GYG Plc (LON: GYG) is the topic of conversation when Head of Research at Zeus Capital Mike Allen joins DirectorsTalk. Mike talks us through the key themes in GYG’s trading update, explains how this changes the forecast and shares his thoughts on the company valuation.
GYG (Global Yachting Group) released a trading update confirming that they have seen a positive uplift in trading at the start of the year and expect full year results to be ahead of current market expectations. The core refit business has seen continued improvements in the trading environment in the first four months of the year and further progress in the New Build segment has also contributed positively to the group’s performance. We are upgrading our forecasts as a result, and now expect adj. EBITDA in 2019E of €3.3m (vs. €3.0m previously) with adj. PBT of €1.6m (vs. €1.3m previously). In our view, this is an encouraging update and is further evidence that the trading environment in refit continues to improve as demand begins to normalise. Even on upgraded forecasts, our 2021E expectations remain 21% below the 2017 outturn at the adjusted PBT level highlighting the extent of a geared recovery on offer.