Two Stocks Under Focus: HUR, BOO

Hurricane Energy PLC

Hurricane Energy PLC (HUR) is an oil and gas exploration and development company that discovers, appraises and develops hydrocarbon resources from fractured basement reservoirs. The company has licenses focussed on the Rona Ridge and owns a portfolio of offshore licences on the UK Continental Shelf.

HUR-Operational update (2^nd September)

The average production rate of the company stood at 14,400 bopd (barrels of oil/day) from first oil to latest lifting as on 17^th August 2019. The company managed to sell 1.2 million barrels of crude till date.

HUR-Financial Highlights for FY18 period ended 31^st December 2018

The company’s reported operating loss decreased from $25 million in FY17 to a loss of $12.7 million in FY18. The Group’s loss after tax for the year 2018 stood at $60.9 million and increased significantly against the loss of $7.0 million reported in 2017, due to an increase in non-cash fair value loss on derivative financial instruments of $42.4 million associated with Hurricane’s convertible bonds. The total comprehensive loss for the year surged from $7 million in 2017 to loss of $59.1 million in 2018. The basic and diluted loss per share rose from 0.46 cents in the financial year 2017 to a loss of 3.11 cents in FY2018. The net cash position stood at $123.2 million at the end of FY2018.

The company is hoping to be the first company to prove that oil can be commercially produced from fractured basement rock formations in UK waters and if it is able to prove production is sustainable at the Lancaster field, then it is likely to attract the interest of oil majors. For the first three months, the group plans to produce an average of 9,000 barrels per day, which is planned to increase to 13,000 for the next three months, demonstrating the scale and deliverability of its production. However, to fully understand the scale of the reservoir and sustainability of production, the market requires nine to 12 months of production data from now.

HUR-Share price performance

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

On 13th September 2019, at 02:40 PM GMT while writing, HUR shares were trading at GBX 47 per share; which were down by 1.34 per cent as compared to the closing price level of the previous day. The company’s market capitalisation was at £947.69 million at the time of writing.

On 5th June 2019, the shares of HUR touched a new peak of GBX 64.70 and reached the lowest price level of GBX 38.00 on 19th December 2018 in the last 52 weeks. The company’s shares were trading at 27.35 per cent lower from the 52-week high price mark and 23.68 per cent higher 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 5,833,813 at the time of writing before the market close. The 5-day stock's average traded volume was 15,569,177.80; 30 days average traded volume- 9,272,622.97 and 90 days average traded volume – 14,950,418.00. The volatility of the company’s stock was higher as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 1.26.

The shares of the company have delivered a negative return of 10.54 per cent in the last quarter. The company’s stock surged by 7.88 per cent from the start of the year to till date. The company’s stock has given investors 10.95 per cent of a negative return in the last year.Â

Boohoo Group PLC

Boohoo Group Plc (BOO) is an AIM-listed stock which is among the market leaders in the online retail fashion space in the United Kingdom. The company has an international presence in the primary markets such as the United Kingdom, Europe, Australia and the United States. The popular brands of the company PrettyLittleThings, NastyGal and boohooMAN targets people within the age bracket of 16 to 30 years.

BOO-Recent News

As on 27th August 2019, a total 2,343 workers were found entitled and applied for the 2019 SIP (Share Incentive Plan) and have been approved free 884 Ordinary Shares each. The company had reportedly acquired Karen Millen and Coasts, a popular British brand on 6^th August 2019. Icelandic bank (Kaupthing) organised a sale for these newly acquired brands. The company will announce its half- yearly results on 25th September 2019.

BOO-Trading Update (as on 5th September 2019)

The company announced a trading update for the H1 FY20, where performance has been ahead of given outlook with robust revenue growth driving operating leverage over key brands. The group’s board now expects that results for the current financial year will be ahead of prior guidance, with company’s sales progress now anticipated in the range of 33 to 38 per cent against the prior guidance which was in between 25 per cent and 30 per cent. The board expects EBITDA margin for the financial year to remain at approximately 10 per cent.

BOO-Financial Highlights for Q1 FY20

In the update reported by the company as on June 12, 2019, the group’s total revenue increased by 39 per cent to £254.3 million in Q1 FY20 against £183.6 million recorded in the year-ago period, primarily driven by revenue growth across all geographical segments with the UK business recording a growth of 27% on a YoY basis and international business nudged by 56 per cent. Gross margin during the period under consideration stood at 55 per cent against 55.2 per cent recorded in the first quarter of the previous financial year. The company’s net cash was recorded at £194 million by the end of the first quarter of the financial year 2020.

The apparel retailer company attained IP (Intellectual Property) assets and the brand of the MissPap for the period under consideration. The company had shown good segmental performance for the period. The company’s Boohoo brand witnessed an increase of 27 per cent (AER basis) in revenue to £123.5 million and its gross margin was at 54.1 per cent. The other brand, PrettyLittleThing revenue was £112.1 million, attained an upside of 42 per cent. The brand’s (PrettyLittleThing) gross margin was recorded at 55.9 per cent. The popular young women brand of the company, Nasty Gal revenue surged to £18.2 million, up by 153 per cent (AER basis). The brand’s (Nasty Gal) gross margin was recorded at 56.1 per cent.

The company delivered strong performance in the first quarter of the financial year 2020. The company’s board expects a revenue generation in the range of 25 to 30 per cent. The company’s expects EBITDA margin to be near about 10 per cent for FY2020.

Boohoo Group Plc decent growth during the first quarter in FY20 is directly correlated to the strong performance of brands under its umbrella, like NastyGal, PrettyLittleThing and Boohoo. The company’s performance was better than of the industry average in terms of revenue generation, net margin, return on equity in the financial year 2019.

BOO-Share price performance

On 13th September 2019, while writing at 02:45 PM GMT, Boohoo Group Plc shares were at a current market price of GBX 269.30 per share; which was lower by 0.18 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £3.14 billion at the time of writing.

On 6th September 2019, the shares of BOO have touched a new peak of GBX 288.60 and reached the lowest price level of GBX 146.39 on 17th December 2018 in the last 52 weeks. The company’s shares were trading at 6.68 per cent lower from the 52-week high price mark and 83.96 per cent higher 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 1,238,742 at the time of writing before the market close. The 5-day stock's average traded volume was 5,085,563.00; 30 days average traded volume- 3,919,544.80 and 90 days average traded volume – 3,995,149.30. The volatility of the company’s stock was 45 per cent higher as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 1.45.

The shares of the company have delivered a positive return of 16.04 per cent in the last quarter. The company’s stock surged by 67.06 per cent from the start of the year to till date. The company’s stock has given investors 55.19 per cent of a positive return in the last year.Â