Needle moving on two FTSE listed trending stocks: Tyman PLC & RM PLC

Summary

• Tyman did not declare the interim dividend for H1 FY2020 and cancelled the final dividend for FY2019.
• Tyman stated that the sales activity picked up in June 2020.
• RM PLC did not declare the interim dividend for H1 FY2020.
• RM PLC expects to repay the loan under the furlough scheme in 2020.

TYMN is an industrials stock, whereas RM is a technology stock. Let's walk through the recent financial and operational updates of two companies.

Tyman PLC (LON:TYMN) – Expects H2 FY20 to be better than H1 FY20

Tyman PLC is a UK based company that provides hardware solutions and commercial access solution to the construction industry. Tyman has business operations in 18 countries. Tyman operates the business in North America under AmesburyTruth, in the UK and Ireland under ERA and for Rest of the World and Continental Europe under SchlegelGiesse. The Company is headquartered in London, and it is included in the FTSE All-Share index.

H1 FY2020 results (ended 30 June 2020) as reported on 28 July 2020

(Source: Company Website)

In H1 FY20, the Company reported revenue of £254.1 million, which declined by 16 percent year on year from £301.9 million in H1 FY19. The operating profit and profit before taxation were £21.0 million and £14.7 million, respectively. The adjusted earnings per share were 9.9 pence. The return on the capital employed narrowed to 10.8 percent in H1 FY20 from 12.7 percent in H1 FY19. The Company negotiated the terms for the covenant. As on 30 June 2020, Tyman had net debt of £219.8 million with cash of £79.9 million and an undrawn credit facility of £78.6 million. The Company had an interest coverage of 8.4x and leverage of 1.8x. Tyman did not declare the interim dividend for H1 FY2020 and cancelled the final dividend for FY2019. In H1 FY20, the Company exited the low margin business of the Fremont and generated a net of the contract worth USD 3 million.

H1 FY2020 Divisional Performance

AmesburyTruth in North America generated revenue of £168.2 million, which was down by 10 percent year on year. The division had a good start in H1 FY20 with new customers win and launch of new products such as acoustical smoke vent and quad roller. ERA division in the UK and Ireland generated revenue of £39.1 million in H1 FY20 that declined from £54.0 million a year ago. SchlegelGiesse that covers the International business reported revenue of £46.8 million, which declined by 23 percent year on year following the subdued activity in the core markets.

Share Price Performance Analysis

1-Year Chart as on August-7-2020, after the market closed (Source: Refinitiv, Thomson Reuters)

Tyman PLC stock closed at GBX 194.80 (as on 7 August 2020). Stock 52-week High and Low were GBX 292.00 and GBX 133.00, respectively. The Company had a market capitalization of £383.01 million.

Business Outlook

The business has recovered partially since the operations resumed from June 2020. The Company expects the H2 FY20 to be more resilient as compared to H1 FY20 due to the measures taken in H1 FY20. Tyman plans to re-balance the sourcing portfolio and it would in-source the patio door hardware and plastic injection moulding. The target would also remain to win good quality customers. The Company expect the outlook to remain uncertain due to the volatile market conditions, but it is hopeful about the structural growth drivers.

RM PLC (LON:RM) - Saved cash of close to £16.0 million

RM PLC is a UK based education technology company that provides services to educational organizations. The Company categorizes the business under RM Resources, RM Results and RM Education. RM Resources provide early year service to education institutes, and RM Results performs the digital assessment of the e-testing and e-marking of educational data. RM Education provides software technology in the UK. The Company is listed in the FTSE All-Share index.

Interim results (ended 31 May 2020) as reported on 7 July 2020

(Source: Company Website)

The Company reported revenue of £79.3 million in H1 FY20, which declined by 17 percent year on year from £95.5 million in H1 FY19. RM generated an adjusted operating profit of £4.2 million and reported adjusted diluted earnings per share were 3.2 pence. The adjusted operating margin declined to 5.3 percent in H1 FY20 from 10.2 percent in H1 FY19. RM had a good performance in Q1 FY20; however, it was severely impacted in the Q2 FY20 due to the cancellation of exams and shutdown of school and colleges. The revenue was up by 2 percent year on year in Q1 FY20, which was negated by 33 percent fall in revenue in Q2 FY20. RM resources business division was most severely impacted due to the closure of schools. RM Resources generated revenue of £35.1 million in H1 FY20 that declined from £49.2 million a year ago as the orders slumped by almost 70 percent. RM Results reported revenue of £15.1 million in H1 FY20 as the business won some new clients in Q1 FY20 that was offset by cancellation of exams in Q2 FY20. RM Education reported revenue of £29.1 million that almost remained flat in H1 FY20 as compared to last year as the business division generates most of the revenue on a recurring basis. As on 31 May 2020, RM had net debt of £14.4 million. The Company saved cash of close to £16.0 million through the cancellation of dividend and deferment of tax payment, capital expenditure and pension deficit payment.

Share Price Performance Analysis

1-Year Chart as on August-7-2020, after the market closed (Source: Refinitiv, Thomson Reuters)

RM PLC stock closed at GBX 240.00 (as on 7 August 2020). Stock 52-week High and Low were GBX 310.00 and GBX 110.00, respectively. The Company had a market capitalization of £201.30 million.

Business Outlook

The Company was focused on delivering capital programmes in FY20, but it has halted the same due to the pandemic and plans to restart it as soon as the situation improves. RM is currently assessing the impact of the pandemic on the business. RM also expects to repay the loan under the furlough scheme this year. The Company is cautious about the recovery of the RM Resources business, and it depends on the reopening of the schools. RM Results new sales pipeline was affected due to the disruption in economic situation. The Company is hopeful over the adaption of digital education in the current scenario that would support the business in the long-term.