British Land Company PLC – Assuaging the Covid-19 disruption with enhanced financial strength and flexibility.

British Land Company PLC (LON: BLND) is a FTSE 100 listed property development and investment company, which manages a portfolio of around GBP 15.4 billion of assets under management.

The Group is expected to organize its annual generate meeting on 29^th July 2020.

Recent News
On 29^th April 2020, the Group revised the date for its FY 2020 financial results (ended 31^st March 2020) and will now be published on 27^th May 2020.

Business and Dividend Update (as on 26^th March 2020)
The Company released an update on the impact of Covid-19 on business performance. As a current priority, the Group is focusing on ensuring the health and safety of its employees, stakeholders, and its assets. The proportion of asset portfolio as of 30^th September 2019 stood at 55 per cent London offices, 41 per cent Retail and 4 per cent Canada Water & Residential. Regarding the liquidity, the Group reported a robust balance sheet position with Revolving Credit Facilities of GBP 450 million and GBP 1.2 billion in terms of cash & undrawn facilities. Moreover, the Group does not require any refinancing until 2024. Further, the Group decided to temporarily suspend dividend payments for the future.

Share Price Performance

Daily Chart as on 13^th May 2020, before the market closed (Source: Refinitiv, Thomson Reuters)

British Land Company’s shares were trading at GBX 334.30 on 13^th May 2020 (before the market close at 12.40 PM GMT+1), down by 2.79% against the last day closing price. Stock's 52 weeks High is GBX 649.40 and Low is GBX 309.40.

Valuation Methodology


Conclusion
During the financial year 2020, the Group is expectingunderlying earnings to be in line with previous expectations; however, the Board was unable to provide guidance for FY2021. However, in the wake COVID-19 disruption, the Group was expecting a deferral in March rent by around GBP 40 million. Moreover, the retail segment appears to be challenging, with no sign of improvement in the near term. In such a scenario, the Group is operating with a strong balance sheet and liquidity position to tackle short term uncertainties while keeping the significant headroom for debt covenants.

Based on the headwinds faced by the group, we have given a "WATCH" recommendation at the current market price of GBX 346.18 (as on 13th May 2020, before the market close at 8:02 AM GMT+1), while we look for any upcoming catalysts in the near term.

TP ICAP Group PLC – Higher Market Volatility Bringing Better Client Volume.

TP ICAP Group PLC (LON: TCAP) is FTSE 250 listed Company, which act as a professional intermediary to bring together the sellers and buyers in global energy, financial, and commodities markets. It provides services related to broking, market intelligence and data & analytics with offices in 26 countries.

Recent News
6^th March 2020: Mark Hemsley was appointed as Non-executive Director of the Board of TP ICAP PLC. He will also be a part of the Risk and Nominations & Governance Committees.

Trading Update (for the three months ended 31 March 2020)

(Source: Company Website)

As on 13^th May 2020, the Group reported a robust financial performance, while safeguarding the interest of all stakeholders despite the challenging macroeconomic backdrop. The Group responded to the disruption quickly by re-engineering its operations through work from home set up to maintain continuous global client services. During the first quarter of 2020, the Group reported a 17 per cent jump in reported revenue (on constant currency basis) to GBP 547 million from GBP 469 million in Q1 FY2019. Regarding the liquidity position at 31^st March 2020, the Company reported GBP 250 million of Revolving Credit Facility (undrawn with maturity in December 2022). Moreover, it has no bond maturities until 2024. Further, the Group said that it has not furloughed any employee or seeking any financial aid from the Government.

Share Price Performance
 
Daily Chart as on 13^th May 2020, before the market closed (Source: Refinitiv, Thomson Reuters)

TCAP’ shares were trading at GBX 367.8 on 13^th May 2020, down by 1.13% (before the market close at 2.16 PM GMT+1) against the last day closing price. Stock's 52 weeks High is GBX 425.00 and Low is GBX 160.25.

From the technical standpoint, 3 days, 9 days and 14 days relative strength index of the stock was unfavourable and the price could fall further from the current trading level.

Valuation Methodology


Risk Analysis
Presently, the company is trading near the 52-week High, raising doubts at its upside potential at the current price level. Moreover, the Covid-19 mayhem and macroeconomic uncertainties will keep the market volatile in the short term.

Conclusion
The Group reported that the trading activity in April 2020 revived to normal as compared to the first quarter of 2020 and was in line with the full-year guidance. The strong trading update of first quarter 2020 reflects the resilience of the business despite the challenging conditions. Currently, the Group is witnessing greater client volumes due to the volatile market situation amid the Covid-19 mayhem. However, given the uncertainties, the Group is unable to provide the full-year guidance.

Based on the valuation and factors highlighted above, we recommend investors to keep a “Watch” on the stock at the current price of GBX 376.20 (as on 13th May 2020, before the market close at 8.13 AM GMT+1) with support from few catalysts needs to be evaluated at a later stage.
 
*All forecasted figures and Peers information has been taken from Refinitiv, Thomson Reuters.

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