Latest Updates Of Three FTSE 350 Stocks: BAB, PZC and HLMA

  • Sep 25, 2019 BST
  • Team Kalkine
Latest Updates Of Three FTSE 350 Stocks: BAB, PZC and HLMA

Babcock International Group PLC

Babcock International Group Plc (BAB) is a London, the United Kingdom-based group, which provides the engineering support services for defence segments. It offers naval support services, technical services, testing, assembly, consultancy and training for the marine sector. The company provides vehicle fleet management services, equipment supports and technical training for military and civil customers.

BAB-Trading update

The company, in its trading updates reported that business performance is in line with the expectations. The UK warship support business and related technology business remained strong; overall the company did well in the Marine sector. In the Nuclear sector, the company improved performance in the defence sector, but the civil market remained a tad challenging. Some of the renowned credit rating agencies confirmed the BBB rating for the company. The company issued 8-year bonds worth €550 million with expiry in 2027.

 BAB-Financial Highlights for Financial Year 2019

For the financial year ending 31st March 2019, the company’s underlying revenue decreased by 3.8 per cent to £5.2 billion as compared with the financial year 2018 of £5.4 billion, driven by the disposals and exits and decline in the short cycle parts of the business, while performance over long term contracts remained solid. Underlying operating profit improved by 0.7 per cent to £588.4 million against the £584.6 million in FY18. Increase in the margin was due to an increased Joint Venture contribution, the exit of low margin businesses and good contract performance. Underlying profit before tax surged by 1.1 per cent to £517.9 million as compared to £512.5 million in FY18. Underlying basic earnings per share climbed 1.2 per cent to 84 pence as compared with previous year data. Underlying operating cash flow stood at £617.8 million. Free cash flow (pension payments) increased by 29.4 per cent to £323.7 million as compared to the prior year data. Net debt was at £957.7 million, a decrease of £157.3 million against the £1,115 million in FY18. Net Debt to EBITDA stood at 1.4x. Full-year dividend per share surged by 1.7 per cent to 30 pence as compared with the financial year 2018 of 29.5 pence, due to the confidence in the prospects of the company and sustained cash generation.

The company had shown decent growth in the performance for the financial year 2019. On the underlying basis, although the company’s revenue had declined, the profitability had improved for the period. The group is well placed to maximise opportunities and manage the challenges through improved programme execution and maintaining the strategy and capital allocation policy.

In FY2020, the company’s underlying operating profit is expected to be in the range of £515-535 million. However, in the future, environmental regulations, foreign exchange risks and expansion by competitors could affect its business operations.

BAB-Share price performance

Daily Chart as on 25-September-19, before the market close (Source: Thomson Reuters)

On 25th September 2019, while writing at 02:52 PM GMT, Babcock International Group Plc shares were clocking a current market price of GBX 562 per share. On 1st October 2018, the shares of BAB have touched a new peak of GBX 732.60 and reached the lowest price level of GBX 410.10 on 23rd May 2019 in the last 52 weeks.

PZ Cussons Plc

PZ Cussons Plc (PZC) is a consumer products company with more than 130 years of history and expertise. The company is known for its innovation and has created some of the world’s best brands, which include Imperial Leather, Cussons Baby, Morning Fresh and St. Tropez. The company’s operations are divided into four categories being Home Care, Personal Care & Beauty, Electricals and Food & Nutrition. The company is having an employee base of more than 5000 professionals catering to the needs of its customers across Africa, Asia, North America and Europe.

PZC-Trading statement

The company is looking forward to disposing the food business in Greece along with Luksja (a Polish personal care product) as a part of the new strategy for more than £50 million. However, the company is facing key risks such as the fragile nature of consumers, the depressed Nigerian economy, highly competitive markets in Australia and uncertainty in the United Kingdom. The company’s cash generation and balance sheet remain strong, though the company expects challenging market conditions across geographies.

PZC-Financial Highlights for Financial Year 2019

For the financial year ending 31st May 2019, the company’s revenue (AER basis) dipped by 6.8 per cent to £689.4 million as against £739.8 million in FY2018. The decline in revenue was reflected by unfavourable market conditions in the African region. The company’s Adjusted operating profit declined by 10.7 per cent (AER basis) to £76.5 million in FY2019 against £85.7 million in FY2018. In the Financial year 2019, the company’s reported operating profit stood at £43.7 million as against £64.8 million in FY2018. In the Financial year 2019, the company’s adjusted PBT (Profit before tax) was reported at £69.8 million as against £80.1 million in FY2018. The company’s reported PBT (Profit before tax) declined by 37.5 per cent to £37 million in FY2019 from £59.2 million in FY2018. The reported profit for the year was £25.8 million in FY2019 versus £41.4 million in FY2018. The company’s reported basic and diluted earnings per share for the FY2019 was down by 35.2 per cent to 6.24 pence from 9.63 pence in FY2018. For the FY2019, the company’s total dividend per share was 8.28 pence, and Net Debt stood at £152.2 million.

Both the top-line and the bottom-line performances for the financial year 2019 declined. The company had mixed geographical performances with a disappointing performance in Africa and strong growth in Europe, the Americas and the Asia Pacific. The company is facing extreme macroeconomic challenges in Nigeria, which had been a key profit driver for the company. The company had announced a new policy of Focus, Scale and Accelerate to improve its operational performance and is closely monitoring its cost base. The company expects 2019/20 to be a year of transformation.

PZC-Share price performance

Daily Chart as on 25-September-19, before the market close (Source: Thomson Reuters)

On 25th September 2019, while writing at 02:53 PM GMT, PZ Cussons Plc shares were clocking a current market price of GBX 206.5 per share. On 22 November 2018, the shares of PZC have touched a new peak of GBX 244.29 and reached the lowest price level of GBX 175 on 30th January 2019 in the last 52 weeks.

Halma PLC

Halma Plc (HLMA) is a UK headquartered company engaged in the operations of manufacturing products that protect and enhance the life quality of people. The company’s operations are divided into four reportable segments being Infrastructure Safety, Environmental & Analysis, Medical and Process Safety.

HLMA-Trading statement

The company, in its recent trading statement said that performance was in accordance with the board’s expectations. Revenue growth of the company was in line with expectations. The company maintains sound financial position and cash generation remains strong, which facilitates in organic growth and acquisitions. Recently, the company acquired Ampac group for £74 million. The company’s interim results for FY20 will be released on 19th November 2019.

HLMA-Financial Highlights for FY19

Led by strong organic growth of 10% (on a constant currency basis) despite challenging market conditions, the company’s revenue for the year under consideration increased by 13% to £1,210.9m from £1,076.2m recorded in the year-ago period and acquisitions contributed 3% to the revenue growth and 2% on a net basis. Adjusted profit before tax surged to £245.7m from £213.7m in FY18 and recorded an increase of 15% on a YoY basis, driven by organic growth of 11% on a constant currency basis.  Statutory profit before tax stood at £206.7m vs £171.9m in FY18 and reported a growth of 20% on a YoY basis. Adjusted earnings per share increased by 17% to 52.74p/share from 45.26p/share recorded in the year-ago period.

During the year under consideration, the company’s Return on Sales surged from 19.9% in FY18 to 20.3%, the Return on Invested Capital expanded to 16.1% from 15.2% recorded in the year-ago period and were well above the group’s estimated Weighted Average Cost of Capital of 7.9% respectively. Total dividend for FY19 also improved by 7% to 15.71p/share on a YoY basis. 

The company performed quite well in the FY19, with 13% surge in revenue, 15% growth in Adjusted profit, improved return on sales and substantially higher spread between Return on Invested Capital and Weighted Average Cost of Capital.

HLMA-Share price performance

Daily Chart as on 25-September-19, before the market close (Source: Thomson Reuters)

On 25th September 2019, while writing at 03:01 PM GMT, Halma Plc shares were clocking a current market price of GBX 1,905.5 per share. On 3rd July 2019, the shares of HLMA have touched a new peak of GBX 2,099 and reached the lowest price level of GBX 1,215 on 11th October 2018 in the last 52 weeks.

 

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