Edison Investment Research

Market Commentary - Housing, Infrastructure, Construction and Services 1st February 2017

Telford Homes has spent £30m on an ex London Electricity site in Tower Hamlets, it is announced this morning.The sector moves yesterday were mainly positive though there was no substantial shift in any direction.

Fitbit – boredom bites. User indifference likely to drive further estimate cuts in 2017.

Fitbit issued a horrible profit warning as users appear to be becoming bored with fitness tracking despite Fitbit’s efforts to drive engagement through the ecosystem.

HBM Healthcare Investments: two IPOs and Q316/17 results

Public offers of portfolio holdings at significant upside to carrying values

Swiss-listed healthcare investment specialist HBM Healthcare Investments (HBMN) has seen a material increase in NAV from the initial public offerings of two of its private portfolio holdings, ObsEva and Anaptys Biosciences. Both companies listed on the US NASDAQ exchange on 26 January.

Market Commentary - Housing, Infrastructure, Construction and Services 31st January 2017

It’s pretty quiet on the last day of the month in terms of news flow. There was no news yesterday at any stage from Atkins or CM2H following the press reports that they are courting each other. SIG was the backmarker on a day when most HICS stocks took a tumble.

Google Enterprise – No G man - Radio Free Mobile

One area where Google has a chance with the enterprise is in the cloud, but there it is already very far behind both Amazon and Microsoft

Market Commentary - Housing, Infrastructure, Construction and Services 30th January 2017

Two tiddlers make the news with trading updates today and consultant WYG has a new Chairman. James Halstead, a company that makes and distributes flooring in the UK indicated on 2nd December, five months into the new financial year, that the sky was falling due to weak sales and rising costs.

Two tiddlers make the news with trading updates today and consultant WYG has a new Chairman. James Halstead, a company that makes and distributes flooring in the UK indicated on 2nd December, five months into the new financial year, that the sky was falling due to weak sales and rising costs. Press chatter about CH2M and Atkins merging is likely to have some credibility, in our view. Our sense is that this one is unlikely to work as the ownership structure is hard to envisage and Atkins come with a £300m pension deficit costing £33m+ in deficit payments alone each year; the Trustees will want substantial guarantees in any deal.

Cloud and mobile drive 3 for 3

Cloud and mobile drive 3 for 3

Tullow’s cost of capital: Uganda farm-out implies a return for Total of 19%

Tullow’s recent deal with Total in Uganda indicates it (along with the E&P sector) still faces a difficult funding situation, with the implied cost of capital for Tullow of 19%.

EnQuest acquisition: Ability to extract net economics (NAV) will be demonstrated over time

EnQuest’s agreement to take over operatorship of Magnus, SVT and associated infrastructure is a material operational undertaking, especially when considered in parallel with commissioning and ramp-up of production at Kraken. The transaction will involve EnQuest taking on several hundred onshore and offshore staff and contractors. With this in mind, EnQuest’s staged approach, which involves taking on just 25% of Magnus and an additional 3% of SVT at the outset, appears to be sensible. The combination of deferred consideration payments, a ‘call’ option on additional equity in the transaction assets and downside protection mechanisms suggest that EnQuest is backing its ability to maximise value from late-life assets without exposing shareholders to potential downsides. EnQuest has until 15 January 2019 to exercise its option over an additional 75% of Magnus and related transaction assets, giving it time to understand the operational complexities as well as study decommissioning options before taking on risk. 

Market Commentary - Housing, Infrastructure, Construction and Services 27th January 2017

T Clarke has the stage to itself today with its trading update for the year ended December 2016. Optically T Clarke appears to be in good shape based on some key financial numbers. But as we suggest above the numbers need to be treated quite carefully as there are a considerable number of adjustments. The biggest riser in the HICS segment was up 1.7% and the largest loser was down 1.9%. By the way the companies concerned were Kier as the riser and SIG as the loser.