Review of LSE listed Halfords Group Plc, Woodford Patient Capital Trust Plc & Redde Plc

Review of LSE listed Halfords Group Plc, Woodford Patient Capital Trust Plc & Redde Plc

       

Halfords Group Plc

Halfords Group plc is a United Kingdom domiciled leading provider of motoring and cycling products and services. The company’s products and services are offered through 450 company owned Halfords stores, 318 garages (under brand name Halfords Autocentres) and 26 Performance Cycling stores (Under the brand names Cycle Republic, Tredz, Boardman and Giant). Services of the company are also offered through web portals halfords.com, cyclerepublic.com and tredz.co.uk where customers can purchase merchandise and through halfordsautocentres.com where client can book garage services online.

The shares of the company are listed on the London Stock Exchange in the main market segment where they use the ticker name HFD for trade.

Trading update

The company on 4 September 2019, came out with a trading update of its performance for the 20-week period ending on 16 August 2019.

  • The LFL revenue of the company at a Group level came down by 3.2 per cent during the period, with the Retail segment coming down by 3.9 per cent and Autocentres growing by 1.1 per cent.
  • The Gross Margin earned by the company across Motoring, Cycling and Autocentres have performed better year-on-year while the company continued to maintain discipline over its costs.
  • The company’s Group service-related sales gave a positive year-on-year growth, on the back of improved service penetration as well as with the debut of the new weCheck and cycle care services of the company.
  • The company’s Group online sales numbers also grew strongly at 8.4 per cent year-on-year, with 85 per cent revenues of Halfords.com orders collected at the company’s outlets.
  • The Autocentres business vertical sales figures continued to grow, with LFL sales increasing by 1.1 per cent. The vertical is performing strongly against its transformation plan and is very well on track to deliver profit growth during the forthcoming periods.

Stock performance at the London Stock Exchange

Price Chart as on 24 October 2019, before the market close (Source: Thomson Reuters)

On 24 October 2019, at the time of writing the report (before the market close, GMT 1.16 PM), HFD shares were trading on the London Stock Exchange at GBX 174.10.

The stock of the company has a 52-week High of GBX 327.20 and a 52-week low of GBX 155.40. The total market capitalization of the company at the time of writing this report was £345.47 million.

Outlook

The company during the first half of the year has witnessed weak sales growth, the impact of which has been somewhat mitigated by higher margins and discipline over costs. The Poor summer weather, combined with weaker consumer activity, has had an adverse impact on the company’s performance with the exception of Motoring services, which has shown a resilient performance.

Despite the challenging business environment, the company has witnessed a positive contribution to sales and margins coming from key elements of its customer centric strategy. The company continues to actively invest in these areas during the second half of the year as well, focusing its resources where it sees good growth opportunities. On this basis, the company anticipates that the underlying profit before tax for FY20 to be within the range of £50 million to £55 million.

 

Woodford Patient Capital Trust Plc

Woodford Patient Capital Trust PLC is a United Kingdom domiciled closed-ended investment management company. The company manages funds that invest in quoted and unquoted equities of companies which are incorporated or listed on Stock Exchanges in the United Kingdom. The company follows a long-term growth investment strategy, investing in companies of all shapes and sizes and diversified across multiple sectors.

The shares of the company have a listing on the London Stock Exchange in the main market segment where trading in them happens under the ticker name WPCT.

Portfolio Manager Appointment

The company on 24 October 2019 came out with an update on appointment of their portfolio managers.

  • The company announced that Schroder Investment Management Limited has been appointed as the its portfolio manager. The company shall rename itself as Schroder UK Public Private Trust Plc shortly following the appointment, which is expected by the end of 2019.
  • Schroder Investment Management Limited shall manage the portfolio of the company in line with its existing investment objective and policy framework. The company will bring together its established and highly successful investment approach that it had previously applied across both quoted and unquoted companies. This will go a long way to manage the company in the long-term and provide positive outcomes for shareholders and the British enterprise.
  • The company has extensive investment management experience across both public and private markets with relevant sector-wise expertise as well, including the healthcare and technology sectors. The company will follow a team-based approach to manage the portfolio. Schroder Investment Management Limited’s beliefs are aligned with Woodford Patient Capital Trust PLC’s philosophy of identifying and providing access to investment opportunities irrespective of the type of ownership structure.

Stock performance at the London Stock Exchange

               

Price Chart as on 24 October 2019, before the market close (Source: Thomson Reuters)

On 24 October 2019, at the time of writing the report (before the market close, GMT 2.23 PM), WPCT shares were trading on the London Stock Exchange at GBX 39.0535.

The stock of the company has a 52-week High of GBX 91.00 and a 52-week low of GBX 29.59. The total market capitalization of the company at the time of writing this report was £344.83 million.

Outlook

Schroder Investment Management Limited has been selected through a competitive process. The firm’s careful and considered approach of making long-term investments, backed by its strong research resources makes it the natural choice to manage the company's portfolio.

Redde Plc

Redde Plc is a holding company. The company is engaged in providing non-fault accident management assistance and related services, fleet management and legal services. The company offers a range of motor claims, accident management services, including vehicle replacement and repair management together with full claims-handling assistance, as well as legal and other personalized services.

The shares of the company have a listing on the AIM (Alternative Investment Market) segment of the London Stock Exchange bearing the ticker name REDD.

Financial Results

The company on 5 September 2019 came out with its annual results for the year ended 30 June 2019.

  • The revenues of the company for the years was £589.7 million, whereas for 2018 financial year revenues were £527.0 million, which is an increase of £62.7 million (11.9 per cent). The sales growth is contributed by a 9.4 per cent growth in the number of credit hires. In addition, there was a 5.2 per cent increase in the total number of repairs undertaken. Also, there were increased activity levels within the Group's fleet and incident management businesses.
  • The company’s adjusted earnings before interest and taxation ("EBIT") for the financial year stood at £49.6 million, an increase of 7.3 per cent over the £46.2 million adjusted earnings before interest and taxation ("EBIT") achieved last year.
  • The adjusted profit before tax of the company for the year stood at £49.3 million, whereas for financial year 2018 it stood at £46.0 million, which is an increase of 7.1 per cent.
  • The company’s adjusted basic EPS for the year stood at 13.44 pence, whereas for financial year 2018 it was 13.27 pence. The adjusted diluted EPS of the company for the year stood at 13.21 pence whereas for FY 2018 it stood at 13.07 pence.

Stock performance at the London Stock Exchange

Price Chart as on 24 October 2019, before the market close (Source: Thomson Reuters)

On 24 October 2019, at the time of writing the report (before the market close, GMT 3.04 PM), REDD shares were trading on the London Stock Exchange at GBX 116.80.

The stock of the company has a 52-week High of GBX 187.80 and a 52-week low of GBX 82.30. The total market capitalization of the company at the time of writing this report was £352.89 million.

Outlook

The company has won a number of new contracts during the year in different business verticals of the Group along with a contract renewal with a major insurer, all of which have provided strength to the company. The Board is confident of achieving its vision for the next financial year ending on 30 June 2020. Trading for the first two months of the next year since the balance sheet date has been in line with the management expectations.

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