Legal & General Group PLC

British-based Legal & General Group PLC (LON: LGEN) is a holding company and is mainly involved in providing products and services related to insurance and investment management.

On 4^th March 2020, the company will announce the full-year results for 2019.

Business Update (as on 19^th November 2019)
The company announced to introduce shortly a GBP-denominated benchmark Tier 2 subordinated debt issuance.LGRI (Legal & General Retirement Institutional) has transacted 8.5 billion pounds of international PRT (Pension Risk Transfer) to 31^st October 2019. Further, this includes a UK PRT of £1.2 billion and a US PRT of $0.6 billion (£0.5 billion) written since the first half of 2019. The Solvency II capital and financial metrics strain of these deals are in line with the company’s prior transactions. The LGRI is in exclusive negotiations on an additional £3 billion of international PRT pipeline of which the company expect to complete before the financial year 2019 end. LGRR (Legal & General Retirement Retail) has attained individual annuity sales which was increased by 34% to £829 million to 31st October 2019as compared with the corresponding period of the last year. Lifetime mortgage advances declined by 15% to £823 million to 31 October 2019 against the same period last year. LGIM (Legal & General Investment Management) had attained £83 billion of external net flows in the year to 31st October 2019, which includes an additional external net flows of £23 billion since the first half of 2019.  On 31^st October 2019, LGIM's AUM stood at £1.2 trillion, an increase of £200 billion against the financial year 2019.

In the financial year 2019, the company expects the Solvency ratio will be in a range of 171%-176%. Till 31^st December 2019, the company assumes that the market conditions will not change.

Share Price Performance

Daily Chart as at November-25-19, before the market closed (Source: Thomson Reuters)

On 25th November 2019, Legal & General Group PLC shares were trading at GBX 280.20 at the time of writing before the market close (at 10:15 AM GMT), up by 0.83% against the previous day closing price. Stock's 52 weeks High and Low are GBX 292.30/GBX 214.90.

Conclusion
On a year-to-date basis, the company’s operating performance reported was decent across all five divisionsand reflecting the robust execution of the stated strategy. The company stay disciplined in the deployment of capital, with net cash flow and the balance sheet remaining robust. The company is taking benefit of the favourable market conditions to raise debt and stay well positioned to generate sustainable profits over the long-term period.

Therefore, based on the above rationale, we have given a “Hold” recommendation at the closing price of GBX 277.90 (as on November 22, 2019).

NMC Health PLC

NMC Health Plc (LON: NMC) is the largest private healthcare company in the U.A.E. (United Arab Emirates). The company provides healthcare services internationally with the UAE and Spain being the major markets.

Capital Markets Day Update (as on 21^st October 2019)
In the second half of 2019, the company confirmed that business performance is building on the robust trends seen in the first half of 2019. The group’s management anticipates that H2 FY2019 to be stronger than the H1 FY2019 and reiterates the full year 2019 guidance across revenues, EBITDA, net income, leverage and cash flow conversion. During H2 FY19, the company will reduce debt by up to US$100 million.

Full Year 2019 Guidance

(Source: Company Website)

In the financial year 2019, the company’s top line is expected in the range of US$2,500-US$2,540 millionat Post-IFRS 16 and Pre-IFRS 16 basis. The net income to equity holders for the financial year 2019 expected to be in the range of US$297-US$305 million at Post-IFRS 16 (US$320-US$330 million at Pre-IFRS 16 basis). The net debt to EBITDA will be below 3.4 times in the financial year 2019.

FY2020 Post-IFRS 16 Guidance

(Source: Company Website)

The company is expecting robust double-digit organic revenue and EBITDA growth in FY2020. The aforementioned facilities are anticipated to contribute towards revenue of US$45-US$55 million in 2020 and, as a result of being in the initial ramp-up phase, it estimateda US$18-20 million of loss at the EBITDA level from new projects (post-IFRS 16) in 2020. Growth capex is expected at US$90-US$100 million, while maintenance capex is expected to be around 3 per cent of revenues for the year.

Share Price Performance

Daily Chart as at November-25-19, before the market closed (Source: Thomson Reuters)

On 25th November 2019, NMC Health PLC shares were trading at GBX 2,585 at the time of writing before the market close (at 1:34 PM GMT), up by 5.124% against the previous day closing price. Stock's 52 weeks High and Low are GBX 3,650/GBX 1,773.50.

Conclusion
The company said that they would report a favourable performance in the second half of the financial year 2019. Consequently, the financial year 2020 is expected to deliver double-digit growth in the top line and bottom line.The group’s management expects to open four new hospitals: two in Oman and two in the UAE. These facilities will improve the total capacity of up to 380 beds. At the end of 2019, the company have a ten-bed cosmetics hospital scheduled for opening in Dubai.

The company will reduce the debt in H2 FY2019. NMC Health is also in the process of achieving regulatory approvals for up to US$200 million, and opportunistic buy-back program announced previously this year.

Therefore, based on the above rationale, we have given a “Hold” recommendation at the closing price of GBX 2,459 (as on November 22, 2019).

Dart Group PLC

British AIM-listed Dart Group Plc (LON:DTG) is an aviation and distribution company, headquartered in Leeds, United Kingdom. The company’s businesses are differentiated in two operating segments: Leisure Travel, which includes Jet2.com and Jet2holidays, and Distribution & Logistics, which includes Fowler Welch.

On 9^th July 2020, the company will announce the results for twelve months ending 31^st March 2020.

Financial Highlights (half-year ended 30 September 2019, £million)

(Source: Interim Reports, Company Website)

In the first half of 2020, the company’s reported revenue increased by 16% to £2,615.2 millionas compared with the corresponding period of the last year, due to an increase in leisure travel segment of 17.17%. The company’s operating profit for the half-year ended 30 September 2019 increased by 3% to £365 million(September 2018: £354.4 million) and profit before FX revaluation and taxation surged by 3% to £349.8 million in September 2019 (September 2018: £340.2 million. Basic earnings per share rose by 2% to 187 pence in H1 FY20 (H1 FY19: 183 pence). In the view of the company’s outlook for the full year 2020, the group’s board declared an interim dividend per share of 3 pence, an increase of 7% from the same period last year.

Share Price Performance

Daily Chart as at November-25-19, before the market closed (Source: Thomson Reuters)

On 25th November 2019, Dart Group PLC shares were trading at GBX 1,421 at the time of writing before the market close (at 8:45 AM GMT), up by 2.67% against the previous day closing price. Stock's 52 weeks High and Low are GBX 1,500/GBX 675.60. The company's stock beta was negative 0.39, reflecting the inverse volatility as compared to the benchmark index.

Valuation Methodology

*Peers: Go-Ahead Group PLC, Tui AG, Stagecoach Group PLC, National Express Group PLC, and On The Beach Group PLC.

Conclusion
For the financial year 2020, the company anticipates market expectations for the Group’s profit before FX revaluation and taxation will remain favourable.Economic conditions may have an impact on the level of demand for the Group’s leisure travel services. Brexit risk signifies the potential impact of the United Kingdom’s decision to leave the European Union on the company’s operations and financial position.

From the perspective of the travel industry market, the company is facing cost pressures in relation to the carbon, fuel, and other operating charges. The company is facing emerging headwinds and cost pressures. Currently, the stock is trading near the 52-week high, suggesting that the upside potential might be limited, and the company can face stiff resistance at the current level.

Based on the headwinds faced by the group, we have given a "WATCH" recommendation at the current price of GBX 1,421 (as on 25th November 2019, before the market close), while we look for any upcoming catalysts in the near term.

Petra Diamonds Ltd

Petra Diamonds Ltd (LON: PDL) is a United Kingdom-based prominent diamond mining group. The company primarily operates in the Sothern Africa with operations in Tanzania, South Africa and Botswana.

On 29^th November 2019, the company will hold its AGM in London, UK.

Recent News
On 15^th November 2019, the company announced that Petra Diamonds in order to deliver efficient assistance to the group's operations and to enable the prompt execution of Project 2022, the company had made several organisational changes. The company executed a flatter management structure. In this structure, all the reporting will be direct to the Chief Executive.

The company also announced that the exceptional blue diamond of 20.08 carat was recovered at the Cullinan Mine in South Africa in September 2019 and has been sold for a total consideration of US$14.9 million (approximately US$741,000 per carat).

Trading Update (from 1 July 2019 to 30 September 2019 (Q1 FY 2020))
The production for the first quarter of 2019 was up by 1 per cent to 1,082,764 carats and was on the track of ca. 3.8 Mcts for FY2020as expected by the company. The diamond prices on a like-for-like basis declined by 4 per cent for the period as compared to Q4 FY2019 data. The net debt as on 30th September 2019, was at US$592.8 million versus US$564.8 million as on 30th June 2019.

Share Price Performance

Daily Chart as at November-25-19, before the market closed (Source: Thomson Reuters)

On 25th November 2019, Petra Diamonds Ltd shares were trading at GBX 8.31 at the time of writing before the market close (at 10:56 AM GMT), down by 1.657% against the previous day closing price. Stock's 52 weeks High and Low are GBX 46.42/GBX 6.18.

Conclusion
The group is delivering robust and consistent production results across the operations. From the current scenario, the company’s results are in line with the anticipations. The company expects the diamond market will remain challenging, and the company with its available cash and banking facilities has enough headroom. The company, through a weakness in ZAR: USD, has been able to offset the impact of weaker diamond prices for the period.

Over the course of 4 years (FY15 - FY19), the company’s revenue surged from USD 425 million in FY15 to USD 463.60 million in FY19. Compounded annual growth rate (CAGR) stood at 2.2 per cent.

The senior project team is actively looking forward to identifying and drive improvement and efficiencies in recently launched Project 2022.They are targeting to achieve free cash flow (cumulative) between US$150 - 200 million over a period of 3 years.

Based on the above rationale, we have given a "SPECULATIVE BUY" recommendation at the current price of GBX 8.13 (as on 25th November 2019, before the market close at 1:09 PM GMT).
 
*All forecasted figures and peers have been taken from Thomson Reuters.

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