Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

Improving operating and financial performance and lower net debt are key management objectives. FY18 results should provide some evidence of progress here, although our revised estimates now contain lower margin and dividend expectations in all three forecast years. Balance sheet clarity and margin recovery will be key share price catalysts, in our view.

Improving operating and financial performance and lower net debt are key management objectives. FY18 results should provide some evidence of progress here, although our revised estimates now contain lower margin and dividend expectations in all three forecast years. Balance sheet clarity and margin recovery will be key share price catalysts, in our view.

Low & Bonar - Re-set dividend expectations, targeting recovery

The new management team has a clear focus on improving financial and operational performance across the group and individual business units. H1 results bear testament to a number of challenges faced in the period but also showed signs that actions are beginning to take effect. We have reduced our EPS estimates (by c 20% this year, c 10% in the following two) to reflect more conservative margin assumptions.

The new management team has a clear focus on improving financial and operational performance across the group and individual business units. H1 results bear testament to a number of challenges faced in the period but also showed signs that actions are beginning to take effect. We have reduced our EPS estimates (by c 20% this year, c 10% in the following two) to reflect more conservative margin assumptions.

Low & Bonar - H1 profits disappoint but change is underway

A new senior management team is in place with a clear agenda to improve operational and financial performance. FY18 is going to be a transition year but investors will still want to see evidence of progress from the two strongest business units and in addressing specific issues in the other two. We have not changed estimates at this stage, but note the increased H2 bias flagged by management. The attraction of the current valuation will depend on the level of investor confidence in underlying prospects.

A new senior management team is in place with a clear agenda to improve operational and financial performance. FY18 is going to be a transition year but investors will still want to see evidence of progress from the two strongest business units and in addressing specific issues in the other two. We have not changed estimates at this stage, but note the increased H2 bias flagged by management. The attraction of the current valuation will depend on the level of investor confidence in underlying prospects.

A period of stability following management change and delivery on some flagged FY18 group projects would see a good return of interest to the fundamental Low &amp; Bonar investment case, in our view. There are clear markers for tracking progress and, in the near term, a 3.3% yield with the expected final dividend payment is a clear attraction.

A period of stability following management change and delivery on some flagged FY18 group projects would see a good return of interest to the fundamental Low &amp; Bonar investment case, in our view. There are clear markers for tracking progress and, in the near term, a 3.3% yield with the expected final dividend payment is a clear attraction.

Low & Bonar - Mixed trading, change underway

A year end update led to a c 5% reduction in our FY17 PBT expectation. More detail on trading performance will emerge with the FY17 results due on 31 January and we will review our group estimates fully at that time. Investors will look for signs of trading stability and prospective cash generation, while eyeing a dividend yield of c 6%. The search for a new CEO is unlikely to have concluded by then, in our view; the role is being covered in the short term by an experienced existing NED.

A year end update led to a c 5% reduction in our FY17 PBT expectation. More detail on trading performance will emerge with the FY17 results due on 31 January and we will review our group estimates fully at that time. Investors will look for signs of trading stability and prospective cash generation, while eyeing a dividend yield of c 6%. The search for a new CEO is unlikely to have concluded by then, in our view; the role is being covered in the short term by an experienced existing NED.

Low & Bonar - Slightly softer end to FY17

United Kingdom

Low & Bonar plc designs, converts, and finishes polymers and other specialist materials into products for niche markets.  The Company manufactures floors, yarns and fabrics, and plastics.

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