Edison Investment Research Limited
London, UK, 3 September 2020
Edison issues outlook on Appreciate Group (APPS)
The COVID-19 pandemic had a modest impact on Appreciate Group's FY20 results, which were in line with revised guidance. The impact on FY21 will be material and although there is a clear ongoing recovery in customer activity, peak Q3 trading will be crucial. No FY20 DPS was declared, but ongoing investment for medium-term digital-based growth should position the group well for the expected continuing recovery.
COVID-19 adds uncertainty to near-term forecasting and impedes reliable anticipation of the benefits of the strategic business plan. Our modified discounted cash flow (DCF) valuation falls to 60p (from 64p), a level which would represent 22x depressed forecast calendar 2021 EPS, consistent with comparator stocks.
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