reports
Hybridan Small Cap Feast - 29 October 2024
* A corporate client of Hybridan LLP ** Potential means Intention to Float (ITF) has been announced, or it is a rumour ***Arranged by type of listing and date of announcement ****Alphabetically arranged Share prices and market capitalisations taken from the current price on the day of publication Dish of the day Admissions: None Delistings: None What’s baking in the oven? ITF announced:*** Potential** Initial Public Offerings: 17th October 2024: Selkirk Group, a newly incorporated company establ...
- David O'Brien
FY trading update shows group on right track
Diales has issued an update for the year to September, stating it traded broadly in-line with consensus expectations. This is encouraging, suggesting profitability was largely unchanged in H2 and in turn, higher EBIT margins. The delivery of the hub and spoke model is gathering pace and the group re-branding to Diales completed in July. Net cash increased to £4.3m (H1 ’24: £3.6m) representing 26% of the NAV and leaves the valuation of the operating business at a significant discount to peers. ...
- Emily Liu
Hybridan Small Cap Feast 12 June 2024
12th June 2024 @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 objecti...
- David O'Brien
Interim Results - Good start to Q3, pipeline growing
The strategic plan implemented in late CY22 is working, with utilisation levels benefitting from the move to a hub-and-spoke operational model and a return to profitability in the smaller Middle East and APAC regions. H2 24 has started positively, particularly in Asia, as the relatively new office in Seoul is delivering on its early promise. The order pipeline continues to expand, benefitting from the rise in expert headcount. The Board has set aside £1m of ‘excess cash’ to buy back shares and ...
- David O'Brien
Trading update - activity remains on budget
The pre-close trading update from Driver Group delivered encouraging progress overall, with the smaller regions returning to profitability and a positive performance in the UK and Europe. The cost rationalisation was completed during the period following the move to a smaller London office. Cash continues to remain high, representing 32% of the market capitalisation. The strategy put in place in H2 of FY23 is expected to deliver higher revenues and profitability ahead of 2027, not least reflect...
Hybridan Small Cap Feast - 14 Dec 23
14th December 2023 Small Cap Team will take a break until Monday 8 January 2024 after this Friday 15th December. Merry Christmas to all our readers. @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...
- David O'Brien
New strategic plan to further improve margins
FY23 preliminary results delivered a strong turnaround in profitability on modestly lower revenues, highlighting action taken on costs and improved levels of utilisation. With a solid foundation now in place, we expect the new strategic plan to deliver an uplift in gross margins of c. 20% by the end of FY27. With plans in place to expand top line revenues plus a focus on added value expert services and related sectors, the outlook is bright and not yet reflected in the company’s current valuatio...
- David O'Brien
Strategy on track, despite timing issues
Driver Group has issued a trading update earlier than normal, citing a weak Q3 (reflecting a combination of timing issues and the later Easter) as reasons. Nevertheless, Q4 has witnessed a return to more normal patterns of trading and coupled with the rationalisation programme yet to impact results and the pipeline of orders looking more encouraging, we think the medium-term outlook appears favourable. The further improvement in net cash levels provides the Board with opportunities, not least in...
Hybridan Small Cap Feast - 13 Jun 23
13th June 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 objecti...
- David O'Brien
Fires extinguished, recovery builds
The interim results from Driver Group were ahead of the profits guidance provided during the pre-close update in late April. Progress on costs has been made as the rationalisation programme has kicked in. The EuAm (Europe & the Americas) region has generated a strong performance, with revenues and profitability at record levels and there is further scope on margins and utilisation levels. The smaller regions produced an improved performance, with expectations of delivering profits for the full ...
- David O'Brien
Welcome news of progress
The pre-close trading update from Driver Group was encouraging, with static revenues (signifying rising productivity), improving profitability and margins, and the move into the black for the first time in two years within the Middle East region. Cash levels continued to improve, highlighting the collection of doubtful debts and higher profitability. We expect the solid foundations put in place by the management team over the last 12-18 months will provide a strong base from which to grow mean...
Hybridan Small Cap Feast - 23 Feb 23
23 February 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 objec...
- David O'Brien
A profitable start to the new year
The new financial year has started strongly with a strong pipeline of opportunities and a lower cost base following an expanded rationalisation programme that resulted in most regions delivering a profit YTD in FY23. The results for FY22 were broadly in line with revised expectations, although the lack of forward visibility results in a continued suspension of estimates. That said, we expect FY23 to prove to be a turning point in the Group’s fortunes as utilisation levels improve now that projec...
- David O'Brien
A sturdier foundation, with positive momentum
Management has undertaken a significant rationalisation programme, successfully commissioned new ERP software, and explored means of reducing central costs to place the Group on a sounder footing moving forward, following an extremely challenging FY22 for Driver Group. The actions are paying off, with Q1 ’23 moving into profit, with further progress anticipated from Q2 onwards. While it is difficult to assess the valuation of a business with no published estimates, what is very clear is the dir...
- David O'Brien
Inflexion point
Driver Group is reaching an inflexion point as it looks to focus operations on the more profitable and less risky geographical regions. Following the H1 period end, management transferred 25 staff in the UAE and Malaysia and several contracts to an unnamed Counterparty in exchange for an advance payment of trade receivables (£2m) and help to collect further monies owed to the Group. As measured by adj. PBT, the interim results were in the middle of the guidance range. We think the resulting red...
- David O'Brien
An elegant solution
The decision to transfer the bulk of Driver Group’s UAE office to a Counterparty solves an ongoing cash collection issue and saves on exceptional (and cash heavy) costs at the same time: a masterstroke in our opinion. The level of cost savings will be a multiple of previous expectations, with improved cash flow, profitability, and higher consultant utilisation levels in Europe another positive side effect. This elegant solution gives confidence in the strength of leadership now in situ within th...
- David O'Brien
A strengthening of the Board
Driver Group is currently part way through a rationalisation of its Middle Eastern and APAC businesses, following losses generated in the regions during H1 ’22. The combination of the new CFO announced, Charlotte Parsons, and the commissioning of a new ERP software will result in more timely reporting procedures and improved management information. Charlotte has extensive experience within the consulting sector and providing high-level strategic and change management advice to several Boards. W...
Driver Group: 3 directors
Three Directors at Driver Group bought/maiden bought 92,500 shares at 27p. The significance rating of the trade was 67/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two year...
- David O'Brien
- Mike Jeremy
Fix Underway
With plans in place to review the Middle East and APAC regions, the trading update suggests that management were taken by surprise. The rationalisation process is likely to be more severe than originally anticipated, potentially including an overhaul of reporting procedures. We expect the focus to turn to gross margins, cash collection and higher utilisation levels – involving headcount reductions, office closures, and a focus on higher quality customers. The likely scale of the required action...
- David O'Brien
Reasons for optimism
Despite the delay, the results for the year to September were in-line with expectations at the adj. PBT level, with the level of dividend doubling y-o-y. The latter highlights the Board’s confidence in improved trading in H2 2022 and the levels of net cash. Q4 ‘21 enjoyed a pick-up in activity levels, which continued into the first two months of the new year, albeit disrupted briefly by Covid in December. With costs at a multi-year low, a rising number of fee earners operating in the added-value...
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