Earnings Update on 4 LSE-listed Stocks – ARW, CSP, TON, and SMWH

Arrow Global Group Plc (LON: ARW)

Overview of the Company

Arrow Global Group Plc is a leading asset manager and investor that focuses on collection, purchase, and servicing of non-performing loans. The company helps financial institutions such as banks, institutional fund investors and specialist lenders to reduce their balance sheet and recapitalise with the objective to increase mainstream lending. ARW if further evolving its business model by extending its footprints in fund management business to capitalise on market opportunities.

Financial Highlights

Arrow Global Group Plc announced its quarterly results for the three-month ended 31^st March 2020.

(Source: company website)

• The new portfolio purchases decreased to £28.1 million in the first quarter of the year 2020 as compared to £56.4 million for the first quarter of the year 2019.
• ARW’s Investment Business (IB) collections declined from £105.5 million in Q1 2019 to £85.1 million in Q1 2020, reflecting 92 per cent of Estimated Remaining Collections assumptions.
• On March 31, the company has sold an additional £30 million of Estimated Remaining Collections (ERC) into AGL Fleetwood Limited. In contrast, it also borrowed an additional non-recourse finance of £21 million on 2nd April 2020.
• As per the company information, the company have raised an additional €356 million of capital commitments, taking the total fund management capital commitments to now €1.2 billion.
• The secured net debt to adjusted EBITDA increased by 0.4x to 3.8x, which falls under the revolving credit facility covenant level of 4.4x of the company.

Share Price Performance - ARW

Arrow Global Group Plc stock is trading GBX 74.00m, down 11.06 per cent or GBX 9.20, on 15 May 2020 as at 1:39 PM GMT. At the time of writing, the market capitalisation of the company stands at GBP 147.50 million, with the 177.28 million of shares outstanding.

Countryside Properties Plc (LON: CSP)

Overview of the Company

Countryside Properties Plc is a LSE-listed housebuilder and urban regeneration company that focuses on building communities. It broadly operates through two segments, i.e. Housebuilding Segment and Partnership Segment. The company’s Housebuilding division develops locations that deliver private and reasonable housing, while its Partnership segment provides private and affordable homes with associating local specialists and housing associations. The company was listed on the London Stock Exchange in the year 2016.

Financial Highlights

The company has unveiled its financial performance of six months ended 31st March 2020.

(Source: company website)

• As at 31 March 2020, the company had 139 active sites compared to 140 sites in the previous corresponding period.
• The company reported a strong trading performance for the period October 2019 to February 2020 with an increase in the net reservation rate by 31 per cent ahead of the previous year.
• Due to lost completion and land sales in March 2020, the profit of the company had been impacted by ~£29 million. It also resulted in increase of ~£83 million in the net debt of the company.
• Due to improved investment in working capital and less adjusted operating margin, the return on capital employed decreased by 710 bps to 25.8 per cent as compared to 32.9 per cent in HY2019.
• Total completions decreased by 4 per cent to 2,271 houses (HY 2019: 2,362 homes), due to loosing of approximately 184 completions at the end 31st March 2020 and the weighting of construction programmes to the second half of the year, reported Countryside.
• The company’s board suspended the payment of an interim dividend due to prevailing uncertainty in the financial year 2020.
• Net finance costs decreased marginally to £6.2 million as compared to £6.5 million in the previous corresponding period. It reflects a lower charge for the interest that also helped the company in offsetting the financial lease expense.

Share Price Performance- CSP

Countryside Properties Plc shares are trading at GBX 294.80 on the London Stock Exchange, down by GBX 10.60 or 3.47 per cent, on 15 May 2020 as at 1:41 PM GMT. At the time of writing, the market capitalisation of the company is recorded at GBP 1.37 billion while the beta of the stock stands at 1.819, reflecting higher volatility compared to the benchmark.

Titon Holdings Plc (LON: TON)

Overview of the Company

Titon Holdings Plc is a company in construction and material sector. Incorporated in 1972, the company has become a leading global producer and supplier of air circulation systems, windows and door hardware. It operates through United Kingdom and South Korea segments. It is listed on the Alternative Investment Market on the London Stock Exchange.

Financial Highlights

Titon Holdings Plc has announced its unaudited Interim Results for the half-year ended 31st March 2020.

(Source: company website)

• Due to fragile trading circumstances and impact of coronavirus pandemic, the net revenue of the company decreased by 22 per cent to £11.22 million during the six months ended 31st March 2020.
• The company’s United Kingdom Ventilation Systems sales increased by 6.5 per cent compared to the previous corresponding period. However, the group’s UK Window and Door Hardware sales decreased by 14 per cent with the decline in overall European Sales.
• Due to lower revenue and one-off restructuring costs of higher bad debt provision, the company’s EBITDA decreased to £0.32 million (1H 2019: £1.17 million) during the six months ended 31st March 2020.
• During the period, the company reported operating cash inflows of £461K. However, the cash balance of the company has decreased by 4 per cent to £3.69 million during the period.
• Given the uncertain economic environment, the company has further decided to preserve cash and not declare any interim dividend for the half year ended 31 March 2020.
• The company’s gross margin declined to 27.3 per cent (2019: 29.3 per cent) due to the fewer contributions from in the UK and Europe for Window and Door Hardware operations.

Share Price Performance - TON

TON stock stands unchanged at GBX 85.00 on the London Stock Exchange on 15 May 2020 as at 1:42 PM GMT. The market capitalisation of the company stands at GBP 9.42 million with 11.08 million of shares outstanding. At the time of writing, the beta of the stock has been recorded at 0.241, reflecting lower volatility compared to the benchmark.

WH Smith Plc (LON: SMWH)

Overview of the Company

WH Smith Plc is a globally recognized retailer for news, books and convenience. The company operates through its two core businesses that include Travel and High Street with around 156 UK air units, 142 UK hospital units, 290+ UK rail units and other and ~600 units outside the UK under travel segment. Whereas, in the High Street division the company owns nearly 575 stores in the UK location with over 200 post offices with the company’s High Street stores.

Financial Highlights

Let’s skim through the financial results of the company recently announced for six months ended 29 February 2020.

(Source: company website)

• During the first half of 2020, the company witnessed a strong sales growth with the total travel revenue up by 19 per cent to £432 million (2019: £364 million) reportedly due to active initiatives and continuing investments.
• Online businesses of the company performed exceptionally well, mainly in books which showed 400 per cent upsurge in sales from the last few months.
• During the six months to 29th February 2020, the company recorded an addition of £36 million in its property, plant and equipment.
• As per the company information, the directors of the company would not be declaring any interim dividend for the six months ended 29th February 2020.
• In April 2020, the company’s total revenue decreased by 85 per cent due to the impact of the novel coronavirus.
• Due to novel coronavirus, the company has experienced a substantial decrease in the passenger number in its UK travel business.

Share Price Performance - SMWH

SMWH shares are trading at GBX 800.50, down GBX 74.00 or 8.46 per cent, on 15 May 2020 as at 1:44 PM GMT. At the time of writing, the market capitalisation is recorded at GBP 1.14 billion with 130.86 million shares outstanding. Its annual dividend yield stands at 6.66 per cent while the beta of the stock is 1.6037, reflecting higher volatility compared to the benchmark.