Three LSE Stocks In Focus: Rio Tinto Plc, Europa Metals Limited And AB Dynamics Plc

Rio Tinto Plc

Rio Tinto Plc (RIO) is an Anglo-Australian mining and metal corporation based out of Melbourne Australia. Founded in 1873 the company has over the years grown through mergers and acquisitions. It is the world’s foremost producers of aluminum, uranium, copper, iron ore and diamonds. The company though is having operations in six continents, its operations are mainly concentrated in Canada and Australia.

The company is listed both on the London Stock Exchange and at the Australian Stock Exchange. At the London Stock Exchange, the shares of the company trade with the ticker name RIO, and at the Australian Stock Exchange also the shares of the company trade with the ticker name RIO. The shares of the company are both constituents of the FTSE 100 index as well as the S&P/ASX 200 index.

News Update (RIO)

The company has initiated arbitration proceedings against GFG Alliance a business conglomerate based out of London, in United Kingdom. The company has last year sold its Dunkirk Aluminum smelter in France to GFG Alliance, for which $50 million is due from the GFG Alliance.

Financial Updates from company’s Half-yearly Result Statement (RIO)

The company for the half-year period ended 30 June 2019 declared revenue of $20.722 billion compared to revenue of $19.914 billion for the half-year period ended 30 June 2018. Its operating profit for the six-month period ending 30 June 2019 was $5.276 billion whereas the operating profit for the six-month period ending 30 June 2018 was $6.458 billion. The profit for the period for the half-year period ended 30 June 2019 was $2.931 billion while for corresponding half-year period ended 30 June 2018 the profit for the period was $4.499 billion. The diluted earnings per share of the company for the six-month period ending 30 June 2019 was 250.7 cents while for the six-month period ending 30 June 2018 diluted earnings per share were 249.9 cents per share.

Source – Company’s Half-yearly report published on 01 August 2019.

Stock Price performance of (RIO)at the London stock exchange (YTD)

(Comparative chart of RIO with FTSE 100 index, Source – Thomson Reuters)

The share prices of Rio Tinto Plc have been outperforming the FTSE 100 index since the beginning of year (1 January 2019). Towards the end of July 2019, the stock’s price growth trajectory has eased down a bit but is still above the FTSE 100 index.

Stock performance at the London stock exchange over the past 5 days till 02 September 2019 (RIO)

Price Chart as on 02 September 2019, before the market close (Source: Thomson Reuters)

On 02 September 2019, at the time of writing of the report (before the market close, GMT 03.45 PM), RIO shares were trading on the London Stock Exchange at GBX 4182.0. The prices of the shares of Rio Tinto Plc have been on a upward trajectory since 27 August 2019, and continued to do so till the time of writing of this report on 02 September 2019.

The stock has a 52-week High of GBX 4979.16, and a 52-week low of GBX 3418.91. The total market capitalization of the company was £70.37 billion.

Outlook (RIO)

The dispute in the payment over Dunkirk Aluminum smelter is of minor value to both the business groups and will have little effect on the profitability or operational performance of either. The smelter is also very well-funded with no cash crunch in near future. The arbitration process however will put to test both the company’s corporate best-practices.

Europa Metals limited

Europa Metals limited (EUZ) is an Australian mining and mineral company, its operations are however based in Spain in Europe. Its primary mines are located in the Province of Leon, in Spain where the company mines for lead, zinc and silver. The three mines located in the area belonging to the company are Rubiales mine, Antonina mine and the Las Medulas mine.

The company is listed on AIM at the London Stock Exchange where its shares are traded under the ticker name EUZ.

News Update (EUZ)

The company on 2 September 2019 came out with an update on the drilling of a test hole it had undertaken with the scope of its Toral project in Spain. The drilling operation has been completed and the samples have been sent to Wardell Armstrong LLC for independent metallurgical testing, based on which the company will be able to provide further update of the value of metals in the prospect.

Financial Updates from company’s Half-yearly Result Statement (EUZ)

The company reported a total revenue of AU$7219 for the six-month period ended 31 December 2019 against a total revenue of AU$71,302 for the six-month period ended 31 December 2018.The Net Loss after income tax of the company for the half-year period ended 31 December 2019 was AU$1,534,312 while for corresponding half-year period ended 31 December 2018 the Net Loss after income tax was AU$712,548. The total comprehensive loss for the six-month period ended 31 December 2019 was AU$1,475,605 while for the six-month period ended 31 December 2018 total comprehensive loss was AU$640,735. The diluted loss per share for the half-year period ended 31 December 2019 was AU$0.028 per share while for the half-year period ended 31 December 2018 diluted loss per share was AU$0.026 per share.

Source – Company’s Half-yearly report published on 15 March 2019

Stock Price performance of (EUZ) at the London stock exchange (YTD).

(Comparative chart of EUZ and AIM All Share index, Source – Thomson Reuters)

The share prices of Europa Metals limited have been moving in consonance with the AIM All Share index since the beginning of 1 January 2019 and it did so till the end of February 2019, since then it started underperforming the index till August 2019. Since the beginning of August 2019, the stock pieces flipped to the upside and have now started to outperform the index and have been doing so till the time of preparation of this report on 02 September 2019.

Stock performance at the London stock exchange over the past 5 days till 02 September 2019

Price Chart as on 02 September 2019, before the market close (Source: Thomson Reuters)

On 02 September 2019, at the time of writing of the report (before the market close, GMT 03.40 PM), EUZ shares were trading on the London Stock Exchange at GBX 0.0470. The prices of the shares of the company have been on a downward spiral since 27 August 2019, which continued till the time of writing of this report on 02 September 2019.

The stock has a 52- week High of GBX 0.17, and a 52-week low of GBX 0.01. The total market capitalization of the company was £5.81 million.

Outlook (EUZ)

The company is an exploration stage company, who is still investing heavily in its mineral exploration activities. For the six-month period ended 31 December 2019 it spent five times as much for its exploration activity as it did for the six-month period ended 31 December 2018. The fortunes of the company are tied to the metallurgical test results awaited from Wardell Armstrong LLC who are conducting independent tests of the samples from the company’s drills conducted during the six-month period (ended 31 December 2019).

AB Dynamics Plc

AB Dynamics Plc (ABDP) is a United Kingdom based automobile sector R&D and technical service provider company. Its services include designing, manufacturing, testing and measurement products for vehicular suspension, breaks and steering systems among others. It provides its services across the world with particular focus on United Kingdom, European Union and North America.

The company was incorporated in 2013 with headquarters at Middleton Drive in London. Its shares are listed on the AIM at the London stock exchange where they trade with the ticker name ABDP.

News Update (ABDP)

The company on 2 September 2019 announced the acquisition of a California based company called Dynamic Research Incorporated (DRI) for a maximum consideration of $24.7 million. The acquired ompany provides similar services in the United States of America and will provide the company with an international footprint and access to the DRI’s ADAS testing intellectual property which will add value to the company’s existing portfolio of products and services.

Financial Updates from company’s half-yearly result statement (ABDP)

The company for the six-month period ending 28 February 2019 reported a total revenue of £25.808 million in comparison to a revenue of £15.286 million for the six-month period ending 28 February 2018. Its gross profit for the half-year period ending 28 February 2019 was £12.919 million whereas for half-year period ending 28 February 2018 the gross profit was £7.865 million. The operating profit for the six-month period ending 28 February 2019 was £6.234 million in contrast to operating profit of £2.917 million for the six-month period ending 28 February 2018.Total comprehensive income for the period ended 28 February 2019 (six-month) was £5.560 million and for the period ended 28 February 2018 (six-month) the total comprehensive income was £2.387 million. The earnings per share on diluted basis for the company for the half-year period ending 28 February 2019 was 27.61 pence per share, whereas for the half-year period ending 28 February 2018 earnings per share on diluted basis was 12.03 pence per share.

Source – Company Half-yearly report published on 15 March 2019

Stock Price performance of (ABDP) at the London stock exchange (YTD).

(Comparative chart of ABDP with the AIM All Share index, Source – Thomson Reuters)

The stock prices of AB Dynamics Plc have been moving in consonance with the AIM All Share index since 1 January 2019 till mid of February 2019 after that it has registered a strong performance and has been outperforming the index ever since till the time of preparation of this report on 02 September 2019.

Stock performance at the London stock exchange over the past 5 days till 02 September 2019 (ABDP)

Price Chart as on 02 September 2019, before the market close (Source: Thomson Reuters)

On 02 September 2019, at the time of writing of the report (before the market close, GMT 03.05 PM), ABDP shares were trading on the London Stock Exchange at GBX 2782.50. Between 27 August 2019 and 30 August 2019, the prices of the stock witnessed an upward movement, while on 30 August 2019 there had been a sideward movement in the prices which continued on 02 September 2019 after a mildly stronger opening trade.

The stock has a 52- week High of GBX 2798.00, and a 52-week low of GBX 1090.39. The total market capitalization of the company was £611.05 million.

Outlook (ABDP)

The company will benefit in the near-term period as there is heightened activity in the electric vehicle research and development activity around the world. The company’s acquisition of Dynamic Research Incorporated (DRI) will provide it strategic depth which will help it get additional business in North America as well as the rest of the world.

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