Europe's largest used car firm boosted its top-line through acquisitions and Brexit FX tailwinds
Companies: BCA Marketplace
BCA Marketplace, Europe's largest used car company, has announced bumper half-year results for the period ended 2 October, showing a hefty boost to the top-line from acquisitions and Brexit-induced FX tailwinds.
Group revenues hit £909.8m in the period, a massive 66% increase year-on-year, primarily due to acquisitions and FX tailwinds. This helped the group boost adj EBITDA by 31% and EPS by 27.8%, leading to a welcome 10% boost to its dividend, giving investors something else to cheer about.
The firm's net debt is up markedly on the previous year at £255.9m, roughly 3.96x EBITDA (Net Debt/EBITDA) (3.18x 2015), which might seem high to investors but it's due to the acquisition of Paragon Automotive.
There are some interesting operational highlights included today that investors will welcome. They give an insight into BCA's growing strength across its business, with WeBuyAnyCar increasing sales by 13.3%, BCA Partner Finance increasing market penetration to 8% from 5.4%, UK Vehicle sales up 8.4% and International sales up 5.7%.
N+1 Singer analyst Matthew McEachran welcomed the results, saying BCA beat expectations by 5% due to FX tailwinds, integration benefits and as a result of management addressing cost pressures:
"...BCA is both operating in markets where there is a structural growth opportunity, and delivering significant strategic enhancements to drive profitable expansion... Rising penetration of existing and newer services (e.g. buyer finance) is driving profit per unit metrics. Alongside plans to drive further efficiencies on top of the natural operational gearing, the outlook for BCA is positive and visibility is good."
Singers has upgraded its EPS forecasts by 3% for the full-year, but say there is potentially still risk to the upside.
Zeus Capital also put out a note on today's results, saying the results were 5% ahead of its expectations at the adj EPS level. Zeus welcomed the strong progress across all four of its divisions:
"...leading to an impressive +31% increase in adjusted EBITDA. Our EPS assumptions remain unchanged, and we are comfortable at the top end of the consensus range. We continue to believe BCA remains well positioned as an attractive structural growth play and is underpinned by a solid and progressive dividend yield."
