# BCA Marketplace PLC AGM statement

- Link: https://www.directorstalkinterviews.com/bca-marketplace-plc-agm-statement/412734895
- Published: 2017-09-08T07:28:21+01:00
- Author: Giles Arbor

**BCA Marketplace PLC** (LON:BCA) has provided a trading update, essentially confirming
it is continuing to trade in line with expectations. Our forecast assumptions are
towards the top end of the consensus range, and we remain comfortable with this.
We also remain comfortable with our original investment thesis, and would expect
the shares to perform well over the longer term given the structural growth opportunities
that lie ahead on a Pan European basis, which translates into double digit EPS growth
through to 2020E.

**Trading Update:** BCA has released a trading update this morning confirming it
continues to trade in line with expectations. The core vehicle auction business 
continues to utilize its market leading position to drive growth in physical and
online channels. Despite talk of increased competition, We Buy Any Car (WBAC) is
still displaying double digit growth and continues to meet management expectations.
WBAC is clearly benefiting from its scale, but Trustpilot ratings also remain strong
as it offers a consistent service. The Automotive Services division continues to
progress well following the appointment of new divisional CEO Ian Carlisle. The 
company has proposed a final dividend of 4.55p per share, which if approved, will
result in a final dividend of 6.75p per share, in line with our expectations.

**Key investment attractions:** We believe BCA offers critical infrastructure to
the automotive market across Europe, and anticipate above average growth being generated
over the foreseeable future, particularly on the Continent. We also believe BCA 
Dealer Pro and its wider technology platform, which should now be enhanced with 
the appointment of a Chief digital Officer, has been overlooked to date. We believe
this product has strong strategic value, and will help to improve the quality of
earnings and drive volumes across the core business. We see a similar development
occurring within UK Buyer Finance, which should also help to improve the quality
of earnings from here.

**Forecast assumptions:** We leave our forecast assumptions unchanged following 
this update. Our forecasts have been at the upper end of consensus expectations 
for some time, and we continue to remain comfortable with our assumptions. We expect
a 3-year revenue CAGR of 31% through to 2020E with an adj. EBITDA CAGR of 21% over
the same period, which we believe is compelling.

**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 as attractive critical infrastructure as it
has now touched over 3.5m vehicles in the UK supply chain alone, and would expect
to see continued growth under most post Brexit scenarios. With an attractive dividend
yield of 4.1% from 2018 and a track record of delivering robust earnings, we would
expect the shares to perform well given the unique structural growth opportunities
ahead.

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