US stocks shrug off call for Johnson and Johnson vaccine to be paused

Liam Roche
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US stocks shrug off call for Johnson and Johnson vaccine to be paused

S&P 500 opened flat as experts analyse Covid-19 vaccine

Health agencies in America have called for the roll-out of the Johnson and Johnson coronavirus vaccine to be paused while they investigate reports of blood clots.

Despite the news the S&P 500 opened flat on Tuesday following days of solid gains on the US index.

The S&P 500 opened higher by 0.05%, at 4,130.10, while the Nasdaq Composite gained 0.38%, to 13,902.45, at the opening bell.

The Centers for Disease control and Prevention and the Food and dRUG administration released a joint statement on Tuesday which said they were looking into six reported cases in the US of “rare and severe” blood clots in people who had received the Johnson and Johnson vaccine.

The individuals concerned were all women between the ages of 18 and 48, and they developed the symptoms between 6 to 13 days after the being vaccinated.

Just under 7m of the doses have been administered throughout the US.

The CDC is having a meeting of its advisory committee on immunisation practices on Wednesday, where it will review the cases, while the FDA will also investigate the nature of the blood clots.

“Until that process is complete, we are recommending a pause in the use of this vaccine out of an abundance of caution,” they said, while Johnson and Johnson confirmed it is continuing to analyse the relevant data alongside the relevant health bodies.

“We are aware that thromboembolic events including those with thrombocytopenia have been reported with Covid-19 vaccines. At present, no clear causal relationship has been established between these rare events and the Janssen Covid-19 vaccine,” it said.

EasyJet Share Price: outlook remains foggy

Liam Roche
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EasyJet Share Price: outlook remains foggy

EasyJet Share Price

As reported a month ago, the EasyJet share price climbed back to 1050p per share following a devastating period for the industry during the pandemic. As economies around the world opened up, the prospects of the travel industry following suit gave cause for hope for investors in airlines with depleted share prices. However, while much of the vaccine roll-out has been a success, and economies are beginning to grow again, a question mark remains over the near-term prospects of the airline industry, a a third wave engulfs Europe. Over the past 30 days the company’s share price has fallen down to 942.2p per share from just under 1050p.

Europe

The key reason for EasyJet’s recent struggles is the current Covid-19 situation in Europe. After a slow start to their vaccine roll-outs, which was troubled by supply shortages, there have been third waves in France, Germany and Italy. As a result, in countries that are key destinations for EasyJet, lockdown restrictions have been reinforced.

However, in an effort to install confidence into the British public, Grant Shapps, the UK Transport Secretary, recently said Brits can start thinking about booking foreign holidays again this summer. Shapps added that the cost of the Covid tests required would need to be significantly reduced.

Declaring the conclusions of the Global Travel Taskforce set up by the government to examine how leisure travel could be reopened safely after lockdown, Mr Shapps said foreign holidays would resume on 17 May at the earliest.

He told the BBC: “This is the first time I’m able to come on and say I’m not advising against booking foreign holidays.”

“But for the first time I think there is light at the end of the tunnel and we’ll be able to restart international travel, including cruises by the way, in a safe and secure way, knowing about the vaccinations, everything we know about the disease this year, and of course that abundance of caution – having the tests in place.”

Shapps said the government will make a list which will be under constant review and that he was hopeful European countries would be upgraded as their vaccination rates improve.

Despite the uncertainty in Europe, spending in the travel industry fell by a smaller amount when compared to January and February. This suggests a growing confidence, in addition to demand, for holidays at some point this year. However, it could be a big ask for EasyJet’s share price to recover to its pre-pandemic level before the end of 2021.

March consumer spending down 7.2%

Liam Roche
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0
March consumer spending down 7.2%

Hospitality and leisure showed signs of recovery

Consumer spending fell 7.2% in March compared to the same period in 2019, as lockdown continued, according to a report by Barclaycard.

However, spending on hotels, resorts and accommodation, as well as entertainment, showed early signs of improvement as Brits began to make plans for when restrictions are lifted.

Spending on essential items rose by 7.7% compared to 2019, the area of highest growth, while non-essential spend was down 14.5%. Although this represents a slight improvement compared to the previous two months of lockdown.

The report by Barclaycard suggests that spending at restaurants should improve following the easing of restrictions, as 26% of Brits have already pencilled in a post-lockdown activity, 41% of which are customers making reservations to eat outdoors at restaurants.

There is also a glimmer of hope for the travel industry as the 54.3% decline in spending on accommodation marked an improvement on the respective 75.4% and 70.3% falls in January and February. This suggests that holidaymakers have begun booking trips for the remainder of the year.

Raheel Ahmed, head of consumer products at Barclays, said: “With springtime finally here and restrictions starting to ease, it’s encouraging to see a renewed sense of optimism across much of the UK. There are also signs that some of those sectors most heavily impacted by the pandemic, such as hotels, resorts, accommodation and entertainment, are beginning to turn a corner, as many look forward to long-awaited trips and activities with family and friends after lockdown.”

“As Brits spent March sprucing up their homes and garden in preparation for warmer weather, DIY stores also enjoyed significant growth. While it remains a very challenging environment for high-street and hospitality outlets, the fact that many consumers are making plans for the future is a positive sign, and we hope to see this pent-up demand lead to growth in more categories as life after lockdown starts to resume,” Ahmed added.

Concurrent Technology: Did the Finals contain a profit warning?

Jon Levinson
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Concurrent Technology: Did the Finals contain a profit warning?

Concurrent Technology (LON:CNC) 95p Mkt Cap: £71m
Yesterday, CNC reported its Finals to December 2020. At the operating level these finals seemed little effected by Covid although a reduced profit to £2.7m from £4.1m was report but its £5m EBITDA was about the same as last year, despite a 9% fall in revenue to £21.1m. Its EPS at 3.75p was down from 4.4pm which gives an historic P/E of 25x and as a show of financial strength the dividend was increased to 2.55p for a 2.7% yield. The gross margins are a healthy enough 53% and net cash increased at the year-end to £11.8m.
CNC is a...

Northbridge Industrial Services: New Team New Dream

Jon Levinson
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0
Northbridge Industrial Services: New Team New Dream

Northbridge Industrial Services (LON:NBI) 95p Mkt Cap £27m
A Star is Born
Finals to December, reported today were heavily Covid impacted but as expected the Crestchic subsidiary was the star performer and accounts for 76% of groups sales. Its equipment sales increased 16.9% while Tasman rental sales struggled with a 7.9% decline leaving overall revenue improving 1.1% to £34m.
A profit of £0.4m was made before pre- exceptional costs and strong cashflow helped to reduce net debt by 11.6% to £6.8m and the Net Asset Value is £27.6m. The Covid effected Tasman was also hit by a £7.7m impairment ...

Bitcoin climbs above $63,00 to all-time high

Liam Roche
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2
Bitcoin climbs above $63,00 to all-time high

Bitcoin record comes one day before Coinbase IPO

Bitcoin has set a new all-time high on Tuesday, surging above $63,000, before retreating slightly.

The pre-eminent cryptocurrency has been pushing up in recent weeks, and is up by over 7% in the last seven days.

The record has come just one day before crypto exchange Coinbase is set for its public listing on the Nasdaq. The company, which may have a valuation north of $100 billion, will begin trading on the Nasdaq under the ticker symbol COIN.

Circle Squared Alternative Investments founder Jeff Sica told FOX Business that Coinbase may be the most important IPO of 2021.

“I see this as a bridge between the disruptive decentralized cryptocurrency market and the traditional market,” Sica said. “This IPO will bring cryptocurrency to the forefront, take away some of the obscurity, and allow people to invest in what I believe is gonna be a very, very significant presence as an alternative currency in the future.” 

Jason Deane, Bitcoin analyst at Quantum Economics said the price increase was inevitable.

“Bitcoin has been testing the resistance levels for some weeks now, each time bouncing off but immediately coming back undeterred.”

Today’s all time high was therefore all but inevitable as sheer market momentum, investor sentiment and accelerating rate of development act as primary drivers,” Deane added.

Just under a month ago, bitcoin broke the $60,000 mark, which brought its market capitalisation to $1trn. While in November 2020, the cryptocurrency surged to a three-year high of $17,891 – then its highest level since December 2017.

In further news regarding institutional adoption, the board at MicroStrategy is now being paid in bitcoin.

Per a company announcement, the Board of Directors “modified the compensation arrangements” for directors that were classified as non-employees. Such directors will receive “all fees” for their services in bitcoin instead of cash.

UK economy in ‘early stages of an economic recovery’ after growing 0.4% in February

Liam Roche
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0
UK economy in ‘early stages of an economic recovery’ after growing 0.4% in February

UK exports to the EU surged by 47% during February, up to £11.6bn

The UK economy grew in February as businesses managed to cope with lockdown restrictions better as exports to the European Union recovered as well.

GDP increased by 0.4% following a 2.2% fall in January, according to figures from the Office for National Statistics (ONS).

A representative from the ONS commented: “Wholesalers and retailers both saw sales pick up a little, while manufacturing improved with car producers experiencing a partial recovery from a poor January. Construction grew strongly.”

Exports to the EU surged by 47% during February, up to £11.6bn, after a 40% drop at the beginning of the year as the Brexit transition unfolded to the detriment of trading levels. Goods coming in from the EU rose by 7.3% having fallen by 29.7% in January.

However, exports are expected to remain below 2020 levels while the economy is nearly 8% below its level prior to the pandemic.

The country took a beating from the coronavirus pandemic as the economy shrank by 9.8%, the biggest fall in more than three centuries and one of the most severe in Europe.

Commenting on UK GDP rising 0.4%, Douglas Grant, director of Conister, part of AIM-listed Manx Financial Group, said:

“The modest rise in GDP is a positive step towards showing signs of the early stages of an economic recovery. While the unemployment rate remains low, much of the country is reopened and vaccinations are administered extensively across the land, the economy has been like a coiled spring as lenders flush with liquidity in a low-yield environment prepare to deploy capital to support resilient business sectors.”

“Lenders and agile, resilient companies alike have been awaiting a directive on which sectors remain a Government priority and the introduction of a new recovery loan scheme (RLS) will provide the necessary catalyst many sectors need to living off an ever-increasing debt pile.”

The UK’s recovery is set to be quicker than anticipated over the next two years as the global economy rebounds from its worst recession since World War 2.

The International Monetary Fund (IMF) is forecasting that the UK economy would grow by 5.3% in 2021 and 5.1% the following year, which would be its fastest rate of growth since 1988. A year ago the UK economy shrank by 9.8%, the most severe recession since 1709.

FTSE 100 off to quiet start ahead of crucial US inflation reading this afternoon

Liam Roche
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0
FTSE 100 off to quiet start ahead of crucial US inflation reading this afternoon

With sterling nudging higher, rising 0.1% against the dollar and 0.2% against the euro, the FTSE 100 fell a further 0.3% to hit 6,880.

“Though the GDP reading for February missed estimates, at 0.4% the country’s economy still grew despite lockdown. Industrial and manufacturing production both exceeded expectations, while construction output also outstripped forecasts,” said Connor Campbell, financial analyst at Spreadex.

A game of tug of war ensued on the FTSE 100 according to Russ Mould, investment director at AJ Bell “as one team consisting of miners, financial and real estate couldn’t make any ground against the other team of energy, healthcare and consumer non-cyclicals”.

Next up is this afternoon’s CPI data. Analysts are expecting the standard figure to rise from 0.4% to 0.5% month-on-month, with the core reading up from 0.1% to 0.2%. “Anything higher than those estimates will likely set alarm bells ringing; anything lower will act as reassurance about the pace of building inflationary pressures,” said Campbell.

FTSE 100 Top Movers

Just Eat (2.72%), B&M European Value Retail (2.43%) and JD Sports (2.39%) are the day’s top risers so far midway through the morning session.

The biggest fallers so far on the FTSE are Experian (-1.36%), Rentokil Initial (-1.17%) and British American Tobacco (-1%).

Just Eat Takeaway

Just Eat confirmed today that it received 200m orders in Q1 of 2021, an increase of 79% compared to the same period the year before. UK customers placed the highest number of orders at just under 64m.

The FTSE 100 company suggested in March in its full-year earnings report that it would see Q1 order growth of over 42%.

JD Sports

JD Sports is expecting its profit for the coming year to surpass its level before the pandemic in its end of year report as the company announced it will be resuming its dividend payments. For the financial year ahead, ending in January 2022, JD Sports is expecting to make a profit before tax in the range of £475m to £500m, a rise from its previous forecast of £440m-£450m.

The FTSE 100 firm will pay out a final dividend of 1.44p per share, the same as in 2019, however it has not offered to return any of the government’s assistance even though JD Sports is ending the year with £800m in net cash.

Sosandar upside potential 48p says N+1 Singer

Liam Roche
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0
Sosandar upside potential 48p says N+1 Singer

Sosandar sets record for revenue in March

Sosandar (LON:SOS), the online women’s fashion brand, has this morning announced that its Q4 revenue is at £3.94m, up 63% from the year before, as part of its trading update for the financial year ended 31 March 2021.

Customer activity rose each month during the fourth quarter with record revenue recorded in March, a 66% increase compared to January, and a 163% rise compared to the previous year when lockdowns made an impact.

The AIM-listed company put its performance down to “increasing level of consumer optimism as lockdown restrictions start to lift”.

The Company expects to report revenue of £12.2m, up 35% year on year, with the EBITDA loss reduced by over 60%.

N+1 Singer evaluated the company’s performance and put forward a fair value estimate:

“With net cash and a market cap of only £39m, we find the investment case compelling, especially with a clear path to profitability now in sight. It currently trades on 1.6x EV/Sales to Mar’22 on conservative estimates (vs. 2 year average of 2.2x).”

“Herein lies the opportunity as EBITDA margin expands. Our fair value estimate of 32p is derived using a regression based EV/Sales multiple of 2.6x. We see scope for this to increase to 48p in the event strong top line growth is sustained, which seems plausible, and to c50-85p over 3 years in our bull case,” the note said.

Ali Hall and Julie Lavington, Co-CEOs Sosandar added their thoughts:

“In what has been a year that no one could have possibly predicted, we are delighted to have shown resilience and our entrepreneurial spirit, overcoming challenges to deliver a significant improvement in revenue and reduction in EBITDA losses, together with the further diversification of our product range.”

“The progress we are making reflects the scale of our opportunity and growing demand for our unique offering in the market. The recent purchasing trends that we have seen from our customers point to a period of increased activity and we believe that our extensive product range can cater to their needs.”

JD Sports expects to beat pre-pandemic profit levels in coming year

Liam Roche
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1
JD Sports expects to beat pre-pandemic profit levels in coming year

JD Sports to reinstate dividend to same level as 2019

JD Sports (LON:JD) is expecting its profit for the coming year to surpass its level before the pandemic in its end of year report as the company announced it will be resuming its dividend payments.

For the financial year ahead, ending in January 2022, JD Sports is expecting to make a profit before tax in the range of £475m to £500m, a rise from its previous forecast of £440m-£450m.

The revised estimate has taken into account a number of recent acquisitions by the sports fashion brand.

For the year ended in January 2021, its sales came in at £6.17bn, slightly up from the previous year, While its profit before tax was £421m, in line with its estimates, and just shy of the £438m announced prior to the pandemic.

The FTSE 100 firm will pay out a final dividend of 1.44p per share, the same as in 2019, however it has not offered to return any of the government’s assistance even though JD Sports is ending the year with £800m in net cash.

Harry Barnick, senior analyst at Third Bridge commented on the strength of the results in the midst of the crisis:

“2020 has been a dire year for UK retail, with an unprecedented double-digit decline across in-store sales,” said Barnick.

“Against this backdrop, JD Sports has performed remarkably, reflecting some of the retailer’s key strengths. JD Sports has a relatively high share of online sales as well as a tight inventory management system and these factors softened the blow of 2020’s pandemic. It allowed sales to continue as stores were closed and supported gross margins, allowing the group to retain its high profitability from the prior year.”

“The next few months will be crucial for JD Sports as it seeks to capitalise on the forecasted pent up demand for retail.”

“Global apparel brands such as Nike and Adidas have been decluttering their distribution network, reducing the number of small and underperforming stockists they rely on. At the same time, they have been clear that they will partner more closely with large omnichannel retailers and JD Sports is likely to benefit from this trend.”

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