BCA Marketplace Scarcity value – Zeus Capital

We update our forecasts to reflect the outperformance achieved in 2018 when BCA Marketplace Plc (LON:BCA) delivered another set of record results, which were 11% ahead of our forecasts at the adjusted PBT level and 9% at the adjusted EPS level. This reflects strong growth, progress and efficiency measures coming through across all divisions within the Group. We view our upgraded forecasts as conservative given the 2018 outperformance which is not fully extrapolated into this upgrade. In addition, contract momentum remains strong within its vehicle re-marketing business.

Approach from Apax: The Board of BCA received two preliminary and conditional indicative proposals from Apax relating to a possible cash offer for the entire share capital of BCA which, after careful consideration, were both rejected by the board. Apax partners have now confirmed that they have no intention to make an offer for BCA Marketplace. In our view the offer made undervalued the company significantly, our valuation methods point to a value of 309p and we view this approach as opportunistic – management have a great track record of M&A and this could also be on the agenda as well as leveraging the enlarged business organically.

Forecast assumptions: We update our forecasts to reflect the 2018 outperformance and positive outlook for the company. We increase our revenue forecasts by 16.8% to £2629.7m and 9.5% to £3093.5m in 2019E and 2020E respectively. Adjusted EBITDA forecasts are 4.2% and 5.2% higher as a result with adj. PBT at £126.3m (+4.3%) in 2019E and £135.4m (+5.6%) in 2020E. We view this as a conservative set of forecasts given the 2018 outperformance which is not fully extrapolated into this upgrade.

Investment view: We remain comfortable with our original investment thesis based on the underlying performance of the business. We continue to believe the growth potential is significant from here across all divisions, especially in Europe in future years. We continue to see BCA Marketplace as attractive critical infrastructure as it now touches over 10.5m vehicles in the UK supply chain alone, and would expect to see continued growth under most post Brexit scenarios. Overall, we believe BCA continues to offer an attractive mix of organic and income growth as it continues to leverage its unique market position on a Pan European basis executed by a proven management team.

Outlook: The trading outlook is positive, and in line with management expectations. We view our forecasts as conservative and believe the group has organic growth potential above what we currently have assumed. Following the BMW contract win we see potential for long term organic growth.

Click to view all articles for the EPIC:
Or click to view the full company profile:
    Facebook
    Twitter
    LinkedIn
    BCA Marketplace PLC

    More articles like this

    BCA Marketplace PLC

    Market Report: Used Cars Market Trends 2018

    Last year will be remembered, perhaps, as a year of two markets with new car registrations under pressure and the used car market, for many, remaining profitable and in good health. For new car sales, uncertainty

    BCA Marketplace PLC

    UK motorists will travel 5.9bn miles this Christmas

    According to new research from webuyanycar.com, over the coming festive week, the majority (70 per cent) of Britons are expecting to spend 11 hours – one and a half working days – in the car. The

    BCA Marketplace PLC

    Demand for LCVs continues at BCA

    Average light commercial vehicle values continue to demonstrate long-term growth with LCVs averaging £7,146 at BCA in November – a rise of 5.1% compared to the same month in 2017 despite both average age and mileage

    BCA Marketplace PLC

    BCA Pulse – Average used car values rise again

    BCA’s Pulse Report shows that average used car values rose by £83 to £9,866 during November 2018, the third highest figure on record. Year-on-year, the headline figure was up by £462, equivalent to a 4.9% increase

    BCA Marketplace PLC

    BCA wins Outstanding Achievement of the Year Award

    BCA have been honoured in the 2018 Used Car Awards with ‘Achievement of the Year’ for the BCA Cycle Challenge which raised a grand total of £100,065 for the Action for A-T charity. The award was

    BCA Marketplace PLC

    BCA focuses on commercial vehicle sector with new appointment

    BCA has appointed Jon Gilbert as Business Development Director Commercial Vehicles, with a brief to develop BCA’s end-to-end strategy in the CV sector and enhance processes around the wider customer experience for commercial vehicles at BCA.

    BCA Marketplace PLC

    Demand remains high as buyers compete for LCVs at BCA

    Average light commercial vehicle values remained strong at BCA as professional buyers competed both in-lane and online during October. The headline value of £7,324 was well ahead year-on-year, underlining the long-term trend for significant and sustained

    BCA Marketplace PLC

    £100k fundraising barrier broken by BCA Cycle Challenge

    The money will help fund Action for A-T’s ongoing support of research into the rare genetic childhood disease ataxia telangiectasia. BCA chief commercial officer Craig Purvey was delighted to hand over a cheque to Sean Kelly,