Ten Lifestyle Group Plc – Pioneer in Lifestyle Management

Ten Lifestyle Group Plc (LON: TENG) is travel & leisure company based out of United Kingdom. The Group is engaged in the business of providing a platform for travel and lifestyle in 26 languages and has 22 offices globally.

Recent News
On 12^th June 2020, Ten Lifestyle Group provided an update on contract updates across APAC and EMEA regions. In EMEA, the Group has agreed for a five-year extension for existing Extra Large contract along with the extension other two Large contracts and Medium contract. In APAC, Ten Lifestyle Group entered in Largecontract for three-year extension and is expected to grow into Extra Large contract.

Financial Highlights – Improved Performance in H1 FY2020 (29^th February 2020)

(Source: Interim Report, Company Website)
 
In the first half of the financial year 2020, driven by strong performance in EMEA region for the period, the net revenue increased by 11 per cent to £23.8 million (H1 FY 2019: £21.5 million). The adjusted EBITDA stood at £2.1 million in the first half of the financial year 2020 (H1 FY 2019: LBITDA £2.4 million), reflecting enhanced operational efficiencies and implementation of IFRS 16. Driven by lower operating expenses for the period, the Group reported a decline in operating losses to £2.1 million in H1 FY2020 (H1 FY 2019: Operating loss of £4.7 million). The Group’s LBT (loss before tax) stood at £3.3 million in H1 FY2020 (H1 FY 2019: LBT of £4.7 million). The loss for the period stood at £3.7 million in H1 FY2020 (H1 FY 2019: Loss for the period £5.2 million). The cash balance declined to £9.6 million in H1 FY2020 (FY 2019: £12.3 million) with no debt.

Share Price Performance

Daily Chart as of July 3rd, 2020, after the market close (Source: Refinitiv,Thomson Reuters)

Ten Lifestyle Group Plc shares were closed at GBX 94.25 on 3^rd July 2020. Stock's 52 week High is GBX 139.00 and Low is GBX 40.00.

From the technical standpoint, 14-day RSI is currently in an overbought zone, which means the stock price can decline furtherfrom the current level.

Valuation Methodology
 

Key Risks
The Company’s performance is subject to external factors, such as the emerging risk of infectious diseases, political and economic disruption; competition from direct price competition; inter-modal; and change in technology.

Conclusion
The Group has shown an increase in financial performance in the first half of the financial year 2020. Both the top-line and the bottom-line performance has improved for the period, but profitability remained in the negative zone. The Company has shown an increase in the performance from the EMEA region and has managed to extend the existing contacts. The Group has also increased the large contract in APAC to extra-large contract. TENG has managed to control the operating expenses which shows enhanced operational efficiencies. The Company operates in a challenging environment which requires continuous investment, sometimes at the cost of profitability, to stay ahead of competitors. The Group is trading close to a 52-week high, raising doubts over further upside potential. 

Based on the above rationale and risks associated, we recommend investors to keep a “Watch” on the stock at the closing price of GBX 94.25 (as on 3^rd July 2020), with support from few catalysts needs to be evaluated at a later stage.

MySale Group Plc – Leading Online Retailer with International Operations

MySale Group Plc (LON: MYSL) is a general retailer company having an international presence. The Group operates through well-established websites in South-East Asia, New Zealand and Australia.

Financial Highlights – Decline in Top-line Performance in H1 FY2020 (31^st December 2019)

(Source: Interim Report, Company Website)
 
In the first half of the financial year 2020, due to lower revenue from all locations in which the Company operate, the revenue declined by 43 per cent to AUD 72 million (H1 FY 2019: AUD 126 million). The Group managed to reduce the cost of sale of goods, but due to decline in revenue, the gross profit declined by 50 per cent to AUD 24.4 million in H1 FY2020 (H1 FY 2019: AUD 48.5 million), while the gross margin declined to 34 per cent. The Company is focused on Inventory Light Marketplace Platform and reduced the operating expenses significantly during the period. The adjusted LIBTDA stood at AUD 3.1 million in H1 FY2020 (H1 FY 2019: adjusted LBITDA of AUD 5 million), reflecting a decline of 38 per cent. The LBT (loss before tax) declined to AUD 3.7 million in H1 FY2020 (H1 FY 2019: LBT of AUD 10.3 million). The loss for the period declined to AUD 3.6 million in H1 FY2020 (H1 FY 2019: net loss of AUD 6.7 million). The cash balance (net) stood at AUD 7.2 million as on 31^st December 2019 (H1 FY 2019: AUD 2.7 million), without any debt.

Share Price Performance

Daily Chart as of July 3rd, 2020, after the market close (Source: Refinitiv,Thomson Reuters)

MySale Group Plc shares were closed at GBX 5.725 on 3^rd July 2020. Stock's 52 weeks High is GBX 8.67 and Low is GBX 1.50.

From the technical standpoint, 14-day RSI is currently in an overbought zone, which means the stock price can decline further from the current level.

Key Risks
The sector in which the Company operates is exposed to political, financial and operational risks, each of which has the potential to significantly impact company/industry performance. Business operations may be impacted due to COVID-19 Pandemic uncertainty and lockdowns in many areas.

Conclusion
The Group is focused on Inventory Light Marketplace Platform, due to which the revenue has declined significantly for the period. The performance stood in line with the expectations of the management in the first half of the financial year 2020. The Group has significantly able to reduce its operating expenses, which resulted in improvement in bottom-line performance. The profitability for the period remained in the negative zone. The Group increased its liquidity position in the H1 FY2020. MYSL operations were impacted by the outbreak of covid-19 and to tackle the situation it has taken actions to reduce costs and preserve cash. The Company has also increased its suppliers by 44 per cent to 450 and also fixed its cost base to AUD 10.5 million. The Group also reduced the headcount to 162 as on 31^st December 2019 from 320 as on 31^st December 2018. The Company has shifted its warehouse to Sydney, Australia, to operate more efficiently. The Group is trading close to a 52-week high, raising doubts over further upside potential. 

Based on the above rationale and risks associated, we recommend investors to keep a “Watch” on the stock at the closing price of GBX 5.725 (as on 3^rd July 2020), with support from few catalysts needs to be evaluated at a later stage.
 
*All forecasted figures and Peer information have been taken from Refinitiv, Thomson Reuters.

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