Industrials

Report by Iron Blue Financials

Following publication of its FY24 registration document, Iron Blue increases their SGO score to 27/60 (newly top quartile). This principally reflects FY24’s P&L benefit from compression in the expense for inventory and bad debtor impairment provisions, which could provide a tough comp effect in FY25. They also note two new contingent liabilities related to a new Grenfell Tower claim brought against SGO subsidiaries as well as assumed Australia asbestos liabilities with FY24’s CSR acquisition. For the first time the FY24 annual report quantified SGO’s reverse factoring activities (€106m). Iron Blue continues to flag sustained stripped out costs and an elevated gap between PPE capex and the P&L depreciation charge.

Industrials

Report by Iron Blue Financials

SGO’s Iron Blue score increases to 26/60 (newly top quartile / fertile grounds for shorting). This reflects an expanded gap between PPE capex and the P&L depreciation charge (14% of PBT adj, vs. 11% and 7% the two previous years) and another increase in receivables factoring (+6% y/y, +40% since FY20). Stripped out one-off costs remained elevated (10% of FY23 PBT adj). A new contingent liability was named in FY23 concerning competition authority investigations into the additives and admixtures sector in the EU, UK and Turkey, while class actions were instituted in the US and Canada. SGO has also continued to consolidate its Russian operations despite seemingly operating independently from the rest of the group. Iron Blue calculates that €112m of gross cash was stranded in Russia.