BILBY (LON:BILB)
SECTOR – SERVICES
RATING – BUY*
MARKET CAP – £31.6m
CURRENT PRICE – 80p
TARGET PRICE – 85p
COMPANY DESCRIPTION
Founded as P&R in 1977, Bilby PLC is the holding company for four building services and utilities providers: P&R Installation Company Ltd.; Purdy Contracts Ltd; Spokemead Maintenance Ltd; DCB (Kent) Ltd. Bilby has a reputation for quality and long experience in the industry. Strategy is a ‘buy and build’ approach targeting similar contiguous operations.
FY17 Results, ahead across the board.
NORTHLAND VIEW
Reporting (unaudited) results for the year to 31 March 2017, Bilby announced revenue of £63.98m, 3.2% above our estimate. Gross contribution was £11.02m, a 17.2% margin, compared to our estimate of £10.6m, 17.1% margin.
FY17 EBITDA (adj.) was £3.91m, 8.6% ahead of our outlook (£3.6m). Operating profit (adj.) was £3.55m (our estimate: £3.44m). Pretax profit (adj.) was £3.32m, 9.2% above our estimate.
Bilby proposes a full year dividend of 1.75p/share (H1 0.25p).
During the year Bilby acquired DCB (for £4.0m) and Spokemead (for £8.7m), enabling expansion of services offered and market and customer reach. The company highlighted H2 contract wins – Carillon, Lambeth Borough, also Bexley and Tower Hamlets – supportive of future earnings momentum, whilst P&R led in the framework tender for gas support work for the South-East Consortium. DCB was awarded two major contracts for building and refurbishment by the Borough of Ashford and West Kent Housing.
FY17 results exceeded our expectations across the board – revenue, gross contribution and EBITDA. The acquired and integrated new operations – DCB and Spokemead – contributed to contract growth and, as Bilby notes, should maintain earnings momentum. Responsible for servicing over 300,000 social housing units Bilby is clearly a major contractor in London and the South East and has demonstrated its ability to grow through acquisition.
SAVANNAH RESOURCES (LON:SAV)
SECTOR – MINING
RATING – CORP*
MARKET CAP – £26m
CURRENT PRICE – 5p#
COMPANY DESCRIPTION
Savannah Resources is an exploration and development company with copper-gold projects located in Oman, a mineral sands project in Mozambique and lithium projects in Finland and Portugal.
Preliminary metallurgical test work from Portuguese lithium project
NORTHLAND VIEW
Metallurgical test work of a composite sample from the Mina do Barroso mining licence has been completed.
The single analysis of the sample defined a head grade of c. 1.95% Li2O and c. 0.9% Fe2O3.
Heavy Liquid Separation demonstrates a pure product c. 8% Li2O can be produced.
Flotation results without optimization achieved c. 83.7% Li2O recovery at c. 5.9% Li2O.
Microscopy confirms that the concentrate was dominantly spodumene with only minor petalite.
A 3,000 to 5,000m drill programme is expected to commence shortly, with a focus on defining a JORC mineral resource estimate.
The metallurgical test work on this single composite sample from Savannah Resources Portuguese lithium project demonstrates that a high-grade, low iron spodumene concentrate can be produced using commercially available technology. As the concentrate produced from the single sample is dominantly spodumene and it is also high-grade with low impurities, the Company believes the concentrate will be highly sought after by manufacturers of battery grade lithium.
SECTOR – OIL & GAS
RATING – CORP*
MARKET CAP – £3.7m
CURRENT PRICE – 3.8p
COMPANY DESCRIPTION
Petrel is an Oil & Gas exploration company with projects in the Porcupine Basin, and applications in Ghana.
FY16 Results; continues to be run conservatively
NORTHLAND VIEW
LBT increased to €256,505 in FY16 from €227,234 in FY15, due to an increase in administrative expenses.
Net cash decreased to €335,301 in FY16 from €795,647 in FY15.
Arbitration procedures against Woodside Energy continues in regards to its Irish Atlantic projects.
At its LO 16/24 and LO 16/25, located in the Porcupine Basin, Petrel is in the process of acquiring additional relevant seismic data.
In Ghana, Petrel (30%) is awaiting outstanding issues to be clarified and sold.
Petrel continues to be conservatively run and will continue to advance its Porcupine Basin licences, arbitration proceedings against Woodside Energy, and seek a resolution for its Ghanaian licence applications.