Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Lookers. We currently have 102 research reports from 6 professional analysts.
Lookers has released a trading update this morning, confirming that Q1 trading was robust, but the group has faced trading pressures during April and May particularly in the used car market. We tweak our forecasts for 2019E, and now expect adj. PBT of £58.0m (vs. £64.0m previously which equates to a 9.4% downgrade). While uncertainty continues to impact trading, we believe this is factored in to the valuation at present and we continue to believe Lookers is well positioned, with a robust balance sheet and proven management team to deliver shareholders returns over the long term.
Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019
Companies: LOOK PGD TLY KRM BAGR HUW BOOM TOT ACSO STR
Lookers recently delivered a credible set of 2018A results which demonstrated the robust nature of the business model in a challenging market. We maintain our 2019E headline earnings assumptions for now, but take a more conservative view of 2020E earnings, with net debt forecasts higher due to a higher 2018 base. We continue to believe Lookers is well positioned, with a robust balance sheet and proven management team to deliver shareholders returns over the long term.
Lookers has delivered a credible performance in the context of significant trading headwinds, achieving strong market outperformance across all three business divisions led by used cars and aftersales. We maintain our forecast assumptions for 2019E and beyond reflecting our more conservative market outlook. While trading headwinds persist, we continue to believe Lookers is well positioned, with a robust balance sheet and proven management team to deliver shareholders returns over the long term
We note the recent underperformance of the shares of late and believe the current price to be an attractive entry point for investors. Lookers has a long track record of delivering strong execution despite the trading headwinds. The shares are -50% since the Benfield acquisition in 2015. At the current share price, the FCF yield is in excess of 12%, with a dividend yield approaching 5% and 94% of the current market cap backed by freehold and long leasehold assets.
Lookers maintained its outlook for the current year, notwithstanding supply-side disruption that created volatility in new car markets in Q318. Used car and aftersales activities remain healthy and Q318 trading was ahead against a strong Q317. There are signs of stabilisation in new car markets in Q418 and Lookers expects to deliver against market expectations for the full year. However, a more cautious view as Brexit looms leads us to reduce our FY19e EPS by 6%. Nevertheless, the undemanding rating remains supported by an attractive yield.
Lookers has announced a trading update this morning confirming they continue to trade in line with market expectations. The group has delivered a credible performance in the context of significant trading headwinds, achieving gross margin expansion new car sales and aftersales. We leave our forecasts for 2018E unchanged but downgrade 2019E and 2020E adj. PBT by 10.2% and 5.5% respectively, reflecting our more conservative market outlook. While trading headwinds persist, we continue to believe Lookers is well positioned, with a robust balance sheet, to deliver shareholders returns over the long term and a FCF yield approaching 10%.
Market conditions have continued to deteriorate in 2018 as new car registrations in September were down 20.5% YoY. Weakness in new car sales in the key month of September, ongoing cost pressures and continuing pressure from OEMs who face their own profitability challenges lead us to take a more cautious approach to our below consensus estimates. Balance sheet strength across the sector is generally robust, and in our view, we are likely to see further consolidation activity once recovery is in sight as smaller operators become more distressed. FCF yields are compelling from next year as major investment projects reach completion.
Companies: CAMB LOOK MMH VTU
Along with its peers, in H118 Lookers continued to be challenged by market conditions, which returned to a more normal sequential development but meant that Q1 profitability was lower than in the prior year. With new and used car markets now appearing to have stabilised, management appears confident that the impact of the new vehicle testing regime is likely to be neutral across H218. With a continued focus on operating cost control, H2 profitability should recover strongly to provide a more normal H1:H2 seasonal split than was seen in 2017. As a result, we maintain our PBT and EPS forecasts.
Lookers has released interim results this morning. Adjusted PBT and EPS is -14% YOY, we believe this was anticipated following a challenging period in the industry. We upgrade our forecasts and move our forecasts towards the consensus average. We continue to believe the shares look oversold, particularly in the context of its balance sheet flexibility, undemanding valuation and progress delivered to date based on strong management execution across all areas of the business.
Harwood Wealth (HW/ LN) Appointment of Gillian Davies as Interim CFO | Lookers (LOOK LN) Resilient H1 PBT given comp, on track to revert to PBT growth in H2
Companies: Harwood Wealth Management Lookers
Lookers have this morning released a trading update for the three-month period to 31 March 2018, essentially confirming the group continues to trade in line with expectations and is seeing good trading momentum, particularly in used and aftersales. The group has a strong balance sheet, supported by positive operational cash flow. We continue to believe the shares look oversold, particularly in the context of its balance sheet flexibility, undemanding valuation and progress delivered to date based on strong management execution across all areas of the business.
Amino Technologies (AMO LN) Contract win with T-2 in Slovenia | ITE Group (ITE LN) Acquisition & Rights Issue | Lookers (LOOK LN) Continued outperformance with growing confidence in forecasts | Northgate (NTG LN) In line year end update; VOH growing, but margins still under pressure | Zytronic (ZYT LN) Financial sector holds back progress elsewhere
Companies: AMO ITE LOOK NTG ZYT
Actual Experience (ACT LN) Large-scale deployment and reseller agreement validates opportunity | Dialight (DIA LN) AGM trading update – some progress on operational issues | Findel (FDL LN) PBT growth at upper end of expectations for FY18 | Gresham Technologies (GHT LN) Clareti contract win provides further evidence of positive momentum | Harwood Wealth (HW LN) Refining the board structure, FD stepping back | Lookers (LOOK LN) Vauxhall network changes could be helpful for partners long term
Companies: ACT DIA FDL GHT HW/ LOOK
Another record year of performance was achieved by the continuing activities of the group despite challenging market conditions that are persisting into 2018. As management pursues its strategy of focusing on the right brands in the right locations supported by appropriate levels of investment, it is continuing to outperform its markets. We expect this to continue with a remaining proactive focus on costs. Comparatives should ease as FY18 progresses but will start tougher due to the strength of markets in Q117. We now expect a modest decline in PBT for the full year.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Lookers. We currently have 102 research reports from 6 professional analysts.
|31May19 16:03||RNS||Result of AGM|
|31May19 07:00||RNS||AGM Trading Update|
|07May19 16:50||RNS||Grant Of Share Options|
|25Apr19 15:50||RNS||Total Voting Rights|
|22Mar19 15:12||RNS||Total Voting Rights|
|18Mar19 17:16||RNS||Holding(s) in Company|
|18Mar19 17:14||RNS||Holding(s) in Company|
Boohoo Group has announced a solid start to FY20 in its Q1 trading statement released this morning. Revenue for the Group is up an impressive 39% YOY to £254.3m, ahead of ZC expectations (+32%) and market consensus (+35%), and against strong Q1 FY19 comparatives (+52%). There was growth across all brands and regions, with the Group continuing to take market share. This positive performance reflects the relevance and strength of the Group’s proposition, further evidenced by it topping the UK Hitwise rankings for the first time in May. Margin performance remains solid, with Group gross margin broadly stable YOY at 55.0% (Q1 FY19: 55.2%). The group was cash flow positive in the quarter with net cash on the balance sheet of £194m at the period end versus £191m at FY19 year end and £151m a year ago. Full year guidance is unchanged at this early stage of the year and we make no change to our forecasts this morning, although see upside risk to our numbers should the momentum seen in the initial three months of FY20 continue. We believe the boohoo Group offers an attractive opportunity to invest in a fast-growing ecommerce business that is both profitable and cash generative. Trading on an FY20 PER of 47.6x, falling to 37.9x in FY21, we believe this rating is justified given the Group’s strong and consistent track record of profitable growth.
We’re just over three months in to 2019 and we’ve seen a 10% UK market rally, retracing much of the Q4 decline, such is the nature of fickle market sentiment. That said, many of the issues we wrote about three months ago that were impacting markets remain: notably Brexit, trade wars, geopolitics and global monetary policy. The 2019 rally thus far feels somewhat fragile, with competing forces of optimism on a potential trade deal which could underpin the rally, against the deterioration in underlying economic data that could ultimately undermine the recent market gains. In this context, we look at what the lead indicators and the market are telling us about the industrial cycle and the stocks most exposed to various industrial trends. The Q4 derating in short cycle industrials and autos had been vicious and while these sectors have seen a more solid footing in 2019, with earnings downgrades being priced in, it will likely take a trough in lead indicators before short cycle stocks can start to perform again and re-rate relative to the market.
Companies: ARS CYAN HYR LIT SOM ABBY AMS AMER ANX ATYM AVON BLVN PIER BUR CGS CAML CALL CSRT TIDE DTG DEMG EMR FPO FST GTLY GENL GOR GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO INDI JHD JOG KEYS KCT KGH LAM LOK MACF MNO MANO MOD MKLW OXIG PCA PANR PARK PGM PHC PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TRAK TRI VNET VTC ZOO ZTF
Companies: AZN AVO AJB AGY ARBB CLIG DNL DPP FLTA GTLY GDR HAYD KOOV MCL MUR PCA PHP RE/ REDX STX SIXH TON SHED VAL VTA W7L
Parliamentary and Brexit developments continue to hold centre stage, although the precise path forward remains as unclear as ever. The uncertainty over Brexit, worries over a possible slowdown in the US and the outlook for global economic growth generally have all contributed to the recent falls in markets. While the rally seen since the start of the year has petered out, most indices have still made progress. In Share News & Views we comment on Bloomsbury Publishing, Bonhill Group*, Braemar Shipping Services*, Burford, Clarkson, LightwaveRF*, Marshall Motor Holdings and Synectics*.
Companies: AOR APC BONH BMS CTG CRPR DMTR ESC EUSP FDM FA/ LWRF LSAI NKTN PCF SNX TCN VRE W7L
For the purposes of the Takeover Code, Edison Investment Research is deemed to be connected with GAME Digital plc. Under Rule 20.1 Edison must not include any profit forecast, quantified financial benefits statement, asset valuation or estimate of other figures key to the offer, except to the extent that such forecasts, statements, valuations or estimates have been published prior to the offer period (as defined in the Takeover Code) by an offeror or the offeree company (as appropriate) in accordance with the requirements of the Code. Consequently we have removed our estimates until the Offer Period ends.
Companies: Game Digital
TCG has confirmed that the group is in talks with its largest Chinese shareholder and business partner, Fosun, to sell its tour operator business separately after announcing the sale of its airline business. Selling separately its two businesses may be the best way to maximise value for all stakeholders at the current stage.
Companies: Thomas Cook Group
We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.
Companies: BCA CLIN CLG CBP DNLM EAH FDL FCRM FUTR GTLY INS GLE NICL SDL SPR TRI
The market has not faced quite so many conflicting challenges for a number of years, whether related to global geopolitics, trade wars, ongoing Eurozone issues or the “will they, won’t they” saga of Brexit. In our Best Ideas, we sought to highlight stocks that present investors with interesting opportunities following recent market moves. Those stocks, we believe, warrant investor attention, in many cases for uncorrelated or stockspecific reasons, regardless of the near-to-medium term market direction. These stocks, in general, represent attractive and well-managed businesses or assets, with share price catalysts and where valuations or recent stock performance provide investors with a good entry point.
Companies: 7DIG ABBY AMS ANX ARS ATYM AVON BLVN PIER CGS CAML CALL CSRT TIDE DTG DEMG ELM EMR FPO FST GTLY GENL GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KEYS KCT KGH LAM MACF MOD MKLW OXIG PCA PARK PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TWD TRAK TRI VNET VTC ZTF
2019 started well for investors with U.S. stocks rallying on the back of trade talks between China and the U.S. resuming. Sterling rebounded in Q1 2019 as expectations built the UK would avoid a “no deal” Brexit, providing a further tailwind to more internationally focused UK companies. This sentiment spread across the globe and filtered its way down into small caps.
Companies: PRSM KMK SYS RAI MNO CCS MANO CBOX KGH
Vertu's FY19 adj. PBT of £23.7m is 8% ahead of our estimate and net debt of £0.3m is better than our £9.8m forecast. FY19 was a difficult year, but with a resilient outcome. FY20E is also likely to be tough, given continued Brexit uncertainty, but trading is in line with management's expectations and we make no change to our FY20E PBT.
Companies: Vertu Motors
The AA innovation day focused on the products and services that The AA will launch over the next 18 months. The ambition is to provide a valuable ecosystem that can be used by AA members and non-members.
Results for the year ended March 2019 were ahead of expectations, both in P&L and cashflow terms. Underlying EPS increased 18% and net bank debt reduced £16m, dropping gearing to 1.1x (from 2.0x in FY17). The growth strategy in Studio and recovery in Education are evidently working. Management has clear ambitions to deliver substantial profitable growth over the medium term, and we have upgraded FY20 forecasts by 3%. On an unjustifiable P/E of only 6.8x there is considerable value for investors and we see fair value at 325p (up from 300p), a TSR of 70%.
Joules has delivered another year of double-digit growth, with sales up 13% but management are guiding to PBT at the top end of market expectations, suggesting 18% growth YoY. The group has seen strong growth in eCommerce which now accounts for c.50% of retail revenue and sales in International markets is up 3ppts to 16% of the Group mix.
Companies: Joules Group
We are downgrading the stock from Buy to Hold, setting 800p as our new 12m TP and lowering our FY17/FY18 EPS expectations by 7%/10%. This takes us 3%/8% below consensus. Trading has been mixed for c.3 years and the anaemic 3 year EPS CAGR of 3% is uninspiring. Until management can evidence a higher growth rate we feel the group should be viewed as a utility type stock with yield being the main attraction. We prefer Marston’s in the sector and are buyers of it ahead of next weeks YE update.
Companies: Greene King
In a sector where traditional offers are struggling, the market awards high valuations to operators that have demonstrated the creation and development of new markets. QUIZ, with its expanding presence in the 16-35 year-old fast fashion market, and only nine months after IPO, is still in the process of realising that promise. The latest indications suggest that it is succeeding, and argue for a re-rating.
Companies: Quiz Plc