## MANU, sales recovering fast

Current, target price USD16, 20 (+26%)

Last, next 12-months cashflow -USD 39, +107 million

March 29th, 2021

1 minute read

Sales

Cashflow

1 minute read

Sales

- Sales were up very strongly again by 58% in the fourth quarter to GBP 172 million.
- This is after a 33% recovery in the third quarter & brings the average quarterly growth up to +8%.
- We predict average quarterly growth of 6% in this next 12 months & sales to reach GBP 212 million by the fourth quarter of 2021.

Cashflow

- But cashflow was negative again at -GBP 38 million in the fourth quarter from positive +GBP 9 million in the third quarter.
- The quarterly average cashflow is now -GBP 10 million.
- We assume lower investment spending of GBP 28 million which with higher sales gives a positive average quarterly free cashflow of +GBP 27 million in this next 12 months.

## Sales recovering, cashflow to turn positive, some de leveraging, not cheap, but higher target price...

Balance sheet

Profit

Value

- The net leverage of cash minus total liabilities was -GBP 895 million in the fourth quarter, better than the -GBP 923 million in the third quarter, but worse than -GBP 796 million a year ago.
- With our forecast positive cashflow & a dividend payout of GBP 59 million...
- ...net cash will improve to -GBP 847 million in 12 months time.

Profit

- Net profit was positive again GBP 64 million in the fourth quarter form -GBP 30 million in the third quarter.
- The cash cost ratio of net profit add non cash costs minus sales as a percent of sales was lower, 59%.
- We use the avenge 69% to predict a positive profit of +GBP 196 million in this next 12 months.

Value

- MANU has paid out capital of GBP 66 million in the last five years.
- At the current market value GBP 1.9 billion, it’s 29X capital paid, 5.9X sales, 1.3X assets, 3.5X equity with a 36% profitability & a 3.1% yield.
- Our cashflow forecast is GBP 107 million. At 1.6% with a 0.5X adjustment, gives a higher target price of USD20.