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Summary
- The retail sales of AML were up by 11 per cent year-on-year in the month of June 2020 because of the early signs from China to re-open the dealerships in that month
- The retail revenue of BRBY decreased by 45 per cent to £257 million in comparison with that of £498 million during Q1 2020
- The revenue of DVO for the first half of the year 2020 decreased slightly to £119 million (H1 2019: £119.2 million)
With falling high street sales and increased online competition, retailers in the United Kingdom were already struggling before the coronavirus pandemic began. They have been severely impacted, which has lessened their chances of survival. The consumer retail witnessed a big drop in sales and fall in the number of customers per store. Recently, the Office for National Statistics, United Kingdom released the data of retail sales of Great Britain for the month of June 2020 which reported that on comparing the figures for the three months to June, with the previous three months, a decline of 11.1 per cent in the value sales and 9.5 per cent in the volume sales was observed.
However, the retail sales recovery period is expected to kick-start after things bounce back to normal, subject to the lockdown not being reimposed further. Retailers are finding new ways to cope and, in some cases, to meet the increase in e-commerce demand.
Let's have a look at the results of some of the consumer discretionary stocks amidst the adversities.
Aston Martin Lagonda Global Holdings PLC
Formed by the merger of Aston Martin and Lagonda, AML is a leading luxury brand. Having headquartered in Gaydon, UK, it focuses on the designing, engineering and manufacturing of luxury sports cars. The company creates and exports cars in 53 countries around the world. It is having four regional offices located across the Asia Pacific, China, Europe, and the Americas regions.
Financial Highlights
On 29 July 2020, the company released its half-yearly results for the period ending 30 June 2020. It saw a downfall in the total retails by 41 per cent to £1,770 million because of the heavy impact on the dealer operations and customer demand with the advance of Covid-19 globally during Q2 (down by 48 per cent) than Q1 (down by 34 per cent). Though the company faced low volumes, retail sales were up by 11 per cent year-on-year in the month of June because of the early signs from China to re-open the dealerships in June. There was a decline in the total wholesales by 63 per cent to £895 million during H1 2020, aligned to the strategy of rebalancing supply to demand and reflecting lower dealer demand given the disruption to operations from Covid-19. Q2 (down by 77 per cent) was weaker than Q1 (down by 45 per cent) as per the company's expectations.
Revenues for the first half of the year were £146 million (H1 2019: £406.0 million), as the company started to reset core sports car volumes aligned to regaining exclusivity and operations were impacted by the advance of Covid-19. The company incurred a loss before tax of £227 million (H1 2019: £80 million). There was an improvement in the cash position of the company which stood at £359.4 million for the six-month period in 2020 (H1 2019: £126.9 million).
Stock Performance
Aston Martin Lagonda Global Holdings PLC (LON:AML) stock was trading at GBX 53.40 on 29 July 2020, at 11:48 AM, up by 7.71 per cent from its previous close of GBX 49.58. The 52-week low/high price was GBX 30.70/630.00. It was having a market capitalisation (Mcap) of £904.35 million. The volume traded at the time of reporting was 12,589,244. The company recorded a negative return on price, which was 90.95 per cent on a YTD (Year to Date) basis.
Burberry Group PLC
The company is into manufacturing and selling luxury goods across stores, outlets and e-commerce platforms.
Financial Highlights
Burberry Group released its Q1 trading results for the period ending June 2020 on 15 July 2020. The retail revenue decreased by 45 per cent to £257 million in comparison with that of £498 million during Q1 2020. The sales in the Asia Pacific region declined by 10 per cent in the quarter, whereas, the scenario in the US region and Europe region was worse, with the sales being down by 70 per cent and 75 per cent respectively. Though these regions saw the growth in sales returning in June, other areas were impacted by the lockdown and the health restrictions in place.
Stock Performance
Burberry Group PLC (LON:BRBY) stock was trading at GBX 1,292.00 on 29 July 2020, at 11:37 AM, up by 2.54 per cent from its previous close of GBX 1,260.00. The 52-week low/high price was GBX 1,085.00/2,329.00. It was having a market capitalisation (Mcap) of £5,099.33 million. The volume traded at the time of reporting was 342,719. The company recorded a negative return on price, which was 42.75 per cent on a YTD (Year to Date) basis.
Devro PLC
Devro is a UK- based company which is engaged in the manufacturing of collagen products for the food industry. It operates in three different segments- America, Asia-Pacific, and Europe. The company sells directly to food manufacturers with the help of agents and distributors.
Financial Highlights
On 29 July 2020, the company released its half-yearly results for the period ending 30 June 2020. The revenue for the first half of the year decreased slightly to £119 million (H1 2019: £119.2 million), whereas, the edible collagen casings volumes increased by 1.4 per cent with good underlying growth offset by Covid-19 headwinds arising in the second quarter. It recorded an underlying operating profit of £18.5 million, which was 4 per cent higher than the prior-year period (H1 2019: £17.8 million), and the underlying operating profit margin was up by 60 basis points to 15.5 per cent (H1 2019: 14.9 per cent), benefiting from continued cost savings and lower depreciation. The underlying basic earnings per share was up by 7 per cent to 7.5 pence (H1 2019: 7.0 pence). The free cash flow of £7.2 million (H1 2019: £4.3 million) was recorded by the company, benefiting from lower cash exceptional items and lower tax payments compared to the H1 2019. There was a reduction in the covenant net debt to £121.5 million.
Stock Performance
Devro PLC (LON:DVO) stock was trading at GBX 150.00 on 29 July 2020, at 11:53 AM, up by 4.75 per cent from its previous close of GBX 143.20. The 52-week low/high price was GBX 126.20/208.00. It was having a market capitalisation (Mcap) of £239.07 million. The volume traded at the time of reporting was 490,150. The company recorded a negative return on price, which was 17.61 per cent on a YTD (Year to Date) basis.
