Interim Results Of Three Small-Capitalisation Companies: JOUL, ADL & CAR.

Joules Group PLC (LON:JOUL): Alternative Investment Market-listed Joules Group PLC is a United Kingdom-based, multi-channel general retailing company. The company designs and sells homeware range, lifestyle clothing and related accessories. Its areas of operations divided into three broader segments such as Retail, Wholesale and Others. The outstanding market capitalisation of the group stood at £180.52m.

In the interim results reported by the group as on January 21, 2020, for the 26-weeks ended as on November 24, 2019, the group reported modest first-half sales and margin performance despite challenging market conditions.

During the period under consideration, the group’s revenue declined by 1.4% to £111.6m against £113.1m reported in the first half of the corresponding previous financial year. However, retail revenue for the 27-weeks period (including black Friday) increased 3.1% in the same period and group's total revenue went up by 1.3%.

The results for the H1FY20 were impacted by the timing of the Black Friday trading session which took place in H2FY20 against the first half of prior year.

The group’s international segment revenue now stood for 17% of the group’s total revenue, and E-commerce stood for more than 50% of the total retail revenue. During the H1FY20, group’s active customers surged to 1.4m, which suggests a growth of 8% on a YoY basis.

However, the group gross margin was broadly in line with the H1FY19 at 54.8%, driven by retail gross margin of 60.8%, up 50bps on a YoY basis and benefited from exchange rate hedging.

Profit before tax (before exceptional costs) plummeted by £0.9m to £8.4m in H1FY20 and was mainly impacted on account of the timing of the Black Friday trading period and the adoption of IFRS 16 – Leases, as well.

The board of the company has also proposed an interim dividend of 0.77p/share for H1FY20 against 0.75p/share reported in the H1FY19.

Free cash flow excluding expenditure on the group’s new Head Office development was at £1.0m in the period against £6.2m reported in the H1FY19. This was driven by lower EBITDA, higher working capital outflow and higher tax payments due to transition to HMRC's quarterly in-advance instalment payments with four tax payments in the first half compared to two in the prior year, with an impact of £1.2m. However, from H2FY20 onwards the number of payments will normalise at two per half year.

However, the group recently updated that Christmas trading period was disappointing because of online stock availability issues and together with non-recurring costs associated with supply chain initiatives and China-US tariffs, these have impacted full-year profit expectations.

However due to the modest performance of the group during the first half of 2020, its shares were trading higher for the second consecutive day. After registering a gain of approximately 10.4% in the January 21, 2020 trading session, its shares extended gains for the second consecutive day on 22 January 2020 and traded approximately 1.49% higher at GBX 205.0 and during the day trading, its shares have touched an intraday high of GBX 205 and a low of GBX 195.50.

On a Y-o-Y basis, its shares have delivered a negative price return of 22.3%, however, bagged approximately 21% in the past five trading session. In the past 52 weeks, its shares have registered a high of GBX 317 and a low of GBX 147.43, respectively.

At the current traded level, its shares traded approximately 35.3% lower against its 52-week high price level and approximately 39.05% above its 52-week low price level.

Andalas Energy and Power PLC (LON:ADL):  The £1.5m market-capitalisation Andalas Energy and Power PLC is a UK-headquartered Oil and Gas Producer. The group is an upstream oil, gas and power company. Earlier it was known by the name, CEB Resources Plc. The group subsidiaries are Corvette Energy (Singapore) Pte Ltd and Peelwood Pty Ltd. as well.

As on January 21, 2020, the group reported its half-yearly results for the six months ended as on October 31, 2019. During the period under consideration, the group reported a loss of US$0.5m against the loss of US$0.86m in the year-over period. The group said that it continues to control its costs very closely and preserve cash to the maximum extent possible without restricting it from developing opportunities.

The major cost for the group is its employees. Therefore, in the order to preserve cash, two of the group's directors have continued not to withdraw their contractual entitlement and have agreed to take deferred payment until the company returns to a solid cash position. At the end of the first half of FY20, the unpaid director's remuneration accounted for $473,000, which remains unpaid on the date of this report.

However, net cash used in operations has substantially declined from US$1.38m in H1FY19 to US$0.36m in H1FY20 and loss per share also narrowed to US$0.06 from US$0.34 recorded in the H1FY19.

However, its stocks plummeted approximately 19.35% to GBX 0.125 in the January 21, 2020 trading session and extended losses for the second consecutive day as on the January 22, 2020 trading session at the time of writing (at 11:56 AM GMT), its shares traded approximately 8.34% lower at GBX 0.114.

In a year-over period, its shares have registered a 52-week high of GBX 1.1 and a 52-week low of GBX 0.11, respectively. Also, on a YoY basis, its shares have tumbled more than 86%, sank approximately 26.1% in the past three months and tumbled approximately 26% in the past five trading sessions.

Also, at the current traded level, its shares tumbled 88.6% from its peak 52-week high price level and were placed approximately 13.6% above its 52 -week low traded level, which reflects that the stock is more tilted towards the 52-week low price level.

Carclo PLC (LON:CAR): The United Kingdom-based Carclo PLC is a basic materials group company. The group is engaged in the supply of fine tolerance, plastic components for injection moulds, primarily for medical products. The outstanding market capitalisation of the company stood at £13.80m, which ranks it among the small-caps listed and traded on the main market of the London Stock Exchange.

As on January 21, 2020, the group reported its interims results for the first half-year ended September 30, 2019. During the period under consideration, the group’s revenue from continuing operations surged to £56.1m, which was 12% higher against the year-over period revenue of £49.9m reported in the H1FY19. Underlying operating profit from continuing operations increased by 57% to £3.3m against £2.1m reported in the H1FY19.

There were significant performance issues in the LED Division, where the Wipac UK and Wipac Czech businesses were disposed-off after the period-end. The results of the two disposed-off businesses are shown as discontinued operations whilst the results of the remaining Optics Business are included in those of the Technical Plastics Division. The two Wipac businesses reported a combined loss, before exceptional costs, of £2.7m against a profit of £2.4 m reported in H1 2019.

Group statutory loss before tax was £5.6m against the profit of £3.4m reported in the H1FY19. Exceptional costs from continuing operations were £1.9m against £0.2m reported in H1FY19.

Solid progress was made in improving the financial position of the group with net debt, excluding IFRS16 lease liabilities, reducing to £26.8m at 30 September 2019 against £35.9m reported at the end of H1FY19.

However, on account of loss reported at the end of H1FY20, its shares tumbled approximately 17% to GBX 15.76 on 22 January 2020. However, in the past three months, its shares have surged approximately 47%, and bagged approximately 50% in the past six months, however, on a Y-o-Y basis, its shares have tumbled approximately 61%.

In a year-over period, its shares have registered a 52-week high of GBX 49.0 and a 52-week low of GBX 9.0. At the current traded level its shares traded approximately 68% below its 52-week peak level and approximately 75% above its 52-week low traded level.