Plans of Gradual Easing of The Lockdown and Earnings of Four LSE Stocks - PEB, SBRY, UPGS and VRP

The coronavirus spread to over 220 companies so far has wreaked havoc and is proving detrimental for the whole global economy. Now there is a common belief that it is going to be the worst recession in decades, stock markets have gone through their nastiest fall in the passing two months only, lots of companies are on the brink of collapse and everyday various companies are slashing their earnings forecast. United Kingdom’s confirmed Covid-19 cases as per WHO have been reported at 171,257 by the early morning of May 2, more than 26,770 have already lost their life due to this pandemic. But life cannot be continued like this and efforts are being made from all front to bring back the normalcy, while the pharma companies are making all-out efforts to get a breakthrough for the cure of the pandemic, the government is charting ways to resume the life, albeit with some restrictions. The UK Chancellor of the Exchequer, Rishi Sunak who is leading the nation’s economic response to covid-19, is reportedly busy preparing a blueprint to allow various businesses to resume in a safe and workable manner, the government will be announcing the details of it in the coming week.

Today, we are going to discuss financial highlights of four companies, Pebble Beach Systems Group Plc, J Sainsbury Plc, UP Global Sourcing Holdings Plc and Verona Pharma Plc, which announced their earnings and informed about the Covid-19 pandemic impact on their business.

Pebble Beach Systems Group Plc

Pebble Beach Systems Group Plc (LON:PEB) is one the prominent international software company. The company is known for its playout robotics and content management solutions for the broadcast and streaming service markets.

PEB – Financial Highlights

On 30^th April 2020, the company announced its result for the period ending 31^st December 2019.

(source: company website)

• The gross margin of the company increased by one percentage points to 74 per cent in the year 2019.
• In the year 2019, Pebble Beach Systems capitalised £1.0 million of development costs (amortised £0.8 million).
• As at 31st December 2019, the available Revolving Credit Facilities of the company reduced to £9.5 million (2018: £10.7 million). During the same period, Interest paid on the Revolving Credit Facilities increased to £0.4 million (2018: £0.3 million).
• Risk in liquidity reduced during the period. The secured bank loans & trade and other payables also decreased by £1.3 million to £14.0 million at the end of 2019.
• Order intake reduced to £10.3 million as compared to £10.8 million in the year 2018.
• As at 31st December 2019, net debt was reported to be at £8.4 million. As at 31st January 2020, net debt dropped to £8.1 million.
• As per the company, the novel Coronavirus has impacted its strategic development plans.

PEB – Share Price Performance

On 01^st May 2020, the Pebble Beach Systems Group Plc’s stock declined by 2.17 per cent or 0.25 points to end at GBX 11.25 as compared to the previous day closing price of GBX 11.50. In the last 365 days, the company achieved the highest price of GBX 12.25 on 30th April 2020, whereas the company’s share posted the one-year lowest price of GBX 5.50 on 02^nd September 2019. The company’s beta is presently reported to be at 1.3, showing high volatility compared to the benchmark index.

J Sainsbury Plc

J Sainsbury Plc (LON:SBRY) is one of the general merchandise retailers having its presence across clothing, financial, food and general merchandise services. The company has an assortment of over 90 thousand products for the consumer.

SBRY – Financial Highlights

On 30th April 2020, the company announced its preliminary results for the 52 weeks to 7th March 2020 as well as released an update on novel coronavirus impact.

(source: company website)

• The company’s underlying PBT reduced by 2.0 per cent to £586 million during the 52 weeks to 7th March 2020. Due to the phasing of cost-cutting, higher marketing expenses and tough weather comparatives, the Underlying profit decreased by 15 per cent in the first half of the year 2020.
• The profit before tax increased by 26 per cent to £255 million.
• The company generated strong cash; retail free cash flow increased by 34 per cent to £611 million during the 52 weeks to 7th March 2020.
• The company’s financial Services underlying profits increased by 55 per cent to £48 million during the period due to an upsurge in contribution from Argos Financial Services.
• Retail underlying operating profit reduced by 4.4 per cent to £938 million, mainly due to rough weather comparatives and higher marketing expenses in H1 FY2020 and a tight General Merchandise market.
• As per the company, Novel coronavirus epidemic has substantial affected company’s operation in the initial part of March 2020.
• Also, due to the novel coronavirus crisis, no dividend had been proposed.

SBRY – Share Price Performance

On 01^st May 2020, the J Sainsbury Plc’s stock declined by 1.77 per cent or 3.50 points to end at GBX 194.60 as compared to the previous day closing price of GBX 198.10. In the last 365 days, the company achieved the highest price of GBX 237.19 on 01^st May 2019, whereas the company’s share posted the one-year lowest price of GBX 171.19 on 17^th March 2020. The company’s beta is presently reported to be at 0.48, showing low volatility compared to the benchmark index.

UP Global Sourcing Holdings Plc

UP Global Sourcing Holdings Plc (LON:UPGS) is a developer and designer of some of the widely popular labels that get used in homes, it also owns and manages these brands. The company has six product categories, i.e. Housewares; Laundry; Heating & Cooling; Audio; Luggage; and Small Domestic Appliances. It sells its product to over 300 retailers in around 38 countries.

UPGS – Financial Highlights

On 30th April 2020, the company announced the six-month result for the period ending 31st January 2020.

• During the six month of FY2020, the revenue of the company increased by 2.8 per cent to £67.7 million due to surge in revenue of UK & European supermarket customers and online platforms by 45.4 per cent and 25.5 per cent, respectively.
• Underlying EBITDA increased by 3.5 per cent to £7.2 million as compared to the prior year. Also, the underlying profit before taxation increased by 4.8 per cent to £6.2 million during the six months of FY2020.
• As at 31st January 2020, the Net bank debt/underlying EBITDA ratio decreased to 1.0x as compared to 1.5x as at 31st January 2019.
• The interim dividend has been postponed for the period, in one of the various steps being taken to safeguard cash and preserve the financial strength of the business during the impact of the novel coronavirus.
• After the early disruption due to novel coronavirus, ninety per cent of the company’s factories in china started their production.

UPGS – Share Price Performance

On 01^st May 2020, the UP Global Sourcing Holdings Plc’s stock decreased by 3.90 per cent or 2.05 points to end at GBX 50.45 as compared to the previous day closing price of GBX 52.50. In the last 365 days, the company achieved the highest price of GBX 99.40 on 17th December 2019, whereas the company’s share posted the one-year lowest price of GBX 27.50 on 19^th March 2020.

Verona Pharma Plc

Verona Pharma Plc (LON:VRP) is a clinical-stage biopharmaceutical company of the United Kingdom. The company’s objective is to protect the health and quality of the people affected by chronic respiratory diseases.

VRP – Financial Highlights

On 30th April 2020, the company announced the operational update and financial results for the quarter ended 31st March 2020.

• As at 31st March 2020, the Net cash, short-term investments and cash equivalents of the company decreased to £20.8 million as compared to £30.8 million as at 31st March 2019. However, in April 2020, the company received a tax credit of £7.3 million in cash of the fiscal year 2019.
• The Net cash used in operating activities for the quarter ended 31st March 2020 increased to £10.1 million as compared to £9.9 million in the prior year.
• Due to increased administrative & general costs, the operating expense of the company also increased during the period.
• The Directors of the company did not recommend any dividend for the quarter ended 31st March 2020.
• During the quarter, a new lease agreement was signed in North Carolina. The company also mentioned the recognition of liability and corresponding right-of-use asset of £575K. The lease will end on 30th April 2024.
• As per the company, the ongoing novel coronavirus could impact the company’s capability to initiate its stage three development.

VRP – Share Price Performance

On 01^st May 2020, the Verona Pharma Plc’s stock declined by 3.41 per cent or 1.50 points to end at GBX 42.50 as compared to the previous day closing price of GBX 44.0. In the last 365 days, the company achieved the highest price of GBX 102.0 on 27th December 2019, whereas the company’s share posted the one-year lowest price of GBX 28.60 on 20^th March 2020.