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May 21 2019, 07:10 IST/BST
UDG has delivered a strong H1 19 performance. We estimate that underlying operating profit rose 6% and FCF conversion was very strong at 77%, putting UDG on track to meet its mid-term cash conversion target this year. In-line with its M&A strategy, it has also announced two deals in the Comms and Advisory space totalling up to $106m spend. We think both are excellent strategic fits. We have left our underlying divisional growth assumptions unchanged and upgrade our FY 2019 and FY 2020 by c.2% and c.5% on today’s deals. This puts the stock on 17.2x 2019 and 15.5x 2020 P/E, with just 0.5x net debt/EBITDA forecast for 2020.
May 21 2019, 07:10 IST/BST