Original-Research: MBH Corporation plc - von GBC AG

Einstufung von GBC AG zu MBH Corporation plc

Unternehmen: MBH Corporation plc
ISIN: GB00BF1GH114

Anlass der Studie: Research Comment
Empfehlung: BUY
Kursziel: 1,82 EUR
Kursziel auf Sicht von: 31.12.2021
Letzte Ratingänderung:
Analyst: Cosmin Filker, Marcel Goldmann

With four further acquisitions, our expectations were exceeded; price target slightly increased; share clearly undervalued

MBH Corporation plc (MBH for short) has continued to show a high level of acquisition activity compared to our last research report (see report dated 08.10.2020), as has been the case so far this year. On 30 October, the company had further strengthened its construction segment with the acquisition of 100% shares in Australian Cobul Constructions ('Cobul'). Cobul, which was founded in 2001, primarily acts as a developer of commercial properties, mainly in the public sector. According to MBH management, average annual revenues for the past financial years are A$11.6 million (GBP6.5 million) and as at 30 September 2020, the company has a 12month EBIT of A$2.7 million (GBP1.5 million). The purchase price of up to GBP 8.0 million is to be paid primarily through the listed 5.0% convertible bond. Only a small portion is to be paid through the issue of MBH shares.

In mid-November 2020, the acquisition of NVQ Nail & Beauty Specialists Training Academy Ltd ('NVQ') marked the tenth acquisition of the current financial year. With revenue of £0.3m generated in the last financial year (ending March 2020) and a positive earnings level, this company is a comparatively smaller acquisition. It is a strategic acquisition, as NVQ had already worked together with Acacia Training, which belongs to the MBH Group. Accordingly, this company will be included under Acacia Training. The purchase price of approximately GBP 0.6 million will be covered exclusively by the issue of convertible bonds.

On 26 November, MBH announced the further strengthening of its education segment through the acquisition of Academy One Group, a leading provider of sports education programmes. In the last financial year (ending 31 March 2020), Academy One had achieved revenues of £3.7m and should, in our view, show a positive earnings level. In this acquisition, too, the total purchase price of up to GBP 3.0m will be paid largely via a listed bond.

Finally, on 14 December 2020, MBH announced the acquisition of Victoria Gosden Travel Ltd. (VGT), a taxi company based in the UK. With revenues of approximately GBP 2.0 million, the company generated EBIT of GBP 0.28 million in 2020. Based on this, the purchase price of GBP 1.3 to 2 million also appears very attractive for this investment.

In our last research study in October 2020, we had only assumed the acquisition of two additional companies, which means that this assumption has now been exceeded. Consequently, we are adjusting our revenue estimates upwards for the current financial year and, on the basis of the higher forecasts, for the coming financial years. At the same time, we are reducing our earnings forecasts for 2020. These are to be understood as a consequence of the lower-than-expected construction sector, which was particularly affected by the impact of the Covid 19 pandemic. Two lockdowns in the UK and the increased restrictions in New Zealand have led to project postponements into the coming financial year.

We have calculated a new target price of GBP 1.64 (previously: GBP 1.55) or EUR 1.82 per share in our updated DCF valuation model. The slight price target increase is a consequence of our higher sales forecasts for the current and the coming financial years. We also assume that the shipped orders in the construction segment can be processed in the coming financial year. Based on the current price level of EUR 0.38, which is significantly lower, we continue to give the share a BUY rating and see it as clearly undervalued.

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/21948.pdf

Kontakt für Rückfragen
Jörg Grunwald
Vorstand
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung.htm +++++++++++++++
Date (time) completion: 16.12.20 (08:32 am) Date (time) first transmission: 16.12.20 (10:00 am)

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