Domino’s Pizza sales soared during lockdown

Liam Roche
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Domino’s Pizza sales soared during lockdown

Domino’s to open 200 new locations

Domino’s Pizza (LON:DOM) announced “exceptional” sales in Q1 as continued lockdowns caused sales of pizza to push higher.

In the UK and Ireland the FTSE 250 company’s sales rose 18.7% to £371.3m in the quarter ending in March.

Just last month the company confirmed plans to open 200 new locations as part of an effort to bring the company’s sales to £1.9bn.

Commenting on trading, Dominic Paul, chief executive said:

“We are pleased with the strong performance of the business in the first quarter of the year. The investments we are making to deliver our multi-year strategic plan give us confidence in our ability to capitalise on the opportunities which lie ahead as the nation begins to emerge from the Covid-19 lockdown restrictions.”

“With management focused on our core UK & Ireland business, we are working to fulfil our vision of being the UK & Ireland’s favourite food delivery and collection business. I look forward to sharing an update on our progress at our half year results.”

Domino’s next scheduled announcement will be its half year results on 3 August 2021.

Domino’s Pizza and Nuro, a Silicon Valley startup, said this month that they will launch a robotic pizza delivery service in Houston as they seek to satisfy increasing online orders during the pandemic.

Taylor Wimpey says housing market is in strong position

Liam Roche
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Taylor Wimpey says housing market is in strong position

Taylor Wimpey order book up by 10,995 homes

Taylor Wimpey (LON:TW) confirmed via a trading statement on Thursday that its order book has grown, as house sales had made a positive start to the year.

The FTSE 100 company confirmed that up to 18 April 2021, outstanding orders were worth £2.81bn (2020: £2,67bn) or the equivalent of 10,995 homes.

Taylor Wimpey also reported that net private sales for the same period had risen to 1.00, up from 0.90 the year before.

The company will payout a final dividend of 4.14p for 2020 and a similar amount again at the half-way through the current year.

While there will not be a special dividend in 2021, the company said, the home builder said it will return excess capital to its shareholders. This position will be reviewed at the next set of financial results in March 2022.

Pete Redfern, chief executive at Taylor Wimpey commented on the update as the company readies for its AGM later today.

“The UK housing market continues to be resilient and we are trading in line with our full year expectations. With strong market fundamentals, customer demand for our high-quality homes remains robust and we are achieving a strong sales rate and building a healthy forward order book,” said Redfern

“The last year has been very challenging for everyone and I must again thank our teams for their outstanding efforts and commitment which have enabled us to continue to deliver for customers. It was pleasing to be recognised by the Home Builders Federation as a five-star homebuilder in March this year and we remain focused on delivering the highest quality service to our customers.”

“We are a cash generative business with a strong balance sheet and remain focused on our strategic priorities to drive operating profit margin while creating long term value for our customers and shareholders,” Redfern added.

Shepherd Neame on course for recovery

Andrew Hore
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Shepherd Neame on course for recovery

Shepherd Neame (LON: SHEP) in common with other brewers and pub companies has been hard hit by the lockdown and related closure of pubs. The share price has recovered significantly over the past six months, but it remains below the level it has been in the four years prior to the Covid-19 pandemic and its asset value.
The Kent-based brewer is quoted on the Apex segment of the Aquis Stock Exchange. It has an asset backed balance sheet so, although borrowings are increasing there are property assets to back this debt. The recovery should be starting.
Interims
Unsurprisingly, interim revenues sl...

Attraqt AI momentum continues

Andrew Hore
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Attraqt AI momentum continues

Online merchandising technology provider Attraqt Group (LON: ATQT) says that momentum has continued into the first quarter of 2021 as retailer clients focus on online. JD Sports, which has been a client for nine years, has signed up for the company’s AI Search product.
Management believes that the focus on online retail will continue even though high street shops have reopened. There has been an upward trend in online spending for many years, but it accelerated last year. Even if there is a correction as high street stores open, ecommerce will continue to grow over the coming years and retaile...

US Solar Fund moves towards dividend target with placing

Liam Roche
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US Solar Fund moves towards dividend target with placing

US Solar Fund in $105m intermediaries fundraiser

US Solar Fund (LON:USF) announced on Wednesday that a placing programme will be conducted over the coming year, including an initial placing, offer for subscription and intermediaries offer of new ordinary shares (initial issue) which has now launched.

The proceeds of the initial issue are expected to be used mainly to fund two transactions which should benefit US Solar Fund by reducing gearing, enhancing dividend coverage, being NAV accretive, all while increasing the company’s size and diversifying its portfolio.

Firstly, by an amount of approximately $82.5 million for the refinancing of the 177MWDC Heelstone Portfolio, reducing the cost and quantum of gearing.

Secondly, by an amount of around $22 million for the acquisition of a further 25% interest in Mount Signal 2, a 200MWDC operating solar plant located in the Imperial Valley of Southern California (MS2), bringing the US Solar Fund’s total ownership of the asset to 50%.

The issue price per new ordinary share will be $1.00 which represents a discount of 4.3% to the closing mid market share price of $1.045 as at 12 April 2021 and a premium of 3.1% to the 31 December 2020 Net Asset Value of $0.97.

New shares issued pursuant to the Initial Issue will be entitled to receive the interim dividend for the three months ended 31 March 2021, the first interim dividend this year. US Solar Fund expects to declare the first 2021 interim dividend in June 2021 for payment in July 2021.

Gill Nott, Chair of US Solar Fund, commented on the announcement:

“US Solar Fund has now delivered on our IPO objectives. As we step up to our target 5.5% dividend we are today asking investors for funds to reduce borrowing costs by refinancing existing debt, and build on our existing stake in California’s Mount Signal 2 solar plant.”

“With a President deeply committed to fiscal policy backing climate change pledges, the United States is now on a clear path to a fully carbon-free transition within 14 years. Delivering on bold and welcome plans in this short time means an urgent need to develop further utility scale solar.”

“The US remains one of the world’s most attractive investment markets for solar power production, with well-established policy frameworks and long-term power purchase agreements. These provide power price certainty for our investment grade corporate offtakers, and reliable cashflows for our investors.”

Equity market correlation with Cryptocurrencies could signal further volatility

UK Investor Magazine
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Equity market correlation with Cryptocurrencies could signal further volatility

We record this Podcast on the wake of the debacle around the European Super League so it would be fitting we touch on the subject and briefly ramifications for the sport.

The FTSE 100 quietly shed a couple of hundred points at the beginning of the week as investors wavered with crashing cryptocurrencies and fears over rising coronavirus cases on India.

There is a question to address in as far as whether the same market forces and investor psychology that drove cryptocurrencies higher are at play in equity markets.

We discuss Kavango Resources (LON:KAV), Coinsilium (LON:COIN) and Union Jack Oil (LON:UJO).

Pensana: A Strategic Stake in the Future

Jon Levinson
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Pensana: A Strategic Stake in the Future

Pensana (LSE: PRE) 
163p (160p- 165p)
Mkt Cap: £330m
Next Results: Y/e June est Oct 
A World-Class Sustainable Supply of critical Rare Earths for the Green economy in Humber 
The new economy needs electric vehicles and wind turbines and these and other strategic green economy industries need tonnes of permanent magnets. Pensana are developing a rare earth mine in Angola, which has an estimated 20 years plus mine life with an annual production of 12,500 tonnes of rare earth oxides. This includes 4,500 tonnes of strategically critical magnet metal rare earth ox...

Netflix Share Price: what now as subscriber growth falls?

Liam Roche
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Netflix Share Price: what now as subscriber growth falls?

Netflix Share Price

Netflix expanded its viewership during lockdowns as people remained in their homes and had little else to do. This phenomenon was reflected in the company’s share price. Compared to exactly one year ago, the streaming company’s share price is up by 26% to $549.57. However, as lockdown restrictions are being eased across the world, there may now be a reversal in the company fortunes. Netflix’s share price dropped by as much as 10% in after-hours trade following the release of its Q1 earnings report, after the FAANG stock revealed that its growth in new subscriptions has taken a hit.

Earnings

Netflix has revealed that its growth in new subscriptions has fallen after lockdowns caused an initial upturn in viewers last year, while it also interrupted production of its major shows. The group added less than four million users in the quarter just gone, two million down on its expectations, warning that it could add a mere one million users in the coming quarter.

Russ Mould, investment director at AJ Bell, has suggested that customers could are exhausted by watching TV and films and now have viable alternatives for entertainment:

“One of the biggest threats to Netflix in 2021 is the great outdoors. People are bored of sitting at home under lockdown restrictions and many will have exhausted all the classic films and boxsets on Netflix by now. The flow of new films to streaming platforms is currently weak and Netflix, in particular, is really suffering from having unappealing new content,” Mould said.

“Now that lockdown restrictions are slowly being eased, the appeal of signing up to Netflix is diminishing as there are alternative activities competing for individuals’ attention, namely pubs, restaurants, domestic travel and hopefully a greater range of leisure pursuits in time.”

Content

Investors will want to know what Netflix’s plans are to provide outstanding content in the coming months and years. And will it be it enough to support continued growth of the company?

The streaming service has allocated a budget of $17bn for 2021. It represents a significant increase from the company’s budget of $11.8bn the year before, which was reduced due the pandemic, and its budget for 2019 of $13.9bn.

“As we’ve noted previously, the production delays from Covid-19 in 2020 will lead to a 2021 slate that is more heavily second half weighted with a large number of returning franchises,” said the company in a letter to shareholders.

Netflix subscriptions slump a concern for investors

Liam Roche
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0
Netflix subscriptions slump a concern for investors

Netflix expecting to add a mere 1m users in the coming quarter

Netflix (NASDAQ:NFLX) has revealed that its growth in new subscriptions has taken a hit after lockdowns caused an initial upturn in viewers last year, while it also interrupted production of its major shows.

The group added less than four million users in the quarter just gone, two million down on its expectations, warning that it could add a mere one million users in the coming quarter.

The fall in subscriber growth could indicate that the trend of stocks performing well thanks to lockdowns is being reversed back as restrictions are eased.

The Nasdaq company’s revenue increased by 24% to $7.16b during the first three months of the year, bringing net income up to $1.71bn from $720m.

The company said: “We believe paid membership growth slowed due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays.”

Russ Mould, investment director at AJ Bell, provided insight into the company’s news:

“One of the biggest threats to Netflix in 2021 is the great outdoors. People are bored of sitting at home under lockdown restrictions and many will have exhausted all the classic films and boxsets on Netflix by now. The flow of new films to streaming platforms is currently weak and Netflix, in particular, is really suffering from having unappealing new content,” Mould said.

“Cinema operators know that customers will only visit their screens if there are enticing films. The same applies to streaming providers – it’s all about content and Netflix’s proposition is diluted by having too many poor-quality shows. Disney Plus’s considerable success in the past few years has shown that quality rules over quantity.”

“Now that lockdown restrictions are slowly being eased, the appeal of signing up to Netflix is diminishing as there are alternative activities competing for individuals’ attention, namely pubs, restaurants, domestic travel and hopefully a greater range of leisure pursuits in time.”

FTSE 100 gets back on its feet after big fall

Liam Roche
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0
FTSE 100 gets back on its feet after big fall

Following its most substantial fall in two months, the FTSE 100 is up by 0.54% to 6,897.04 on Wednesday, as the index has staged a mini-resurgence.

“Investors will be relieved to see the FTSE 100 dust itself off and get fight back on Wednesday as it looks to regain some of the big losses,” says AJ Bell investment director Russ Mould.

The move higher comes despite one of the market’s big fears – inflation – ticking up in the UK.

“It probably helps that the CPI measure came in short of expectations and it is also worth remembering that a modest climb in prices is a sign of the economy getting back on its feet,” Mould said.

“The likely trajectory of inflation in the longer term means this issue is not going to go away and will remain something investors need to consider even if a short-term spike linked to pent-up demand in lockdown diminishes,” he added.

In London shares linked to the reopening, including airlines and other travel-related businesses, managed a bit of a rebound. “We will almost certainly see more swings in sentiment as we move from spring into summer,” said Mould.

FTSE 100 Top Movers

Making up the most ground on Wednesday is IAG (3.41%), Hikma Pharmaceuticals (2.65%) and Next (2.54%).

While at the bottom end of the FTSE 100 less than two hours into the day’s trading is Just Eat (-4.48%), Bunzl (-2.88%) and Weir Group (-2.28%).

BHP

BHP gave an update on production at its Western Australia iron ore business, which it said had reached record levels in the first nine months.

The mining giant said it was expecting to finish the year strongly as a result. 

The FTSE 100 company said its annual production guidance for iron ore and petroleum was unchanged, while it reduced guidance for metallurgical coal and energy coal, on account of wet weather conditions.

Antofagasta

Antofagasta confirmed on Wednesday that its production and costs were aligned with its expectations in Q1 although it remains wary of the consequences of another lockdown in Chile.

The major mining company announced its copper production was on schedule at 183,000 tonnes, 5.7% lower than the year before, and 5% down on Q4. The results were largely down to reduced grades at its Los Pelambres mine.

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