We suggested buying shares in BCA Marketplace (BCA) this time last year (177p, 16 Jun 2016). The subsequent 11 per cent appreciation in market value, although modest, is still noteworthy because it was achieved as uncertainties gathered over the near-term outlook for the auto market.
The UK's largest used vehicle seller will be keeping tabs on a Financial Conduct Authority (FCA) review of lending practices within the automotive market. In particular, whether the review will have any knock-on effects for personal contract plans (PCPs), a latter day - and now ubiquitous - form of car financing, which has proved a boon for BCA's business model. There are also concerns over diesel car valuations following widespread criticism of the polluting effects of this fuel, even though the government has kicked the issue into the long grass.
Wider challenges aside, the group's full-year figures detail growth across all its business units on the back of rising organic volumes and increased penetration of new and existing markets. The UK remarketing segment benefited from the growth in outsourced remarketing contracts, together with the continued success of the webuyanycar.com brand. Adjusted cash profit from domestic remarketing increased by 21.6 per cent to £84m, although the attendant surge in revenue per vehicle and a substantial contraction in the underlying margin are down to accounting treatment - BCA now takes ownership of vehicles prior to sale in remarketing contracts, as opposed to hiving them off via a third party.
Statutory figures were driven by full-year contributions from BCA Automotive (formerly Stobart Automotive) and Ambrosetti, while the Paragon Automotive acquisition has expanded capabilities in outsourced vehicle services, including logistics, imaging, inspection and financing. The service offering also stands to benefit from the March deal to acquire alloy wheel refurbishment business, Supreme Wheels Direct.
Numis gives adjusted pre-tax profit of £109m for the March 2018 year-end, leading to EPS of 10.7p, against £92.5m and 9.1p in 2017.
| BCA MARKETPLACE (BCA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 197p | MARKET VALUE: | £1.54bn | |
| TOUCH: | 196.8-197.3p | 12-MONTH HIGH: | 213p | LOW: 156p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 148p* | NET DEBT: | 23% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 † | 0.26 | -9.3 | -30.0 | nil |
| 2013 † | 0.44 | -24.2 | -108 | nil |
| 2014 † | 0.89 | 7.0 | 2.7 | nil |
| Year to 2 Apr | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 (15-month period) | 1.15 | 3.9 | 1.2 | 6.00 |
| 2017 | 2.03 | 56.4 | 5.2 | 6.75 |
| % change | +76 | +1,346 | +333 | +13 |
Ex-div: 14 Sep Payment: 29 Sep *Includes intangible assets of £1.56bn, or 200p a share. †2012-14 revenue, adjusted pre-tax and EPS from Cenkos Securities | ||||
