April has proved a positive month for the majority of the listed stocks with a slight polarisation of results, albeit with there being very few press releases to justify price movements.
Trading has been generally thin, with people holding their breath for both an indication of the first quarter’s trading results and how the retail environment is behaving post-scrappage.
Looking at the year-to-date position, the current top performer is Pendragon which has risen 25 per cent during 2010, albeit with all of that gain having effectively occurring during April. Given the lack of official announcements this represents speculation over future trading performance and represents a return of the gains made during January.
Lookers has continued its strong share price performance so far in 2010, producing slow and steady gains. Market sentiment is weighted towards Lookers as a result of the published focus on aftersales and it remains the UK dealer group with the second highest market capitalisation after Inchcape.
Inchcape also saw steady gains during April, bolstered by the geographical spread of operations and the expectation that the remainder of Europe will recover faster than the UK. HR Owen also increased in share price during April.
The big loser during the month from the established listed businesses was Vertu which saw a steady decline in share price. As a result of having a financial year ending in February, Vertu is yet to release full year financial statements, however the news is expected to be positive.
In spite of this and a small acquisition announced in Scotland, the total company market capitalisation remains below balance sheet net asset value. In fact, depending on the final financial results for the year, the market capitalisation may well be below the net asset value after writing off all capitalised goodwill. This is in marked contrast to other listed businesses that stand at a significant premium to their net asset value even with large goodwill balances already capitalised.
April also saw the debut of Cambria Automobiles plc as a listed stock. During April the shares have fallen by circa 20 per cent from their initial listing price with the shares still finding their feet.
We will obtain greater clarity over relative performance within the next few weeks as indications of all important first quarter trading start to leak. This will be supported by data on post-April retail sales which will decrease current uncertainty over the impact which the removal of scrappage and the showroom tax is likely to have on trading for the remainder of 2010.
If you have any questions on the above, call me on 0161 493 1930
