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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 12-
month 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 lock-
downs 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
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Date (time) completion: 16.12.20 (08:32 am)
Date (time) first transmission: 16.12.20 (10:00 am)

-------------------übermittelt durch die EQS Group AG.-------------------


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