Two FTSE 250 Stocks Under Focus: Electrocomponents Plc and Aggreko Plc

Two FTSE 250 Stocks Under Focus: Electrocomponents Plc and Aggreko Plc

Electrocomponents Plc

Electrocomponents Plc (ECM) is a global distributor of electronic and industrial products using multiple channels. The company offers over 500,000 products sourced from more than 2,500 suppliers. The company provide its products and services to more than 1 million customers and ships over 50,000 parcels per day. The company is having its operations in 32 countries with an employee base of more than 6,600 professionals globally. As on June 01, 1967, its shares got admitted to the main market of the London Stock Exchange. Threadneedle Asset Management Ltd., Majedie Asset Management Ltd., and Wellington Management Co. LLP are the major institutional shareholders in the company. (Source: Thomson Reuters).

ECM-Trading Update: H1 FY20

During the period, the group's revenue growth performance was moderate, driven by a like-for-like basis revenue growth of 5%. Also, the group gained market share in EMEA despite heightened macro headwinds. In the first half of FY20, RS PRO revenue surged by 10% on a like-for-like basis, and digital revenue performed in line with the group's expectations.

However, despite the moderate revenue performance of the group, its gross margin declined by 0.8% on a YoY basis. The group also highlighted that it expects gross margin to shrink further in the second half of the FY20.

ECM-Financial highlights for H1 FY20

(Source: LSE)

On 12th November 2019, the company released its interim results for the fiscal year 2020 period ended 30th September 2019. The company’s revenue was up by 7.3 per cent to £978.7 million in H1 FY20 as against £911.8 million in H1 FY19. The company’s gross margin decreased to 43.7 per cent in H1 FY20 from 44.4 per cent in H1 FY19. The company’s operating profit plunged by 5.8 per cent to £91.2 million in H1 FY20 as against £96.8 million in H1 FY19. The company’s net finance costs decreased to £2.3 million in H1 FY20 from £3.9 million in H1 FY19. The company’s profit before taxation was down by 4.3 per cent to £89.0 million in H1 FY20 as against £93.0 million in H1 FY19. The company’s tax charge stood at £21.4 million in H1 FY20 as against £23.0 million in H1 FY19. The company’s earnings per share were down by 4.4 per cent to 15.2 pence in H1 FY20 as against 15.9 pence in H1 FY19. The company looks forward to declaring an interim dividend of 5.9 pence per share. The net debt of the company increased to £220.7 million as on 30th September 2019 as compared to March 2019 data of £122.4 million.

ECM-Share price performance

Daily Chart as at 13-November-19, before the market closed (Source: Thomson Reuters)

On 13th November 2019, while writing at 08:32 AM GMT, Electrocomponents Plc shares were clocking a current market price of GBX 635.20 per share; which was more by 0.82 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £2.81 billion at the time of writing.

On 8th November 2019, the shares of ECM have touched a new peak of GBX 729.80 and reached the lowest price level of GBX 478.40 on 03rd January 2019 in the last 52 weeks. The company’s shares were trading at 12.96 per cent lower from the 52-week high price mark and 32.77 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 207,675 at the time of writing before the market close. The company’s 5-day stock's daily average traded volume was 1,960,407.80; 30 days daily average traded volume- 1,159,017.27- and 90-days daily average traded volume – 1,022,242.96. The volatility of the company’s stock was 25 per cent higher as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 1.25 with a dividend yield of 2.44 per cent.

The shares of the company have delivered a positive return of 16.49 per cent in the last quarter. The company’s stock surged by 24.36 per cent from the start of the year to till date. The company’s stock has given investors 1.88 per cent of a positive return in the last year. 

Aggreko Plc

London Stock Exchange-traded Aggreko Plc (AGK) has operational interests in providing modular, mobile power and related solutions. Its operational area segments are divided into Power Solutions and Rental Solutions, respectively. Its focus is diversified on a range of sectors including oil and gas, petrochemicals, utilities, events, manufacturing, services, construction, mining and shipping. As on September 29, 1997, its shares were admitted to the main market of the London Stock Exchange.

AGK-Trading update

On 12th November 2019, the company released a trading update for 9M FY19. The company’s revenue (underlying) was down by 2 per cent compared to 9M FY18. The company’s underlying revenue from Rental solutions was down by 1 per cent during the period. The company’s underlying revenue from Power Solutions Utility was down by 7 per cent during the period. The company’s full-year earnings outlook is in line with market expectations.

AGK-Interim Results for 9M FY19 

(Source: Company Release)

During the period under consideration, the group’s revenue declined by 4% on an underlying basis to £768 million from £857 million recorded a year-over period, driven by power solutions industrial underlying revenue deceleration by 9 per cent, 7 per cent underlying revenue reduction in power solutions utility and 1 per cent increase in the underlying rental solutions, respectively.

Operating profit surged by 12 per cent on an underlying basis to £81 million, and operating margins expanded by 1.6 percentage points (underlying) to 10.5 per cent. Operating cash flow for the period stood at £210 million and recorded a surge of £50 million, which was mainly driven by a £31 million lower working capital outflow. Also, the group's Return on Capital Employed (ROCE) improved by 0.6 percentage points on an underlying term to 10.2 per cent, and the group’s interim dividend stood flat at 9.38 pence per share.

The group's performance in the first half of 2019 was moderate, with revenue slumping against the comparable period of the previous financial year, driven by underlying revenue slowdown in Northern Europe, as the group's Next Generation gas contracts in Ireland started to off-hire as planned, due to slowdown in wider market on account of Brexit related uncertainties.

AGK-Share price performance

Daily Chart as at 13-November-19, before the market closed (Source: Thomson Reuters)

On 13th November 2019, while writing at 08:50 AM GMT, Aggreko Plc shares were clocking a current market price of GBX 810.00 per share; which was less by 1.48 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £2.11 billion at the time of writing.

On 13th November 2018, the shares of AGK have touched a new peak of GBX 869.60 and had reached the lowest price level of GBX 688.90 on 11th December 2018 in the last 52 weeks. The company’s shares were trading at 6.85 per cent lower from the 52-week high price mark and 17.57 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 25,619 at the time of writing before the market close. The company’s 5-day stock's daily average traded volume was 460,334.00; 30 days daily average traded volume- 517,956.03- and 90-days daily average traded volume – 527,699.14. The volatility of the company’s stock was 5 per cent lower as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 0.95 with a dividend yield of 3.30 per cent.

The shares of the company have delivered a negative return of 1.89 per cent in the last quarter. The company’s stock surged by 12.23 per cent from the start of the year to till date. The company’s stock has given investors 3 per cent of a negative return in the last year. 

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