years. Nevertheless, ArborGen’s market positions remain strong and we believe that this will translate to good earnings growth in each of our estimate years, albeit at a slower rate than we previously anticipated. Our core DCF is now...
- Toby Thorrington
Rubicon - Well-positioned going into H2
Rubicon’s H1 performance contained typical seasonal trading features ahead of the more important H2 trading period and our earnings estimates are unchanged. We are encouraged to see a number of positive commercial steps being taken in each of the main countries, which will support future aspirations. Our earnings estimates are unchanged as is our previous DCF valuation analysis which indicated a NZ$0.74 per share valuation.
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
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