Stock of the day 04/06/2015 – Halfords Group PLC/Fuller, Smith & Turner PLC

Bikes and beer is the name of the game on Friday, as Halfords and Fuller, Smith & Turner announce their latest results.

Come Friday Halfords Group PLC will be hoping to race past the opposition when it announces its full year 2014/15 earnings release. Halfords failed to gain any real traction in 2014, opening the year at £4.44 before closing at £4.67 12 months later, seeing highs of £5.15 and lows of £4.20 in the process. 2015 has been slightly more consistent, but only after the stock suffered a big loss in the first week of January, taking its price to £4.23. Since then Halfords has gradually risen, culminating in a high of £4.93 on Wednesday; it has a current trading price of £4.88 (04/06/2015, IT-Finance.com).


(Source: IT-Finance.com 04/06/2015)

The popularity of cycling since the double-whammy boost of the 2012 Olympics and Bradley Wiggins’ Tour de France victory has helped propel Halfords to its current position, and has allowed it to reopen its long dormant Cycle Republic specialist stores, something investors may be questioning in the coming months.

Friday will see the first earnings release under new CEO Jill McDonald, who took over at the start of May after leaving her namesake McDonald’s where she was the UK head. It looks like might be an enjoyable debut with analysts expecting a strong set of results from Halfords. Sales are forecast to finally break £1 billion after hitting £939 million last year, whilst earnings per share are expected to jump to £0.314 from £0.288. This should leave Halfords’ with around an 8% increase in pre-tax profits to £78.8 million against £72.6 million in 2013/14. The stock has a consensus rating of ‘hold’ with an average target price of £4.78.

After a stellar 2013 gave way to a disappointing 2014, Fuller, Smith & Turner PLC appears to have got its mojo back in the New Year ahead of its full year 2014/15 results. 2013 saw Fuller jump by around £2 across the year, and it entered 2014 at £9.26; however, 12 months later the stock entered 2015 at £9.35 after a difficult year where the company failed to sustain any significant growth. Yet 2015 has been a different story; largely uninterrupted gains between January and April saw the stock reach £10.36 by the start of the month, and despite somewhat of a slowdown across April and half of May, Fuller has jumped back into life of late to reached a current trading price of £10.70 (04/06/2015, IT-Finance.com).


(Source: IT-Finance.com 04/06/2015)

The main catalyst for this 2015 revitalisation was a record breaking Christmas season that saw Fuller’s post a near 7% increase in sales at its managed pubs and hotels. Joined by a 4% increase in underlying profits in its tenanted inns alongside a 4% jump in beer and cider volumes, and this news at the end of January helped Fuller maintain the goodwill that had already crept in at the start of the year, something it had struggled with throughout 2014.

In terms of results, back in November Fuller posted a 10% rise in revenue to £162 million for the 6 months until September 27th, with an 8% jump in pre-tax profits to £19.6 million. Given the company’s full year data will include those impressive holiday season figures, Fuller, Smith & Turner is looking at another solid set of results on Friday. The stock currently has a consensus rating of ‘buy’ with an average target price of £11.50.

Thursday’s stock news:

Royal Mail began to fall this afternoon, slipping over 3% as George Osborne announced the British government is set to sell its remaining 30% stake in the company to help reduce the UK deficit. An actual date for the sale wasn’t given beyond stating that they would wait until the government was sure it could get the best value for its money.

It was a very bad Thursday for Moneysupermarket.com, which plunged 9.6% following the news that Ofgem has asked the price comparison site to provide information as the energy regulator begins an investigation into a potential breach of competition law. uSwitch was also asked to hand over information, sending Zoopla’s shares tumbling over 5% due to its recent purchase of the price comparison site.