Business Performances Review of Two Varied Sector Stocks of FTSE: Arrow Global Group Plc and J D Wetherspoon Plc

Business Performances Review of Two Varied Sector Stocks of FTSE: Arrow Global Group Plc and J D Wetherspoon Plc

Arrow Global Group Plc

Arrow Global Group Plc (ARW) is the United Kingdom-headquartered financial services company engaged in the business of providing financial services. Its areas of operation are categorised into segments like investment businesses, and asset management and servicing business. The group is engaged in buying and managing secured and unsecured loans from financial institutions like Banks and NBFCS.

ARW-Financial highlights for nine-months period ended 30th September 2019

(Source: LSE)

On 12th November 2019, the company released its results for the nine-month period of the fiscal year 2019. The company’s income from portfolio investments at amortised cost decreased to £142,703 thousand in 9M FY19 from £149,837 thousand in 9M FY18. As a result, the company’s total income from portfolio investments decreased to £187,895 thousand in 9M FY19 from £191,241 thousand in 9M FY18. The company’s total income increased to £256,867 thousand in 9M FY19 from £255,308 thousand in 9M FY18. The company’s operating profit increased to £82,790 thousand in 9M FY19 from £79,309 thousand in 9M FY18. The company’s profit before taxation increased to £42,396 thousand in 9M FY19 from £25,550 thousand in 9M FY18. The company’s profit after taxation increased to £32,219 thousand in 9M FY19 from £20,534 thousand in 9M FY18. The company’s free cash flow grew by 14.7 per cent to £174.4 million in Q3 FY19 as against £152.0 million in Q3 FY18. The company’s profit before taxation surged by 65.6 per cent to £42.4 million in Q3 FY19 as against £25.6 million in Q3 FY18. The company’s underlying profit before taxation plunged 5.4 per cent to £50.4 million in Q3 FY19 as against £53.3 million in Q3 FY18. The company is focussing on cost efficiencies. The trading has been in line with the market expectations for the Financial Year 2019. The company’s operations are impacted by the uncertainty created due to ongoing Brexit and other macro-economic factors. Further, any change in the legislation or regulatory changes will also impact negatively on the company’s performance. The company’s overall funding position had improved with a successful asset supported securitisation facility agreement which has resulted in an improved liquidity and management income related to the capital-light asset.

ARW-Share price performance

Daily Chart as at 15-November-19, before the market closed (Source: Thomson Reuters)

On 15th November 2019, while writing at 10:44 AM GMT, Arrow Global Group Plc shares were clocking a current market price of GBX 214.00 per share; which was more by 2.099 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £369.78 million at the time of writing.

On 6th August 2019, the shares of ARW have touched a new peak of GBX 284.58 and reached the lowest price level of GBX 166.20 on 21st February 2019 in the last 52 weeks. The company’s shares were trading at 24.80 per cent lower from the 52-week high price mark and 28.76 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 11,852 at the time of writing before the market close. The company’s 5-day stock's daily average traded volume was 296,264.60; 30 days daily average traded volume- 192,354.27- and 90-days daily average traded volume – 392,440.04. The volatility of the company’s stock was 26 per cent higher as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 1.26 with a dividend yield of 6.25 per cent.

The shares of the company have delivered a positive return of 8.04 per cent in the last quarter. The company’s stock surged by 18.42 per cent from the start of the year to till date. The company’s stock has given investors 1.36 per cent of a negative return in the last year. 

J D Wetherspoon Plc

J D Wetherspoon Plc (JDW) is a proprietor and administrator of pubs. The organization was incepted in the year 1979. It supplies alcoholic and non-alcoholic drinks, eatables and espresso at its bars. Its variety of eatable things incorporates small meals, pub classics, chicken and ribs, breakfast club, Sunday early lunch, gourmet burgers, beefsteak club, chicken club, curry club, sides, pastries, servings of mixed greens, pasta, and hotdogs among others.

JDW-Trading Update

On 13th November 2019, J D Wetherspoon announced its first-quarter trading update for the 13-week period ending 27th October 2019. The company’s sales (like-for-like) surged by 5.3 per cent, and total sales went up by 5.6 per cent for the period. In the start of the financial year, the company disposed of four pubs and opened one new pub and is planning to open 10 to 15 pubs in the current Financial Year.

JDW-Financial Highlights for FY19

(Source: LSE)

The company’s total sales increased by 7.4 per cent to £1,818.8 million as compared to the previous year data in the financial year ending July 2019. Like-for-like (LFL) sales rose by 6.8 per cent in FY19, bar sales climbed by 5.8 per cent, food sales surged by 8.3 per cent, slot/fruit machine sales increased by 10.3 per cent, and hotel room sales rose by 3.9 per cent. Operating profit (before exceptional items) reduced by 0.3 per cent to £131.9 million as compared with the financial year 2018 of £132.3 million. The operating margin (before exceptional items) stood at 7.3 per cent in FY19 versus 7.8 per cent in FY18. The company’s PBT (Profit before tax and exceptional items) declined by 4.5 per cent to £102.5 million against the £107.2 million in FY18. Profit before tax and after exceptional items declined to £95.4 million in FY19 against the £88.9 million in FY18. Profit after tax and after exceptional items stood at £72.7 million in FY19 against the £66.7 million in FY18. Basic earnings per share (before exceptional items), stood at 77.2 pence in FY19 against the 81.1 pence in FY18. Basic earnings per share (after exceptional items), stood at 70.6 pence in FY19 against the 64.6 pence in FY18. Diluted earnings per share (before exceptional items), stood at 75.5 pence in FY19 against the 79.2 pence in FY18. Diluted earnings per share (after exceptional items), stood at 69 pence in FY19 against the 63.2 pence in FY18.

The company had a reasonable start to the financial year 2019. The group had a decent financial with earnings rising throughoutRevenue was affected by consumer confidence, unemployment and real wages. The company’s costs were rising due to inflation, a national living wage, rents, rates, utilities. The regulatory issues such as the MRO (Market Rent Only) regulations, beer duty, sugar tax etc. also impacted the company’s performance negatively.

The company also faces severe competition not only from other restaurants/bar operators but also the likes of Deliveroo, Uber Eats and Just Eat; and the pubs are affected either way by changing weather patterns. The chain announced 20 pence cut in the cost of a pint of beer in nearly 700 of its pubs to highlight the advantages of leaving the European Union.

JDW-Share price performance

Daily Chart as at 15-November-19, before the market closed (Source: Thomson Reuters)

On 15th November 2019, while writing at 10:50 AM GMT, J D Wetherspoon Plc shares were clocking a current market price of GBX 1,554 per share; which was more by 0.19 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £1.62 billion at the time of writing.

On 5th September 2019, the shares of JDW touched a new peak of GBX 1,645.20 and reached the lowest price level of GBX 1,051.00 on 18th December 2018 in the last 52 weeks. The company’s shares were trading at 5.54 per cent lower from the 52-week high price mark and 47.85 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 28,066 at the time of writing before the market close. The company’s 5-day stock's daily average traded volume was 90,641.20; 30 days daily average traded volume- 85,007.00- and 90-days daily average traded volume – 102,123.84. The volatility of the company’s stock was 22 per cent lower as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 0.78 with a dividend yield of 0.77 per cent.

The shares of the company have delivered a positive return of 5.87 per cent in the last quarter. The company’s stock surged by 39.35 per cent from the start of the year to till date. The company’s stock has given investors 31.89 per cent of a positive return in the last year. 

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