Latest Updates On Two LSE Stocks: INFA and RDW

Infrastrata Plc

Incorporated in 2007 and formerly known as Portland Gas Plc Infrastrata Plc is engaged in the development and construction of gas storage and associated facilities. The company works on dynamic solutions to address the worldwide demand for safe, secure and environmentally positive energy storage and delivery services. The company’s primary focus is on its Islandmagee Gas Storage facility. The company operates from primarily 2 locations – Dorset and Northern Ireland. It has three subsidiaries – Islandmagee Storage Limited, Portland Gas Limited and Portland Gas Storage Limited.

INFA – Recent News

On 9th September 2019, the company announced an update on its Islandmagee gas project. The company announced that the project had completed key workstreams in the past two months and the project is now in the final stage of pre-construction activities. The company also announced that the previously announced negotiations with the equity partner are in the final stages, and if all goes well, the negotiations will be completed as part of taking the Final Investment Decision (FID).

The list of the key milestones completed, as per the company’s announcement are – Engineering: Value Engineering, Land: all easements acquired and all key land areas acquired, Environmental: all key statutory compliances adhered, and permissions obtained. Full Enabling work prior to construction is expected to be commenced by December 2019.

In the month of June 2019, the company also announced a transformational offtake agreement with Oil and Gas giant Vitol for all the storage capacity at their planned Islandmagee storage facility in Northern Ireland. The CEO of Infrastrata believes that this would be the turning point for the company as the free environment around the manual process of bringing in the gas with money being made on the trading side of the transaction. Although Brexit might be a challenge for this agreement to be executed, both the companies seemed positive about the value of services being provided.

Financial Performance (Interim results ended 31 January 2019)

The company has not reported any revenue as the project is still in its initiation phase, but it is anticipated that the company will report revenue by the end of next financial year. INFA’s operating loss almost doubled at £652,647 due to the increase in operating expenses as the company keeps on making expenses on its up-coming Islandmagee project. The company has a total long term debt issuance of GBP 200,000 and a total short term facility of GBP 540,221 obtained from Costain Oil. Apart from this, the company reported a Negative Basic EPS of GBX 0.04 per share, as compared to negative HY1 2018 figure of GBX 0.09 per share.

The most important goal for the board of the company is to increase the shareholder value by making its Islandmagee Gas Storage Facility project profitable, in the midst of making Islandmagee, an energy hub by adding more project phases and making them commercially viable. The company is also looking for more avenues globally by creating safe and secure energy infrastructures to add to their portfolio. The Islandmagee facility is currently expected to provide 25 per cent of the UK’s natural gas storage capacity.

INFA – Share price performance

On 9th September 2019, at 11:45 AM GMT, while writing, INFA shares were trading at GBX 0.43 per share; plunging by 4.44 per cent or GBX 0.02 as compared to the previous day’s closing price of GBX 0.45 per share. As of last trade, Infrastrata Plc stock traded 10.26 per cent above its 52-week low of 0.39, set on August 15, 2019 and 80.1 per cent or GBX 1.74 per share below its 52-week high price of GBX 2.17, set on January 15, 2019. The Market Capitalisation (M-Cap) of the company is around GBP 6.71 million.

4.97 million shares of the company have been traded so far. The stock has declined 36.30 per cent in the last one year.

The beta of the stock was recorded at 1.1996, indicating that it is more volatile in its movement in comparison to the benchmark index.

Redrow Plc

Based in the United Kingdom, Redrow Plc is engaged in residential housing development and is one of the leaders in that space in the London Metropolitan area. The company’s major operational focus is on Homebuilding, especially for the first time home-owners. The company focuses on conventional family housing in its apartment schemes in the greater London area. The company has come up with an innovative solution to support the first time homeowners called “Help to buy – Equity Loan”, through which homeowners get 20 per cent financing support from the government and only need a mortgage from the bank for the 75 per cent of the total amount. This loan is interest-free (for the first five years of the term) hence reducing a major financial burden for middle-class families for home- ownership.

The Company’s brand of apartments and schemes include the Heritage Collection, which are developed for urban living. The Regent Collection includes apartments and builder floors, which are designed similar to the townhouses. The company owns all these brands through its subsidiaries and its USP, amongst all is its application of the consumer code for homebuilders, which it strictly follows when it comes to providing any kind of primary or after support service to the potential home buyers.

RDW Financial Performance (Results for the year ended 30 June 2019)

The company delivered 1,712 affordable homes, which is up by 55 per cent from the previous year’s figure of affordable homes. Company’s land asset base has now added 7,379 plots, 40 per cent of which have already been converted from forward land. The group’s revenue has increased by 10 per cent to a record of GBP 2.1 billion from GBP 1.9 billion in 2018. This has been driven by a 13 per cent increase in the Legal Completions which is at 6,442 from previous year’s figure of 5,718 and the private average selling price increasing by 2 per cent to GBP 389,500 in 2019 from GBP 380,200 recorded in 2018 due to geographic mix and a small element of house price inflation. This is in line with company’s growth strategy.

Redrow Plc has also shown a record Profit Before Tax (PBT) to GBP 406 million, which is up 7 per cent from 2018’s PBT of GBP 380 million.

The group also showed an exceptional trading performance throughout the year which led to a robust cash generation and consequently, there was a positive cash position of GBP 124 million in 2019, up 49.5 per cent from the 2018 figure of GBP 63 million.

The EPS was at a record high at GBX 92.3 per share, a change of 8.00 per cent from 2018, which was at GBX 85.3 per share. On back of this strong and resilient performance by the company, the board has declared a final dividend of GBX 20.5 per share, taking the final dividend for the year to GBX 30.5 per share, which is a 9 per cent increase Year on Year. The dividend will be paid on 13th November 2019.

Amidst this strong performance, the key challenge for the company still remains the uncertain policies that might come in to effect due to Brexit which might impact the cost of moving and hence affect the major revenue stream for the company. The board has said that the company is a little conservative around the policies, but they have a strategy in place to tackle this challenge.

RDW Share Price Performance

On 9th September 2019, at 1:15 PM GMT, while writing, RDW shares were trading at GBX 590 per share; plunging by 1.07 per cent or GBX 6.35 as compared to the previous day’s closing price at GBX 596 per share. As of last trade, Redrow Plc stock traded 8.41 per cent below its 52-week high of 643.82, set on March 6, 2019 and 22.78 per cent or GBX 134.33 per share above its 52-week low price of GBX 455.32, set on December 17, 2018. The Market Capitalisation (M-Cap) of the company is GBP 2,099.05 million. 264,920 shares of the company have been traded so far. The stock has declined 0.29 per cent in the last one year from the price of GBX 626.85 per share.

The beta of the stock was recorded at 0.8997, indicating that it is less volatile in its movement in comparison to the benchmark index.

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