BCA Marketplace PLC (LON:BCA) has delivered another strong set of results, which are 9% ahead of our forecasts at the adjusted PBT level and 5% at the EPS level. This reflects strong growth and progress across all divisions in the Group. We are maintaining our headline assumptions on the back of these results, and continue to believe the Group is well positioned over the medium term.
H1 results: Revenues were 28.8% ahead of last year, and were 9% ahead of our expectations. Adjusted EBITDA was strong and +17.5% YOY exceeded our forecasts by 4%, with progress delivered across all divisions on this measure. This flowed through to adjusted EPS, which was +17.4% YOY and 5% ahead of our forecast expectations. The H1 dividend broadly mirrored growth in earnings and was +18% YOY and 4% ahead of our forecast.
Key performance driver: UK Remarketing was a strong performance with core volumes +6.9% backed with good strong contract momentum driving revenue growth of +37.1% YOY producing YOY EBITDA growth of 10.8% and EBITDA per vehicle +3.4% all of which exceeded our expectations. International Remarketing saw volumes +4.2% YOY with FX rates providing a 7% favourable movement to reported results vs. the prior period. EBITDA per vehicle were 5.8% YOY driving revenues +4.2% and EBITDA +10.3%, again ahead of our expectations. WBAC continued to deliver strong volume growth ahead of our expectations, which was running at 13.8% during the period, driving revenues +14.9% and EBITDA +33.0%, which was 3% ahead of our forecasts. Automotive Services continues to integrate well into the Group, and delivered strong growth with adjusted EBITDA +12% ahead of our forecast.
Forecast assumptions: We are maintaining our headline forecasts although increase our revenue forecasts to take account of the higher UK run rate relating to contracts in the core UK business as well as Services. We have also made modest tweaks to our net debt forecasts and increased the fully diluted number of shares in issue to reflect the current period.
Zeus 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 PLC as attractive critical infrastructure as it now touches over 3.5m 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.
You can listen to an interview with Mike Allen, Head of Research at Zeus Capital discussing this research note here.
