Aston Martin Lagonda Global Holdings Plc

Aston Martin Lagonda Global Holdings Plc (LON: AML) is a Warwick, United Kingdom-based manufacturer of the luxury sports car and grand tourers. The company is manufacturing and exporting vehicles in 53 countries around the world.

Operations Update and Covid-19 Impact
On 24^th March 2020, Aston Martin Lagonda Global Holdings released an update on operational performance and impact of COVID-19 pandemic. The group remained focused on ensuring the safety and health of its employees, business partners and business partners local communities. The company followed the health measures advised by the health department and governments to reduce the spread of the virus and contain it. The group expect its sports car wholesales to be on the lower side in the financial year 2020 versus 2019 data. The company decided to lower the dealer inventories of luxury models. At present around third of the dealer network has stopped working and a third are operating with reduced capacity. In the Chinese region, few of the dealers were closed earlier are now open and returning to full capacity. As expected, the group’s order book continues to increase, and deliveries are planned to begin in the 2020 summer if suppliers and factories operations stabilise. The outbreak of virus previously impacted demand in China and the APAC region and is now impacting the demand in other regions, which will increase risks and uncertainties to the company’s financial performance in FY2020. The group is taking multiple steps to improve its supply chain managing business more broadly.

Share Price Performance

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

Aston Martin Lagonda Global Holdings Plc shares were trading at GBX 77.95 at the time of writing after the market close on 3^rd April 2020. Stock's 52 weeks High is GBX 353.13 and Low is GBX 35.31.

Conclusion
The FY19 was a quite challenging period for the Group. Despite the growth in retail sales, the group could not yield revenue and profitability. This weakened performance further put liquidity pressures alongside higher net debt of £876m and substantially increased adjusted leverage to 7.3x. Presently, the company emphasis is on revitalising the business, ensuring profitable progress in the medium-term and launching DBX and Aston Martin Valkyrie. In the light of ongoing scenario of Covid-19 contagion, the performance of business would be further hampered since it has been impacting supply chain and dampening demand since China represented 9% of their total wholesales in FY2019.

Based on the headwinds faced by the group, we have given a "WATCH" recommendation at the closing price of GBX 77.95 (as on 3^rd April 2020). Moreover, the stock is looking overstretched currently on technical analysis front.

Keller Group Plc

Keller Group Plc (LON: KLR) is a London, the United Kingdom-headquartered geotechnical solutions specialist company. The company’s business is differentiated in three segments: North America, EMEA and Asia-Pacific (APAC).

The group will release its trading update on 21^st May 2020.

Covid-19 Impact
On 25^th March 2020, Keller Group released an update for the impact of Covid-19 and measures taken by the company to withstand uncertain period. The group remained focused on ensuring the safety and health of its employees and following the advice given by local authority and World Health Organisation. The company was supporting the local authority to reduce the spread of the virus and established an Executive Committee to regularly update advice to employees, divisional oversight in an effective manner and establish business continuity planning. The company has multiple revenue streams and source raw materials locally to operations and flexible and scattered workforce. The group expect global macroeconomic demand to reduce in the long term. In January and February trading, the group’s operations remained unaffected by a coronavirus and are ahead of expectations, while in the March market conditions deteriorated and impacted the company’s trading primarily in European countries. The group’s North American operations become challenging due to lockdowns and state-specific restrictions. The APAC business was impacted at the beginning of the year and at present trading has been impacted moderately. With the rapidly evolving COVID-19 situation makes trading outlook more uncertain.The group has taken the required steps to preserve cash and reduce operating costs. The company has large borrowing facilities available and stood at GBP 230 million with a cash balance of GBP 76 million at the end of February 2020. The group feel it is early to quantify the impact of the virus on earnings and will monitor the situation closely.

Share Price Performance

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

Keller Group Plc shares were trading at GBX 502.00 at the time of writing after the market close on 3^rd April 2020. Stock's 52 weeks High is GBX 898.61 and Low is GBX 419.03.

Valuation Methodology

*Peers: Forterra Plc, Morgan Sindall Group Plc and Tyman Plc.

Conclusion
In the medium term, the company stays strategically well-positioned with continuing favourable market fundamentals anticipated to support profitable growth. The order book continues to be decent, and the company stay focused on positioning the business to take full advantage of the positive market trends of infrastructure and urbanisation growth. The group’s operations were impacted due to Covid-19 outbreak as it resulted in a disturbance in the supply chain and operational performance. The company’s operations in multiple locations impacted due to the outbreak. With the outbreak of Covid-19, many countries-imposed restrictions on travel and resulted in a sharp fall in the stock markets globally.

Based on the headwinds faced by the group, we have given a "WATCH" recommendation at the closing price of GBX 502 (as on 3^rd April 2020). Moreover, the stock is looking overstretched currently on technical analysis front.

*All forecasted data and peer information have taken from Thomson Reuters.

Disclaimer

PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE INFORMATION PROVIDED HEREIN SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS.
References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.
This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332.
The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine is not responsible for material posted on this website and does not guarantee the content, accuracy, or use of the content in this site. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated.
Kalkine do not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional licensed financial planner and adviser.