Stock Insights: CYBG, WG, RDSA

Stock Insights: CYBG, WG, RDSA
About CYBG Plc 

CYBG Plc (CYBG) is a provider of personal and commercial banking and related financial solutions. It operates through Clydesdale Bank, Virgin Money, Yorkshire Bank, and B brands. The company offers a range of accounts and deposits services; credit and debit cards; loans and mortgages; life and non-life insurance; corporate financing; treasury solutions; foreign exchange services; and digital banking solutions. It provides investment and pension products, wealth management, and private banking solutions.

CYBG- Recent News

On 4th September 2019, the company received large volumes of PPI information requests as the deadline was on 29th August 2019. Therefore, the company has decided to increase its provisions by £300 million – £450 million.

CYBG-Trading Update for Q3 FY2019 (comparisons are on a pro-forma basis)

In the third quarter of 2019, mortgage book reduced by 0.2 per cent to £60.4 billion against the same at the end of March 2019, driven by the decline in new business volumes and a surge in the redemptions in the current quarter. Business lending rose by 0.5 per cent to £7.7 billion, due to lower volumes from new business in the subdued market. In Q4, the company had a strong pipeline of new lending. Personal lending climbed by 5.7 per cent to £4.8 billion, driven by growth in the credit card business. Customer deposit surged by 1.8 per cent to £62.8 billion, driven by an increase in deposit growth in Business and Personal divisions. The company’s integration programme performed well with a delivery £45 million of annual run-rate cost synergies and the company remained on track for completion of FSMA Part VII in October 2019.

CYBG-Financial Highlights for H1 Financial Year 2019 (£, million)

For the first half of the financial year 2019, the company’s net interest income surged from £426 million in H1 FY2018 to £820 million in H1 FY2019. The increase in the net interest income was due to a significant increase in the interest income for the current period. Reported total operating income increased by £423 million to £926 million in H1 FY2019 against £503 million in H1 FY2018. Operating profit before impairment losses stood at £215 million in H1 FY2019 against a loss of £73 million in H1 FY2018. The company’s pre-tax profit stood at £42 million in H1 FY2019 versus a loss of 95 million in H1 FY2018. The group reported a profit after tax of £29 million in H1 FY2019 as against a loss of £76 million in H1 FY2018. The Basic and diluted earnings per share for H1 FY2019 stood at 0.2 pence against a loss per share of 10.2 pence in H1 FY2018.

The company had shown good growth in the financial performance for the third quarter and in the first half of the financial year 2019. In the Q3, the company’s lending business performed well, and as a part of the integration programme, the company has delivered a £45 million of annual run-rate cost synergies.

Application of Virgin Money brand across the business is a substantial move for the lender, and this would enable it to attract a more expansive customer base with enhanced core capabilities. Post-execution of complete integration of the Virgin Group, the group is targeting a Net Interest Margin between 165-170 bps and underlying operating costs would be below £950 million for the financial year ending 2019.
The group is also aiming to bring operating costs below £780 million by the end of 2022 and cost-to-income ratio to the mid-40% by the end of FY22. This move will allow the lender to reshape their balance sheet and shift focus to increase exposure in the high margin assets and lower-cost deposits. This strategy will also support them to simplify the business through digitising and would enhance incremental cost efficiencies.

CYBG-Share price performance

Daily Chart as at 06-September-19, before the market close (Source: Thomson Reuters)

On 06th September 2019, at the time of writing (before the market close, at 03:20 PM GMT), CYBG shares were trading at GBX 113.25, up by 4.57 per cent against the previous day’s closing price. Stock’s 52 weeks High and Low are GBX 340.00/GBX 108.30. The group’s stock is reflecting higher volatility as against the benchmark index based on the beta of 1.30.

About John Wood Group PLC

John Wood Group PLC (WG) is an Aberdeen, Scotland-headquartered group which provides performance-driven project, engineering and technical services to its customers throughout the asset life cycle. The group’s operations are differentiated in five operating segments: Assets Solutions Americas (‘AS Americas’), Asset Solutions Europe, Africa, Asia, Australia (‘Asset Solutions EAAA’), Environment and Infrastructure Solutions (‘E&IS’), Specialist Technical Solutions (‘STS’) and Investment Services.

WG-Recent News

The company declared an interim dividend of 11.4 US cents per share which will be paid on 26th September 2019.

WG-Financial highlights for H1 FY19 period ended 30th June 2019

The company’s revenue plunged by 2.6 per cent year over year to $4.78 billion in H1 FY19. The adjusted EBITDA (without factoring the impact of IFRS 16) rose by 7.2 per cent to $314 million in H1 FY19 as against $293 million in H1 FY18. The adjusted EBITDA margin (without factoring the impact of IFRS 16) improved by 0.6 per cent to 6.6 per cent in H1 FY19 as against 6 per cent in H1 FY18. The adjusted EBITDA (post capturing IFRS 16) was recorded at $384 million in H1 FY19, which includes $ 70 million from factoring of IFRS 16. The company’s operating profit surged by 479.2 per cent to $139 million in H1 FY19 as against $24 million in H1 FY18.

WG-Share price performance

Daily Chart as at 06-September-19, before the market close (Source: Thomson Reuters)

On 06th September 2019, at the time of writing (before the market close, at 03:17 PM GMT), WG shares were trading at GBX 380.2, down by 2.51 per cent against the previous day’s closing price. Stock’s 52 weeks High and Low are GBX 801.20/GBX 352.70. The group’s stock is reflecting higher volatility against the benchmark index based on the stock’s beta of 1.22.

About Royal Dutch Shell Plc

Royal Dutch Shell Plc (RDSA) is a Hague, Netherlands-based international group of energy and petrochemical company, which engages in exploring, producing, refining and marketing oil and natural gas. The company explores for natural gas and crude oil globally, in conventional fields and from other sources, such as coal formations, tight rock and shale. The group also manufactures and markets chemicals.

RDSA-Recent News

On 2nd September 2019, the company announced the release date of its Q3 results and quarterly dividend declaration. The company will declare results on 31st October 2019.

 

RDSA-Financial Highlights for H1 Financial Year 2019 ($, million)

In the first half of the financial year 2019, the company’s revenue stood at $174,278 million as against $186,000 million in H1 FY2018. The decline in the revenue was driven by a dip in the revenue from all reportable segments for the period. The total revenue and the other income stood at $177,499 million in H1 FY2019 versus $190,382 million in H1 FY2018. The company’s total expenditure declined to $163,176 million in H1 FY2019 from $172,405 million in H1 FY2018. The PBT (Profit before tax) declined by 20.33 per cent from $17,977 million in H1 FY2018 to $14,323 million in H1 FY2019. The company’s profit for the year attributable to the shareholders stood at $8,999 million in H1 FY2019 as against $11,923 million in H1 FY2018. The basic earnings per share for H1 FY2019 was $1.11 versus $1.44 in H1 FY2018. The diluted earnings per share for H1 FY2019 was $1.10 versus $1.42 in H1 FY2018.

The company carries out the development, engineering, construction and facilities operation and maintenance, and provides training services for the oil and gas industry. Despite week top-line and bottom-line performances, the company delivered decent cash flow performance. The company reduced its total expenditure in the first half of the financial year 2019.

New contracts, increasing demand for oil and petroleum products and upstream investment forecasts for 2019 could provide new growth opportunities to the company.  The company’s operations may be impacted negatively due to ongoing uncertainly created by Brexit as it will impact the company’s supply chain.

The company had increased its competitive portfolio during the period with the introduction of first LNG cargo from Prelude and Appomattox and expect to generate added cash in future. The company’s customer-facing and Upstream businesses are flexible and will contribute to generating cash flows to meet FY2020’s outlook.

RDSA-Share price performance

Daily Chart as at 06-September-19, before the market close (Source: Thomson Reuters)

On 06th September 2019, at the time of writing (before the market close, at 03:15 PM GMT), RDSA shares were trading at GBX 2,250.50, down by 1.48 per cent against the previous day’s closing price. Stock’s 52 weeks High and Low are GBX 2,811.38/GBX 2,209.50. The group’s stock is reflecting lower volatility as against the benchmark index based on the beta of 0.89.

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