With Ebitda below our expectations and debt higher than we forecast, our confidence in a positive outcome for shareholders continues to diminish. As such we reduce our target price to 7p, reflecting the group’s balance sheet value of its investment in Matthew Clark of £44.5m. Hold.
JAMES MARTIN | BARCLAYS CAPITAL
Operating performance was again weak in the core portfolio with quarter four net income down 4.6 per cent, which is not ideal as a backdrop for convincing bondholders to take on more risk. There is better value in Spirit bonds with returns of eight per cent plus, both of which have superior assets.
DOUGLAS JACK | NUMIS SECURITIES
Full year profit is ahead at £64m (our forecast £62m; consensus £60m). A decline is expected in 2013, prior to stabilisation in 2014. As a result, we are downgrading 2013’s profit forecast by 22 per cent and moving to “hold”, awaiting the outcome of imminent discussions with bondholders.