It has been confirmed that TDR Capital has offered to buy BCA Marketplace (BCA) for around £1.91bn, with an offer price of 243p a share representing a 24.9 per cent premium to BCA’s closing price on the day prior to the bid.
The offer, which has received the unanimous backing of the BCA board, was revealed alongside the car wholesaler/auctioneer’s full-year figures, which detailed a surge in revenue and an accompanying 278 basis point reduction in the gross margin. The top line included an £87.4m uplift linked to the adoption of accounting standard IFRS 15, while profitability was constrained by the industry-wide introduction of the Worldwide Harmonised Light Vehicle Test Procedure.
The challenges facing the wider automotive sector have been widely documented, although sales for the group’s UK vehicle remarketing and vehicle buying segments both exceeded £1.2bn on the back of growing vehicle purchases from both outsourced remarketing contracts and direct from consumers. BCA essentially relies on ‘churn’ and its WeBuyAnyCar portal delivered volume growth of 18.7 per cent, against 12.9 per cent in the prior year.
Bloomberg consensus estimates give adjusted pre-tax profit of £141.8m for the March 2020 year-end, giving EPS of 13.8p, rising to £155m and 15.1p in FY2021.
| BCA MARKETPLACE (BCA) | ||||
| ORD PRICE: | 242p | MARKET VALUE: | £1.9bn | |
| TOUCH: | 241.8-242p | 12-MONTH HIGH: | 243p | LOW: 177p |
| DIVIDEND YIELD: | 4% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 143p* | NET DEBT: | 21% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 (15-month) | 1.15 | 3.9 | 1.2 | 6.00 |
| 2017 | 2.03 | 56.4 | 5.2 | 6.75 |
| 2018 | 2.43 | 75.9 | 7.2 | 8.55 |
| 2019 | 3.03 | 89.5 | 8.6 | 9.65 |
| % change | +25 | +18 | +19 | +13 |
| Ex-div: | 19 Sep | |||
| Payment: | 30 Sep | |||
| *Includes intangible assets of £1.48bn, or 189p a share. | ||||
