Review of three FTSE Stocks: Balfour Beatty Plc, Mitchells & Butlers Plc & Cherming Group Plc

Review of three FTSE Stocks: Balfour Beatty Plc, Mitchells & Butlers Plc & Cherming Group Plc

Balfour Beatty Plc

Balfour Beatty Plc (LON: BBY) is a global infrastructure group which develops, constructs, finances and provides advanced and useful infrastructure that strengthens day to day life, helps communities and supports economic growth. The company works in three geographies which are UK, USA and Hong Kong with the full support of 26,000 employees globally. Government departments & agencies and private sector organisations are the primary customers of the company. The company has around 110 years of experience in providing highly complicated infrastructure schemes through projects. The company reports the performance in three segments which are Infrastructure Investments, construction services and support services.

News Updates

On 16th December 2019, the company announced that Leo Quinn acquired 59 shares of 50p each in the company as on 13th December 2019.

Trading Updates

On 12th December 2019, the company announced the trading update for to 11th December 2019.

The company announced that the order book is expected to be more than £14 billion in FY2019 as compared to £12.6 billion in FY2018, which is significantly higher. In FY2019, the revenue is expected to be around 5% more as compared to FY2018 which was reported at £7.8 billion.

The profit from operations is marginally higher as compared to the company’s Board’s expectations. All earnings-based businesses, i.e. UK Construction, US Construction and Support Services, are expected to attain industry-standard margins for the FY2019.

Additionally, the average monthly net cash is expected to be close to £310 million in FY2019 which is quite better than previous £194 million at the end of FY2018. In October 2019, the company successfully refinanced its revolving credit facility and entered into an agreement for a £375 million facility extending up to October 2022.

Financial Highlights

On 14th August 2019, the company announced its interim financial report for the six months ended 28th June 2019 through a press release.

The company’s total revenue increased to £3,884 million in H1 FY2019 as compared to £3,839 million in H1 FY2018, an increase of 1.17 per cent.

The company’s total profit from operations increased to £71 million in H1 FY2019 as compared to £60 million in H1 FY2018, an increase of 18.3 per cent. The total pre-tax profit rose to £63 million in H1 FY2019 as compared to £50 million in H1 FY2018, an increase of 26 per cent.

The company’s basic earnings per share decreased to 6.7 pence in H1 FY2019 as compared to 10.1 pence in H1 FY2018. The total dividend per share increased to 2.1 per share in H1 FY2019 as compared to 1.6 per share in H1 FY2018.

(Sources: LSE)

Share Price Performance

On 20th December 2019, at 10:33 AM GMT, while writing, BBY share price was reported to be trading at GBX 266.60 per share on the LSE, a decrease of 0.15 per cent or GBX 0.40 per share, as compared to the previous day's closing price, which was reported to be at GBX 267.00 per share.

On 04th March 2019, the shares of BBY were GBX 295.80, which was highest and reached to GBX 192.30 on 07th August 2019, which was lowest in the last 52 weeks. The present share price was down by 9.87 per cent from 52-week high price whereas it was up by 38.64 per cent from the 52-week low price.

The company's market capitalisation was reportedly valued to be at GBP 1.84 billion as per the share's current market price. The stock outstanding of the BBY share has been reported to be at 689.74 million, and the free float has been said to be at 686.39 million.

The beta of the BBY share was reported to be at 0.6243. It means that the company's share price movement is less volatile in its trend, as compared to the benchmark market index's movement.

Outlook

As per the company information, the company's construction services, and support services’ markets and capabilities are in the favourable side even though there is short term political uncertainty. At any time, the company has more than 50% of its order book denominated in US dollars, which enables it to be resilient to cyclical effects in any single geography, sector or to any individual project.

 

Mitchells & Butlers Plc

Mitchells & Butlers plc (LON: MAB) maintains and runs pubs and restaurants. The company operates around 1700 restaurants and pubs in the UK & Germany and offer customers hygienic food & drink and a pleasant service. The company’s different brands are Sizzling Pubs, Vintage Inns, Harvester Ember Inns, Toby Carvery, Castle, Nicholson’s, O’Neill’s, ALEX, All Bar One, Miller & Carter, Browns, Innkeeper’s Lodge, Oak Tree, Orchid Pubs, Premium Country Pubs and Stonehouse Pizza & Carvery. The company is also an advanced trainer and provides training and qualifications to the employees such as Kitchen NVQ Apprenticeships, Quality Educational Spirit, a Post Graduate certificate for managers (CMS), Soft Drinks Training, Post Graduate Diplomas, apprenticeships and MBA/MSc programmes for higher levels of management.

News Updates

On 29th November 2019, the company notified that its capital comprised of 429.1 million shares of 8 13/24p each with voting rights and no shares were held in treasury.

Financial Highlights

On 20th November 2019, the company announced its full-year financial report for the 52 weeks ended 28th September 2019 through a press release.

The company's total revenue increased to £2,237 million in FY2019 as compared to £2,152 million in FY2018, a change of 3.94 per cent. The overall earnings before interest, tax and depreciation & amortisation increased to £418 million in FY2019 as compared to £417 million in FY2018.

The company's operating profit increased to £297 million in FY2019 as compared to £255 million in FY2018, a change of 16.5 per cent. The total pre-tax profit rose to £177 million in FY2019 as compared to £130 million in FY2018.

The company's basic earnings per share increased to 33.5 pence in FY2019 as compared to 24.5 pence in FY2018 whereas diluted earnings per share increased to 33.3 pence in FY2019 as compared to 24.4 pence in FY2018. There was no dividend paid in FY2019.

The company further announced that the like to like sale growth was 3.5% in FY2019. The capital expenditure decreased to £152 million in FY2019 as compared to £171 million in FY 2018, whereas Net debt reduced to £1.56 billion in FY2019 as compared to £1.69 billion in FY2018.

(Sources: LSE)

Share Price Performance

On 20th December 2019, at 10:36 AM GMT, while writing, MAB share price was reported to be trading at GBX 448.50 per share on the LSE, flat with respect to the previous day's closing price, which was reported to be at GBX 448.50 per share.

On 20th November 2019, the shares of MAB were GBX 483.0, which was highest and reached to GBX 236.50 on 14th May 2019, which was lowest in the last 52 weeks range. The present share price was down by 7.14 per cent from 52-week high price whereas it was up by 89.64 per cent from the 52-week low price.

The company's market capitalisation was reportedly valued to be at GBP 1.92 billion as per the share's current market price. The stock outstanding of the MAB share has been reported to be at 429.17 million, and the free float has been said to be at 190.22 million.

The beta of the MAB share was reported to be at 0.6914. It means that the company's share price movement is less volatile in its trend, as compared to the benchmark market index's movement.

Outlook

As per the company information, the market remains challenging due to the high level of macroeconomic uncertainty, but the company is focused on reducing net debt as well as maintaining a strong balance sheet.

 

Chemring Group Plc

Chemring Group Plc (LON: CHG) provides support to the customers with knowledge and improvement to safeguard platforms, people, missions and information against continuously evolving threats. The company is operating in four markets which are UK, US, Australia and Norway as well as exports products and services around the world. Also, it operates three segments which are Sensors & information, Countermeasures & energetics and Publications. The company strategy is to provide lucrative growth by working in the markets where it has differentiators such as niche technology and high hurdles to entry.

News Updates

On 17th December 2019, the company confirmed that it awarded conditional award over 157,635 1 pence ordinary share to Sarah Ellard who is a director of the company.

On 17th December 2019, the company declared that it awarded conditional award over 245,085 1 pence ordinary share to Andrew Lewis, who is a director of the company.

On 17th December 2019, the company declared that it awarded conditional award over 307,142 1 pence ordinary share to Michael Ord who is a director of the company.

On 17th December 2019, the company declared that, as on 16th December 2019, it granted award of 41,195, 64,048 & 100,333 deferred 1 pence ordinary share to Sarah Ellard, Andrew Lewis & Michael Ord in satisfaction of 40% annual bonus payment for the year ended 31st October 2019.

On 16th December 2019, the company announced that Nigel Young signalled about his retirement as on 30th April 2020 from the post of non-executive director. Additionally, Andrew Davies will also be stepping down from the post of Chairman of the Remuneration Committee after AGM in March 2020, and Laurie Bowen will take his position. However, Andrew Davies will stay on as a member of the Remuneration Committee.

Share Price Performance

On 20th December 2019, at 10:40 AM GMT, while writing, CHG share price was reported to be trading at GBX 234.50 per share on the LSE, a decrease of 0.42 per cent or GBX 1.00 per share, as compared to the previous day's closing price, which was reported to be at GBX 235.50 per share.

On 19th December 2019, the shares of CHG were GBX 238.70, which was highest and reached to GBX 134.0 on 28th March 2019, which was lowest in the last 52 weeks.

The beta of the CHG share was reported to be at 0.5381. It means that the company's share price movement is less volatile in its trend, as compared to the benchmark market index's movement.

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