Earnings Updates of Two FTSE 250 Listed Stocks: Fresnillo Plc and Travis Perkins Plc

The FTSE 250 Index is the UK’s stock market index which comprises of 250 mid-cap businesses, not big enough to be included in the Footsie 100 list. It is considered a better gauge in terms of analysing the UK economy, as it constitutes more domestic-focused companies. In the last ten days, the index has generated a negative return of 9.21 per cent, mainly due to the concerns of Coronavirus outbreak. Here, we are going to discuss the latest result announcements of two diverse sector stocks, which are constituents of FTSE 250 index and are quoted on the London Stock Exchange (LSE). The stocks include Fresnillo Plc (FRES) from the Mining Sector and Travis Perkins Plc (TPK) from the Support Services sector.

Fresnillo Plc Financial Results for The Year Ended 31st December 2019

The company remained optimistic and determined for the future, although 2019 was a more challenging year as expected. Due to higher gold and silver prices, the Company’s Adjusted revenue was up by 1.2 per cent to US$2,270.2 million in the fiscal year 2019 as against 2018. Although the profit margins of the company decreased over the period but still were maintained at healthy levels. The challenging operating environment was clearly seen in the financial year results with EBITDA and Gross profit declining by 26.3 per cent and 40.9 per cent, to US$674 million and US$461.7 million, respectively.

The Group’s Profit from continuing operations was down by 66.1 per cent to US$171.7 million during the period. Due to the commissioning of several projects such as the dynamic leaching plant at Herradura in 2018 and the pyrites plant at Saucito, the Capex of the company was down by 16.4 per cent to US$559.3 million.

The Group’s cash and other liquid funds were down by 40 per cent to US$336.6 million. The Group possessed a lower leverage ratio and a strong balance sheet. Due to lower profits for the period, dividends paid were down by 52.3 per cent to US$142.2 million in accordance with the Group’s dividend policy.

(Source: Company’s filings, London Stock Exchange)

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About Fresnillo Plc

Fresnillo Plc (LON:FRES) quotes on the London and Mexican Stock Exchanges under the ticker symbol FRES. It is Mexico's largest gold producer and the world's largest primary silver producer. Most of the operating mines owned by Fresnillo Plc are in Mexico. The Group has exploration projects and mining concessions in Mexico, Peru and Chile. The Company has a rich history of exploration and mining. The company has a proven track record of mine development, and operations while maintaining a lower cost of operations.

Fresnillo Plc -Stock price performance

Daily Chart as at Mar-04-20, before the market close (Source: Thomson Reuters)

On 04th March 2020, at the time of writing (before market close, GMT 10:53 AM), Fresnillo Plc’s shares were trading at GBX 653.40, up by 0.55 per cent against its previous day closing price. Stock's 52 weeks High and Low is GBX 921.20 /GBX 536.80. At the time of writing, the share was trading at 29.07% lower value than its 52w High and 21.72% higher than its 52w low. The company’s stock beta was 1.03, reflecting higher volatility as compared to the benchmark index. The outstanding market capitalisation was around £4.79 billion along with an annual dividend yield of 1.74%.

Travis Perkins Plc Full Year Results for The Twelve Months Ended 31 December 2019

With early signs of progress from the strategic initiatives set out in December 2018, the Group produced a positive performance in 2019 against a challenging market backdrop. The company’s Total Group revenues grew by 3.8 per cent on a like-for-like basis and 3.2 per cent to £6,956 million in 2019.

Despite the challenging market environment, with a strong recovery in Wickes and continued excellent growth in Toolstation, the company achieved sales growth, which was driven by a good performance from the Merchant businesses. The reduction in sales (P&H business) was concentrated in the lower margin wholesale business only.

The company’s Adjusted operating profits surged by 7.8 per cent to £442 million in the fiscal year 2019 as against £375 million in 2018. For the fiscal year 2019, the Group continued to generate good free cash flow of £195 million. The cash conversion rate of the company improved to 54 per cent in the fiscal year 2019 as against 46 per cent in the year 2018. Due to higher net working capital, the company’s Covenant net debt increased by £44 million to £344 million. This move of the company can be attributed as a risk mitigation method against a 'no deal' exit from the EU.

The company’s Adjusted earnings per share surged by 6.3 per cent to 112.7 pence in the fiscal year 2019 as against 106 pence in the fiscal year 2018. Due to marking-to-market of foreign exchange contracts and higher financing charges during the year, the increase in adjusted EPS was modestly lower than the increase in adjusted operating profits. The Group’s operating profit surged to £232 million, which included a £246 million goodwill impairment on a statutory basis during the year against the loss of £22 million in 2018.

The Board of the company proposed a hike of 3.2 per cent in the annual dividend to 48.5 pence in the fiscal year 2019 as against 47 pence in the fiscal year 2018 as the company envisions growth catalysts in the coming years.

(Source: Company’s filings, London Stock Exchange)

About Travis Perkins PLC

Travis Perkins Plc  (LON:TPK) is a Northampton, United Kingdom-headquartered distributor of building materials to the building, construction and home improvement markets, which operates more than 20 businesses across the UK and owns 15 plus product brands within these businesses, along with a national network of more than 600 branches. The group is one of the largest suppliers to the UK’s building and construction industry and with products such as building materials, plumbing and heating, landscaping materials, timber and sheet materials, more than 100,000 product lines are available to trade for professionals and self-builders. The operations of the group are differentiated in four segments, namely Merchanting, Retail, Toolstation and Plumbing & Heating.

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Travis Perkins Plc -Stock price performance

Daily Chart as at Mar-04-20, before the market close (Source: Thomson Reuters)

On 04th March 2020, at the time of writing (before market close, GMT 10:58 AM), Travis Perkins Plc’s shares were trading at GBX 1,432.00, down by 2.75 per cent against its previous day closing price. Stock's 52 weeks High and Low is GBX 1,841.00 /GBX 1,160.50. At the time of writing, the share was trading at 22.22% lower value than its 52w High and 23.40% higher than its 52w low. The company’s stock beta was 0.92, reflecting slightly lesser volatility as compared to the benchmark index. The outstanding market capitalisation was around £3.70 billion along with an annual dividend yield of 3.29%.