For the purposes of the Takeover Code, Edison Investment Research is deemed to be connected with BCA Marketplace. 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.
20 Jun 19
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.
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14 Jan 19
BCA Marketplace - Trading up at half-year
Interim results indicate the resilience of BCA’s model in the face of still challenging UK market fundamentals. The company delivered top-line growth of 22% and adjusted EBITDA growth of 12.7% and is able to maintain its expectation that market forecasts for FY19 will be achieved. While the uncertainties in new car markets persist, largely due to supply-side constraints and the looming Brexit, we maintain our EBITDA estimates for this year and next despite some divisional mix changes. The FY20 P/E multiple of just 15.7x is undemanding in our view given BCA’s investment proposition delivering healthy cash flows.
05 Dec 18
Adjusted EPS +18.5%, on track
BCA has delivered another strong set of results, which are 6% ahead of our forecasts at the adjusted PBT level. The strong YOY growth delivered across all headline measures is testament to strong execution and a quality business model faced with uncertain market conditions. We are maintaining our forecasts on the back of these results.
29 Nov 18
Attractive entry point
We note the recent underperformance of the shares of late and believe the current price to be an attractive entry point for investors. BCA has a portfolio of critical infrastructure products and services which positions it well in this market, and has scarcity value in our view. We see BCA as a unique investment opportunity with an undemanding valuation in the context of close peers, with a reliable yield on offer.
24 Oct 18
BCA Marketplace - 'Phygital' vehicle remarketing and services
BCA Marketplace (BCA) offers unique access to each stage of the vehicle lifecycle. Dominant in used car vehicle exchange, the company has built up its presence in vehicle buying through We Buy Any Car (WBAC) and is developing its Automotive Services division. Going forward, the company aims to develop its market-leading positions through its range of physical and digital (‘phygital’) offerings and services in the UK and Europe.
01 Aug 18
We update our forecasts to reflect the outperformance achieved in 2018 when BCA delivered another set of record results, which were 11% ahead of our forecasts at the adjusted PBT level and 9% at the adjusted EPS level. This reflects strong growth, progress and efficiency measures coming through across all divisions within the Group. We view our upgraded forecasts as conservative given the 2018 outperformance which is not fully extrapolated into this upgrade. In addition, contract momentum remains strong within its vehicle re-marketing business.
20 Jul 18
Small Cap Breakfast
Ovoca Gold (to be renamed Ovoca Bio PLC) - RTO of IVIX, a Russian company developing a drug candidate for the treatment of female sexual dysfunctions. No monies to be raised, market cap of £8.5m, due 30 July Nucleus Financial—independent wrap platform provider . FYDec17 revs £40.36m and PBT of £5.1m. Offer TBA. Due late July. Kropz PLC-Intention to float by the emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West Africa Immotion Group - aims to become the market leader in "out of home" Immersive Entertainment Experiences. Offer TBA. Due 12 July
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06 Jul 18
Strategic delivery + strong trading performance drives significant beat
Results for the year ended March were comfortably ahead of expectations; £120.9m PBT was £10m/9% better and EPS 8% better driven by UK Remarketing, WBAC vehicle buying, and lower interest costs. Net debt was also £40m lower than anticipated after adjusting for favourable timing of payments. DPS increased 26.7% to 8.55p (N+1E 8.0p) on the back of this performance. Ongoing modernisation of its technology platform and customer solutions is continuing to increase the uptake of key services. Operational gearing from organic volume growth and increased services penetration is lifting margins, as are a range of site efficiency initiatives, improved integration of acquired businesses, and increased online penetration. These dynamics are ongoing and not one-off. At the same time, the integration of services to provide end-to-end solutions for scaled customers is both increasing volume from existing customers and attracting new customers. Yesterday it announced its largest ever motor services deal - a multi-year agreement with BMW UK. With FY19 having started well, the board is understandably excited by the opportunities ahead.
29 Jun 18
BCA Marketplace (BCA LN) Strategic delivery + strong trading performance drives significant beat | Fulcrum Utility Services Limited (FCRM LN) Delivering further strong profit growth | Synairgen (SNG LN) Biomarker data confirms target engagement, important year ahead |
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29 Jun 18
Adjusted EPS + 25.3% YOY
BCA has delivered another set of record results, which are 11% ahead of our forecasts at the adjusted PBT level and 9% at the adjusted EPS level. This reflects strong growth, progress and efficiency measures coming through across all divisions within the Group. In addition, contract momentum remains strong within its vehicle re-marketing business.
28 Jun 18
Small Cap Breakfast
Monreal PLC—AIM cash shell moving to NEX by taking advantage of opportunities to invest in the technology, media, and telecom (TMT) sector. Due 03 July Ananda Developments— Company has been established to invest in the developing market for medicinal or therapeutic Cannabis derivatives, or related products. Raising £750k at 0.45p with market cap of £1.3m. Due 04 July
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28 Jun 18
Approach from Apax Partners
We note the announcement made towards BCA this morning regarding a preliminary conditional approach from Apax Partners LLP on the 9th May and an all cash offer for the company at 200p per share and confirming that the board of BCA has rejected this proposal. In our view, this bid undervalues BCA’s current prospects. We believe BCA continues to offer an attractive mix of organic and income growth as it continues to leverage its unique market position on a Pan European basis executed by a proven management team.
11 Jun 18
BCA Marketplace (BCA LN) Motoring ahead – H2 trading beats market expectations | Ergomed (ERGO LN) FY results show impressive pharmacovigilance growth | Liontrust Asset Management (LIO LN) HOLD tight: more to come as flows continue | Oxford Instruments (OXIG LN) Year end trading in line | Severfield (SFR LN) Positive conclusion to FY’18; Medium term targets reiterated
BCA ERGO LIO OXIG SFR
11 Apr 18
Small Cap Breakfast
Fundamentum Supported Housing REIT. Raising £150m. Focussed on UK Social Housing assets. Due 2 May Vivo Energy—retailer and marketer of Shell-branded fuels and lubricants in Africa, Due in May. 100% secondary sell-down of existing Shares by Selling Shareholders, No new Money. Pricing TBA Gore Street Energy Storage Fund—Seeking to raise £100m for the purposes of investment in a diversified portfolio of utility scale energy storage projects. Due 12 April. Odyssean Investment Trust—Raising £100m at £1. Due 1 May. The Company will primarily invest in smaller company equities quoted on markets operated by the London Stock Exchange.
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11 Apr 18
Raising the ba
We were impressed by the recent interim results that exceeded our expectations and further validate management’s growth strategy. The business continues to benefit from increased scale, value-added focus and operating efficiencies while the recent raising to the Premium List should also help broaden the stock’s investor appeal. We believe the share price performance should continue to build on the recently improved trading momentum and reiterate our Buy recommendation.
10 Jan 18
Small Cap Breakfast
Cradle Arc—holding company of a group of companies focused on the exploration and development of precious and base metals projects in Africa. Offer raising £2.4m with market cap of £20.25m. Expected 10 Jan 2018 Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity. Raising £1.6m. Mkt Cap £25m. Due 28 Dec 2017. Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £75m market cap. FYMar18E rev £241.5m and £7.19m PBT. OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.
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27 Dec 17
N+1 Singer - BCA Marketplace - Strong H1 trading and bright growth prospects
H1 PBT was 6% ahead of our expectations, with strong growth and small beats across all operating segments. While we make no changes to FY forecasts at this stage, pending trading through the winter season, it should be noted that to meet FY expectations BCA only needs to deliver flat PBT in H2 (vs +28% in the last 5 half year periods). Given structural dynamics favouring exchange volumes, BCA’s share gains, and strong momentum in WBAC in particular, we continue to see potential risk to the upside. We maintain a BUY stance with an unchanged 275p target noting the FTSE index review takes prices at COB today, and becomes effective at the end of the week, at which point BCA should become a FTSE250 index constituent.
28 Nov 17
Adjusted EPS +17%, on track
BCA has delivered another strong set of results, which are 9% ahead of our forecasts at the adjusted PBT level and 5% at the EPS level. This reflects strong growth and progress across all divisions in the Group. We are maintaining our headline assumptions on the back of these results, and continue to believe the Group is well positioned over the medium term.
28 Nov 17
BCA has today reported impressive interim results, ahead of our expectations and with progress achieved in all of the key financial metrics. The business continues to benefit from increased scale, focus on value-added services and efficiencies and the recent move up to the Premium List should also help broaden the stock’s investor appeal. We believe the shares’ performance should continue to build on the recently improved trading momentum and reiterate our Buy recommendation.
28 Nov 17
Small Cap Lunch
Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT Belluscura— Provider of premium medical devices at value prices to address part of the global unmet need for affordable, premium quality medical devices. Raising £7.5m to £10m. Offer TBA. Due early Dec Ten Lifestyle Hldgs - Technology-enabled lifestyle and travel platform providing trusted concierge services to the world's wealthy. Net revenue increased from £20m in the year ended 31 August 2015 to £33m in the year ended 31 August 2017, a compound annual growth rate of 29%. Offer raising £32.2m at 134p with market cap of £104.8m, expected 29 Nov 2017. Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native invideo advertising . 2016 rev £0.7m and £7.3m operating loss. Offer TBA OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m. OG Graphite, brownfield development-stage graphite company focused on the reactivation of its wholly-owned Kearney natural flake graphite mine and mill located 280 km north of Toronto, Canada. Offer TBA, expected mid November.
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28 Nov 17
N+1 Singer - BCA Marketplace - Share price fall presents a buying opportunity
We note yesterday's fall in the share price, which pulled back close to the levels at the time of the AGM. The AGM update was very upbeat and potentially signalled overly conservative forecast assumptions. In our view the fall is overdone given significant strategic advances at the company over 2 years, and unassailable barriers to entry in terms of its physical remarketing and data platform. Market nerves around residual pricing risk are misplaced; BCA is price agnostic and historically defensive. Indeed movements in residual price can, and recently did, drive additional remarketing volumes to which BCA’s success is actually linked. As detailed in earlier research, there are several structural forces at play which are increasing volumes through exchanges, especially the market leader BCA. We expect the interims on 30 Nov to vindicate the key points of our Buy stance which we presented in our preview note dated 15 Sept. In essence several variables could facilitate stronger growth than the market currently forecasts, e.g. higher volumes, take-up of add-on services and related profits, and benefits of operational leverage. The move to a Premium listing on Monday will also mark a key milestone and pave the way to FTSE250 inclusion in Dec. Having fallen 30% below our recently increased target price, we argue the fall offers an excellent entry point.
13 Oct 17
N+1 Singer - BCA Marketplace - Further strong growth + bright prospects. H1 preview
BCA is the leading vehicle exchange operator in the UK and Europe, where structural shifts are driving incremental volumes. Market share is growing too having broadened and enhanced its end-to-end services, enabling solutions for large scale customers (incl. OEMs). Data is a growing part of this unique platform, and of increasing value. Leveraging in-house upgrade capacity also presents scope to increase profit/unit beyond ongoing growth in Buyer finance. Market nerves around residual pricing risk are misplaced; BCA is price agnostic and historically defensive. With a move into the FTSE250 imminent we stay at Buy and have upgraded our target price by 9% to 275p.
15 Sep 17
BCA has provided a trading update this morning, essentially confirming it is continuing to trade in line with expectations. Our forecast assumptions are towards the top end of the consensus range, and we remain comfortable with this. We also remain comfortable with our original investment thesis, and would expect the shares to perform well over the longer term given the structural growth opportunities that lie ahead on a Pan European basis, which translates into double digit EPS growth through to 2020E.
07 Sep 17
Accelerating past expectations
The final results comfortably surpassed our forecasts and confirm BCA is making encouraging trading progress across its portfolio. We believe the business can sustain strong trading momentum with management remaining focused on delivering an innovative, first-class customer service that is helping to drive volumes, increase efficiency and attractively grow EBITDA. Current trading is progressing well and we reiterate our Buy recommendation.
12 Jul 17
June SMMT data: private registrations -7.8% YOY and -4.8% YTD
The SMMT (Society of Motor Manufacturers and Traders) has released data this morning confirming new car registrations in June of 243,454 which is -4.8% YOY, implying a H1 of 1,401,811 units which is -1.3% YOY but represents the second highest H1 on record. Private registrations were -7.8%, with fleet also showing a decline at -2.4% YOY representing 57.1% of registrations vs. 55.6% last year. We continue to believe the earnings risk has been accounted for in heavily discounted valuation multiples based on cautious and below consensus forecast assumptions across our coverage universe. We continue to favor stocks with flexible balance sheets at this stage of the cycle, and believe stocks such as Vertu and Cambria remain significantly underpinned by their growing property portfolios and proven operating models.
BCA CAMB VTU PDG INCH LOOK MMH MOTR AUTO
05 Jul 17
Another period of delivery
BCA has delivered another strong set of final results, which are 3% ahead of our forecasts at the adjusted EPS level. Strong growth across all divisions has led to an impressive YOY growth rate of 38% in adjusted EBITDA and 30% in adjusted EPS. We are maintaining our headline assumptions at the adjusted EPS level for 2018E and 2019E, which remain towards the top end of the consensus range.
27 Jun 17
BCA has provided a short trading update this morning, essentially confirming it is trading at the upper end of expectations. Our forecast assumptions are towards the top end of the consensus range, and we remain comfortable with our assumptions. We remain comfortable with our original investment thesis, and would expect the shares to perform well over the longer term given the structural growth opportunities that lie ahead on a Pan European basis, which translates into double digit EPS growth through to 2020E.
03 May 17
N+1 Singer - BCA Marketplace - Positive trading + transition to Premium listing - Buy
BCA issued two positive updates yesterday. 1) H2 performance was at the upper end of expectations. We have upgraded FY17 EPS by 4%, lifting YoY growth to 29.4%, with only a part year contribution from Paragon. We see upside risk to outer years too given a structural shift towards auctions, share gains & additional service revenues, and operational gearing. 2) BCA is moving to a premium listing which will be well received given it was originally scheduled a year ago. High barriers to entry, a dominant platform, unique data and EPS growth make a compelling investment case. Adj. ND/EBITDA remains comfortable at <2x (ex CID). We have raised our TP to 252p.
03 May 17
N+1 Singer - T2 Trend spotting - Strategy update
In our second edition of “Trend spotting” we note how in the last three weeks the defensive rotation trend has gathered pace and further evidence has emerged of the “relative fading” in the UK economy. However we now see early signs of the “risk on” trend starting to reassert itself in equity markets and we look at small cap laggards plus European exposure as ways to play this.
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31 Mar 17
SMMT 2016 data
The SMMT (Society of Motor Manufacturers and Traders) has released data this morning confirming a record new car market of 2.69m registrations and +2.3% YOY. This is the fifth year in a row of growing new car registrations. Headline December registrations were -1.1% with private registrations -5.5% completing a third quarter in succession of negative growth in this segment. Fleet continues to drive the growth in this market and was +4.8% YOY representing 51.3% of registrations vs. 50.0% last year. The key question is what will happen in 2017 post Brexit with uncertainty levels still high. We maintain our cautious stance and downgraded our EPS forecasts by 8-15% across the sector in November accordingly. That said, we believe the earnings risk has been accounted for in trough valuation multiples based on cautious forecast assumptions (we assume a 10% drop in new car registrations vs. the SMMT at -5%). We continue to favor stocks with flexible balance sheets at this stage of the cycle, and believe stocks such as Vertu and Cambria remain significantly underpinned by their growing property portfolios.
BCA CAMB VTU PDG INCH LOOK MMH AUTO
05 Jan 17
From dock to beyond
BCA has delivered a strong set of results that are 5% ahead of our forecast at the adjusted EPS level. Strong growth has been made across all four 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.
30 Nov 16
N+1 Singer - BCA Marketplace - Strong momentum in H1, preview - Buy
BCA is benefiting from market growth and a structural shift towards auctions. The team has developed a truly end-to-end service offering and is widening engagement (incl. OEMs). Activity levels are visibly increasing and share gains are set to continue. Rising penetration of existing and new services (e.g. buyer finance) is driving profit per unit metrics. Alongside plans to drive efficiencies on top of the natural operational gearing, the outlook for BCA is positive and visibility is good. We forecast PBT growth of 22% in H1 (interims due 30 Nov) and believe there is upside risk to our 20% 3-year forecast EPS CAGR. We have a 220p target price and reiterate our BUY stance.
09 Nov 16
Update with management
As BCA enters into closed period, we remain comfortable with the investment case, with the shares responding well to the EPS enhancing Paragon acquisition. We remain comfortable with the valuation given the structural growth opportunities and strategic value of the assets, and believe the prospective dividend yield of 4% remains highly attractive
28 Sep 16
N+1 Singer - Motor Retail - A compilation of recent snippets
After our interesting conference at the start of July (featuring Vertu, Lookers, Marshall, Cambria, ASE and Tesla), Motor Retail shares have generally bounced from their lows, but remain below previous levels. In this note we summarise the recent sector snippets and reiterate some key positive conclusions from our conference, plus provide a link to the video of the event. Brexit, economic uncertainties and SMMT stats are weighing on the sector in sentiment terms, but it is noticeable how the quoted companies continue to actively pursue their growth and consolidation strategies and give reassuring updates. Interims next week from Lookers and Marshall Motors should provide further insight.
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11 Aug 16
Following on from its recent reassuring results last month, BCA has announced the acquisition of Paragon Automotive. We believe this is an exciting transaction that further expands and consolidates its service offering that will ultimately mean it will manage over 1.5 million cars in the UK alone offering significant organic growth and synergy opportunities. Under conservative assumptions, we would anticipate this transaction being 4-5% EPS enhancing in 2017E rising to 8-10% in 2018E.
19 Jul 16
BCA has delivered a strong set of maiden results exceeding our forecast expectations across the board. Good strategic progress has been made in a short space of time, and we remain very happy with our original investment thesis, which continues to be underpinned with a strong dividend yield.
28 Jun 16
N+1 Singer - Morning Song 28-06-2016
BCA Marketplace (BCA LN) – Video content Prelims underline BCA as the dominant player with compelling growth | Northgate (NTG LN) Results in line, softer UK performance | Swallowfield (SWL LN) – Video content Completion of transformational acquisition
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28 Jun 16
N+1 Singer - Retail - Matthew - Brexit driven forecasts and valuation update
Prior to the EU vote, fears of Brexit undermined consumer confidence and spending patterns, and sterling weakened against the US$ and the €. Wider fears for employment, consumer spending and economic slow-down had hit Retail stocks significantly (-10% rel. YTD). Friday’s surprise Brexit vote has impacted Sterling again and will further knock confidence and spending too. The sector came under material further pressure as a result, falling 10% on the day vs the Allshare’s 3%. As noted on Friday, there are 4 stocks in our universe where forecasts are favourably exposed to FX upside risk (BCA, Boohoo, Swallowfield, Walker Greenbank), 5 stocks which we have downgraded (Debenhams, Findel, Halfords, N Brown, Howden Joinery) with the remainder left unchanged including Motor Retailers.
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27 Jun 16
Attractive entry point
We note the recent underperformance of the shares of late, and believe the current price to be an attractive entry point for investors. There has been a lack of news flow since the H1 results in November, but we believe the market dynamics remain positive for it to execute its strategy.
17 May 16
Taking the temperature
We believe that the UK motor sector has had a strong Q1 2016, which should position most companies well for H1. Consumers are still responding well to attractive financing deals, and we anticipate a strong H1 performance from dealers as a result. Valuations amongst the dealer groups remain undemanding in our view, and we see scope for further consolidation during the coming year.
BCA INCH AUTO LOOK MMH PDG VTU CAMB AN KMX CPRT KAR GPI LAD PAG SAH
08 Apr 16
Dominant player with highly compelling growth
Strengthening market growth (including a living wage boost in Used), plus a structural shift to auctions, is benefiting BCA. Engagement with corporates/OEMs is also increasing activity levels. Share gains should continue too given its market-leading proposition and growing range of services – the rising penetration of which (now incl. buyer finance) is driving profit per unit. Add in efficiencies + operational gearing, and the outlook is positive. We forecast a 3-year EPS CAGR of 17% but risk is to the upside.
26 Feb 16
Signs of US consolidation in UK market
We note the acquisition of UK private company Spire Automotive by US listed Group 1 Automotive yesterday for an undisclosed sum. With US motor retailers seemingly struggling for growth and seeing more margin pressure, it will be interesting to see whether we see more transactions of this nature, particularly against a backdrop of a strengthening US dollar. Market conditions in the UK look to remain robust with UK new car sales for January the strongest since 2005, with residual values seemingly still robust. The sector remains good value to us, and looks like the dealers across the pond also see this too.
BCA INCH AUTO LOOK PDG VTU CAMB AN KMX CPRT KAR GPI LAD LAD SAH
05 Feb 16
Bullish EPS outlook driven by volumes, gearing and buyer finance
A meeting with management yesterday further underpins our confidence in this compelling growth investment. BCA is benefiting from strengthening market growth plus a structural shift towards auctions. New leadership is widening engagement (inc OEMs) and winning contracts, and activity levels are already benefiting. With a market-leading proposition and broadening range of services, it is well placed to continue growing market share too. Rising penetration of existing + new services (e.g. buyer finance) is driving profit per unit metrics. Alongside plans to drive efficiencies on top of natural operational gearing the outlook for BCA is positive (upside risk) and visibility good. BUY.
04 Feb 16
ACCESSO TECHNOLOGY GRP PLC (ACSO LN) FY 2015 results comfortably in line | BCA MARKETPLACE PLC (BCA LN) Bullish EPS outlook driven by volumes, gearing and buyer finance | CARCLO (CAR LN) Trading in line | SKYEPHARMA PLC (SKP LN) GSK Q4 2015 results highlight Ellipta® sales ahead of expectations
BCA ACSO CAR SKP
04 Feb 16
Dominant player with highly compelling growth
BCA is benefiting from strengthening market growth plus a structural shift towards auctions. New leadership is widening engagement (inc OEMs) and winning contracts, and activity levels are already benefiting. With a market-leading proposition and broadening range of services, it is well placed to continue growing market share too. Rising penetration of existing and new services (e.g. buyer finance) is driving profit per unit metrics. Alongside clear plans to drive efficiencies on top of the natural operational gearing, the outlook for BCA is positive and visibility good. We forecast a 3-year EPS CAGR of 17% (bull case 30%) and initiate with a 220p target price. BUY.
11 Jan 16
1Spatial (SPA LN) Strategic partnership with HERE | BCA Marketplace (BCA LN) Dominant player with highly compelling growth | Cambria Automobiles (CAMB LN) Acquisition of 3rd Land Rover Franchise | Hargreaves Services (HSP LN) Complementary accretive acquisition | Minds + Machines Group (MMX LN) Proposed board changes | Skyepharma (SKP LN) Pre-close update: early milestone recognition and cash > estimates | Verona Pharma (VRP LN) Directorate change
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11 Jan 16
Outlook for 2016
We believe that the UK Motor Sector continues to offer attractive opportunities following a successful 2015 given it’s anticipated above average growth rates, strong cash generation and attractive ROCE generated from largely robust balance sheets. We also expect further consolidation amongst the dealers, as the operating environment continues to favour larger groups in our view.
BCA AUTO CAMB INCH LOOK MMH PDG VTU
01 Jan 16
H1 results from BCA show an encouraging underlying picture, with the core business benefiting from higher than expected volumes backed with strong cost control. Good strategic steps have also been made in a short space of time, and we remain comfortable with our original investment thesis.
30 Nov 15
Good maiden results and high level of confidence in future growth
BCA is benefiting from growth in end markets, as well as a structural shift towards auctions. New leadership is more engaged with the OEMs, as evidenced by a new contract win, and activity levels already appear to be benefiting. With a market-leading proposition and a broadening range of services, BCA is well placed to continue growing market share too. Increasing its penetration of existing and new services (e.g. buyer finance) is driving profit per unit metrics. Alongside a clear strategy to deliver efficiencies on top of the natural operational leverage, these dynamics result in a clearly positive outlook. Barriers to entry are high and its physical portfolio impossible to replicate. Today’s results look to be at the upper end of market expectations and risk could be to the upside.
30 Nov 15
Very positive CMA outcome
We note the announcement from the CMA (Competition and Markets Authority) regarding the acquisition of SMA Vehicle Remarketing. The upshot is that BCA will be required to sell its site in Newcastle on competition grounds to a competitor of its choice. We believe this is a very positive outcome, and will allow management to integrate the rest of the business. We did not factor in anything for this transaction into our forecasts given we knew this investigation was pending from the outset. We do not anticipate much of an uplift to current year forecasts, but this should have a modest positive impact to March 2017 and beyond. Following modest share price weakness of late, we would expect this update to be taken well ahead of it announcing H1 results on 30 November.
17 Nov 15
SMMT September data
The SMMT (Society of Motor Manufacturers and Traders) has released data for the key trading period of September this morning. The headline number has again come in at record levels, showing growth in private registrations vs. what was a strong prior year comparative. However, we do think there was an element of self-registration that took place here, with the fleet market again driving a significant proportion of the growth. The VW emission issue does represent some uncertainty for dealers as we move into Q4, but this is seasonally quiet anyway and we suspect dealer profitability will be intact for 2015
BCA INCH AUTO LOOK PDG VTU CAMB AN KMX CPRT KAR GPI LAD PAG SAH True
06 Oct 15
Good start to year, with market trends and company initiatives on track
BCA is set to benefit from growth in end markets, as well as a structural shift towards auctions. Under new leadership BCA is more engaged with the OEMs, and activity levels already appear to be benefiting. With a market-leading proposition and a broadening range of services, BCA is well placed to continue growing market share too. Increasing its penetration of existing and new services (e.g. buyer finance) should bolster profit per unit metrics. Today’s update is reassuring on this front. Alongside a clear strategy to deliver efficiencies on top of the natural operational leverage these dynamics result in a positive outlook. Barriers to entry are high, its physical portfolio impossible to replicate, and the growth opportunities, in both the UK and Europe, look extremely compelling.
27 Aug 15
Trading update – On track to deliver
BCA has released a solid trading update confirming that it continues to trade in line with expectations. Q1 trends show good YOY growth, with the UK performing particularly well and Europe slightly behind. However, with Q2 currently trending ahead of Q1, current trading is clearly going to plan. In addition, the company has made another strategic acquisition, which we have not accounted for in our forecasts, and therefore remain conservative in our view. We continue to believe the company remains well positioned, and we believe the growth prospects for this company remain significant against a backdrop of solid market fundamentals.
01 Aug 15
BCA has announced in its AGM statement that it continues to trade in line with expectations. Its adjusted EBITDA for 2014 is bang in line with our forecast, and slightly ahead of that indicated in the prospectus. We note the Competition and Markets Authority is looking at its recent acquisition of SMA Vehicle Remarketing. However, given the size of the transaction in the context of the Group, we did not upgrade our forecasts on the back of this, therefore we believe there is minimal forecast risk to this investigation and await the outcome. The decision to move the year end looks sensible to us, and will allow investors to view the underlying picture of the business in a more accurate light in our view. Overall, this is a solid update, and we continue to believe the growth prospects for BCA are significant against a backdrop of solid market fundamentals at present.
01 Jun 15