Review Of Two LSE Listed Stocks - Fevertree Drinks Plc and Derwent London Plc

  • Nov 05, 2019 GMT
  • Team Kalkine
Review Of Two LSE Listed Stocks - Fevertree Drinks Plc and Derwent London Plc
Fevertree Drinks Plc

Fevertree Drinks Plc is the United Kingdom-based leading supplier of carbonated mixers for alcoholic beverages. The company launched its brand first in the United Kingdom in 2005 and has ever since expanded its operations into more than 70 countries. The company produces and sells premium mixers for Gin, Vodka, Rum and Whiskey, and distributes them widely through retail outlets, restaurants, hotels, bars as well as cafes.

The shares of the company have a listing on the London Stock Exchange in the Alternative Investment Market (AIM) segment. There the shares trade with the ticker name FEVR.

Results Update

The company on 23 July 2019 came out with its interim results for the six-month period ending on 30 June 2019.

  • The revenue of the company for the period was up by 13 per cent to stand at £117.3 million, while for the first half of 2018 the revenue stood at £104.2 million.
  • The Gross margin of the company for the period was 51.9 per cent, whereas, for the first half of 2018, the gross margin of the company was 53.2 per cent.
  • The Adjusted EBITDAof the company for the period was up by 8 per cent to stand at £36.7 million, while for the first half of 2018 the figure stood at £34.0 million.
  • The Net cash held by the company as on 30 June 2019 was £104.1 million, while for the corresponding period ending in 2018 the figure stood at £56.4 million.
  • The Diluted Earnings Per Share of the company for the period was up by 7 per cent to stand at 24.30 pence, whereas for the first half of 2018, the figure stood at 22.72 pence per share.
  • The board of the company has declared an Interim dividend of 5.20 pence per share for the period, which is up 23 per cent from the corresponding interim period dividend in 2018 of 4.22 pence per share.

Source – Company’s half-yearly result publication on 23 July 2019

Performance at the London Stock Exchange

Price Chart as on 05 November 2019, before the market close (Source: Thomson Reuters)

On 05 November 2019, at the time of writing the report (before the market close, GMT 12.09 PM), FEVR shares were trading on the London Stock Exchange at GBX 1833.50.

The stock of the company has a 52-week High of GBX 3290.00 and a 52-week low of GBX 1766.50. The total market capitalization of the company at the time of writing the report was £2.12 billion.

Outlook

The company is well-positioned to leap into its next phase of growth with a strong geographical footprint and a superior portfolio of high-quality carbonated mixers. The company has strategic agreements with crucial alcoholic beverage producing companies of the world which it believes would bring it significant global opportunity and would be the key to its next phase of development.

The company though remains mindful of the harsh operating environment because of the economic outlook for the next year and beyond. The management is, however, hopeful that it will be able to meet its guidance for the full year.

Derwent London Plc

Derwent London Plc is the United Kingdom domiciled Real Estate Investment Trust (REIT). As of 30 June 2019, the company owns 84 buildings in its commercial real estate portfolio which are predominantly located in central London and are valued at approximately £5.4 billion (including joint ventures), making the company the largest London focused Real Estate Investment Trust in the United Kingdom.

The company acquires low-value properties in central London, especially where it believes there is scope for development and works on the regeneration of those properties to add value to them keeping in mind the changing needs and tastes of future tenants. The company primarily acquires such properties in the West End and the Tech Belt areas of central London.

As part of its commitment to a sustainable environment, the company in October 2019 became the first Real Estate Investment Trust (REIT) in the United Kingdom to sign a Green Revolving Credit Facility. Other than that, the company also launched its own Green Finance Framework and signed the Better Buildings Partnership's climate change commitment.

The company has a 5.7 million square foot portfolio of assets which include landmark schemes including White Collar Factory EC1, Brunel Building W2, Angel Building EC1, Tea Building E1, 1-2 Stephen Street W1 and Horseferry House SW1.

The company has been a recipient of many industry awards namely the CoStar West End Deal of the Year 2019 for Brunel Building, the Westminster Business Council's Best Achievement in Sustainability award and the EG Offices Company of the Year for 2019.

The shares of the company have a listing on the London Stock Exchange at the main market segment. There they trade with the ticker name DLN. The shares of the company also form part of the FTSE 250 segment.

News Update

The company on 04 November 2019 came out with a news update about its pre-letting of three floors of its central London property of Soho Place W1 to Apollo Management International, LLP.

  • The space that has been pre-let represents 43 per cent of the total floor space of the property totalling 83,100 square foot comprising the second, third and fourth floors. The lessees have also committed to a fifteen-year lease agreement with a review of the rental amount every five years. The lessees also have the option of renting the remaining first-floor available space of 5,200 square foot.
  • This pre-letting and including the other pre-lettings of Soho Place W1 which were announced during the year have ensured that 96 per cent of the property has been let out of this property.

Performance at the London Stock Exchange

Price Chart as on 05 November 2019, before the market close (Source: Thomson Reuters)

On 05 November 2019, at the time of writing the report (before the market close, GMT 12.09 PM), DLN shares were trading on the London Stock Exchange at GBX 3548.00.

The stock of the company has a 52-week High of GBX 3694.00 and a 52-week low of GBX 2775.00. The total market capitalization of the company at the time of writing this report was £3.99 billion.

Outlook

The company has been able to pre-let almost all the 1 Soho Place property two years ahead of its completion and that too with fifteen-year lease agreements. This demonstrates the strong market dynamics of the pre-letting market in London. The company has another property called Elizabeth, that is lined up for the next year. Given the market scenario, the company is hopeful of repeating the current success next year as well.

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