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Northland Capital Partners View on the City - Management Resource Solutions

Northland Capital Partners View on the City - Management Resource Solutions

Management Resource Solutions (LON:MRS)

SECTOR – SUPPORT SERVICES

RATING – CORP*

MARKET CAP – £9.1m

CURRENT PRICE – 4.3p#

ANALYST – MIKE JEREMY

 

Year-end June

2017A

2018A

2019E

2020E

 

Revenue (A$m)

52.4

69.1

No forecasts provided

EBITDA (A$m)

(4.9)

12.3

Adj. pre-tax Profit (A$m)

(10.6)

6.0

Adj. EPS (A$c)

(13.0)

3.0

DPS (A$c)

-

-

Net Cash/(Debt) (A$m)

(15.7)

(20.4)

P/E (x)

-

3.2

Dividend yield (%)

-

-

EV/EBITDA (x)

(7.1)

3.2

 

SOURCE: Northland Capital Partners Limited estimates. #Priced at prior trading day close. *Northland Capital Partners Limited acts as Nomad and Broker to Management Resource Solutions plc and therefore this information should be viewed as a Marketing Communication.  1GBP=A$1.77.

 

Trading update – FY19 in-line with board expectations

 

NORTHLAND VIEW

  • In a Trading Update Management Resource Solutions reported “the first six months of FY19 was a period of continued progress for the Group.”
  • The company provided updated guidance for FY19, expecting trading in-line with Board expectations:

§  Net Revenue of A$73.0m - 75.0m (FY18: $69.1m);

§  EBITDA of A$12.0m - 14m (FY18: $12.3m);

§  Profit before Tax $8.0m - 9.0m (FY18: $6.0m);

§  EPS of A4.5 - 5.1c per share (2.6p - 3.0p per share at an A$/GBP exchange rate of 1.7).

  • Performance has been driven by strong demand for MRS' services in the resources and construction markets in Australia, continued investment in core profitable assets and rigorous cost management, plus a strong focus on new markets with higher margins. The process of restructuring, review of assets and depreciation, debt restructuring and improved internal synergies will continue through FY19.   
  • The Group intends to announce Interim Results on 28 February.

 

  • MRS delivered a strong 2017/18 turnaround. We have noted high levels of Australian government spending on core civil infrastructure and growth in the construction sector, factors which are echoed in the company’s own confidence in its outlook, augmented by the restructuring measures and improvements in operational efficiency the company has put into action.

COMPANY DESCRIPTION

Management Resource Solutions plc through its subsidiaries Bachmann Plant Hire and MRS Services Group, offers plant hire, equipment repair, refurbishment and fabrication, mine rehabilitation, earthmoving, road construction and support services.

 

1. Northland Capital Partners Limited (“Northland”) acts as Nominated Advisor and/or Broker to the company.

2. Northland) and/or its affiliates companies do beneficially own 1% or more of any class of the issuer’s equity securities, as of the end of the month immediately preceding the date of issuance of the research report or the end of the second most recent month if the issue date is less than 10 calendar days after the end of the most recent month. 

3. The authoring analyst or any associate of the authoring analyst does maintain a long or short position in any of the issuer’s securities directly or through derivatives, including options or futures positions.

4. Northland, its affiliated companies, partners, officers, directors or any authoring analyst of Northland has provided services to the issuer for remuneration during the preceding 12 months other than investment advisory or trading services.

5. Northland or any of its affiliated companies has performed investment banking services for the issuer during the 12 months preceding the date of issuance of the report.  

6. A partner, director, officer, employee or agent of Northland or any of its affiliated companies is an officer, director, employee or advisor of the issuer.  Disclosures are applicable for all companies

7. The authoring analyst, or any associate of the authoring analyst, has viewed the material operations of the issuer. 

8. The authoring analyst, or any associate of the authoring analyst, received reimbursement for travel expenses.

9. Northland makes a market in the securities of this company.

 

 

DISCLAIMER

This document is provided solely to enable clients to make their own investment decisions. It may therefore not be suitable for all recipients and does not constitute a personal recommendation to invest. It does not constitute an offer or solicitation to buy or sell securities or instruments of any kind. If you have any doubts about the suitability of this service, you should seek advice from your investment adviser. This document is produced in accordance with UK laws and regulations. It is not intended for any person whose nationality or residential circumstances may render its receipt unlawful.

The past is not necessarily a guide to future performance. The value of shares and the income arising from them can fall as well as rise and investors may get back less than they originally invested. The information contained in this document has been obtained from sources which Northland Capital Partners Limited believes to be re¬li¬able. The Com¬pany does not warrant that such information is accurate or complete. All estimates and prospective figures quoted in this report are forecasts and not guaranteed. Opinions included in this report reflect the Company’s judgement at the date of publication and are subject to change without notice. If the investment(s) mentioned in this report are denominated in a currency different from the currency of the country in which the recipient is a resident, the recipient should be aware that fluctuations in exchange rates may have an adverse effect on the value of the investment(s). The listing requirements for securities listed on AIM or PLUS markets are less demanding, also trading in them may be less liquid than main markets.

Northland Capital Partners Limited and/or its officers, as¬sociated entities or clients may have a position, or other material interest, in any securities men¬tioned in this report. Northland Capital Partners Limited does not provide recommendations on securities of firms with which it has a corporate relationship. More information about our management of Conflicts of Interest, Investment Research Methodology & Definition of Recommendations can be found at www.northlandcp.co.uk 

Northland Capital Partners Limited is authorised and regulated by the Financial Conduct Authority and a Member of the London Stock Exchange.

Published by/copyright: Northland Capital Partners Limited, 2013. All rights reserved

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