Land Securities Group PLC

Land Securities Group Plc (LAND) is a London Stock Exchange-listed holding company. Its area of operations is divided into two categories, Retail portfolio and the London Portfolio. The company do investment in real estate sector which includes shopping centres, shops and offices. The company also made small investments in residential, leisure and hotel properties.

Recent News
On 11th July 2019, the Land Securities Group announced that its Chief Executive, Robert Noel, had intended to retire from the Land Securities Group PLC during the financial year 2020.

Financial Highlights – Financial Year 2019 (£, million)

(Source: Annual Report, Company Website)
 
During the financial year 2019, the group's total revenue stood at £757 million against £830 million in the financial year 2018. The company’s total operating loss for FY2019 was £40 million against an operating profit of £505 million in FY2018. The total before tax-loss expanded to £123 million from a loss of £43 million reported in the FY18. Basic and diluted loss per share for FY19 stood at 16.1 pence against the per-share loss of 5.8 pence recorded in the year-ago period. However, on an adjusted basis, the group recorded an earnings per share of 59.7 pence and recorded a growth of 12.4 per cent on YoY basis, this was mainly on account of increased revenue profit and lower shares in issue as compared with the previous financial year. The combined value of the portfolio stood at £13.8 billion and declined by 4.1 per cent or £557 million against the year-ago period. The decline in the portfolio value was mainly because of weaker retail markets. Full Year dividend of the group was up by 3.1 per cent to 45.55 pence.

Share Price Performance

Daily Chart as at August-06-19, before the market close (Source: Thomson Reuters)

On 6^th August 2019, at the time of writing (before the market close, GMT 3:09 PM), Land Securities Group Plc shares were trading at GBX 780.80, up by 0.85 per cent against the previous day closing price. Stock's 52 weeks High and Low is GBX 946.50/GBX 764.90.

Valuation Methodology

*Peers: Derwent London Plc, Safestore Holdings Plc, British Land Company Plc, Newriver Reit Plc and Capital and Regional Plc.

Conclusion
The company had shown a decline in the financial performance for the financial year 2019. The company’s top-line performance had declined, and its profitability remained in the negative zone. The company had low levels of development activity underway. The company CEO, departure comes after the announced widening losses because of the dropping value of its retail portfolio. 

Uncertainty around Brexit and the wider macro-economic environment could affect negatively on the company’s construction capacity and retention of skilled human resources. A series of retailers having fallen down after struggling with the transition to e-commerce, the higher costs and week pound. The company is financially well-positioned, with strong cash balances, to tackle the challenges.

Based on the above rationale and valuation done using the above methodology, we have given a "Watch" recommendation at the closing price of GBX 774.20 (as on August 5, 2019), based on the 12.50x NTM Price/Cash Flow (approx.) on the FY20E cash flow per share (approx.), while we look for any upcoming catalysts.
 

Jubilee Metals Group PLC

Jubilee Metals Group PLC (JLP) is a London, the UK-based diversified metals development company. The group focuses on reprocessing of historical surface mine waste and materials with an aim to obtain long-term, low-capital intensive, low-risk commodity output from waste materials of mine surface. The company holds the mining right granted on March 2017 to the main PGM (Platinum Group Metals) project in the Eastern Bushveld complex and has secured surface platinum-bearing tailings to recover PGMs and lead, chromite, vanadium, and zinc - bearing tailings in Zambia.

Six Month Operations Update (as on 5^th August 2019)
The company’s revenue increased by 75 per cent to £14.36 millionas compared to H2 FY18. Operational earnings surged by 47 per cent to £5.64 millionagainst the H2 FY18. In H1 2019, production of chrome concentrate surged to reach 164,936 tonnes with both the Windsor chrome and the DCM fine chrome operations brought on-line. In H1 2019, production of PGM reached to 11.6 thousand ounces through the second quarter of 2019 and delivering 6.5 thousand ounces.

In June 2019, the joint venture Platinum Group Metal (PGM) retrieval plant for the Windsor Platinum Group Metal project begun commissioning, through the grinding circuit and this circuit was critical for attaining high retrievals of PGMs being fetched into operation in July 2019. During H1 2019, Windsor PGM project had delivered PGM rich material of 212.6 thousand tonnes. The company expects to continue its strong performance in the full year due to the speeding up of the Kabwe vanadium, zinc and lead project, following the acquisition of the Sable Zinc Kabwe Limited refinery in Zambia.

Share Price Performance
 
Daily Chart as at 6th August 2019, before the market closed (Source: Thomson Reuters)

On 6th August 2019, at the time of writing (before the market close, GMT 10:30 AM), Jubilee Metals Group PLC shares were hovering at GBX 2.96 and decreased by 7.5 per cent as compared with the previous day closing price. Stock's 52 weeks High is GBX 3.75 and 52-weeks Low is GBX 2.02. The group’s stock beta stood at 1.12, reflecting higher volatility as compared to the benchmark index. On a six-month basis, the company’s stock has delivered a price return of around 26.21 per cent.

Conclusion
The company notes the uncertain political risk and potential nationalisation, although they believe the latter would face significant hurdles. The company’s operations are impacted by multiple risks and uncertainties such as the impact of volatility of commodity prices, currency fluctuations, environmental risks, government regulation, etc. The current ratio surged in the current period as compared to the industry median.

The company had shown a decent trend in top-line and bottom-line performance in the current period. Moreover, the company is trading near its 52-week high, raising doubts at its upside potential at current prices.

Based on the macro headwinds with political and economic uncertainties, investors are recommended to keep a “Watch” on the stock at the closing price level of GBX 3.20 (as on 5^th August 2019), with support from few catalysts needs to be evaluated at a later stage.
 
 
*All forecasted figures and peers have been taken from Thomson Reuters.

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