Fear of Deep Global Recession and Financial Highlights of Three LSE Stocks- PLUS, ASC and ZTF

  • Apr 09, 2020 BST
  • Team Kalkine
Fear of Deep Global Recession and Financial Highlights of Three LSE Stocks- PLUS, ASC and ZTF

Now it is being said that the month of March has marked the start of the deep global recession, as the spread of novel coronavirus continued and intensified rather instead of being contained, resulting into several nations going into complete lockdown, putting all economic activities at a complete halt. The UK has been severely impacted too, and various industries are tethering all their resources to keep them running in these difficult times. Lots of companies have deferred their dividends while many of them have delayed their earnings announcements so that they can ascertain the impact of the outbreak on their business.  Here we are going to discuss the latest earnings of three diversified sector companies, PLUS500 Ltd, ASOS Plc and Zotefoams Plc, which belongs to Financial services sectors, General retailer sectors and Chemical sectors, respectively.

PLUS500 Ltd

PLUS500 Ltd (LON: PLUS) is the prominent provider of CFDs (Contracts for Difference). It provides trading facilities to its client on forex, cryptocurrency, commodities, ETF’s, shares, indices and options. PLUS 500 is a Cyprus based company, and its offices are situated at Limassol. The company is dually listed on the London Stock Exchange as well as the Cyprus Securities Exchange.

PLUS – Trading Updates

On 07th April 2020, the company announced its trading update for the three months ended 31st March 2020.

(source: company website)

  • The company reported a strong surge in revenue and number of customers trading activity based on a strong show at all the major financial and operational KPI’s.
  • During the three months ended 31st March 2020, the revenue increased by 487 per cent to $316.6 million as compared to the same quarter of the previous year. The increase was mainly due to a significant increase in volatility throughout the international market, resulting into increased trading activity. 
  • The number of new customers addition also increased by 289 per cent to 82,951 because amid the volatility of financial markets, the company’s efficient marketing algorithms encouraged new registration of customers.
  • Active Customers improved by 98 per cent to 194,024 during the period as compared to the first quarter of the year 2019. 
  • The EBITDA of the first quarter for the year 2020 increased by 1,863 per cent to $231.6 million as compared to Q1 2019. EBITDA margin improved to 73 per cent in Q1 2020 compared to 22 per cent in Q1 2019. 
  • Company’s cash balances increased to $515.6 million as at 31st March 2020 as compared to the previous year same quarter.
  • Due to high level of consumer Income and due to improved engagement on the trading platform, the average revenue per user increased by 197 per cent during the first quarter of the year 2020 and a 69 per cent improvement as compared to the previous quarter.

PLUS – Impact of COVID-19

As per the company has informed that its staffs are working remotely from home due to the impact of COVID-19 and it did not face any major impact as the business operations are entirely online. The company has also said that it will assess the impact of novel coronavirus and will take action accordingly.

PLUS – Share price performance

At around 11:14 AM (GMT) on 09th April 2020, Plus500 Ltd’s stock was trading at a price of GBX 1,112.50 per share on the London Stock Exchange, up by 19.00 points or 1.74 per cent from its previous closing of GBX 1,093.50. The Beta of the stock stood at -0.51, while its Market Capitalisation was reported at GBP 1.16 billion.

ASOS Plc

ASOS Plc (LON: ASC) is an online retailer for fashion-loving young people across the world. The company marks its presence through mobile/desktop and the market-leading app with ten languages in more than 200 markets. The company’s consumers can shop around 85,000 products through these channels. The company’s objective is to provide frictionless experience while supporting a different mode of payment methods & hundreds of local deliveries and returns options to the customers.

ASC – Financial Highlights

On 07th April 2020, the company announced its Interim Results for the six months to 29th February 2020.

  • The group revenue of the company increased by 21 per cent to £1,596.8 million during the six months ending 29th February 2020.
  • During the six months to 29th February 2020,the gross margin ratio decreased by 170 bps due to cargo and duty costs. The retail gross margin decreased by 200 bps as compared to the prior year.
  • During the reported six months, the net debt of the company increased by 332 per cent, mirroring the seasonal peak.
  • The profit before tax increased by 653 per cent as compared to the prior year. 

(Source: Company website)

  • Reduction by 10 per cent in conversion shows customer shifting to mobile web, which has a comparatively higher mix of new visitors, with a lower initial conversion rate.
  • Due to the acquisition of new customer as well as a reduction in churn, the active customer increased by 22.3 million.
  • The total order of the company increased by 19 per cent to £1 million during the first half.
  • The visit on the sites also increased by 22 per cent during the six months to 29th February 2020.

ASC – Impact of COVID-19

The company informed that demand at the end of the first half have been impacted due to lockdown amid novel coronavirus. However, interruption from china for product sourcing is low. The group has already conducted the stress test related to the COVID-19, which showed that this pandemic had affected the customer demand as novel coronavirus impact businesses globally where the company operates.

ASC – Share price performance

At around 11:14 AM (GMT) on 09th April 2020, ASOS Plc’s stock was trading at a price of GBX 2,055.00 per share on the London Stock Exchange, up by 55.00 points or 2.75 per cent from its previous closing of GBX 2,000.00. The Beta of the stock stood at 2.23, while its Market Capitalisation was reported at GBP 1.68 billion.

Zotefoams Plc

Zotefoams Plc (LON: ZTF) is the leading company in cellular material. It is one of the top-most producers of low weight cross-linked polyolefin block foams (AZOTE®). The company also sells and licenses microcellular materials technology and high-performance product (T-FIT® & ZOTEK®). The company is headquartered near to London, UK and has more than 450 employees globally. 

ZTF – Financial Highlights

On 07th April 2020, the company released its preliminary results for the FY19.

  • The group revenue of the company decreased slightly to £86 million as compared to £81.04 million during the year 2018.
  • During the year 2019, the gross profit margin decreased to 35.4 per cent due to operating costs and depreciation and from new strategic assets.
  • Profit before tax was reported at £9.81 million during the year 2019.
  • The company is focusing primarily on organic growth. Over the past five years, the ZTF has invested £4 million in property, plant and equipment including Capitalisation interest.
  • Net cash inflow from operations before investment in working capital reduced by 12 per cent to £15.39 million as compared to £17.48 million during the year 2018.

ZTF – Impact of COVID-19

The company has informed that the small processing facility for T-FIT technical insulation in China returned to work during the beginning of March 2020 after the extended closure due to novel coronavirus outbreak. However, the company said that this pandemic had caused difficulties for the company’s operations. Due to COVID-19, the company is focusing on low cash outflows and boosting the financial health for the shorter term. The company has suspended the dividend for the year ended 31st December 2019.  

ZTF – Share price performance

At around 10:21 AM (GMT) on 09th April 2020, Zotefoams Plc’s stock was trading at a price of GBX 201.80 per share on the London Stock Exchange, down by 3.20 points or 1.56 per cent from its previous closing of GBX 205.00. The Beta of the stock stood at 1.46, while its Market Capitalisation was reported at GBP 99.02 million.


Disclaimer

The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site.

 

With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities. 

Amidst this, are you getting worried about these falling interest rates and wondering where to put your money?

Well! Team Kalkine has a solution for you. You still can earn a relatively stable income by putting money in the dividend-paying stocks.

We think it is the perfect time when you should start accumulating selective dividend stocks to beat the low-interest rates, while we provide a tailored offering in view of valuable stock opportunities and any dividend cut backs to be considered amid scenarios including a prolonged market meltdown.

To know more about these dividend stocks, click here

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK