Two Automobile Industry Stocks Under Focus: Lookers PLC And Auto Trader Group PLC

Lookers PLC

Lookers PLC (Identifier: LOOK) is an Altrincham, the United Kingdom-based group, which operates as motor retail and aftersales company. The company’s business is organised into three divisions: Automotive, Agricultural and Leasing. The company’s operations cover all four UK countries and the Republic of Ireland where it is engaged in the sale of new and used cars and providing aftersales services.

LOOK-Q3 Trading update

On 1st November 2019, the company released its trading update for the third quarter of the fiscal year 2019, period ended 30th September 2019. The company maintains a strong property portfolio. The company has £312.1 million of freehold and leasehold property. In addition, the company enjoys a revolving credit facility of £250 million for the period up to March 2022. The company’s net debt was recorded at £73.9 million at 30th June 2019 representing 0.9x EBITDA. The company emphasises on working capital management and improving cost efficiencies to drive cash flow. The company observes additional capital expenditure discipline and looks for opportunities to dispose of surplus property. Andy Bruce and Nigel McMinn (CEO & COO) will be stepping down from the board effective from 1st November 2019.

LOOK-Financial Highlights for H1 FY19

In H1 FY2019, the total revenue increased by 2.7 per cent to £2,646.4 million as compared with the corresponding period of the last year, due to an increase in both used cars and aftersales services. Like-for-like revenue growth was 0.1 per cent. Underlying profit before tax reduced by 27.5 per cent to £29.2 million against the £40.3 million in H1 FY18, due to a challenging market backdrop. Profit before tax stood at £24.9 million, a decrease of 39.7 per cent from the previous year same period data. Underlying basic earnings per share reduced by 29.5 per cent to 6.06 pence against 8.59 pence in H1 FY18. Basic earnings per share were 5.17 pence, a decrease of 41.3 per cent as compared with the corresponding period of the last year.

The company had a strong balance sheet with net debt of £73.9 million, a decrease from £86.9 million at 31st December 2018. Interim dividend per share stood at 1.48 pence and remained flat against the same period in 2018. Net book value was £312.1 million.

The company has delivered a decent performance over the half-year of 2019 with continued solid momentum in both the aftersales and used car businesses, demonstrating the diversity and resilience of the company’s business model. The present political environment, exchange rates and Brexit create a degree of uncertainty in the economy of United Kingdom.

LOOK-Share price performance

(Source: Thomson Reuters)

While writing (as on 04th November 2019, at 09:58 AM GMT), Lookers PLC shares were trading at GBX 46.05 per share, down by 5.44 per cent as compared to the previous day’s closing price level. The company’s market capitalisation was around £189.56 million.

LOOK shares have clocked a high of GBX 109.80 (as on 07 March 2019) and a low of GBX 33.70 (as on 12 July 2019) in the past year. At the current price point, as quoted in the price chart, the company’s shares were trading 58.06 per cent below the 52-week high price point and 36.64 per cent above the 52-week low price point.

At the time of writing, the stock’s volume before the market close, stood at 616,716. Stock’s average daily traded volume for 5 days was 993,657.00; 30 days- 618,717.50 and 90 days – 1,201,267.28. The company’s stock beta (5Y monthly) was 0.62, which makes it less volatile as against the benchmark index.

The average daily traded volume of the stock for 5 days surged by 60.60 per cent as against 30 days’ average daily traded volume. At the time of writing, the shares of the company were trading below the 30-days and 60-days SMA.

In the past 1 month, LOOK shares have delivered negative return of 15.74 per cent. Also, on a YTD (Year-to-Date) time interval, the stock plunged by approximately 47.29 per cent and was up by 13.92 per cent in the last three months.

The stock’s RSI (Relative Strength Index) for the 30-days, 14-days and 9-days was recorded at 43.00, 35.26 and 26.76 respectively. Also, the stock’s 3-days RSI was recorded at 2.97. 

Auto Trader Group PLC

Digital automotive marketplace Auto Trader Group plc (Identifier: AUTO) is engaged in the business of buying and selling used and new vehicles. The company operates in Ireland through its Website www.carzone.ie, with a similar business model.  The company derives revenue from retail customers for its product and services; the company also drives revenue from vehicle advertisements on the company’s websites. Some part of the revenue also comes from insurance and loan financing services.

AUTO-Financial highlights for FY19

The company’s reported revenue surged by 8 per cent to £355.1 million in the financial year 2019 in comparison to £330.1 million in the financial year 2018. Revenues from trade and manufacturer & agency segments propelled this surge in the reported revenues. The company’s operating profit surged by 10 per cent to £243.7 million in the fiscal year 2019 as against £221.3 million in the financial year 2018. The company’s operating profit margin surged to 69 per cent. The company’s profit before taxation surged by 15 per cent to £242.2 million in FY19 as against £210.7 million in FY18. The company’s basic earnings per share surged by 18 per cent to 21 pence in FY19 as against 17.74 pence in FY18. The company’s cash generated from operations surged by 13 per cent to £258.5 million in FY19 as compared to £228.4 million in FY18. The company’s returned £151.1 million through share buy-backs of £93.5 million and £57.6 million of paid dividends.

The gross external bank debt of the company reduced to £313 million in FY19 from £343 million in FY18. The company recommended a final dividend of 4.6 pence per share in FY19 as against 4.0 pence per share in FY18. The total dividend/share of the company surged by 13.5 per cent to 6.7 pence in FY19 as against the 5.9 pence in FY18.

AUTO-Share price performance

(Source: Thomson Reuters)

While writing (as on 04th November 2019, at 10:11 AM GMT), Auto Trader Group PLC shares were trading at GBX 546.20 per share, up by 0.36 per cent as compared to the previous day closing price level. The company’s market capitalisation was around £5.03 billion.

AUTO shares have clocked a high of GBX 606.80 (as on 11 June 2019) and a low of GBX 411.70 (as on 20 November 2018) in the past year. At the current price point, as quoted in the price chart, the company’s shares were trading 9.98 per cent below the 52-week high price point and 32.66 per cent above the 52-week low price point.

At the time of writing, the stock’s volume before the market close, stood at 973,203. Stock’s average daily traded volume for 5 days was 2,571,431.60; 30 days- 3,467,105.17 and 90 days – 3,361,699.21. The company’s stock beta (5Y monthly) was 0.18, which makes it less volatile as against the benchmark index.

The average daily traded volume for 5 days plunged by 25.83 per cent as against 30 days average daily traded volume. At the time of writing, the shares of the company were trading above the 30-days and 60-days SMA.

In the past 1 month, AUTO shares have delivered positive return of 5.59 per cent. Also, on a YTD (Year-to-Date) time interval, the stock surged by approximately 19.66 per cent and was up by 1.15 per cent in the last three months.

The stock’s RSI (Relative Strength Index) for the 30-days, 14-days and 9-days was recorded at 52.56, 52.72 and 48.41 respectively. Also, the stock’s 3-days RSI was recorded at 9.28.