Relx Plc

RELX Plc (REL) is a London based world’s leading global information services company. The company provides information-based analytics and decision tools to customers using innovative solutions which merge content and data with analytics and technology.

Financial Highlights – H1 Financial Year 2019 (30^th June 2019, £, million)

(Source: Interim Report, Company Website)

In the first half of the financial year 2019, due to good growth in face-to-face and electronic revenues, the company’s revenue increased by 6 per cent to GBP 3,888 million as against GBP 3,653 million in H1 FY2018. The company’s reported operating profit was up by 8 per cent to GBP 1,048 million in H1 FY2019 versus an operating profit of GBP 969 million in H1 FY2018. The company’s adjusted PBT (Profit before tax) was up by 8 per cent to GBP 1,143 million in H1 FY2019 versus an adjusted PBT of GBP 1,054 million in H1 FY2018. The company’s reported PAT (Profit after tax) stood at GBP 779 million for the first half of the financial year 2019 versus a PAT (Profit after tax) of GBP 678 million in the H1 of the financial year 2018, an increase of 15 per cent. The reported earnings per share in H1 FY2019 surged by 17 per cent to 39.9 pence versus reported earnings per share of 34.1 pence in H1 FY2018.

Share Price Performance

Daily Chart as at October-21-19, before the market closed (Source: Thomson Reuters)

On 21st October 2019, RELX Plc shares were trading at GBX 1,723.00 at the time of writing before the market close (at 9:05 AM GMT), down by 0.95% against the previous day closing price. Stock's 52 weeks High and Low are GBX 2,027.00/GBX 1,497.50.

Valuation Methodology

*Peers: Experian Plc, Auto Trader Group Plc, Ascential Plc, Goco Group Plc and Reach Plc.

Conclusion
Although the company has shown decent top-line and bottom-line performance in the first half of the financial year 2019, the demand of the company's products and services may be adversely affected by macro-economic and political events, a risk which has intensified in the past few months. Moreover, RELX operates in a highly dynamic market with excessive competition, and demand continues to change due to rapid innovations in technology. Failure to adapt to these changes can have a material impact on the company's performance. 

Based on above valuation, we recommend investors to keep a "Watch" on the stock at the closing price of GBX 1,739.50 (as on 18^th October 2019), with support from few catalysts needs to be evaluated at a later stage.
 

Just Eat Plc

 
Just Eat Plc (JE) is a United Kingdom-headquartered high-tech company, which operates as a leading global hybrid marketplace for online food delivery. With brands across 13 countries, the international footprint of the company helps it in generating a diversified revenue base.

Q3 Update
On 21st October 2019, Just Eat announced its Q3 update ending 30th September 2019. The company’s revenue increased by 25 per cent to £248 million for the period, while the orders increased by 16 per cent to 62 million. Driven by speedy growth in the delivery proposition, the UK orders surged by 8 per cent to 33 million for the period. The company’s Canadian subsidiary SkipTheDishes had been performing well with double-digit growth. The company witnessed a strong performance in Switzerland and Italy. The company’s iFood with more than 21 million orders in September had shown exceptional growth.

Financial Highlights – H1 Financial Year 2019 (30th June 2019, £, million)

(Source: Interim Report, Company Website)

In the first half of the Financial Year 2019, orders increased by 21 per cent to £123.8 million against the £102.5 million in H1 FY2018, through 2 million net new customers joining Just Eat. The company’s reported revenue surged by 30 per cent to £464.5 million as compared with the corresponding period of the last year, due to an increase in orders and given the greater weighting of delivery. Underlying EBITDA, excluding Mexico, reduced by 16 per cent to £72.4 million against the £86 million in H1 FY18, driven by the accelerated rollout of delivery. Profit before tax was down by 98 per cent to £0.8 million as compared to £48.1 million in H1 FY18. Adjusted Basic EPS stood at 5.7 pence, a decrease of 36 per cent from the same period in 2018.

Share Price Performance

Daily Chart as at October-21-19, before the market closed (Source: Thomson Reuters)

On 21st October 2019, Just Eat Plc shares were trading at GBX 582.80 at the time of writing before the market close (at 11:30 AM GMT), down by 6.75% against the previous day closing price. Stock's 52 weeks High and Low are GBX 833.14/GBX 519.20.

Valuation Methodology
 
*Peers: Ocado Group Plc, Cineworld Group Plc, N Brown Group Plc, J Sainsbury Plc and WM Morrison Supermarkets Plc.

Conclusion
The group continues to build a more dynamic environment, leading to faster executions, simpler operations, and more accountability. This will help to deliver value to customers and shareholders for the long-term and report better financials in the future. Moreover, with growing pressure from investors, Just Eat is focussing on technological innovation to stand out in the food-delivery space. The company is aiming to reinvest increased profits to accelerate growth through new initiatives, specifically in the UK and Australia. The focus remains on increasing its customer base in key zones.

Over the course of 4 years (FY14 - FY18), the company’s revenue surged from £157.00 million in FY14 to £779.50 million in FY18. Compound annual growth rate (CAGR) stood at 49.27 per cent.

Based on the decent prospects with strong revenue growth and increased orders which are supported by valuation done using the above method, we have given a “BUY” recommendation at the current price of GBX 582.80 (as on 21^st October 2019, before the market close) with single-digit upside potential based 34.00x NTM Price/Cash Flow (approx.) on FY19E cash flow per share (approx.).
 

Vivo Energy Plc

Vivo Energy PLC (VVO) is engaged in the business of Oil refining and markets under the brand of Shell to retail and commercial customers. The company distributes fuels, lubricants and liquefied petroleum gas (LPG).

Financial Highlights – H1 Financial Year 2019 (30^th June 2019, $, million)

(Source: Interim Report, Company Website)
 
In the first half of the financial year 2019, due to good contribution from Engen, the company’s revenue increased by 6 per cent to $3,903 million as against $3,673 million in H1 FY2018. The company’s adjusted EBITDA was up by 4 per cent to $212 million in H1 FY2019 versus a $204 million in H1 FY2018. The company’s EBITDA was up by 13 per cent to $200 million in H1 FY2019 versus $176 million in H1 FY2018. The company’s reported PAT (Profit after tax) stood at $72 million for the first half of the financial year 2019 versus a PAT (Profit after tax) of $71 million in the H1 of the financial year 2018. The reported diluted earnings per share in H1 FY2019 declined by 6 per cent to 5.1 cents from 5.4 cents in H1 FY2018.

Share Price Performance

Daily Chart as at October-21-19, before the market closed (Source: Thomson Reuters)

On 21st October 2019, Vivo Energy Plc shares were trading at GBX 119.80 at the time of writing before the market close (at 1:30 PM GMT), down by 0.17% against the previous day closing price. Stock's 52 weeks High and Low are GBX 144.70/GBX 93.71.

Valuation Methodology
 
*Peers: Pendragon Plc, BCA Marketplace Plc, Vertu Motors Plc and Applegreen Plc.

Conclusion
The company has shown decent financial performance in the first half of the financial year 2019. Both the top-line and the bottom-line performance have improved for the period. The recent acquisition of EngenHoldings is also performing well and contributing well to the company’s revenuegrowth for the period. The business was able to grow its EBITDA in FY18, and this highlights the flexibility and diversification strength of the company's portfolio. The company had opened 41 service stations across its markets for the period.

Over the course of 3 years (FY15 - FY18), the company’s revenue surged from USD 5,971.8 million in FY15 to USD 7,549.3 million in FY18. Compound annual growth rate (CAGR) stood at 8.13 per cent.

Based on the above rationale and supported by valuation done using the above method, we have given a “BUY” recommendation at the current price of GBX 119.80 (as on 21^st October 2019, before the market close) with single-digit upside potential based 14.00x NTM Price/Earnings (approx.) on FY19E earnings per share (approx.).
 

MC Mining Ltd

MC Mining Limited (MCM), earlier known as Coal of Africa Limited, is an Australia-based coal development, exploration and mining company. The group’s development segment engaged in the determination of the technical feasibility and commercial viability of resources, and the search for resources for commercial exploitation.
Financial Highlights – Financial Year 2019 (30^th June 2019, $, thousand)

(Source: Annual Report, Company Website)
 
For the financial year ending 30^th June 2019, the company’s revenue decreased from $32,693 thousand in FY18 to $26,403 thousand. The company’s operating loss for FY2019 was at $28,883 thousand versus an operating loss of $94,608 thousand in FY2018. In FY2019, loss after tax (continuing and discontinued operations) stood at $33,726 thousand versus a loss after tax of $101,578 thousand in FY2018. The company’s basic and diluted loss per share (continuing and discontinued operations) stood at 23.72 cents in FY2019 versus a basic and diluted loss per share of 71.99 cents in FY2018.

Share Price Performance

Daily Chart as at October-21-19, before the market closed (Source: Thomson Reuters)

On 21st October 2019, MC Mining Ltdshares were trading at GBX 29 at the time of writing before the market close (at 2:30 PM GMT), down by 7.93% against the previous day closing price. Stock's 52 weeks High and Low are GBX 70.92/GBX 17.06.

Conclusion
The company’s top-line performance has declined in the financial year 2019. But the bottom-line performance has improved, while the profitability remained in the negative zone for the period. The right mining applications for the Generaal and Mopane projects are at a progressive stage and the company anticipate that these will be granted soon. Discussions for the sale of the thermal coal are progressing and the group anticipate finalising the contract in Q2 FY19. At Uitkomst, the underground contract mining operations were acquired during the current period, resulting in the mixing of equipment, systems, and around 340 staff.

Over the course of 4 years (FY15 - FY19), the company’s revenue surged from USD 0.7 million in FY15 to USD 26.4 million in FY19. Compound annual growth rate (CAGR) stood at 147.81 per cent.

Based on the above rationale, we have given a "Speculative Buy" recommendation on the stock, at the current price of GBX 29 (as on 21^st October 2019, before the market close).
 
*All forecasted figures and Peers information has been taken from Thomson Reuters.Currency exchange rate taken for 1 USD = 0.76915 GBP

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