LONDON, April 15, 2015 /PRNewswire/ --
Edison Investment Research, a leading international investment research firm, announces the initiation of full coverage of Corac Group
Highlights of the analysis on Corac Group by Edison's industrial engineering analyst Roger Johnston are as follows:
Corac Group is a specialist engineering, technical and managed services group, structured around two market-facing divisions: Aerospace & Defence (54% of FY14 sales) and Energy & Process (46%).
With Corac yet to transition to profit, P/E-based peer ratings do not reflect the progress achieved. We therefore value Corac on a sum-of-the-parts basis using relative EV/EBITDA multiples. This yields an implied fair value of £30.9m or 7.3p/share. Our approach discounts the EBITDA loss-making Energy & Process Industries segment to zero, highlighting that the current rating is more than supported by A&D alone. We feel further evidence that the strategy is resulting in contract wins and that cash drain continues to reduce could act as a catalyst to re-rating.
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