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Summary
- Howden Joinery Group Plc reported a 10.1% year-on-year increase in revenue between 14 June 2020 and 31 October 2020.
- French and Belgian depots performance improved.
- Purplebricks Group Plc has shown a surge of 8% year-on-year in instructions for H1 FY21.
- Cash balance at the end of October 2020 was more than £75 million, and the balance sheet remained debt-free.
Howden Joinery Group Plc (LON:HWDN) and Purplebricks Group Plc (LON:PURP) are LSE listed consumer and real estate stock, respectively. Shares of HWDN and PURP were up by close to 0.68% and 1.63%, respectively from the last closing price (as on 4 November 2020, before the market close at 10:15 AM GMT).
Howden Joinery Group Plc: Planning to launch 15 new depots in the UK
Howden Joinery Group Plc is the FTSE 250 listed Company, which is engaged in the sale of kitchen and joinery products through more than 730 depots across various geographies like UK, France and Belgium as shown below.
(Source: Company Presentation)
Upcoming Event - The Company expects to publish its 2020 preliminary results for the 12 months ended on 30 November 2020 on 25 February 2021.
Trading Update (14 June 2020 to 31 October 2020) as reported on 2 November 2020
- As per the update released on 2 November 2020, total revenue for the reported period ended on 31 October 2020 has surged by 10.1% year-on-year. Similarly, gross margin for the period has already crossed the levels that it has achieved during H1 FY20 ended on 31 May 2020 but stayed lower than it was in the same period in FY19. However, the UK revenue for the eleven months ended on 31 October 2020 was down by 6.8% year-on-year.
- The Company has announced that it will repay £22 million, received under the UK Government's Job Retention Scheme by the end of the year.
- Howden's French and Belgian depots have performed better than last year and generated the year-on-year revenue growth of 33.3% & 25.4%, respectively during the reported period.
- The Company is planning to launch 15 new depots in the UK in 2020, taking the total count of depots to 747. Four new depots will be opened in France.
- The Company is planning to pay dividends along with full-year results in February 2021 with subject to no further disruption caused by Covid-19.
Recent Developments
On 16 October 2020, the Company announced that Paul Hayes would replace Mark Robson as the Chief Financial Officer (CFO) of the Company with effect from 27 December 2020.
H1 FY20 results (ended 13 June 2020) as reported on 23 July 2020
The revenue of the Company has plunged by 28.7% year-on-year to £465 million in H1 FY20 ended on 13 June 2020 due to adverse impact of Covid-19. The Company has reported the loss before tax of £14.2 million, which includes the government furlough income of £21.5 million. The net cash balance as of 13 June 2020 was £253.4 million having the support of £76 million from government schemes.
(Source: Company Presentation)
Share Price Performance Analysis of Howden Joinery Group Plc
(Source: EODHD/Others, created by Kalkine group)
Shares of Howden Joinery Group Plc were trading at GBX 649.60 and were up by close to 0.68% against the previous closing price as on 4 November 2020, before the market close at 10:15 AM GMT). HWDN's 52-week High and Low were GBX 736.80 and GBX 394.00, respectively. Howden Joinery Group Plc had a market capitalization of around £3.83 billion.
Business Outlook
The Company is showing signs of recovery in FY20 since the easing of lockdown. It has experienced a robust trading autumn period due to enhancement in demand levels and high amount of stock availability. However, the Company remains dubious regarding its dividend payment in this unprecedented situation full of uncertainties.
Is Purplebricks Group Plc capitalizing on stamp duty holiday?
Purplebricks Group Plc is the FTSE AIM All-Share listed leading UK technology-led estate agency business. The Company was founded in 2012, and it has operations in the UK, Canada and Germany. It is backed by venture capital firm, DN Capital.
Recent Updates - The Company will publish its half-year results for the period ended 31 October 2020 on 15 December 2020.
Trading Update (for the six months ended 31 October 2020) as reported on 2 November 2020.
The UK housing market started its recovery from mid-May driven by several factors, such as easing of lockdown and announcement of stamp duty holiday. The Company is expecting an 8% surge in instructions for the six months ended on 31 October 2020 to 35,387. It was 32,850 during H1 FY20. Adjusted EBITDA for H1 FY21 is expected to be £3.50 million. The financial position is very resilient having, the cash balance of over £75 million as on 31 October 2020.
Recent Developments
On 25 September 2020, the Company announced that Elona Mortimer-Zhika has joined Purplebricks Board as a Non-Executive Director with immediate effect.
Financial Highlights (FY20 ended 30 April 2020) as reported on 3 August 2020
The revenue of the Company declined by 2% year-on-year to £111.1 million in FY20 ended on 30 April 2020. The average revenue per instruction (ARPI) has increased by 12% year-on-year from £1,243 in FY19 to £1,394 in FY20. The Company has a decent financial position reflecting the cash balance of £66.0 million as on 15 July 2020 following the disposal of Canadian business. Purplebricks does not have any debt on the balance sheet.
The Company has closed its operations in various geographies like the US, Australia and Canada during the year.
(Source: Company Presentation)
Share Price Performance Analysis of Purplebricks Group Plc
(Source: EODHD/Others, created by Kalkine group)
Shares of Purplebricks Group Plc were trading at GBX 62.20 and were up by 1.63% against the previous closing price as on 4 November 2020, before the market close at 10:15 AM GMT). PURP's 52-week High and Low were GBX 134.80 and GBX 22.05, respectively. Purplebricks Group Plc had a market capitalization of around £188.38 million.
Business Outlook
Purplebricks Group Plc has confirmed that they will report the profit for the first half of FY21. However, The Company is very cautious regarding the prospects of growth due to an adverse impact of Covid-19 situation on the housing industry and the end of the Stamp Duty holiday. The Company has exited most of their businesses, and now they are solely focusing on the UK housing market, grabbing lucrative opportunities to add significant shareholder value.
