SandpiperCI Group — Growing undeterred

SandpiperCI Group (TISE International Stock Exchange: SANDPI)

Last close As at 21/12/2024

92.00

0.00 (0.00%)

Market capitalisation

GBP92m

More on this equity

Research: Consumer

SandpiperCI Group — Growing undeterred

SandpiperCI Group’s FY22 results confirm another outstanding performance following a year that was once again affected by pandemic-related challenges. The food retail side of the business continued its industry beating performance; the non-food shops were affected by some forced closures but showed significant growth versus the prior year, and footfall trends have continued to improve. We expect FY23 to be characterised by an underlying slowdown in food retail and a further improvement in non-food, as shopping habits return to normal. The inflationary environment is likely to provide a tailwind to revenues, though we broadly maintain our profit forecasts at this juncture given the prevalence of cost inflation, which is likely to adversely affect margins.

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Written by

Consumer

SandpiperCl Group

Growing undeterred

FY22 results

Retail

28 June 2022

Price

92p

Market cap

£92m

Net debt/cash (£m) at xx xxxx

13.6

Shares in issue

100m

Free float

100%

Code

SANDPI

Primary exchange

TISE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

NA

NA

NA

Rel (local)

NA

NA

NA

52-week high/low

98p

82p

Business description

SandpiperCI operates a high-quality portfolio of retail brands covering food, clothing and specialist products. It primarily operates franchise stores but also a number of its own food convenience stores. It is the leading Channel Islands retailer and is also present in Gibraltar and the Isle of Man.

Next events

H123 results

November 2022

Analysts

Sara Welford

+44 (0)20 3077 5700

Russell Pointon

+44 (0)20 3077 5700

SandpiperCl Group is a research client of Edison Investment Research Limited

SandpiperCI Group’s FY22 results confirm another outstanding performance following a year that was once again affected by pandemic-related challenges. The food retail side of the business continued its industry beating performance; the non-food shops were affected by some forced closures but showed significant growth versus the prior year, and footfall trends have continued to improve. We expect FY23 to be characterised by an underlying slowdown in food retail and a further improvement in non-food, as shopping habits return to normal. The inflationary environment is likely to provide a tailwind to revenues, though we broadly maintain our profit forecasts at this juncture given the prevalence of cost inflation, which is likely to adversely affect margins.

Year end

Revenue
(£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

01/21

200.4

5.1

4.09

3.00

22.5

3.3

01/22

210.7

7.3

5.82

3.30

15.8

3.6

01/23e

216.1

6.9

5.50

3.50

16.7

3.8

01/24e

221.4

6.4

5.15

3.60

17.9

3.9

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

FY22 results

FY22 revenue of £210.7m was up 5.1% y-o-y while trading EBITDA of £12.7m was up 12% y-o-y. Net debt reduced by £4.0m during the year to £13.6m, despite the acquisition of Red Group for £0.9m (net of cash acquired). We note that the food retail business witnessed like-for-like sales growth of 16% over two years, which undoubtedly benefitted from the pandemic, but the performance was materially stronger than food retailers in mainland Britain during the same period.

Expansion to drive growth in the long term

Sandpiper has leveraged its relationships with its franchise partners to introduce their brands in additional geographies, while finding opportunities in existing geographies, such as the acquisition of Le Cocq’s Stores in Alderney in 2021. In our view, there are some opportunities for in-fill across existing geographies and scope for entry into new territories, although we believe the larger long-term opportunity is likely to be an expansion into an adjacent segment such as hospitality.

Valuation: Fair value of 130p

We value Sandpiper primarily on a DCF basis. We have rolled forward our DCF model and increased our WACC assumptions to reflect rising interest rates. Our model assumes medium-term sales growth of 3.5%, terminal growth rate of 1.5% and broadly flat margins. At a WACC of 8.7% this results in an unchanged fair value of 130p/share. While there are not many direct peers, Sandpiper trades on a CY22 P/E of 16.6x and EV/EBITDA of 9.1x, a c 25% premium to a peer group of food retailers and franchisors. We believe a premium is justified by Sandpiper’s significant freehold property portfolio and its attractive and well-underpinned dividend yield (3.8% in 2022).

FY22 results

FY22 revenue of £210.7m was up 5.1% y-o-y while trading EBITDA of £12.7m was up 12% y-o-y. Net debt was reduced by £4.0m during the year to £13.6m. The food retail business witnessed like-for-like sales growth of 16% over two years, a stronger performance than food retailers in mainland Britain. Gross margins were up 80bp during FY22 and trading EBITDA margins were up 40bp. As discussed above, we expect the food retail side of the business to decelerate in volume terms as trading normalises in FY23, while the non-food retail business should continue to recover as consumer footfall improves. In addition to these trends, inflation is starting to feature across the entire business. We expect FY23 revenues to see some benefit from this as prices rise, and of course the food retail side is less discretionary and hence less likely to see an adverse impact on volumes (though downtrading could start to feature). We also expect rising costs, however, and hence our profit forecasts are broadly unchanged. We illustrate the changes to our forecasts below.

Exhibit 1: Old versus new forecasts (FY22–24)

Year end January
(£000s)

FY22e

FY22

Change

FY23e

FY24e

Old

New

Change

Old

New

Change

Revenues

205,182

210,674

2.7%

210,424

216,063

2.7%

215,659

221,433

2.7%

Gross profit

15,937

18,836

18.2%

16,344

18,454

12.9%

16,750

18,912

12.9%

Gross margin

7.8%

8.9%

1.2%

7.8%

8.5%

0.8%

7.8%

8.5%

0.8%

Trading EBITDA

11,833

12,715

7.5%

12,135

12,176

0.3%

12,437

12,479

0.3%

Trading EBITDA margin (%)

5.8%

6.0%

4.7%

5.8%

5.6%

(2.3%)

5.8%

5.6%

(2.3%)

Normalised PBT

5,306

7,281

37.2%

5,334

6,881

29.0%

5,357

6,432

20.1%

Reported PBT

5,306

7,422

39.9%

5,334

6,881

29.0%

5,357

6,432

20.1%

Normalised basic EPS (p)

4.25

5.82

37.2%

4.27

5.50

29.0%

4.29

5.15

20.1%

Normalised diluted EPS (p)

4.25

5.82

37.2%

4.27

5.50

29.0%

4.29

5.15

20.1%

Reported basic EPS (p)

3.87

5.55

43.2%

3.89

5.02

29.0%

3.91

4.70

20.1%

Dividend per share (p)

3.30

3.30

0.0%

3.50

3.50

0.0%

3.60

3.60

0.0%

Net debt/(cash)

17,018

13,640

(19.8%)

16,737

11,719

(30.0%)

16,417

10,641

(35.2%)

Source: Edison Investment Research, company data

Valuation

We value Sandpiper primarily on a DCF basis, which we have rolled forward to commence in FY23. Our model assumes medium-term sales growth of 3.5%, a terminal growth rate of 1.5% and broadly flat margins. We have raised our WACC to 8.7% (from 8.2%) to capture the effect of rising interest rates. At a WACC of 8.7%, our DCF analysis results in a fair value of 130p per share. Our medium-term sales growth of 3.5% reflects long-term RPI forecasts of c 3% over the cycle and modest growth in store space, as Sandpiper expands across its existing geographies.

We illustrate Sandpiper’s valuation metrics versus its peers in Exhibit 2 below. Comparison is not straightforward as there are not many direct peers. We include the listed franchisors as peers although we recognise their business models are slightly different. Sandpiper trades on a CY22 P/E of 16.6x and EV/EBITDA of 9.1x, a c 20% premium respectively to its peer group on both measures. We believe a premium is justified by Sandpiper’s significant freehold property portfolio, its attractive and well-underpinned dividend yield (3.8% in 2022), and management’s recognition that dividend yield is important to its investors. While there is no defined catalyst to suggest a revaluation is imminent, we believe continued earnings growth will underpin the shares. In addition, the significant freehold property valuation (last valued in January 2022) lends support to the valuation.

Exhibit 2: Peer group valuation (calendarised)

Market cap

P/E (x)

EV/EBITDA (x)

Dividend yield (%)

(m)

2022e

2023e

2022e

2023e

2022e

2023e

Sainsbury

£4,958.1

9.9

9.8

5.1

5.1

5.8

5.9

Tesco

£19,108.4

12.0

11.5

6.8

6.6

4.2

4.4

Wm Morrison

£2,839.0

8.0

8.2

4.6

4.7

3.6

5.0

Marks & Spencer

£391.3

20.2

17.6

8.4

7.4

0.0

0.0

Hotel Chocolat

£168.9

9.8

5.9

4.2

3.6

0.0

6.4

Card Factory

£1,361.0

14.9

13.7

12.6

11.8

3.5

3.8

Domino's Pizza

£80.5

17.7

11.8

9.1

7.9

0.0

0.0

DP Eurasia

£4,958.1

9.9

9.8

5.1

5.1

5.8

5.9

Peer group average

13.2

11.2

7.3

6.7

2.4

3.6

SandpiperCI Group

£92.0

16.6

17.8

9.1

8.9

3.8

3.9

Premium/(discount) to peer group

26.0%

58.6%

25.1%

32.5%

54.6%

7.3%

Source: Refinitiv, Edison Investment Research, company data. Note: Priced at close on 27 May 2022.

Sandpiper trades at a premium to its peers on both P/E and EV/EBITDA. This is due to its strong property portfolio, attractive dividend yield and relatively low level of debt, in our view. The current equity market valuation is £92m, or an EV of £106m. With a property portfolio valued at £67.5m, this implies the franchise operations are valued at just £38.5m. Of course, for full comparison, an operating company stripped of the property would have to bear rental costs instead of depreciation. The dividend is well covered by free cash flow and Channel Island investors should benefit from tax relief on any dividends paid after December 2020.

Exhibit 3: Financial summary

£'k

2018

2019

2020

2021

2022

2023e

2024e

2025e

31-January

FRS102

FRS102

FRS102

FRS102

FRS102

FRS102

FRS102

FRS102

INCOME STATEMENT

Revenue

 

 

174,884.0

189,056.0

188,475.0

200,380.0

210,674.0

216,062.8

221,433.3

226,940.5

Cost of Sales

(160,200.0)

(174,956.0)

(173,836.0)

(184,148.0)

(191,838.0)

(197,609.2)

(202,521.1)

(207,557.9)

Gross Profit

14,684.0

14,100.0

14,639.0

16,232.0

18,836.0

18,453.6

18,912.2

19,382.6

EBITDA

 

 

8,444.0

10,013.0

10,973.0

11,310.0

12,715.0

12,176.0

12,478.6

12,789.0

Normalised operating profit

 

 

3,838.0

5,003.0

5,834.0

5,972.0

7,868.0

7,494.6

6,974.5

7,186.5

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

(1,395.0)

4,309.0

(2,390.0)

(389.0)

141.0

0.0

0.0

0.0

Share-based payments

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Reported operating profit

2,443.0

9,312.0

3,444.0

5,583.0

8,009.0

7,494.6

6,974.5

7,186.5

Net Interest

(1,306.0)

(1,207.0)

(1,058.0)

(854.0)

(587.0)

(613.8)

(542.5)

(488.6)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

(257.0)

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

2,532.0

3,796.0

4,519.0

5,118.0

7,281.0

6,880.8

6,431.9

6,697.9

Profit Before Tax (reported)

 

 

1,137.0

8,105.0

2,129.0

4,729.0

7,422.0

6,880.8

6,431.9

6,697.9

Reported tax

(1,248.0)

(1,348.0)

(1,281.0)

(1,462.0)

(1,873.0)

(1,857.8)

(1,736.6)

(1,808.4)

Profit After Tax (norm)

(247.2)

3,036.8

3,563.8

4,094.4

5,824.8

5,504.7

5,145.6

5,358.3

Profit After Tax (reported)

(111.0)

6,757.0

848.0

3,267.0

5,549.0

5,023.0

4,695.3

4,889.5

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(247.2)

3,036.8

3,563.8

4,094.4

5,824.8

5,504.7

5,146.6

5,359.3

Net income (reported)

(111.0)

6,757.0

848.0

3,267.0

5,549.0

5,023.0

4,695.3

4,889.5

Basic average number of shares outstanding (m)

100

100

100

100

100

100

100

100

EPS - basic normalised (p)

 

 

(0.25)

3.04

3.56

4.09

5.82

5.50

5.15

5.36

EPS - diluted normalised (p)

 

 

(0.25)

3.04

3.56

4.09

5.82

5.50

5.15

5.36

EPS - basic reported (p)

 

 

(0.11)

6.76

0.85

3.27

5.55

5.02

4.70

4.89

Dividend (p)

0.50

1.00

2.30

3.00

3.30

3.50

3.60

3.60

Revenue growth (%)

12.4

8.1

(-0.3)

6.3

5.1

2.6

2.5

0.0

Gross Margin (%)

8.4

7.5

7.8

8.1

8.9

8.5

8.5

8.5

EBITDA Margin (%)

4.8

5.3

5.8

5.6

6.0

5.6

5.6

5.6

Normalised Operating Margin

2.2

2.6

3.1

3.0

3.7

3.5

3.1

3.2

BALANCE SHEET

Fixed Assets

 

 

76,015.0

92,809.0

95,748.0

98,468.0

100,743.0

100,382.9

100,414.6

100,485.6

Intangible Assets

27,268.0

26,169.0

24,454.0

24,605.0

23,875.0

22,325.0

20,775.0

19,225.0

Tangible Assets

48,745.0

66,471.0

71,292.0

73,861.0

76,866.0

78,055.9

79,637.6

81,258.6

Investments & other

2.0

169.0

2.0

2.0

2.0

2.0

2.0

2.0

Current Assets

 

 

26,070.0

23,295.0

26,014.0

22,114.5

26,129.0

28,612.4

30,192.5

32,037.0

Stocks

10,203.0

10,447.0

10,505.0

11,990.0

13,496.0

13,902.0

14,247.6

14,601.9

Debtors

4,089.0

5,229.0

5,714.0

5,742.0

6,126.0

6,282.7

6,438.9

6,599.0

Cash & cash equivalents

11,778.0

7,619.0

9,795.0

4,382.5

6,507.0

8,427.7

9,506.1

10,836.1

Other

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Current Liabilities

 

 

(49,207.0)

(31,127.0)

(33,566.0)

(30,916.3)

(34,257.0)

(34,857.7)

(35,374.2)

(36,000.3)

Creditors

(27,856.0)

(29,215.0)

(26,716.0)

(29,054.0)

(32,400.0)

(33,000.7)

(33,517.2)

(34,143.3)

Tax and social security

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Short term borrowings

(21,351.0)

(1,912.0)

(6,850.0)

(1,862.3)

(1,857.0)

(1,857.0)

(1,857.0)

(1,857.0)

Other

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Long Term Liabilities

 

 

(2,722.0)

(25,047.0)

(24,556.0)

(23,957.0)

(19,160.0)

(19,160.0)

(19,160.0)

(19,160.0)

Long term borrowings

(101.0)

(23,367.0)

(22,038.0)

(20,168.0)

(18,290.0)

(18,290.0)

(18,290.0)

(18,290.0)

Other long term liabilities

(2,621.0)

(1,680.0)

(2,518.0)

(3,789.0)

(870.0)

(870.0)

(870.0)

(870.0)

Net Assets

 

 

50,156.0

59,930.0

63,640.0

65,709.2

73,455.0

74,977.5

76,072.9

77,362.3

Minority interests

0.0

0.0

0.0

(468.5)

(912.0)

(912.0)

(912.0)

(912.0)

Shareholders' equity (excl minorities)

 

50,156.0

59,930.0

63,640.0

65,240.7

72,543.0

73,058.9

74,065.5

75,160.9

CASH FLOW

Op Cash Flow before WC and tax

8,444.0

10,013.0

10,973.0

11,310.0

12,715.0

12,176.0

12,478.6

12,789.0

Working capital

2,195.0

(1,306.0)

(3,329.0)

1,052.0

(226.0)

38.0

14.8

111.6

Exceptional & other

(2,475.0)

(3,849.0)

(3,052.0)

(1,498.0)

(1,807.0)

(613.8)

(542.5)

(488.6)

Tax

(6.0)

(30.0)

(1,700.0)

(1,471.0)

(848.0)

(1,857.8)

(1,736.6)

(1,808.4)

Net operating cash flow

 

 

8,158.0

4,828.0

2,892.0

9,393.0

9,834.0

9,742.4

10,214.3

10,603.5

Capex

(3,877.0)

(3,458.0)

(8,548.0)

(2,325.3)

(1,575.0)

(4,321.3)

(5,535.8)

(5,673.5)

Acquisitions/disposals

(4,212.0)

(10,272.0)

0.0

(2,610.0)

(932.0)

0.0

0.0

0.0

Net interest

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Equity financing

0.0

0.0

2,419.0

0.0

0.0

0.0

0.0

0.0

Dividends

0.0

0.0

(2,254.0)

(2,996.4)

(3,278.0)

(3,500.0)

(3,600.0)

(3,600.0)

Other

4,750.0

4,751.0

7,681.0

(6,885.8)

(1,925.0)

0.0

0.0

0.0

Net Cash Flow

4,819.0

(4,151.0)

2,190.0

(5,424.5)

2,124.0

1,921.1

1,078.4

1,330.0

Opening net debt/(cash)

 

 

(7,229.0)

9,674.0

17,660.0

19,093.0

17,647.8

13,640.5

11,719.3

10,640.9

FX

(270.0)

(8.0)

(14.0)

12.0

0.0

0.0

0.0

0.0

Other non-cash movements

(21,452.0)

(3,827.0)

(3,609.0)

6,857.7

1,883.3

0.0

0.0

0.0

Closing net debt/(cash)

 

 

9,674.0

17,660.0

19,093.0

17,647.8

13,640.5

11,719.3

10,640.9

9,310.9

Source: Edison Investment Research, Company data

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This report has been commissioned by [SandpiperCl Group and prepared and issued by Edison, in consideration of a fee payable by SandpiperCl Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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