MediaZest share price jumps as company confirms new business wins

Liam Roche
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MediaZest share price jumps as company confirms new business wins

MediaZest reveals £250,000 of additional written orders

MediaZest (LON:MDZ) shares soared this morning, by over 80% to 0.16p in early morning trading, before settling at 20% up in the afternoon, following the auto-visual creative company providing an updated on “an encouraging rate” of new project work.

The AIM-listed company, which held its annual general meeting on Tuesday, confirmed that £250,000 of additional written orders had been received, while similar number of additional orders are currently at the later stage of negotiations.

While a small proportion of these projects have already been completed, the MediaZest board expects the majority to be delivered in the second half of the current financial year, ending 31 September 2021.

Geoff Robertson, chief executive of MediaZest, commented on the increase in orders in addition to the outlook for the coming year.

“We have seen a marked increase in new business opportunities since the beginning of the calendar year and the Board is pleased with the rate at which these opportunities are being converted into orders. Although some uncertainty remains, primarily due to the ongoing impact of Covid-19, the outlook for the second half of the financial year is promising and we look forward to updating our shareholders further in due course.”

“The information contained within this announcement is deemed to constitute inside information as stipulated under the UK Market Abuse Regulation. Upon the publication of this announcement, this inside information is now considered to be in the public domain.”

Echo Energy share price soars after completion of debt restructuring

Liam Roche
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Echo Energy share price soars after completion of debt restructuring

Echo Energy CEO hails ‘landmark’ moment

The Echo Energy (LON:ECHO) share price spiked on Tuesday as the company confirmed it had completed the restructuring of its debt obligations.

The oil and gas firm announced that at a meeting between holders of its Luxembourg-listed €20 million 8.0% secured notes, an 84% majority approved proposals for restructuring.

At afternoon trading the Echo Energy share price is up by 30.3% to 0.99p per share following the trading update by the AIM-listed company.

The note’s maturity will be extended by three years to 15 May 2025 as part of the restructuring, with all cash interest payments on the notes rolled to the maturity date.

The previously announced conditional restructuring of its €5 million 8.0% secured convertible debt facility will now become effective.

No further cash interest payments will be required before final maturity, as the Debt Facility restructuring will see its final maturity extended to April 2025.

Martin Hull, Echo’s Chief Executive Officer, commented on the restructuring as well as the implications for shareholder returns.

“I am delighted that Echo has now successfully completed the restructuring of its debt obligations. The new arrangements result in no cash payments to Noteholders until maturity in 2025. This enables the Board to focus on rapidly delivering on its strategy to improve shareholder returns,” Hull said.

“Commodity price strength, including the very material increases in gas price recently announced, combined with the more than doubling of oil production following the ongoing infrastructure upgrades, provide a markedly improved and positive outlook for shareholders.”

“This is a landmark moment for Echo and I am confident that we can now drive forward and reward shareholders in the future.”

Imperial Brands makes a positive start to 2021

Liam Roche
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Imperial Brands makes a positive start to 2021

Imperial Brands to increase its tobacco market share in its main five markets

Imperial Brands (LON:IMB) confirmed on Tuesday that the company made a “good start” to 2021 as the manufacturer of Gauloises and Winston cigarettes is planning to benefit from an increase in tobacco prices and reduced losses in vaping.

The FTSE 100 company also said it has begun to increase its tobacco market share in its main five markets with gains in America, the UK and Spain outweighing declines in Australia and Germany.

Imperial Brand’s new CEO Stefan Bomhard outlined a five-year plan that directs investment onto the key five markets that provide 72% of its profits.

The cigarette maker will also focus on tobacco-heating products in Europe and e-cigarettes in America, aiming to rebalance losses from its previously more focused approach.

Imperial reaffirmed its forecasted low-to-mid single digit growth in organic adjusted operating profit growth for the year, saying that its tobacco sales matched its expectations.

In the first half of the coming financial year, the FTSE 100 company is predicting its revenue will grow by 1% on an organic, constant currency basis, on account of increased tobacco prices and raised next-generation product (NGP) revenue growth. It is also expecting increased profits from its logistics operations in Europe, Logista.

Rival brand British American Tobacco has said it will channel more resources to NGP-type products after seeing 3m more people use its e-cigarette, tobacco heating and oral nicotine products during the pandemic in 2020.

US 10-year Treasury yield hits 14-month high as inflation concerns increase

Liam Roche
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0
US 10-year Treasury yield hits 14-month high as inflation concerns increase

President Biden will travel to Pennsylvania to set out plans for a $3tn stimulus package

The US 10-year Treasury yield rose to 14-month highs on Tuesday as expectations for strong growth and inflation caused a sell-off in bond markets.

According to Bloomberg data, the 10-year yield increased by 0.05% from yesterday’s closing level to above 1.76%, the highest point since January 2020, just over a year ago.

The recent round of selling resulted from investors’ positive outlook over America’s vaccine rollout and an additional stimulus package.

Bond markets in America have headed up a global retreat in government debt since the start of the year, as investors worry that the Fed will allow the economy to heat up, with vast amounts of spending along with monetary stimulus to raise inflation.

An index of debt issued by governments in the developed world has dropped by 5% since January on a total return basis.

Joe Biden said on Monday that by the middle of April 90% of adults would have access to a vaccine at a site within 5 miles of their home address. The President will also travel to the state of Pennsylvania on Wednesday to set out plans for a $3tn stimulus package, following his $1.9trn stimulus payment to citizens this month.

Rupert Thompson, chief investment officer at wealth manager Kingswood, said the “massive” scale of stimulus in the US and globally has caused “considerable nervousness over inflation and has been behind the recent sell-off in government bonds”.

Royal Mail to reinstate dividend as parcel business booms

Liam Roche
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Royal Mail to reinstate dividend as parcel business booms

Royal Mail says operating profits for year will be around £700m

Royal Mail (LON:RMG) confirmed on Tuesday that it will pay a one-off final dividend of 10p per share, as well as saying it will outline a new dividend policy alongside its upcoming results announcement in May.

The postal service slashed its dividend after the first lockdown due to the uncertainty caused by the policy announcement.

However, the business benefited from lockdowns as the number of parcels being sent due to people increasingly shopping online led Royal Mail to upgrade its profit forecasts.

Royal Mail revealed its operating profits for the year ending in March 2021 would be in the region of £700m which would be be more than twice that of a year ago.

The FTSE 100 company also provided medium-term expectations for GLS, the overseas parcel deliverer.

GLS is expecting to grow its revenue at 12% annually from a base of €3.6bn in 2019-20 up to the 2023-25 financial year. It also expects to double its operating profit to €500m while generating €1bn of free cash flow with capital expenditure in the range of 3-4% of revenue.

In the nearer-term, GLS is forecasting its adjusted operating profit for FY2020-21 to be around £350mln (€390mln) and adjusted operating profit margin 8.7%, according to a statement released today.

For the year ending in March 2019 Royal Mail paid a total dividend of 25p per share, however, it suspended its shareholder payout at the time of the annual results in June 2020 due to the impact of the pandemic.

Russ Mould, investment director at AJ Bell, commented on the company’s outlook:

“Royal Mail is currently in a sweet spot as the pandemic has accelerated the shift from physical to online retail, thereby creating a massive tailwind for companies that deliver parcels. It will be hoping that this trend remains intact even when people start to go back to work in offices and get out of the house more.”

FTSE 100 rises to 12-day high of 6,785

Liam Roche
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FTSE 100 rises to 12-day high of 6,785

The FTSE 100 was one of the better performing indexes on Tuesday with its key mining, oil and banking stocks all moving in the right direction. The FTSE 100 added 0.7%, lifting it to a 12-day high of 6,785.

“Though Archegos uncertainties are still hanging over the markets, European investors felt settled enough to push the region’s indices higher on Tuesday,” said Connor Campbell, financial analyst at Spreadex.

“There are dangers lurking to undermine these month-end gains. As occurred when February came to a close, bond yields are on the rise. And though the markets have broadly made their peace with that in recent weeks, it could still cause a record high-imperilling wobble,” Campbell added.

“Similarly, just because markets appear to have moved on this morning, doesn’t mean the dust has settled on Archego Capital’s collapse. That situation could still have some nasty surprises up its sleeve.”

FTSE 100 Top Movers

IAG (4.16%), Legal and General (2.94%) and Barclays (2.81%) were the top movers on the FTSE 100 on Tuesday morning.

While Severn Trent (-1.79%), Fresnillo (-1.77%) and Rentokil Initial (-1.41%) lost the most ground on the index.

Dividends

Total FTSE 100 dividend payments (excluding special dividends) are now expected to grow by 21% this year to £73.4 billion – a yield of 3.8%. Rio Tinto is expected to be the index’s single biggest dividend payer in 2021, well ahead of British American Tobacco, Shell, GlaxoSmithKline and Unilever.

Russ Mould, investment director at AJ Bell, comments:

“Current consensus forecasts show that the FTSE 100 is set to deliver its first year of dividend growth since 2018 this year, with a £74.3 billion payout enough to equate to a yield of 3.8%. That compares to a payout of £61.4 billion for last year which, if confirmed by company announcements, would be the lowest figure for the FTSE 100 since 2013.

“Total payments peaked at £85.2 billion in 2018 and even 2022 is not expected to return to that level as corporate profits, cash flows and confidence look to recover from the effects of the pandemic.”

Greatland Gold applies for new licences to expand footprint of Ernest Giles Project

Liam Roche
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Greatland Gold applies for new licences to expand footprint of Ernest Giles Project

Greatland Gold’s applications will increase the footprint of the project from 880km2 to 1,950km2

Greatland Gold (AIM:GGP) confirmed on Tuesday that it has made two applications for new exploration licenses adjacent to its existing ones at the Ernest Giles project in Western Australia.

The applications for Mount Smith (E38/3612) and Welstead Hill (E38/3613) cover a total area of 1,070km2 and join existing tenure at the Ernest Giles project located approximately 250km north-east of Laverton in the goldfields of Western Australia.

Greatland Gold’s applications will increase the footprint of the project from 880km2 to 1,950km2.

They will cover a prospective Archean greenstone rock sequence and were acquired following an internal review of historical and recent regional exploration data. The review concluded that the broader project area is prospective for gold, nickel and base metals mineralisation.

In preparation for the anticipated grant of the licenses, Gretland will focus on enhancing its targeting criteria and refining locations for future drill holes.

Shaun Day, Chief Executive Officer of Greatland Gold plc, commented on the results: 

“The new licences represent an excellent opportunity to double the size of our footprint across the underexplored Ernest Giles greenstone belt. Following a detailed internal review of exploration data, we have identified compelling structural targets in an area containing dense and magnetic units of Archean greenstone sequences, with potential for gold, nickel and base metals mineralisation.”

“This aligns with our strategy to seek to discover Tier 1 deposits both through the ramp-up of exploration activities across our existing 100% owned licences and by identifying new opportunities that can bring value to Greatland. We look forward to reporting progress on the two applications in due course.” 

The price of gold fell yesterday as the US dollar strengthened and hopes of a speedy economic recovery dampened demand for the precious metal.

The commodity fell by 1.18%% to $1,712.90 in the afternoon, while gold futures dipped 1.18% to $1,711.80.

AG Barr profits drop after ‘difficult’ year

Liam Roche
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0
AG Barr profits drop after ‘difficult’ year

AJ Barr to resume dividend in coming year

AG Barr (LON:BAG), owner of Irn Bru and Rubicon, confirmed on Tuesday that its profit and revenue dropped during 2020 following a turbulent year of business.

The company’s revenue came in at £227m for the year, down by 11%, while pre-tax profit fell by 12% to £32.8m.

The business was impacted by the coronavirus pandemic in March 2020 as the UK first went into lockdown. AG Barr’s ‘out of home’ sale of its soft drinks dropped, which saw its revenue fall by 9.1% in the first quarter of the year.

While at points the company did see sales surge, especially during the summer, further lockdowns hit the business hard as revenue fell by 14.6% during the second half of the year.

The firm retains a sense of optimism moving forward and even outlined plans to resume its dividend during the coming financial year.

Roger White, chief executive, commented on the company’s results while looking ahead:

“We delivered a resilient financial performance in a year that was difficult for all. I am extremely proud of everyone in our business for their commitment and flexibility, which allowed us to remain fully operational throughout the pandemic,” White said.

“Across the year, we continued to focus on our key strategic initiatives. We have significantly progressed our multi-beverage strategy, extended our reach into new channels and accelerated our roadmap towards net zero, which we aim to deliver by 2040. We closed the year in strong financial health, with our brands and business poised for growth on a like for like basis, and with the clear intention to recommence dividend payments in 2021.”

“Whilst there now appears to be a route out of lockdown, the immediate future remains uncertain. Notwithstanding this current backdrop, our strategy for the year ahead is to support our core growth initiatives with significant investment.”

“We have exciting plans to deliver across the Group and are confident of continuing to make further progress in the coming year.”

Sharply earnings enhancing deal for React

Andrew Hore
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0
Sharply earnings enhancing deal for React

Specialist cleaning services provider React Group (LON:REAT) has enjoyed increasing demand for its services due to Covid-19. The purchase of Birmingham-based Fidelis Contract Services will be significantly earnings enhancing from day one and will help to increase scale.
The initial consideration is £1.7m - £1.5m in cash and £200,000 in shares at 2.1p each. Deferred consideration could be up to £3.05m depending on the performance in the year to March 2021 and next year. This will be paid in cash instalments between October 2021 and March 2024.
React is a specialist cleaning and decontamination ...

Dollar rising sends gold down

Liam Roche
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0
Dollar rising sends gold down

Spot gold fell by 1.18% to $1,712.90

The price of gold fell on Monday as the US dollar strengthened and hopes of a speedy economic recovery dampened demand for the precious metal.

The commodity fell by 1.18%% to $1,712.90 in the afternoon, while gold futures dipped 1.18% to $1,711.80.

There are three reasons driving this drop, according to Giles Coghlan, chief currency analyst, HYCM.

“Firstly, it has to with the performance of the USD. There is a clear correlation between gold and the greenback. When the dollar is weak, the price of gold tends to rise, and vice versa. With the passing of the recent stimulus bill and the US slowly transitioning out of lockdown, the market seems confident about the future prospects of the US economy, leading to a recovering USD and a drop in gold prices. Should the easing of lockdown measures continue, I would anticipate further declines in the price.”

Coghlan continued: “Secondly, rising real yields. This is like a poison for gold prices: when real yields rise, this pressures gold. Thirdly, gold ETFs have been falling for over 25+ days. The fall in gold ETFs heavily influences gold prices and funds have plenty more to sell. The outlook for gold looks to be a clear sell on rallies in the current environment.”

The dollar index held steady just below four-month highs against its rivals, while gold’s safe-haven status came under threat as investors turned towards riskier assets.

Speculators will now look ahead to Joe Biden’s infrastructure spending package, set for Wednesday, and rumoured to be between $3trn and $4trn.

While many see the precious metal as a hedge against inflation that could come in the wake of Biden’s stimulus, a recent rise in US Treasury yields has dented its attractiveness.

“We see virtually no scope for noticeably higher prices until mid-year, though gold should be able to make significant gains in the second half of the year,” Commerzbank analysts wrote in a note.

“Gold is currently lacking the support of financial investors, as buying interest is low.”

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