An Insight Into Three Stocks: NMC, PDG, RIV

An Insight Into Three Stocks: NMC, PDG, RIV
About NMC Health PLC

NMC Health PLC (NMC) is an Abu Dhabi-based diversified health care company operating in the United Arab Emirates. The group operates in health care, trading, and information technology sectors and is top ranked amongst the biggest fertility service providers across the world.

Recent Development at NMC

The shares of the company soared by as much as 42% on 22 August 2019 as a target stake worth up to $1.9 billion  (£1.6 billion) and jointly owned by KBBO Group, Saeed Bin Butti Al Qebaisi and Khalifa Butti Bin Omeir, drew the attention of two groups, including one backed by China’s Fosun, at a premium to market price.

NMC Financial Highlights for H1 FY19 ($, m)

The company’s revenue surged by 32.6 per cent to $1,236 million in H1 FY19 as against $932 million in H1 FY18. The company’s profit from continuing operations was recorded at $228.1 million in H1 FY19 as against $179.7 million in H1 FY18. The company’s PBT (Profit before taxation) was recorded at $140.6 million in H1 FY19 as against $118.7 million in H1 FY18. The company’s free cash flow for the period was recorded at $77.8 million in H1 FY19. Post IFRS-16, the company’ net income attributable to shareholders (adjusted) was recorded at $137.5 million. The company’s EBITDA/net income ratio was 55 per cent in H1 FY19 (pre-IFRS 16). In addition, the company’s net debt/EBITDA multiple was consistent at 3.4x both pre and post IFRS 16.

The company can identify new potential markets and sees many more opportunities for leveraging growth both organically and inorganically.

 NMC Share Price Performance

Daily Chart as at 02-September-19, before the market closed (Source: Thomson Reuters)

On 2nd September 2019, at 03:05 PM GMT while writing, NMC shares were trading at GBX 2,538 per share; which were up by 1.43 per cent as compared to the closing price level of the previous day. The company’s M-cap (market capitalisation) was recorded at £5.22 billion at the time of writing.

On 4th September 2018, the shares of NMC have touched a new peak of GBX 3,984.00 and reached the lowest price level of GBX 1,773.50 on 15 August 2019 in the last 52 weeks. The company’s shares were trading at 36.29 per cent down from the 52-week high price mark and 43.10 per cent higher the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 360,607 at the time of writing before the market close. The company’s 5-day stock’s average traded volume was 755,419.60; 30 days average traded volume- 770,313.67 and 90 days average traded volume – 661,491.16. The company’s stock is less volatile in comparison with the benchmark as the beta of the company’s stock was recorded at 0.80.

The shares of the company have delivered a positive return of 4.12 per cent in the last quarter. The company’s stock plunged by 8.55 per cent from start of the year to till date. The company’s stock has generated a negative return of 36.75 per cent in the last year. 

About Pendragon PLC (Sector: General Retailers)

London Stock Exchange-listed, Pendragon Plc (PDG) is an online automotive retailer and engaged in the sale of a range of new cars, light motor vehicle, used cars, commercial vans, trucks and other motor vehicles. The group is headquartered in the Nottinghamshire, the United Kingdom.

PDG Recent News

The company released that it agreed on August 15, 2019 to dispose of the assets and trade of its Chevrolet motor vehicle authorisation situated at Puente Hills, California.

On 3rd July 2019, the company announced the sale of its Jaguar Land Rover motor vehicle dealership located in Mission Viejo, California. On 18th September 2019, the company will announce its half yearly results ending 30 June 2019.

PDG Trading Update (as on 17th April 2019)

The speciality retailer reported its trading update for the three months ended as on March 31, 2019. Reported revenue of the group during the period under review surged by 4.6% on a Like-for-like basis, New revenue zoomed by 6.3% on a LFL basis, Revenue from the Used car segment during the three months to March 31, this year improved by 2.9%, and aftersales revenue grew by 5.5% on LFL basis.

During the period under review, New Gross Profit slashed by 5.4% on an LFL basis, and gross profit from the used segment declined by 1.6% on an LFL basis, and aftersales gross profit slumped by 5.0% respectively.  Operating costs during the January 01 to March 31, 2019, surged by 6.2% on an LFL basis.

Pendragon Like-for-like new revenue growth stood at 6.3% in the period compared to the reduction in registration in the overall new car market of 2.4% vs the corresponding period of the previous financial year. However, the stiff trading situation during the period under review impacted the margins in new, used and aftersales segments.  This performance reflects the higher concentration of operating costs and higher losses within the car store, resulting in the underlying pre-tax loss of £2.8 million.  However, the pre-tax loss was around £10 million lower than the management expectation for the period.

As compared to the peer group, the group’s stock is trading at a Price-to-Cash Flow of 4.7x, whereas industry median stood at 7x, which indicates the stock is trading at a steep lower valuation in terms of P/CF multiple. Also, the Pendragon’s dividend yield is highest at 11.1%, within the closed peer group. However, the stock is trading considerably below the 200-day simple moving average price level, which could resist stock price movement in near-term.

The group is going through several operational changes, which in short-term could affect the group’s pre-tax profits and margins. However, the group may return to the overall profitability by the second half of the current financial year.

PDG Share Price Performance

Daily Chart as at 02-September-19, before the market close (Source: Thomson Reuters)

On September 02, 2019, at the time of writing (before the market close, at 03:09 PM GMT), PDG shares were trading at GBX 10.72, up by 5.09 per cent against the previous day’s closing price. Stock’s 52 weeks High and Low are GBX 28.90 /GBX 10.00. The group’s stock is reflecting lower volatility as against the benchmark index based on a beta of 0.45.

About River and Mercantile Group PLC (Sector: Financial Services)

River and Mercantile Group PLC (RIV) is a London, the United Kingdom-based asset management and advisory services focussing on consulting and advisory to fiduciary and fund management. Business operations are spread across: Fiduciary Management Division, Derivative Solutions Division, Equity Solutions Division and Advisory Division.

RIV Trading statement

On 29th July 2019, the company issued trading update for 3 month and 12 month-period ended 30th June 2019. The company’s fee-based earning AUM surged by 18 per cent in the 12 months to £39.8 billion. The company’s gross turnover during the 12-month period was recorded at £6.9 billion.

RIV Financial Highlights (H1 FY 2019, £’000)

The company’s total revenue rose from £39.02 million in H1 FY2018 to £39.10 million in H1 FY2019, due to the significant impact on revenue in terms of net management fees which were increased by 4 per cent in the same period. Adjusted profit after tax stood at £8.4 million, as compared to £9.6 million in H1 FY18, driven by an increase in revenues in the recent period which were offset by the cost of external research provision post‐MiFID II and cost of investments. Statutory net profit after tax declined from £9.1 million in H1 FY2018 to £6.7 million in H1 FY2019.Adjusted basic earnings per share stood at 10.49 pence against the 11.99 pence in H1 FY 2018. The company’s Board has declared an interim dividend per share of 6.3 pence, which includes a special dividend per share of 2 pence related to net performance fees.

RIV Share Price Performance

Daily Chart as at 02-September-19, before the market close (Source: Thomson Reuters)

On September 02, 2019, at the time of writing (before the market close, at 03:11 PM GMT), RIV shares were trading at GBX 255, down by 3.59 per cent against the previous day’s closing price. Stock’s 52 weeks High and Low are GBX 323.43/GBX 210.33. The group’s stock is reflecting lower volatility as against the benchmark index based on a beta of 0.44.

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