DAVY VIEW

UDG has reported a strong set of FY 2019 results at the top end of EPS guidance, with both Ashfield Communications & Advisory (C&A) and Sharp (c.80% of profits) delivering ahead of expectations. Cash flow was also exceptionally strong, in part due to better cash management. We prudently leave our underlying EPS forecasts unchanged at this stage but think the group is well positioned into 2020. The stock is trading on 18.3x 2020 PE with balance sheet leverage of just 0.4x net debt/EBITDA. We reiterate our ‘Outperform’ rating.