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In the short term, the outlook for the global economy remains uncertain, weighed down by escalating pandemic of the Coronavirus and its potential impact on the financial markets and businesses. The companies are preparing to adapt to changes in market conditions while observing discipline in their respective business model. As of now, it is too early to assess the impact of the Coronavirus on the UK economy, though the Financial Services sector is improving its operating efficiency and observing discipline.
The companies are relying on their deep expertise, prudent and resilient business model to navigate through the current turbulence and deliver value for their stakeholders in a difficult state of market conditions.
This article talks about recent business performance updates of some diverse sector stocks quoted on the London Stock Exchange (LSE). The stocks include Arix Bioscience Plc from the Financial Services sector, Close Brothers Group Plc from the Banking sector, TP ICAP Plc from the Investment Services sector.
Arix Bioscience Plc â Full-year results for the year ended 31 December 2019
While maintaining a prudent approach to capital allocation, the company focused on investing in innovation and breakthrough-based biotech companies. During 2019, the Group implemented a leaner structure and lower cost base. Due to volatility in the valuation of listed securities in the companyâs portfolio, the Group recorded a loss for the financial year 2019. The companyâs revenue was down to £0.5 million in the fiscal year 2019 as against £1.3 million in the fiscal year 2018.
(Source: Companyâs filings, London Stock Exchange)
The net asset value totalled £202.1 million at the year-end, which was down by £68.1 million from £270.2 million in 2018. This can be attributed to downward revaluation of Arixâs investments of £58.6 million in the fiscal year 2019 as against £51.2 million positive revaluation in the fiscal year 2018.
The companyâs cash balances were down to £54.6 million in the fiscal year 2019 as against £91.2 million in the fiscal year 2018. The reduction in cash balances was triggered by strong investment activity, with £39.2 million deployed across both new and existing portfolio companies.
Business overview: Arix Bioscience Plc
United Kingdom-based Arix Bioscience Plc (LON:ARIX) is mainly focused on generating value from the commercialisation and development of discoveries and new technologies. It is a venture capital entity having a global presence with a focus on investing and building breakthrough biotech groups. The company has an international clientele. The groupâs main activity is to finance, develop, and source healthcare and life science businesses globally.
Arix Bioscience Plc-Stock price performance
On 10th March 2020, at the time of writing (before market close, GMT 10:46 AM), Arix Bioscience Plcâs shares were trading at GBX 78.50. Stock's 52 weeks High and Low is GBX 159.00/GBX 77.00. The beta of the company stood at 0.49, which meant that in comparison with the benchmark index, the stock was significantly lower in volatility. The total market capitalisation of the company was recorded at £106.41 million.Â
Close Brothers Group Plc - H1 FY20 results
The group's performance for the six months ending 31 January 2020 reflects the disciplined application of its business model in a period of lower activity in the UK economy. The company delivered a return on opening equity of 13.6 per cent in H1 FY20 as against 16.1 per cent in H1 FY19 and declared an interim dividend of 22.7 pence in H1 FY20, which was up by 3 per cent against 22.0 pence in declared in H1 FY19.
The companyâs adjusted operating profit plunged to 9 per cent to £125.7 million in H1 FY20 as against £138.8 million in H1 FY19.
The Groupâs Statutory operating profit before taxation from continuing operations decreased by 8 per cent to £124.1 million in H1 FY20 as against £135.6 million in H1 FY19. The companyâs Adjusted basic earnings per share was down by 9 per cent to 63.8 pence in H1 FY20 as against 69.8 pence in H1 FY19, and statutory basic earnings per share from continuing operations also reduced by 7 per cent to 63 pence in H1 FY20 as against 68.1 pence in H1 FY19.
The company stated that it is committed to invest in the business and generate strong returns for the shareholders in the wide range of market conditions.
 (Source: Companyâs filings, London Stock Exchange)Â
Business overview: Close Brothers Group Plc
Leading UK merchant banking group, Close Brothers Group Plc (LON:CBG), provides lending & deposit services, wealth management services and securities trading. The company has an employee headcount of more than 3,000 people in the United Kingdom. The Group is listed on the London Stock Exchange and is a constituent of FTSE 250.
Close Brothers Group Plc -Stock price performance
On 10th March 2020, at the time of writing (before market close, GMT 10:50 AM), Close Brothers Group Plcâs shares were trading at GBX 1,160. Stock's 52 weeks High and Low is GBX 1,663.00/GBX 998.59. The beta of the company stood at 0.76, which meant that in comparison with the benchmark index, the stock was lower in volatility. The total market capitalisation of the company was recorded at £1.72 billion.
TP ICAP Plc - FY19 results
The Group delivered a buoyant performance in 2019, with resilient growth in its non-Global Broking businesses as the companyâs policy of broadening its base continued to yield good results. In the first half of the year, while the Global Broking faced some hiccups as companyâs main clients witnessed considerable weakness in trading, the company delivered a strong performance in the H2.
The companyâs underlying revenue improved by 1 per cent on constant currency to £1,833 million in the fiscal year 2019 as against £1,763 million in the fiscal year 2018. The companyâs underlying operating profit was up by 1 per cent to £279 million in the fiscal year 2019 as against the previous year.
Due to lower integration costs and lower impairment of intangible assets, the companyâs operating profit increased by 53 per cent to £142 million on a statutory basis in 2019 from £93 million in the prior year. Due to foreign exchange headwinds, the companyâs underlying operating profit margin was down by 0.5 per cent to 15.2 per cent in 2019 as compared to 2018. The companyâs operating margin stood at 7.7 per cent on a statutory basis. The company proposed a dividend of 16.85 pence in 2019.
(Source: Companyâs filings, London Stock Exchange)
Business overview: TP ICAP Plc
TP ICAP Plc (LON:TCAP) is an inter-dealer brokerage company which was formerly known as Tullett Prebon Plc, a United Kingdom domiciled company. The company acts as an intermediary in the wholesale business of over-the-counter financial products and exchange-traded financial markets and commodity markets. It facilitates the commercial and investment banking businesses in trading related activities particularly. The company has its operations in Continental Europe, in the Middle East, In the Americas, and in the Asia Pacific region. The companyâs offerings have more than five product verticals: Fixed Income Securities and their derivatives; Treasury Products; Interest Rate Derivatives; Equities and Energy.
TP ICAP Plc -Stock price performance
On 10th March 2020, at the time of writing (before market close, GMT 10:55 AM), TP ICAP Plc shares were trading at GBX 363.40. Stock's 52 weeks High and Low is GBX 425.00/GBX 265.40. The beta of the company stood at 0.53, which meant that in comparison with the benchmark index, the stock was significantly lower in volatility. The total market capitalisation of the company was recorded at £2 billion.
Comparative Chart of ARIX, CBG, and TCAP
 (Source: Thomson Reuters)
