Recent Business Performance Update Of Two Stocks: LUCE, MRO

About Luceco PLC

Luceco Plc (LUCE) is a London, the United Kingdom-based group and provides a range of brands, including Masterplug, Ross, Luceco, and BG Electrical. The group’s products comprise Luxpanel, Epsilon and ambient lighting. The company distributes and manufactures various LED (light-emitting diode) lighting wiring and products accessories in Europe, the Americas, Africa, the Middle East, the Asia Pacific, and the United Kingdom. The company’s business is differentiated in four segments: Wiring Accessories, Portable Power, LED Lighting, Ross and other.

LUCE-Trading update for 26 weeks period ended 30th June 2019

On 30th July 2019, the company released its trading update for H1 FY19. The company exhibited strong performance which was in line with management expectations. The company was able to muster strong revenue growth in the retail segment within the United Kingdom; revenue surged by 10 per cent. The product and channel mix coupled with cost optimisations helped in improving gross margins in the second half of FY18, which was carried forward to the first half of FY19. The operating margin of the company is expected to be around 9 per cent for H1 FY19. The company’s net debt/ LTM EBITDA was at 1.5x for the period.

On 28th August 2019, the company made an announcement, that from 1st September 2019, Mr. Will Hoy will take charge as a Non-Executive Director of the company.

LUCE-Financial highlights for H1 FY19

On 9th September 2019, the company declared its half-yearly results for the period ended 30th June 2019. The company’s reported revenue surged by 10.1 per cent (AER basis) to £82.7 million in H1 FY19 as against £75.1 million in H1 FY18. The company’s reported gross margin surged by 9 percentage points to 35 per cent in H1 FY19 as against 26 per cent in H1 FY18. The company’s reported operating profit surged by 325.8 per cent to £7 million in H1 FY19 as against the reported loss of £3.1 million in H1 FY18. The reported operating margin of the company improved by 12.6 percentage points to 8.5 per cent in H1 FY19 as against negative operative margin of 4.1 per cent in H1 FY18. The company’s profit before taxation (reported) stood at £5.3 million in H1 FY19 as against the loss before tax of £4.1 million in H1 FY18. The company’s reported profit for the period surged by 193.2 per cent to £4.1 million in H1 FY19 as against the loss of £4.4 million in H1 FY18.  The company’s reported basic earnings per share stood at 2.6 pence per share in H1 FY19 as against the loss per share of 2.7 pence in H1 FY18. The company successfully reduced its debt. The adjusted net debt of the company reduced by 12.1 per cent to £36.4 million in H1 FY19 post-adoption of IFRS 16 as against £41.4 million in H1 FY18. The company’s return on capital employed (ROCE) was up by 11 percentage points to 18.3 per cent in H1 FY19 as against 7.3 per cent in H1 FY18. The company revised the dividend pay-out ratio from 20 per cent to 25 per cent and declared an interim dividend of 0.6 pence per share. The optimisation of processes and increasing efficiencies are driving the growth for the company in these challenging market conditions.

LUCE-Share price performance

Daily Chart as at 09-September-19, before the market closed (Source: Thomson Reuters)

On 9th September 2019, at 12:59 PM GMT while writing, LUCE shares were trading at GBX 80.42 per share; which were up by 10.61 per cent as compared to the closing price level of the previous day. The company’s M-cap (market capitalisation) was recorded at £117.36 million at the time of writing.

On 6th June 2019, the shares of LUCE have touched a new peak of GBX 133 and reached the lowest price level of GBX 32.10 on 21st December 2018 in the last 52 weeks. The company’s shares were trading at 39.53 per cent lower from the 52-week high price mark and 150.52 per cent higher than 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 1,361,612 at the time of writing before the market close. The company’s 5-day stock’s average traded volume was 241,038.60; 30 days average traded volume- 461,444.10 and 90 days average traded volume – 552,362.11. The beta of the stock stood at 1; the stock was as volatile as the index considered as the benchmark.

The shares of the company have delivered a negative return of 19.04 per cent in the last month. The company’s stock surged by 110.72 per cent from the start of the year to till date. The company’s stock has generated a positive return of 48.22 per cent in the last year.

About – Melrose Industries Plc

Melrose Industries Plc (MRO) is an investment company that specialises in buying strong fundamental manufacturing business which can be further improved in terms of performance and be monetized. The company provides products such as air management, security, home automation, ergonomic and electricity generating equipment. Its business portfolio comprises Nortek and brush. Melrose’s air management offers air quality and home solutions; residential and commercial havoc solutions, custom and commercial air solutions products.

MRO-Recent News

On 5th September 2019, Melrose Industries Plc announced its interim results ending June 30th, 2019.

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

In the first half of the financial year 2019, the company achieved decent results, with adjusted revenue reported at £6,002 million as against £2,971 million in H1 FY2018. The company’s statutory revenue for H1 FY2019 was at £5,700 million as against £2,847 million in H1 FY2018. The increase in the revenue was driven by a solid performance from all the reportable segments for the period. In H1 FY2019, gross profit accelerated significantly to £1,132 million against £505 million recorded in H1 FY2018. The adjusted operating profit for H1 FY2019 stood at £539 million in H1 FY19 versus £284 million in H1 FY2018. The company’s statutory operating loss stood at £11 million in H1 FY2019 versus an operating loss was £325 million in H1 FY2018. The company reported an adjusted PBT (Profit before tax) of £429 million in H1 FY2019 versus £244 million in H1 FY2018. The company’s statutory LBT (loss before tax) stood at £128 million in H1 FY2019 versus a loss of £372 million in H1 FY2018. The company’s loss for the period stood at £150 million in H1 FY2019 versus a loss of £330 million in H1 FY2018. The company’s basic and diluted loss per share (continuing and discontinued) was 3.4 pence in H1 FY2019 versus a basic and diluted loss per share of 10.8 pence in H1 FY2018.

The company’s top-line performance has improved for the first half of the financial year 2019. The company has improved its profitability for the period but remained in the negative zone on a statutory basis.
The group believes that the strong focus on controlling costs, production, and enhanced customer delivery will result in the improvement of the businesses of the company. With change related to the accountability, followed by significant investments and a more controlled strategic focus being applied to improve all major aspects of the businesses, the company remain confident of the future success in the second half of FY 2019.

The company faces a few macro challenges presented by the automotive sector and tariffs, but with its quick decision making and improved customer delivery, the company has improved its operational efficiency.

MRO-Share price performance

Daily Chart as at 09-September-19, before the market closed (Source: Thomson Reuters)

On 9th September 2019, at 01:05 PM GMT while writing, MRO shares were trading at GBX 200.50 per share; which were down by 1.47 per cent as compared to the closing price level of the previous day. The company’s M-cap (market capitalisation) was recorded at £9.8 billion at the time of writing.

On 10th September 2018, the shares of MRO have touched a new peak of GBX 227.70 and reached the lowest price level of GBX 145.94 on 11th December 2018 in the last 52 weeks. The company’s shares were trading at 11.94 per cent lower from the 52-week high price mark and 37.38 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 3,637,320 at the time of writing before the market close. The company’s 5-day stock’s average traded volume was 13,544,190.40; 30 days average traded volume- 11,622,643.57 and 90 days average traded volume – 11,404,269.09. The beta of the stock stood at 1.62, the stock has higher volatility to the tune of 62 per cent in comparison with the index considered as the benchmark.

The shares of the company have delivered a positive return of 20.82 per cent in the last month. The company’s stock surged by 24.14 per cent from the start of the year to till date. The company’s stock has generated a negative return of 11.57 per cent in the last year.

 

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