Bca Marketplace Share Discussion Threads

[mike740] 18/7/2015 11:57

Think there should be a knock on effect here for BCA.........

Car dealers fuelled for further upside
By Harriet Mann | Fri, 17th July 2015 - 16:50

Ample. iii

Car dealers fuelled for further upside In a sign that Britain's economic recovery is helping people's wallets, turnover in the UK motor industry hit a record £69.5 billion in 2014. But there is a much tastier investment case than the sale of new cars in this cyclical sector, one that is being ignored by the markets, says Fidelity's UK Smaller Companies manager Alex Wright.
On a valuation basis, the sector looks cheap against its broader retail counterpart. The four listed car dealers Wright holds - Pendragon (PDG), Lookers (LOOK), Vertu Motors (VTU) and Marshall Motors (MMH) - have an average forward price/earnings (P/E) multiple of 11.7 times versus the general retail industry's 16-17 times. But there's more to this than just valuation. Wright reckons there are two trends that should support the motor industry going forward - cyclical growth and structural change.

The recent growth in car sales has been a gradual process. The government's so-called "cash for clunkers" initiative in 2009 was an obvious boost to the new car market, and both economic recovery and low fuel prices since have helped increase car sales. This has opened up a number of growth opportunities in the sector.

New cars that enter the cycle are recycled as they get older, which is generally a three-year tale. This is good for motor companies as margins are much better on older cars and aftersales (servicing) is the most profitable element of the businesses.

The gross margin on new cars tends to be between 5-8% and used cars 8-10%, but aftersales come with a massive 45-65% gross margin, Wright explains. He reckons aftersales growth will last for some time, too, and warns that investors may miss this opportunity if they believe car numbers are the only growth drivers.

Structurally, the period of consolidation is upon is. The motor industry is incredibly fragmented, with many small dealerships competing against each other, but unable to invest for growth.

Pendragon and Lookers have the largest market share (around 10% and 4% respectively according to Wright), which means they have enough cash to invest in new technology and IT - that's crucial as more car browsing and deals are executed online.

Being able to market inventory attractively and move it around the country also means these bigger companies can steal market share organically from smaller peers. Clearly, M&A will make it easier for small dealers and will enhance the earnings of bigger rivals.

"So, there is a good cyclical change story, a big consolidation story and an organic structural growth story, all at incredibly low valuations. I think this continues to be a very interesting sector," added Wright.

[scottishfield] 17/7/2015 11:39

in today, see hw we go.

[miti 1000] 17/7/2015 11:33

Could wax lyrically but will just give one small pointer as to what lays ahead.

New car sales reached their nadir in 2009 .Since then we have had over 40 consecutive months of increasing car sales growth in the uk.

Now, since 2010, most car purchases(over 60%) have been done on 3 year hire purchases plans . After 3 years , most of these cars are given back to OEM's and the sellers jump onto the next 3 year plan. These used cars mainly go to auction rather than direct to dealers....who's the leader ? BCA. So what we have is huge visibility till at least 2019 and very strong growth and a very progressive dividend policy(let Redde be your guide where Avril Palmer-Baunack worked her wonders).

I could go on and on but lets see how the share price performs.

[mike740] 17/7/2015 11:07

Yep Invesco increasing there stake.

Could be a real corker this one.

[miti 1000] 17/7/2015 10:37

Invesco have been buying and perhaps Marwyn as well .Sellers are from the IPO, probably smaller hedge funds. This has a strong institutional base so once those loose sellers are gone, it will go much much higher...my target 250p in the next year.

[shakeypremis] 17/7/2015 10:03

What's going on here? Some huge trades, the price has not moved at all however.

[mike740] 16/7/2015 13:04

Joined you guys earlier today.

hxxp://citywire.co.uk/money/marwyn-redeploys-fat-peppa-pig-profits/a827011?ref=citywire-money-latest-news-list

ames Corsellis, a Marwyn director who is stepping down from Entertainment One’s board, said: ‘This remains an important investment for Marwyn and we continue to be excited by the scale of the opportunity that faces Entertainment One going forward.’

MVIL, a £150 million closed ended fund, has achieved a five-year, 227% total gain for investors. It will return £5.3 million to shareholders, the third time it has distributed this sum since the start of last year.

It will invest around £15 million in three of its 13 other investments, including BCA Marketplace (BCA +
), the seond hand car dealer behind webuyanycar.com, which it acquired in a £1.2 billion reverse takeover by Haversham.

Marwyn adopts a distinctive 'build and sell' approach to its investments. Haversham was a shell company it launched last year with Avril Palmer-Baunack, the former bosss of Autologic, with backing from leading investment groups Invesco, Woodford and Artemis.

[simon gordon] 15/4/2015 15:44

What Investment - 15/4/15:

Neil Woodford

‘We participated in Haversham’s share placing, which will help fund the company’s acquisition of BCA (British Car Auctions) for £1.2bn. BCA is a high-quality business with a unique position in the used-vehicle marketplace and strong long-term prospects. We believe that the new management team is well placed to create significant shareholder value with a sensible growth strategy. Haversham has now been renamed BCA Marketplace as part of the transaction.’

[hedgehog 100] 10/4/2015 16:40

From "The Investors Chronicle", 2 April 2015:

"BCA Reverses into Haversham

ALEX NEWMAN

Haversham Holdings (HAV) has completed its £1.2bn reverse takeover of British Car Auctions, the owner of webuyanycar.com. Haversham, which was formed by specialist investment house Marwyn and former Autologic chief executive Avril Palmer-Baunack last year, will change its name to BCA Marketplace and re-list on the main market.

The acquisition will be funded by a £1bn share issue, £294m of which will be used to tackle the enormous debt pile BCA accrued under private equity ownership.

The fact that Haversham has secured the support of some serious institutional investors suggests the investment case - the base estimate for growth in the vehicle-buying market is 12 per cent per year - has been well received. The shares will list at 150p, and demand for exposure could be keen."


Please also note the following thread which may be of interest:

"THE REVERSE TAKEOVERS & SHELLS THREAD (RTO)"