Encouragingly, prospects at Marshall of Cambridge remain strong, with the order book equating to 1.3x historic revenues. This augurs well for FY24 and beyond, particularly with the five-year plan focused on growing revenues and margins. However, a drive for efficiency and productivity improvements has temporarily faltered in the face of contract delays across Aerospace and Land Systems.
The Aerospace division expects to secure additional MRO work from the US Marine Corps for servicing and more complex maintenance requirements. The Group hopes to benefit from its gain-share agreement with the MoD and future MRO contracts with any C-130 purchasers, thereby adding to its 17 international customers. Breaking ground for its US-based MRO facility in North Carolina also augurs well for the Company’s goal of securing a larger share of the maintenance of the world’s largest C-130 fleet.
FY24 should prove significant for the Property division, with a hearing relating to planning approval expected on phase three of the Marleigh development and further news anticipated on Cambridge East. The proposed developments remain a store of future value for the Group, with no development yet on the 460 acres set aside for Cambridge East and a further 200 acres becoming available after the airport move to Cranfield.
With no published estimates ahead of the retirement of the UK MoD’s C-130 fleet, we use the net asset value to underpin a fair value for the Group. In June 2023, the NAV amounted to £282.5m, equating to 478p / share. That stands at a 23% premium to the last matched trading price for the NVPOs.
