reports
- Robin Byde
Ricardo (RCDO LN) - Better positioned; delivery is key - HOLD
Following Ricardo’s H1 statement we make minor changes to our estimates for updated information on the defence unit disposal, acquisition of infrastructure consulting firm E3 Advisory (E3A), the revised general outlook and new financial targets. Despite the sell-off in the shares we think the outlook for global consulting activity, particularly in automotive & industrial, remains uncertain. Ricardo’s operating margins and cash conversion are too low. We note the stake building by Science Group (...
- Robin Byde
Ricardo (RCDO LN) - Strategy on track but order delays weigh - HOLD
We downgrade Ricardo to HOLD from BUY following a mixed pre close update issued for the half year. The mission to simplify and focus the Group’s portfolio is on track with the recent disposal of Ricardo Defense. That said, despite H1 order intake up 10% year-on-year, converting orders to billable activity is taking longer than expected and delays will weigh on full year forecasts. The numbers are noisy anyway with the disposal of Defense and acquisition of E3 Advisory, but our preliminary headli...
Ricardo: 2 directors
Two Directors at Ricardo bought 22,083 shares at 405p. The significance rating of the trade was 56/100. 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 years clearly showing Cl...
- Robin Byde
- Robin Byde
Ricardo (RCDO LN) - Looking oversold
All the metrics at Ricardo are now moving in the right direction but share price performance remains sluggish. We think part of the reason is that FY24A was somewhat turbulent, with restructuring, integration of acquisitions and uncertainty around the performance of the Automotive & Industrial businesses. FY25E should see a calmer focus; on organic growth, delivery against a record orderbook and further efficiencies to lift the operating margin. Automotive & Industrial activity has steadied. To ...
- Robin Byde
Ricardo (RCDO LN)
We believe the investment case for Ricardo is positive and upgrade our estimates following the trading update last week. Despite a weaker first half, Ricardo confirmed that trading to the year-end was in line with market consensus. Activity was strong across all units; notably the Automotive & Industrial division recovered well in H2. Our estimates were at the lower end of consensus, and the outlook is now more positive. FY24E adjusted PBT is increased by c.9% to c.£31m. Liabilities will also be...
- Andy Hanson
- Carl Smith
- Robin Byde
Industrials Round-up - 08 July 2024
The UK industrial sector continues to strengthen with June output and order books increasing for a second consecutive month, albeit at a slightly slower pace than in May. We think it is too soon to declare conclusively a turnaround, but recent industrial and economic data have been reassuring, as inflation returned to the BoE’s 2% target and sentiment remained positive.
- Andy Hanson
- Carl Smith
- Robin Byde
Zeus Industrials Round-Up - 11 June 2024
As we approach the end of H1, recent industrial and economic indicators display an encouraging picture, cautiously supporting optimism for the latter half of 2024. UK manufacturing returned to growth in May, with many countries recording higher PMI readings. Inflation data across the globe was also encouraging, prompting the Bank of Canada and ECB to cut interest rates last week. UK GDP growth for Q1 was also positive and overall business confidence appears to have improved.
- Robin Byde
Ricardo (RCDO LN) - Getting there
Ricardo has been busy, making useful tuck-in acquisitions and earlier this week announcing a c.$400m contract extension to the US Army’s Humvee fleet upgrade programme. Full year results yesterday were also positive, combined with good progress on the transformation of the divisional portfolio. Order intake was up 23% (£522m), constant currency revenue was up 14% (£445m) and operating profit up 16% (£34m). The operating margin ticked up slightly to 7.6% (vs. 7.4% in FY22a); but this was still we...
- Liberum Research Team
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JE00BLR94N79 INVINITY ENERGY
- Liberum Research Team
APH ALLIANCE PHARMA PLC
DPH DECHRA PHARMACEUTICALS PLC
RCDO RICARDO PLC
EZJ EASYJET PLC
KIE KIER GROUP PLC
YNGA YOUNG & CO.'S BREWERY PLC A
PETS PETS AT HOME GROUP PLC
LMP LONDONMETRIC PROPERTY PLC
RMG ROYAL MAIL PLC
SPI SPIRE HEALTHCARE GROUP PLC
FEVR FEVERTREE DRINKS PLC
AJB AJ BELL
BYIT BYTES TECHNOLOGY GROUP PLC
JE00BLR94N79 INVINITY ENERGY
- Alex O’Hanlon
- Joe Brent
- Sanjay Vidyarthi
LIBERUM: Ricardo* - Acceleration towards "One Ricardo"
We attended Ricardo’s CMD yesterday and make 5 key points: 1) Management indicated that trading is in line with expectations for FY 23. 2) Ricardo’s end to end capability across many markets and geographies makes it unique. 3) Strategic and digital investment will help accelerate growth and the margin progress. 4) A performance culture is being created which will help ensure delivery to clients through “One Ricardo”. 5) The target for FY 27 to more than double underlying operating profit in the ...
- Liberum Research Team
- Liberum Research Team
- Liberum Research Team
- Liberum Research Team
- Liberum Research Team
- Alex O’Hanlon
- Joe Brent
- Sanjay Vidyarthi
LIBERUM: Ricardo* - Succesful McLaren re-bid underpins expected volume...
Ricardo has announced its success on the contract re-bid with McLaren. The contract takes the relationship with McLaren into the next decade and adds visibility. The contract underpins the expectation of rising volumes at McLaren at similar margins. There is still scope for further growth with McLaren, and other OEMs, in new areas. We maintain our TP of 659p based on a c. 20% discount to peers.
- Robin Byde
Ricardo (RCDO LN) - Up with events pending CMD
We have been positive on RCDO as trading and order intake has recovered, but we think the stock will now mark time pending the CMD and strategy update in May. We refresh our estimates and valuation after recent H1s, and another tuck-in acquisition. For FY23e our revenue is lifted by 2% to £429m and operating profit lifts by 4% to £34m. Our EPS is held back slightly (up 2% to 33.1p) with higher assumed taxes and cost of debt. Similar upgrades are applied in FY25e. With higher estimates, record or...
- Liberum Research Team
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