Berenberg reiterates 'buy' rating on Genuit

Berenberg noted that in October, Genuit had flagged a deterioration in trading in the third quarter, with its repair, maintenance and improvement unit being particularly hit, and guided for underlying earnings at the lower end of the prevailing £96.8m-100m range.

In the outturn, full-year 2022 underlying earnings came in at £98.2m, with margins "slightly better" than expectations.

"With Genuit's revenues roughly equally split between UK new build, UK RMI and 'other' (infrastructure, commercial and international), it is clearly exposed to a challenging UK macro outlook in FY 2023," said Berenberg, which noted that its base case suggests that the broader UK construction market will fall by roughly 5-6% this year.

That said, the German bank highlighted that its view was also that the company has increasingly positioned itself in the right end-markets, with the right product set, and that it can "whether the downturn well" and that it will be able to take share in the recovery thereafter.

"We cut our expectations for FY 2023-24 back in Q3 2022 and our numbers are effectively unchanged today," concluded Berenberg, which also stuck by its 370.0p target price on the stock.

Reporting by Iain Gilbert at Sharecast.com