Result Updates Of OneSavings Bank Plc, Charter Court Financial Services Plc and Costain Group Plc

OneSavings Bank Plc and Charter Court Financial Services Plc have agreed to merge with all approvals received till 30 June 2019. Costain Group Plc is dealing with the slump in the business caused by the impending effects of Brexit. Below is a performance comparison of the three companies on the London Stock Exchange over the past one year along with that of FTSE 250 index.

(Source: Thomson Reuters)

OneSavings Bank Plc

OneSavings Bank Plc (OSB) is a British savings bank based out of Kent, providing specialized lending and retail savings services in United Kingdom. The lender, earlier known as Kent Reliance, took up its new name when a part of its ownership was taken over by American specialist private equity firm JC Flowers. The bank is 59.9 per cent owned by Kent Reliance Provident Society and 40.1 per cent owned by JC Flowers.

The company’s headquarter is in Chatham in Kent and its shares are listed on the London Stock exchange, where they trade with the ticker name OSB. The company’s shares are also components of the FTSE 250 Index.

Recent News update

The bank on 21 August 2019 came out with its First half-year results for the period ended 30 June 2019. The company has delivered a good performance; its loan book witnessed a growth of 10 per cent in this first half-year compared to the corresponding period of the prior year. The underlying profit before tax has increased by 6 per cent and its cost to income ratio improved to 28 per cent from 27 per cent of the year-ago period.

Financial Update of OneSavings Bank Plc for H1 2019 ending June 2019 (£’ million’s)

Source – Company financial report publication for H1 2019

For the half-year ended 30 June 2019 the company reported net interest income of £227.9 million compared to net interest income of £190.1 million for half-year ended 30 June 2018. The total income for the half-year ended 30 June 2019 was £143.8 million, whereas it was a total income of £133.1 million for the period ended 30 June 2018. The profit before taxation for the half-year ended 30 June 2019 was £91.0 million, compared to a profit before taxation of £91.8 million for the period ended 30 June 2018. The net profit for the half-year ended 30 June 2019 was £65.8 million, whereas it was a profit of £69.5 million for the half-year ended 30 June 2018. The earnings per share (diluted) of 25.3 pence was for the H1 ended 30 June 2019, whereas for the half-year period ended 30 June 2018 it was 27.3 pence per share. The company declared an interim dividend of 4.90 pence per share for the half-year ended 30 June 2019, whereas for the half-year period ended 30 June 2018 it was 4.3 pence per share.

The share price performance of OneSavings Bank Plc at the London Stock Exchange

Daily Chart as on 21 August 2019, before the market close (Source: Thomson Reuters)

On 21 August 2019, at the time of writing of the report (before the market close, GMT 08.49 AM), OSB shares were trading on the London Stock Exchange at GBX 343.4, down by 3.37 per cent over the previous day’s closing price of GBX 355.4. The stock has a 52- week High of GBX 458.80, and a 52-week low of GBX 321.70. The total market capitalization of the company was around £868.43 million.

Outlook

The lender has given out a strong performance under tough market conditions. Loan book increase of 10 per cent amidst an improvement in the cost to income ratio, is a testimony of the high competence levels of the executive team.

The bank is merging itself with Charter Court Financial Services Plc, approval of which had been received from the latter’s shareholders on 6 June 2019, and final approval was obtained from Competition and Markets Authority on 30 July 2019 (post results day event).

Charter Court Financial Services Plc

Charter Court Financial Services Plc (CCFS) is a United Kingdom-based financial services company, its services include retail savings products, mortgage products and credit analysis services. The bank operates three brands: Charter Savings Bank for retail banking services, Precise Mortgages for mortgage services and Exact Mortgage Experts for credit analysis services on mortgage portfolios.

The company was founded in 2008 and is headquartered in Wolverhampton England, and its shares are listed for public trading at the London Stock Exchange with ticker name CCFS. The shares of the company are also a constituent of the FTSE 250 index.

Recent news update

The company came out with its financial results for the first half of the financial year 2019 ending 30 June 2019. The performance was sterling but slightly lower than what it was for half-year ended 30 June 2018. Its profit after tax fell by 11.28 per cent over the half-year period ended 30 June 2018. However, there was growth in its loan book of 22.8 per cent to £7 billion, and a cost to income ratio stood 28.7 per cent (adjusted). The company also increased its retail savings deposit book by 39.5 per cent year – on – year to £6 billion.

Financial Update of Charter Court Financial Services Plc for H1 2019 ending June 30, 2019 (£’ million’s)

(Source – Company financial report publication for H1 2019)

The company for the half-year ended 30 June 2019 reported net interest Income of £100.1 million compared to net interest Income of £84.4 million for half-year ended 30 June 2018. The Total Income for the half-year ended 30 June 2019 was £125.0 million, whereas it was a Total Income of £124.7 million for the period ended 30 June 2018. The profit before tax for the half-year ended 30 June 2019 was £82.6 million, compared to a profit before tax of £93.1 million for the period ended 30 June 2018. The profit after tax for the half-year ended 30 June 2019 was £62.3 million, whereas it was a profit after tax of £71.1 million for the half-year ended 30 June 2018. The lower profits for the half-year were on account of the reduction in fair value of derivative instruments, higher administrative expenses, and higher impairment charges. The earnings per share (diluted) of 25.7 pence was for the H1 ended 30 June 2019, whereas for the period ended 30 June 2018 it was 29.5 pence per share. The company declared a dividend of 4.3 pence for the half-year ended 30 June 2019 whereas it was a dividend of 2.8 pence per share for the half-year ended 30 June 2018.

The share price performance of Charter Court Financial Services Plc at the London Stock Exchange

Daily Chart as on 21 August 2019, before the market close (Source: Thomson Reuters)

On 21 August 2019, at the time of writing of the report (before the market close, GMT 12.35 AM), CCFS shares were trading on the London Stock Exchange at GBX 276.5, down by 5.14 per cent over the previous day’s closing price of GBX 291.5. The stock has a 52- week High of GBX 375.00, and a 52-week low of GBX 224.13. The total market capitalization of the company was around £695.16 million.

Outlook.

The company’s lower performance than last year was due to lesser loan sales, less non-interest income and unfavourable derivative price movement. However, it remains one of the most efficient banks in the United Kingdom with the cost to income ratio of 28.7 per cent (adjusted).  The bank is on the verge of merging itself with OneSavings Bank plc, approvals for which have already been obtained from shareholders and regulators.

Costain Group Plc

Costain Group Plc (COST) is a United Kingdom-based civil engineering and construction company. The company is 154 years old and has been involved with some prestigious projects during its lifetime, namely the Channel tunnel rail link, Trans-Iranian Railways and The Dubai International Airport.

The company is headquartered in Maidenhead Berkshire England, and its shares are listed on the London Stock Exchange where they trade with the ticker name COST.

Recent News Update

The company on 21 August 2019 came out with its financial results for the first half of its financial year ended 30 June 2019. The company’s revenues have slipped 21.7% per cent during the period, followed by a massive 57.7 per cent fall in its pre-tax profits compared to the similar half-year period ending 30 June 2018. Other than that, the company had to shell out a sum of £ 10 million for repairing a project it had constructed nearly a decade back.

Financial Update of Costain Group Plc for H1 2019 ending June 2019 (£’ million’s)

(Source – Company Half-yearly report publication for H1 2019)

The company for the half-year ended 30 June 2019 reported revenue of £594.1 million compared to revenue of £758.7 million for half-year ended 30 June 2018. The Gross profit for the half-year ended 30 June 2019 was £30.1 million, whereas it was a gross profit of £44.5 million for the period ended 30 June 2018. The operating profit for the half-year ended 30 June 2019 was £10.2 million, compared to an operating profit of £21.4 million for the period ended 30 June 2018. The net profit for the half-year ended 30 June 2019 was £7.5 million, whereas it was a net profit of £16.1 million for the half-year ended 30 June 2018. The lower profits for the half-year were on account of lower revenues, compounded by the one-time expenditure that company had to bear for repairing one of its projects. The earnings per share (diluted) of 6.90 pence was for the H1 ended 30 June 2019, whereas for the period ended 30 June 2018 it was 14.80 pence per share. The company has declared a dividend of 3.8 pence per share for the half-year ended 30 June 2019, whereas it was 5.15 pence per share for the half-year period ended 30 June 2018.

The share price performance of Costain Group Plc at the London Stock Exchange

Daily Chart as on 21 August 2019, before the market close (Source: Thomson Reuters)

On 21 August 2019, at the time of writing of the report (before the market close, GMT 12.48 AM), COST shares were trading on the London Stock Exchange at GBX 162.00, up by 11.41 per cent over the previous day’s closing price of GBX 145.4. The stock has a 52- week High of GBX 466.5, and a 52-week low of GBX 141.00. The total market capitalization of the company was around £156.34 million.

Outlook

The company fall in revenues was because of not winning new contracts. This is the result of the gloomy business environment gripping the United Kingdom in the run-up to Brexit. The situation will remain the same for some time after the passage of that event as well, putting most of the companies in this sector in stress.

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