City round-up: Autotrader; Regional REIT; AstraZeneca; Convatec
Autotrader, the Manchester-based online car dealership group, reported better half year revenues, the six month period put the brakes on pre-tax profits in the period to September 30, 2022.
Turnover was £249.8m, which was a 16% increase on previous year levels, but pre-tax profits of £148m were down on last year’s £150m figures. However, the board has recommended an increased interim dividend, up from last year’s 2.7p per share to 2.8p per share.
The group said its customer numbers and product uptake exceeded expectations, and its competitive position continues to be strong.
During the reporting period it launched a small-scale trial for its Deal Builder journey on Auto Trader which combines the component parts of part-exchange, reservations and finance applications, forming an end-to-end transaction journey. Initial feedback to date has been positive.
In June it completed the acquisition of Autorama (UK) Limited, one of the UK’s largest marketplaces for leasing new vehicles.
Autorama’s online marketplace and fulfilment capabilities will transform Auto Trader’s existing leasing proposition. The acquisition positions the group to better take advantage of significant disruption taking place within the new car market, particularly the growing penetration of electric vehicles and likely changes to distribution models.
Autotrader returjed £82.3m to shareholders, compared with £148.4m a year ago, through £30.6m of share buy-backs and dividends paid of £51.7m.
And staffing numbers increased to 1,112 on average during the period, compared with 941 at the same point a year ago, with the acquisition of Autorama contributing 122 of the increase.
Chief executive, Nathan Coe, said: “Our first half results demonstrate the strength of our position with car buyers and the depth of partnership we are building with customers. Achieving this in a period impacted by high levels of economic uncertainty is a credit to both our people and customers, and provides confidence in navigating the rest of the year.
“Longer term, we are well placed to grow as we further develop the core Auto Trader business, extend it to enable car buyers to complete more of their purchase online, and provide the industry-leading data and technology platform for our customers.”
Property firm Regional REIT, which has has offices in Old Trafford overseeing properties throughout the North West, said it has traded well throughout its third quarter period, to September 30, 2022, in an update to the market this morning.
The group completed a number of lease renewals during the quarter with retention remaining high at 70.3% of units remain let.
It achieved a rent roll of £72.2m, up from £72m in the second quarter, ending June 30.
Cash and cash equivalent balances were £48.4m, down from £56.1m in the period ending December 31, 2021, and the group had gross borrowings of £442.7m, compared with £439.9m by the end of December 2021.
As previously indicated, the company will pay a dividend of 1.65p per share for the period July 1, 2022 to September 30, 2022, an increase of around three per cent.
It said its outlook remains positive.
Stephen Inglis, CEO of asset manager London & Scottish Property Investment Management, said: “I am pleased to report another robust period of trading for the company, with several positive increases across key areas as Regional REIT continued to make good progress.
“It was a busy quarter for new lettings, with 36 completed during the period, providing the group with £1.2m in income. Additionally, the company achieved an increase in both occupancy levels, now at 84.6%, and rent roll, totalling £72.2m for the period.
“Good progress was also made in ESG implementation, highlighted by our increased GRESB score, an area of our asset management in which we continue to make significant strides.”
He added: “Whilst the economic backdrop clearly remains challenging, the company is optimistic that it will continue to deliver a high level of dividend income, and continues to enhance the portfolio of high quality assets across the UK. The diversification by geography and occupier has positioned the group well to benefit from the return to the office, which continues to accelerate.”
Pharmaceutical group, AstraZeneca, said it achieved a 37% increase in total revenues in the year to day, of $33.144bn.
Its trading update also showed a core operating margin of 32%, up six percentage points at CER, benefiting from favourable phasing and product mix.
The group has registered 19 approvals in major markets since the first hafl 2022 results.
Chief executive, Pascal Soriot, said: “AstraZeneca continues to see the benefit of our sustained investment in R&D, with 19 major regulatory approvals since our last earnings call.
“After a strong performance in the year to date, we have increased our Core EPS guidance for the full year 2022. Additionally, recent encouraging data for several of our pipeline programmes have given us the confidence to proceed with additional late-stage clinical trials as we maintain our focus on delivery of our growth ambitions.
“I would also like to highlight the announcement at COP27 to accelerate the delivery of our net zero strategy. Our company intends to lead by example on this increasingly important objective for the world.”
The group employs around 4,700 people in the North West on sites at Macclesfield and Alderley Park in Cheshire and Speke on Merseyside.
Convatec, the Deeside-based medical products business, released a trading update for the 10 months ended October 31, 2022, today, in which it said group revenue increased by 2.4% on a reported basis (H1: 3.6%) impacted by foreign exchange movements.
On a constant currency basis revenue was up 7.8% (H1: 8.0%) and was up 6.3% on an organic basis1 (H1: 6.4%). Following sustained good sales growth, guidance for 2022 organic revenue growth has been increased to 5.4% to 5.8% (previously 4.0% to 5.5%.).
In Advanced Wound Care, organic revenue growth was high single-digit for the first 10 months, broadly in line with the first half year. In North America the limited position in foam continued to impact performance ahead of the launch of ConvaFoam in Q4. The strong performance in Global Emerging Markets and good performance in Europe continued.
In Ostomy Care, organic revenue growth was low single-digit for the first 10 months, as expected and consistent with the first half year. Good growth in Convatec products was achieved, particularly in the Global Emerging Markets. The growth in Europe and North America continued to be impacted by planned rationalisation, leading to improvements in mix and consequently margin.
In Continence and Critical Care, organic revenue growth for the first 10 months was mid single-digit, in line with the first half year. The growth in Continence Care improved in the second half with better supply chain management. The organic growth in the critical care component – which is only the Flexi-seal portfolio following the exit of hospital care – declined in the second half. This was as expected, given it is against strong COVID-19 driven comparatives.
In Infusion Care, organic revenue growth was double-digit for the first 10 months, slightly lower than in the first half year. Underlying demand for infusion sets remains strong and the group continues to expect at least high single-digit growth for the full year. Growth in the remainder of the year will be lower reflecting the order phasing and strong demand seen year to date.
The group has updated its full year guidance, saying, given the sustained good sales growth so far this year, it now expects organic revenue growth for 2022 to be between 5.4% and 5.8% (previously 4-5.5%.)
Inflation in raw materials and freight has moderated in recent months, but inflation in utilities and labour has increased. Overall, Convatec continues to expect COGS inflation of 8-9% for the year and it continues to expect to deliver constant currency adjusted operating profit margin of at least 18%.
Foreign exchange rate movements have been volatile in recent months. The FX impact on 2022 is currently estimated to be a around six per cent headwind on revenue growth with a ~90bps tailwind to the EBIT margin. These estimates are based on actual rates to October 31, and spot rates for the remainder of the year. On this basis, the group expects to publish an adjusted operating profit margin of more than 19%.