Latest Results – IPF, INTU, CWD, RST And FOUR

Latest Results – IPF, INTU, CWD, RST And FOUR

International Personal Finance

International Personal Finance PLC (IPF) is a financial services company which has operations across 11 markets in Europe, Mexico and Australia, and provides small sum, unsecured consumer loans and lines of credit to more than two million customers. Through a unique combination of home credit and digital channels, the company seeks to serve its customers who are underbanked or underserved by mainstream credit operators IPF Digital, which is a leading fintech business, and the largest home credit business in the world.

Recent Development

The Council of Ministers in Poland on 28 June 2019 proposed to further limit the costs that can be charged by financiers in connection with consumer loan agreements from the earlier proposed cap of 20% of the loan value and the additional cap per annum at 25% to 10% of the loan value and additional cap per annum at 10%.

Financial Highlights (H1 FY 2019, in £m)

(Source: Company Filings)

Driven by the strong growth in new markets of IPF Digital where the company saw continued demand from consumers for digital loans, credit issued rose by 6.3% to £672.3m. Annualised impairment as a share of revenue was 27.7%, indicating good credit quality, and average net receivables increased by 7.6% to £970.9m. Revenue rose by 6.7% to £446.9m while the net revenue increased by 2.1% to £323.1m. Profit before tax stood at £56.1 million, which declined by 0.7% but was in line with H1 2018, while statutory earnings per share were 14.8p in H1 2019, against 16.7p in H1 2018.

Share Price Commentary

Daily Chart as at 01-August-2019, before the market closed (Source: Thomson Reuters)

 

On 01 August 2019, at the time of writing (before the market closed, GMT 4:37 pm), IPF shares were trading at GBX 107.33, up by 5.9% against the previous day closing price. Stock’s 52 weeks High and Low is GBX 254.60/GBX 98.10. Total market capitalisation (outstanding) was around GBP 226.65 million, with a dividend yield of 12.23%.

Conclusion

The amendment to the draft proposal by the Polish government to reduce an existing cap on non-interest costs charged by lenders would hit the company substantially, and it is closely monitoring the developments of this matter. IPF Digital continued to report strong growth, and the company reported that it was on course to deliver its maiden profit this year, while challenging the macroeconomic environment and weaker than expected collections led to Mexico Home Credit business profit declining by 50% to GBP3.5 million. The shares of the company declined by almost 8% on the day of announcement of results.

Intu Properties

Intu Properties PLC (INTU) is a British real estate investment trust that owns and manages 20 shopping centres in the UK and Spain, which are leased for retail and leisure purposes or for commercial activities. The group has an expanding portfolio in Spain and a growing multichannel presence across its markets.

Recent Development

The company on 4 June 2019 announced that Robert Allen had been appointed as the Chief Financial Officer of the company, replacing Barbara Gibbes who had been acting as interim CFO.

Financial Highlights (H1 FY 2019, in £m)

 (Source: Company Filings)

Due to the 7.7 per cent reduction in like-for-like net rental income of GBP 16.8 million, net rental income declined by GBP 17.9 million in the period to GBP 205.2 million, after a string of retail restructures by major clients. The loss before tax rose to GBP 856.4m in the six months to 30 June, from a loss of GBP 506.5m in the corresponding period of 2018, while IFRS loss for the period attributable to owners rose to GBP 829.6 million from a loss of GBP 486.2 million recorded in H1 FY18. IFRS basic loss per share was 61.7 pence, while underlying EPS was 4.9 pence in the period.

Share Price Commentary

Daily Chart as at 01-August-2019, before the market closed (Source: Thomson Reuters)

 

On Aug-01-19, at the time of writing (GMT 4:40 pm), INTU shares were hovering at GBX 44.83, down by 6.31% against the previous day closing price. Stock’s 52 weeks High and Low is GBX 204.00/GBX 43.59. Total market capitalisation (outstanding) was around GBP 647.96 million.

Conclusion

Some weaker retailers are struggling to survive in a multichannel environment as the retail property market is impacted by the fundamental changes ongoing in the retail sector, leading to a higher level of administrations and company voluntary arrangement, which has been impacting the rental income. The group has been facing decreasing property values and pessimistic investor sentiment because of weak consumer confidence and the current political uncertainty in the country. The share of the company lost 31.9% on the day of the announcement.

Countrywide

Countrywide PLC (CWD) is the largest property services group in the United Kingdom, which specialises in both the residential and commercial property markets. The company operates more than 60 brands through over 850 branches across the UK and offers a diverse range of products and services.

Financial Highlights (H1 FY 2019, in £m)

(Source: Company Filings)

During the first half of the financial year 2019, income declined by 4% to £290.6 million, against £302.9 million reported in H1 2018. Against a backdrop of a weak sales market, but in line with the expectations, adjusted EBTIDA (pre-IFRS16) declined by 61% to £3.9 million, while adjusted EBITDA was £20.2 million. Operating profit before exceptional items was £10.0 million (H1 2018: £3.3 million loss), while underlying profit before tax was £4.8 million, against a loss of £8.3 million last year. Underlying profit was £4.7 million and the statutory loss for the period was £37.7m.

Share Price Commentary

Daily Chart as at 01-August-2019, before the market closed (Source: Thomson Reuters)

 

On 01 August 2019, at the time of writing (GMT 4:45 pm), CWD shares were hovering at GBX 4.99, up by 0.80% against the previous day closing price. Stock’s 52 weeks High and Low is GBX 28.89/GBX 3.10. Total market capitalisation (outstanding) was around GBP 81.04 million.

Conclusion

While the political and Brexit uncertainty remains, the company is confident that the full year result will be in line with the expectations, as the group continues to make operational and financial progress. Helped by the cost actions taken in the first half and the increased momentum in sales of complementary services, the company expects adjusted EBITDA in the second half to be strong. The shares of the company declined by 4.57% on the day of the announcement.

Restore

Restore PLC (RST) is an AIM-listed company that provides services to offices and workplaces in the private and public sectors, including document storage, cloud and media storage, document shredding, commercial and workplace relocation, and others.

Financial Highlights (H1 FY 2019, in £m)

(Source: Company Filings)

As the company continues to benefit from good visibility of contracted annuity revenues, revenue was up by 15% to GBP 106.2m, including organic growth of 3%. Statutory operating profit was GBP 16.8m while adjusted operating profit was GBP 22.2m, up by 18% over the year. EBITDA rose by 18% to GBP 25.9m from GBP 22m in H1 FY18. Statutory profit before tax was GBP 12.0m, up by 30% over the year, while adjusted profit before tax was up by 17% to GBP 20.1m. Basic earnings per share were 7.8p, up by 28%, and adjusted earnings per share rose by 10% to 13.1p. Interim dividend per share was up 20% to 2.4p and net debt at the end of the period reduced to GBP 95.0m.

Share Price Commentary

Daily Chart as at 01-August-2019, before the market closed (Source: Thomson Reuters)

 

On 01 August 2019, at the time of writing (before the market closed, GMT 4:48 pm), RST shares were trading at GBX 440, up by 2.32% against the previous day closing price. Stock’s 52 weeks High and Low is GBX 528/GBX 250.13. The company’s stock beta was 0.63, reflecting less volatility as compared to the benchmark index. Total outstanding market capitalisation was around GBP 534.26 million, with a dividend yield of 1.49%.

Conclusion

As a result of improved cash generation, the company expects a material reduction in leverage during the year, and expectations for full-year remained unchanged. The new public sector team continued to build a good pipeline, and the company continued to focus on organic growth and market share gains. The company seeks to grow in the country, both organically and through selective acquisitions, to add capability and scale to the operations. On the day of the announcement of results, the share price rose by 5.65%.

4imprint Group

4imprint Group PLC (FOUR) is a London-based direct marketer of promotional merchandise which sales and distributes promotional products in USA, Canada, the UK and Ireland. The company seeks to promote service, product or event of customers to their target audience through a wide range of medium.

Financial Highlights (H1 FY 2019, in $m)

 (Source: Company Filings)

Due to a strong result across both new and existing customer order activity, revenue in the first half of financial 2019 was $405.1m, an increase of $56.7m or 16% over the previous year. Profit before tax in the current was $19.4m and was 22% higher than H1 2018, while the underlying profit before tax was $19.79m, representing an increase of 21%. Basic earnings per share were 54.81c (H1 2018: 44.96c), up by 22% over the prior year, while underlying basic earnings per share was 55.81c (H1 2018: 46.03c), representing an increase of 21%. The company declared an interim dividend per share of 20.52p (H1 2018: 15.85p), up by 29% over the prior period. Cash balance at the end of the period was $42.7m (H1 2018: $26.5m).

Share Price Commentary

Daily Chart as at 01-August-2019, before the market closed (Source: Thomson Reuters)

 

On 01 August 2019, at the time of writing (before the market closed, GMT 4:50 pm), FOUR shares were trading at GBX 2,820, up by 1.07% against the previous day closing price. Stock’s 52 weeks High and Low is GBX 3,140.60/GBX 1,765.00. The company’s stock beta was 1.23, reflecting more volatility as compared to the benchmark index. Total outstanding market capitalisation was around GBP 783.07 million, with a dividend yield of 2.07%.

Conclusion

The company expects full-year results to be slightly above the current market consensus forecasts, driven by a proven business model and an attractive market opportunity. The increase in cash position shows the cash generative nature of the direct marketing business model and customer retention patterns remained healthy during the period.

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