reports
- Liberum Research Team
- Liberum Research Team
- Liberum Research Team
- James Allen
- Nick Anderson
LIBERUM: DWF Group - Debatably Wants Funding
DWF’s trading update suggested net revenues are in line but PBT is likely c.5% below our estimate and further below consensus. Management remains confident in the outlook, but ambitious yoy PBT growth of 25% makes FY 24 estimates look stretched. Lock-up days have increased from 179 days to c.190 days and net debt is expected to be much higher than our estimate of £80m at c.£95m, indicating poor cash generation. The trend of net debt coming in much higher than expected has therefore continued. We...
- Liberum Research Team
- Liberum Research Team
- Mike Allen
- Rachel Birkett
- James Allen
- Nick Anderson
LIBERUM: Professional Services - Balance sheet strength critical
As the macroeconomic backdrop worsens, we favour quality names with strong balance sheets that can easily withstand a deterioration in trading. Our simple scorecard system highlights Keystone and Gateley as the high-quality stocks to own. Both generate cash and have strong balance sheets and few exceptionals, but they trade 38% and 9% below their historic multiples, respectively. Our scorecard also indicates that DWF and Knights are the stocks to avoid, and this is supported by our balance sheet...
- Andy Hanson
- Bob Liao
- Carl Smith
- Mike Allen
- Rachel Birkett
- Robin Byde
- Robin Savage
- Andy Hanson
- Bob Liao
- Carl Smith
- Mike Allen
- Rachel Birkett
- Robin Byde
- Robin Savage
Zeus Top Picks 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 ...
- Mike Allen
Audio Note: DWF Group – Resilient performance in a challenging environ...
In this audio note, Zeus’ Mike Allen summarises the investment case for DWF Group. H1 FY23 Results: Group revenue of £179.1m is +3.4% YOY which we see as a robust performance versus a strong prior year comparative and against a turbulent economic backdrop. Listen to the audio note below, and read the full research here. Listen to all episodes of the Zeus Research team Audio Notes here. This content is issued by Zeus Capital Limited (“Zeus”) (Incorporated in England & Wales No. 4417845), w...
- Mike Allen
- Rachel Birkett
DWF Group (DWF LN) - Resilient performance in a challenging environmen...
• H1 FY23 Results: Group revenue of £179.1m is +3.4% YOY which we see as a robust performance versus a strong prior year comparative and against a turbulent economic backdrop. Legal Advisory grew 3.8%, with Connected Services +15.5%, offset by a decline in Mindcrest -16.6% YOY as a flagship contract ended and an increasingly competitive marketplace resulted in aggressive pricing of work. All divisions are well positioned with a strong pipeline to accelerate growth in H2. Higher direct costs have...
- Mike Allen
- Mike Allen
- Rachel Birkett
DWF Group (DWF LN) - EPS enhancing transaction
DWF has reached an agreement to acquire Whitelaw Twining Law Corporation, a leading independent Canadian law firm. This is expected to be EPS enhancing in the first full year of ownership, and we will formally put this in our forecasts closer to completion post H1 results on 8 December.
- Mike Allen
ZEUS PODCAST: A Different Perspective podcast: Mike Allen, Head of Res...
In this episode, Nick Searle speaks to Mike Allen, Head of Research at Zeus. Mike explains how he entered the industry, and explains how the research offering is structured at Zeus. He also gives some thoughts on his top picks in these turbulent markets. Click to listen and subscribe to the podcast: /exclusives/3837477006/
- Mike Allen
- Rachel Birkett
Audio Note: DWF Group - Accelerating growth and upgraded outlook
In this audio note, Zeus’ Mike Allen summarises the investment case for DWF Group. Results were well flagged at a trading update in May. Net Revenue of £350.2m is +3.6% YOY, with LFL growth of 7%. Adjusted PBT of £41.4m is +21.1% YOY reflecting a 170bps increase in PBT margin to 11.8%.
- Mike Allen
- Rachel Birkett
DWF Group (DWF LN) - A record year of strategic progress
• FY22 Results: Results were well flagged at a trading update in May. Net Revenue of £350.2m is +3.6% YOY, with LFL growth of 7%. Adjusted PBT of £41.4m is +21.1% YOY reflecting a 170bps increase in PBT margin to 11.8%. Adjusted EPS of 10.7p was +45% YOY, delivering sector leading growth in profitability, reflecting strong progress made in operating efficiencies. DPS of 4.75p is progressive, +5.6% YOY (FY21A: 4.5p) but below our estimate of 5.9p. Net debt of £71.8m is £11.6m higher YOY, driven ...
- Mike Allen
- Rachel Birkett
DWF Group (DWF LN) - On track, growing confidence
DWF has announced it is on track to deliver our FY22 adjusted PBT forecast despite some challenges particularly on utilisation during H2. Lock up days also continue to fall, and we sense increasing confidence in delivering medium-term strategic growth, reflected in a growing M&A pipeline. We continue to believe DWF is significantly undervalued, and the current valuation is at odds with its execution to date, strong growth outlook and sector leading dividend.
- Mike Allen
- Rachel Birkett
DWF Group Plc (DWF LN) - Growth, income, quality earnings
Transformation complete: We believe the strategic change programme unveiled by management in July 2020 has been successfully executed. The business model has been streamlined with attractive organic growth opportunities identified. A focus on operational excellence has delivered a meaningful reduction in the cost: income ratio which stood at 39.1% at H1 FY22, a 130bps improvement YOY. New rigour around working capital management has resulted in a meaningful reduction in lock up days, down 15 day...
DWF GROUP PLC. sees an upgrade to Positive due to a better fundamental...
The general evaluation of DWF GROUP PLC. (GB), a company active in the Business Support Services industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 4 out of 4 possible stars while its market behaviour can be considered as defensive. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Positive. As of the analysis date January 14, 2022, the closing price was GBp 1...
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