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Analyst Q&A with Mike Allen at Zeus Capital: Gyg PLC (LON:GYG)

Gyg PLC (LON:GYG) is the topic of conversation when Zeus Capital’s Head of Research Mike Allen caught up with DirectorsTalk for an exclusive interview.


Q1: Gyg, or Global Yachting Group, issued a trading update on Tuesday, what key themes did you note in that statement?

A1: They issued a very positive trading update, they indicated that trading in the core refit business had continued to improve during the first 4 months of the year and we also saw further progress made in the new build segment as well. So, that led to more positive than expected trading patterns and we understand that the order book in both refit and new build continue to build well too.

Clearly, this is encouraging on the back of what was a difficult year in 2018 but demand in refit now looks to be normalising and I think the group has probably capitalised on this quite well too.

They do have some additional operation capacity that they’ve built in so hopefully they are well positioned to respond to any further market improvement.


Q2: Has this changed your forecasts in any way?

A2: Yes, we upgraded our forecast. So, 2019, we upgraded our revenue forecast by about 2% but that drove a 10% increase in EBITDA and 22% in earnings which is good news and we flowed through that upgrading to 2020 and 2021 as well.


Q3: What’s your view on Gyg PLC in terms of valuation or as an investment?

A3: Clearly, we are at the early stages of what we’d hope to be a geared recovery but I think it should be fairly encouraging that we’d like to think if you look at the 2017 outturn which we believe we could get back to at some point, the shares are on less than 10 times earnings. At the moment they are on a higher rating, just reflecting the recovery that we’ve got at the moment and hopefully, given by the momentum of the business, we should see further upward adjustments going forward.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.