Significant share price accretion in a motor industry stock has hardly been commonplace in 2017 as concerns mount about the health of the car market. So it’s pleasing to see our June 2016 advice to buy shares in car services group BCA Marketplace (BCA) come good. The stock is up by more than a fifth since the original tip, while these half-year numbers pushed the price up 6 per cent on results day.
Strong sales momentum had several factors, including the full-year effect of outsourced remarketing contracts and recent acquisitions. Higher volumes, particularly in the UK vehicle remarketing division, also helped adjusted cash profit grow by 18 per cent, which in turn drove operating profit up by more than a fifth to £40.9m. Growth there would have been even greater if it wasn’t for the effect of climbing depreciation and amortisation costs, along with other one-off charges.
These results also reflect the international business, which enjoyed an exchange-rate fuelled boost of 7 per cent. Strip that out, and adjusted cash profit per unit sold would have largely fallen flat year on year.
Analysts at broker N+1 Singer expect pre-tax profit of £108m for the year ending March 2018, giving EPS of 10.4p, compared with £97.4m and 9.5p in FY2017.
| BCA MARKETPLACE (BCA) | ||||
| ORD PRICE: | 217p | MARKET VALUE: | £1.69bn | |
| TOUCH: | 216.8-217.3p | 12-MONTH HIGH: | 230p | LOW: 175p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 40 | |
| NET ASSET VALUE: | 149p* | NET DEBT: | 25% | |
| Half-year to 1 Oct | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 0.91 | 26.7 | 3.1 | 2.2 |
| 2017 | 1.17 | 34.9 | 3.3 | 2.6 |
| % change | +29 | +31 | +6 | +18 |
| Ex-div: | 14 Dec | |||
| Payment: | 31 Jan | |||
| *Includes intangible assets of £1.55bn, or 199p a share | ||||
