Four FTSE250 Stocks Under Spotlight: HOC, QQ., INCH and ICP

Result Updates of Three FTSE Stocks – NANO, BRD and AGM

Hochschild Mining

London, United Kingdom-based Hochschild Mining Plc (HOC) is a precious metal producer company with business operations spread across the Americas for more than 50 years. The company is mainly focusing on good quality gold and silver deposits. The company is presently operating in 3 underground mines in southern Peru and one underground mine in southern Argentina.

HOC-Recent developments

In Chile, the company has acquired rare earth deposit (BioLantanidos Ionic Clay). This move by the company will help in diversification of its portfolio of precious metals with rare earth metals. This is a lower risk, lower capex and lower cost (operations) investment. This acquisition was announced by the company on 2nd October 2019.

HOC-Financial highlights for H1 FY19

In the first half of the financial year 2019, the company’s reported revenue declined by 5 per cent to $354,450 thousand from $372,328 thousand in H1 FY2018, driven by a decline in the average price of silver in the current financial year. Gross profit for H1 FY2019 dipped to $101,619 thousand from $105,069 thousand in H1 FY2018. In H1 FY2019, the adjusted EBITDA declined by 5 per cent to $153,734 thousand from $161,906 thousand in H1 FY2018, mainly due to the decline in the revenue and increase in the administrative and exploration expenses for the period.

The reported operating profit for H1 FY2019 stood at $32,744 thousand against $64,628 thousand in H1 FY2018. The total profit before taxation was down by 23.44 per cent to $29,518 thousand in H1 FY2019 from $38,554 thousand in H1 FY2018. The total net profit of the year was $16,661 thousand in H1 FY2019 versus $10,718 thousand in H1 FY2018. The total basic and diluted earnings per share stood at US$0.03 in H1 FY2019 versus US$0.03 in H1 FY2018. Interim dividend per share stood at 2 cents, an increase from 1.965 cents in H1 FY18.

In the first half of the financial year 2019, the company’s top-line and bottom-line performance declined. Despite the weak financial performance, the company is expecting a rise in demand for both gold and silver. With the global financial markets started experiencing volatility, the growth prospects of precious metals will improve in the year 2019. In the H1 of the financial year 2019, the company’s cash balance was at $95.4 million as compared to $79.7 million at the end of FY2018. The company has reduced its net debt to $62.4 million in H1 FY2019. The company’s growth strategy revolves around lower costs, optimising projects at earlier stages and strategic partnerships to maximize the shareholders’ value. The group’s board declared an interim dividend per share of 2 cents ($102 million), which signifies the ongoing successful operational and strategic performance.

HOC-Share price performance

(Source: Thomson Reuters) Chart as on 03-October-19, before the market close

On 03rd October 2019, at the time of writing (before the market closed, at 11:32 am GMT), HOC shares were trading at GBX 188.5. Stock’s 52 weeks High and Low is GBX 232.20/GBX 146.65.

 

QinetiQ Group

Qinetiq Group PLC (QQ.) is a United Kingdom-based aerospace and defence company and is engaged in providing technical assurance, test, evaluation and contract-funded research, and it help its customers to develop intellectual property through internal funding.

QQ.-Recent News

On 2nd October 2019, the company announced that it had arrived at a deal to acquire MTEQ (Manufacturing Techniques Incorporation) on a cash-free, debt-free basis for US$105 million to be remunerated in cash on completion and an earn-out of up to US$20 million owed in cash and shares reliant on delivering stretching financial targets over three years. The company also doubled the size of its US business with the purchase of MTEQ. The purchase would grow Qinetiq’s US revenue to about US$300 million. The company estimated that the acquisition would boost the earnings per share.

QQ.- Trading Update for Q1 FY2020

The group stated that they had witnessed a good start during the initial periods of the FY20, supported by decent operational performance across the group. Also, the group stated that they are well placed to deliver full-year revenue growth of mid-single-digit for FY20. Its performance in EMEA services delivered decent growth in orders and revenue during the quarter under consideration against the year-ago period and at the expected margins. Particularly Cyber Information and Training businesses performed well. Also, on account of decent growth in its core product businesses, global division performed well against the year-ago period.

QQ.-Financial highlights for FY19

Driven by strong order flow during the year under consideration and £3.1 billion high-quality backlog, revenue for the fiscal period 2019 expanded by 8 per cent on an organic basis and stood at £911.1 million. Underlying operating profit during the year improved by 1 per cent and excluding non-recurring trading items of £7 million, the group’s operating profit was up by 3 per cent offsetting UK single source profit headwind. Underlying EPS during the period improved by 2 per cent to £19.7 pence and full-year dividend increased by 5 per cent to 6.6 pence.

Q1 FY20 indicates that company has performed well, with decent growth in both the operational segments, supported by decent growth in the orders, revenue and margins which were in line with the company’s expectation. However, in its key operating markets like the UK and US, the group is expected to face challenges as spending in the major markets remains under pressure. The company reported decent growth in the latest trading update and the FY19 results.

QQ.-Share price performance

(Source: Thomson Reuters) Chart as on 03-October-19, before the market close

On 03rd October 2019, at the time of writing (before the market closed, at 11:36 am GMT), QQ. shares were trading at GBX 307. Stock’s 52 weeks High and Low is GBX 324.40/GBX 265.00.

 

Inchcape Plc

United Kingdom-based automotive retailer and distributor, Inchcape Plc (INCH) functions in around 32 national markets. The company’s business is differentiated in three segments: Distribution, Retail and Central. The Distribution segment comprises geographical regions, such as the United Kingdom and Europe, Asia, Australasia, and Emerging Markets.

 

INCH-Recent developments

The company has decided to sell its three retail sites of mainland China, which shall generate net cash of £54 million to refocus on distribution markets in Asia. China Yongda Automobiles Services Holdings Limited bought the three sites from the company.

INCH-Financial Highlights for H1 FY19

For the first half of the financial year 2019, the company’s reported revenue rose by 2.4 per cent (AER basis) to £4,725 million as compared with the H1 financial year 2018 of £4,614 million, while on a constant currency basis, revenue surged by 2.7 per cent, due to the growth in the emerging markets. The operating profit before exceptional items declined by 10.4 per cent to £179.8 million in H1 FY2019 against the £200.6 million in H1 FY2018. On a constant currency basis, operating profit before exceptional items reduced by 11.1 per cent. Operating margins decreased by 50 bps to 3.8 per cent in H1 FY2019 as compared with the previous year data. Reported profit before tax stood at £153.7 million in H1 FY2019, a decrease of 3.3 per cent as compared to £158.9 million in H1 FY2018. On a constant currency basis, profit before tax (before exceptional items) declined by 12.8 per cent to £156.3 million in H1 FY2019 from £177.2 million in H1 FY2018, due to the challenging retail trading environment and impact on margins. Free cash flow reduced by 63 per cent to £25 million in H1 FY2019 from £67.5 million in H1 FY2018.

The company’s overall financial performance remained decent with improvement in the top-line and the bottom-line performance. But the company’s operating profit and profit before tax had declined, which raises the questions on the operational performance of the company. In UK & Australia, the company had disposed of 10 loss generating sites, generating a cash flow of £34 million.

INCH-Share price performance

(Source: Thomson Reuters) Chart as on 03-October-19, before the market close

On 03rd October 2019, at the time of writing (before the market closed, at 11:37 am GMT), INCH shares were trading at GBX 613. Stock’s 52 weeks High and Low is GBX 677.50/GBX 482.20.

 

Intermediate Capital Group PLC

Intermediate Capital Group plc (ICP) is an asset management company which primarily invests in debt and equity instruments in North America, the United Kingdom, Europe, and Asia Pacific.

ICP-Recent News

Lord Davies will take charge as Chairman and Non-Executive Director of the company and will be replacing Kevin Parry post regulatory approval. Lord Davies is presently serving as Chairman (Corsair Capital LLC) and Independent Director (Diageo plc).

ICP-Trading statement for Q1 FY20

The company’s assets under management was up by 4 per cent to €38.6 billion on 31st March 2019. New funds amounting to €2.1 billion raised in Q1 FY20. The company’s third-party fee earning assets under management surged by 5 per cent to €31.0 billion in Q1FY20. The company has deployed prudent strategies across all funds to deliver strong performance.

ICP-Share price performance

(Source: Thomson Reuters) Chart as on 03-October-19, before the market close

On 03rd October 2019, at the time of writing (before the market closed, at 11:37 am GMT), ICP shares were trading at GBX 1,331. Stock’s 52 weeks High and Low is GBX 1,579.67/GBX 895.91.