Marks and Spencer Group PLC

Marks and Spencer Group Plc was incorporated in the year 1884 with headquarters in London, the United Kingdom, is a well-known supplier of clothing, footwear, home furnishings, beauty care, accessories and foods products through a network of retail stores and online channels. The company trades at the London Stock Exchange and is a part of the FTSE 100 index. According to the annual report 2019, the company’s business operations are spread across 57 countries having a customer base of around 32 million users and established stores of around 1,487.

Financial Highlights (FY2019, £ million)

(Source: Annual Report, Company Website)

The company’s reported revenue declined by 3 per cent to £10.4 billion as compared with the financial year 2018 data of £10.7 billion, due to the decrease in the United Kingdom and International market. Operating profit before adjusting items declined by 10.4% to £601 million against the £670.6 million in FY18.

Profit before tax and adjusting items stood at £523.2 million, down by 9.9 per cent from the previous year data.

Basic earnings per share (EPS) rose by 31.3 per cent to 2.1 pence as compared with the prior year data, mainly driven by the impact of the decrease in adjusting items year on year. The company announced a final dividend per share of 7.1 pence, resulting in a total dividend per share decreased by 25.7 per cent to 13.9 pence as compared with the financial year 2018 of 18.7 pence.

Share Price Performance

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

On 6^th June 2019, at the time of writing (before the market close, GMT 10:55 AM), MKS shares were trading at GBX 224.30, down by 2.65 per cent against the previous day closing price. Stock's 52 weeks High and Low is GBX 302.80/GBX 218.80. The company’s stock beta was 1.20, reflecting higher volatility as compared to the benchmark index.

Valuation Methodology


Conclusion
The company FY results to end March 2019 were fairly poised, although reflected a continued significant challenges within the business. The positive news from the report was an improvement in the Food trends, though this was somewhat offset by a continued sluggish performance in the Clothing & Homeware.

Cost pressures, aggressive competition and consumer impact of the UK’s departure from the European Union are contributing to the challenges faced by the company. The risk from external factors such as a rise in raw material prices and the impact of Brexit is expected to increase substantially in the coming months, and the company has limited influence on such external factors.

However,the industry is witnessing a fundamental shift towards the online marketplace. Although the company has started taking online marketplace seriously and very early signs of improvement can be seen butits online capabilities remain significantly behind its competitors.

Data has shown that despite a healthy employment market, real wages have not risen substantially, and consumers are saving more now.

On the base of above valuation and fundamental analysis, we recommend investors to keep a cautious “Watch” on the stock at the closing price of GBX 230.40 (as on 5th June 2019), with support from few catalysts needs to be evaluated at a later stage.
 

MaxCyte Inc

MaxCyte Inc (MXCT) is a biotherapeutic company that conducts research and develops cell transfection technologies. The company utilizes flow electroporation technology for discovery, development and manufacturing of cell-based therapeutics for chronic and acute diseases. MaxCyte offers services which include transfection insourcing services, processing assemblies and quality systems. The company’s drug delivery application comprises of GPCR’s, Ion channels, primary cell transfusion and maxcyte STX instrument. MaxCyte is headquartered in Gaithersburg, Maryland, the US.

Financial Highlights (FY2018, US$ million)

(Source: Final Results, Company filings, LSE)

The company’s reported revenue increased by 19.29 per cent to $16.7 million as compared with the financial year 2017 of $14 million, due to the high-margin recurring annual fees from cell therapeutics business and complemented by recurring revenues from the sale of proprietary single-use disposable processing assemblies.

Gross margins remained stable at approximately 89 per cent and, Adjusted EBITDA loss before CARMA expenses and non-cash stock-based compensation stood at $0.8 million, and EBITDA loss in 2018 remained in line with expectations at $6.8 million. The net loss before CARMA investment decreased from $2.4 million in FY17 to a loss of $2.3 million in FY18.

Total assets of the company were $24.3 million as compared to $31.4 million in FY17, as well as cash and cash equivalents totalling to $14.4 million.

Basic and diluted net loss per common share decreased from $0.20 cents in 2017 to $0.17 cents in 2018. The group has never declared common stock dividends per share and had no plans to do so in the foreseeable future. Additionally, the Company's long-term debt agreement restricts the payment of cash dividends.  

Share Price Performance

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

On 6^th June 2019, at the time of writing (before the market close, GMT 1:00 PM), MXCT shares were trading at GBX 167.75, up by 0.15 per cent against the previous day closing price. Stock's 52 weeks High and Low is GBX 254/GBX 157. The company’s stock beta was 0.29, reflecting lower volatility as compared to the benchmark index.

Valuation Methodology


Conclusion
The company included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud and implementing processes that respond to those risks.

The company will continue to enable important new medical advancements with the potential to make a significant impact on the lives of patients.The company might face macro headwinds with respect to political and economic uncertainties which might impact company’s business operations.

On the base of above valuation and fundamental analysis, we recommend investors to keep a cautious “Watch” on the stock at the closing price of GBX 167.50 (as on 5th June 2019), with support from few catalysts needs to be evaluated at a later stage.

 
*In valuation Methodology, all USD figures have been converted into GBP; USD: GBP - 0.79
*All forecasted figures and peers have been taken from Thomson Reuters.

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