Goldman Sachs profits pour in

Bronte Carvalho
-
199
Goldman Sachs profits pour in

New York-based investment bank Goldman Sachs (NYSE:GS) has outperformed Wall Street analysts’ predictions with a jump in profits, as its investment banking, wealth management and bond, currency and commodities trading divisions all thrived during the pandemic.

Goldman Sachs reported quarterly revenue of $11.74 billion, up 18% from a year ago, and posted net income of $4.5 billion – a 135% surge from the fourth quarter of 2019.

The bank reported record revenue of $9.42bn from its investment banking unit, driven by booming demand for initial public offerings and an increase in merger activity. Goldman Sachs ranked #1 in worldwide announced and completed mergers and acquisitions, worldwide equity and equity-related offerings and common stock offerings for the year.

Goldman Sachs also said it posted its best year for global markets revenue in a decade, coming in at $21.26bn (43% higher than 2019), largely due to strong trading volume in both Fixed Income, Currency and Commodities (FICC) – which included the third highest annual net revenues in intermediation and record net revenues in financing – and Equities, which included record net revenues in derivatives.

Among its other successes were Asset Management, which generated net revenues of $7.98bn, while Consumer & Wealth Management generated record net revenues of $6bn, including record Wealth Management net revenues and significantly higher Consumer Banking net revenues.

Earnings per share rose to $24.74 for 2020, up from $21.03 in 2019. In the last quarter, earning jumped to $12.08 per share, up from $4.69 a year ago, and $8.98 in July-September. Analysts had expected a profit of $7.47 per share on average, according to IBES data from Refinitiv.

Chairman and CEO David Solomon said in a press release, “it was a challenging year on many fronts” and added that “we hope this year brings much needed stability and a respite from the pandemic”.

Reuters weighed in on Goldman’s results, pointing out that the bank has benefitted from some big stock market floats recently:

“Goldman’s performance was in line with broader gains for trading units across Wall Street banks, with JPMorgan Chase also reporting stronger-than-expected results as financial market volumes remained consistently high. The Wall Street giant also benefited from record levels of capital markets activity during the quarter, as it generated handsome underwriting fees from a number of high-profile IPOs including Airbnb, Doordash, Lufax and Root”.

Meanwhile Octavio Marenzi, CEO of Opimas – a capital markets management consultancy – told The Guardian that Goldman Sachs’ earnings were “shockingly good”.

“We were expecting a strong performance, but Goldman outperformed in almost every business line. While other banks, such as JP Morgan and Citigroup had to contend with retail and corporate banking units that were a bit soft, Goldman’s activities are squarely focused on investment banking and trading—areas that did well everywhere, but especially well at Goldman Sachs”.

Shares at the Wall Street bank were down -0.72% to USD 299.00 as of GMT 15:56, stifling recent gains which saw the stock hit an annual peak of USD 309.41 last week.

Entain shares plummet as MGM backs out

Bronte Carvalho
-
0
Entain shares plummet as MGM backs out

British sports betting and gambling firm Entain plc (LON:ENT) has seen its shares freefall after casino operators MGM Resorts International announced it does not intend to submit a revised proposal for the firm, which snubbed an $11 billion takeover deal earlier this month.

Entain, previously known as GVC Holdings – which owns Ladbrokes and Sportingbet – rejected MGM’s takeover proposal in early January on the basis that it severely undervalued the company.

MGM said it did not plan to increase its approach, and would not be making a firm offer on Entain “after careful consideration and having reflected on the limited recent engagement between the respective companies regarding MGM’s rejected all-stock proposal”.

Shares at the betting firm plummeted 14.36%% to 1,210.50p as of GMT 15:15, undoing almost all the gains made in the past month since the takeover approach was announced to the public.

The Telegraph reported on the weekend that Aberdeen Standard – Entain’s third-biggest investor – said that MGM was undervaluing the company by billions of pounds amid a US online gambling bonanza.

Wes McCoy, Aberdeen Standard investment director, said: “If you’re going to buy this company from my fundholders, then the conversation is going to have to start with: ‘This is a great company, now let’s talk’. This offer is not in the right zip code, or postcode”.

Despite MGM’s abrupt decision, Entain released a statement citing its intentions to continue working alongside the casino giant across the pond:

“We look forward to continuing to work closely with MGM to drive further success in the United States through the BetMGM joint venture”.

The news comes just a week after Entain’s CEO, Shay Segev, announced he is to step down after just 7 months in the role. He still has to complete his 6 month notice period unless a successor is appointed.

“We are sorry that Shay has decided to leave us but recognize that we cannot match the rewards that he has been promised,” Barry Gibson, chairman of Entain, said in a statement.

Gold rallies ahead of Biden inauguration

Bronte Carvalho
-
0
Gold rallies ahead of Biden inauguration

The price of gold made a modest rally on Tuesday afternoon, gaining 0.25% to $1,840.91 per ounce after lunchtime, following a turbulent few weeks which saw the precious metal take a -2.31% hit.

Responsibility for the uptick, analysts at FX Street say, is “exclusively sponsored by the emergence of some selling around the US dollar, which tends to underpin demand for the dollar-denominated commodity”.

The greenback slipped in morning trading as investors awaited comments from U.S. Treasury Secretary nominee Janet Yellen “to talk up the need for major fiscal stimulus”.

After a 2% rise in the dollar so far in 2021, a surprise for many investors who had bet on the currency’s decline following its weakness in 2020, analysts are now projecting a weaker greenback from here on out – which usually works in gold’s favour.

Nevertheless, the prevailing upbeat market sentiment stopped bullish traders from placing any aggressive bets, and might rule out any strong rally for gold in the near future.

Global risk sentiment remains “well supported” by the optimism over the rollout of COVID-19 vaccines around the world as well as hopes for more aggressive fiscal spending under Joe Biden’s presidency, which could cap gold’s gains in the coming weeks.

Investors might prefer to wait on the sidelines, FX Street stated, ahead of President-elect Joe Biden’s inauguration on Wednesday. It might take a few days for markets to settle on a coordinated response, and analysts suggest it would be “prudent to wait for some strong follow-through buying” before hedging bets on any further appreciating move.

“In the absence of any major market-moving economic releases, traders will look forward to US Treasury Secretary nominee Janet Yellen’s confirmation hearing for some impetus. This, along with the broader market risk sentiment, might further contribute to produce some short-term trading opportunities around the XAU/USD”.

Moonpig set for £1.2bn stock market debut

Bronte Carvalho
-
0
Moonpig set for £1.2bn stock market debut

Online greeting card and gift retailer Moonpig has filed its intention to float on the UK stock market, with an approximate value of £1.2bn. The firm said on Tuesday that it is aiming for a February debut.

Demand for Moonpig’s products soared during the pandemic. With lockdown keeping people separated for birthdays and special occasions, the company’s handy next-day delivery option for cards, gifts and flowers offered a much-needed alternative, and transactions leaped 156% in March as the peak of the pandemic began to unfold.

Moonpig has appointed Citigroup Global Markets Limited and JPMorgan Securities as joint global co-ordinators ahead of the float, with HSBC Bank, Jefferies International and Numis Securities as joint bookrunners.

On announcing details of the planned initial public offering, Moonpig – which has been owned by the private equity firm Exponent since 2016 – said it would float at least a quarter of the company. US firms BlackRock and Dragoneer Global Fund have already agreed to buy £130m of the shares, with £80m and £50m committed respectively.

Moonpig is expected to publish its prospectus with further details next week. Its 450 employees are also set to be given shares.

Among them is chairwoman Kate Swann – former chief executive of WH Smith – who is expected to make £7m from the float. Moonpig’s chief executive Nickyl Raithatha is in line for £11m, and finance director Andy MacKinnon will also see £2m.

Well-established as the UK’s biggest online greeting card retailer, boasting more than 12 million customers, Moonpig managed to capitalise during lockdown when its high street rivals were forced to shut. The firm delivered 46 million cards and 7 million gifts and flowers in the 12 months up to October 2020. It reportedly manages up to 300,000 orders a day – one third of which are placed via its app.

Moonpig made £156m in sales in the six months to the end of October, compared with £173m for the entire previous year.

CEO Raithatha welcomed the news of the firm’s proposed IPO:

“As leaders of a market undergoing an accelerating shift online, we’re delighted to bring Moonpig Group to the public market. Our data-powered technology platform makes it incredibly easy for our customers to create more special moments for the people they care about”.

HSBC to close 82 UK branches

Safiya Bashir
-
0
HSBC to close 82 UK branches

HSBC has announced plans to close 82 branches as the group focuses more on online banking.

The banking group has said that despite the closures, there will be minimal redundancies as staff will be redeployed to “suitable nearby locations”. It has not said how many jobs will be affected.

The number of branches in the UK will fall to 511 and the decision reflects “local market trends, customer behaviour and branch usage”.

Jackie Uhi, HSBC UK’s Head of Network, said: “In recent years we have introduced more digital options to make our customers’ lives easier and we know that customers are becoming more comfortable primarily using online and mobile banking to take control of their finances, turning to other channels for very particular interactions.”

The group said that even before the pandemic, the number of customers using bank branches fell by a third over the past five years.

Last year the group revealed a major restructuring plan, where it announced plans to cut 35,000 jobs globally.

The bank said that currently, 90% of all customer contact is over the phone, internet or smartphone.

TSB recently announced closure of 164 branches in the UK.

TSB chief executive Debbie Crosbie said: “Closing any of our branches is never an easy decision, but our customers are banking differently – with a marked shift to digital banking.

“We are reshaping our business to transform the customer experience and set us up for the future.

“This means having the right balance between branches on the high street and our digital platforms, enabling us to offer the very best experience for our personal and business customers across the UK.”

Vaccine developers to bank $14.7bn by 2023

Bronte Carvalho
-
0
Vaccine developers to bank $14.7bn by 2023

As the mass Covid-19 vaccination drive continues, new data from Finaria.it has revealed that vaccine developers BioNTech-Pfizer (NASDAQ:BNTX, NYSE:PFE) and Moderna (NASDAQ:MRNA) are set to bank $14.7bn in revenue from sales of their coronavirus vaccines by 2023.

The Pfizer-BioNTech candidate made headlines for becoming the first vaccine to be approved for use in the general public when the UK’s Medicines and Healthcare Regulatory Authority (MHRA) authorised the jab in early December. So far, the joint effort by American Pfizer and Germany’s BioNTech has a standing order for 40 million doses from the UK government, and is expected to make $3.1bn in sales during 2021.

However, this figure is expected to drop to under $1.4bn in 2022 and continue trickling over the next few years. The most significant downside of the BioNTech-Pfizer vaccine is that it needs ultra-cold storage, with temperatures as low as -70°C, which has already posed a serious logistical challenge for the UK and a number of other countries.

In 2023, as mass inoculation hopefully enters its final phase, BionTech-Pfizer COVID-19 vaccine sales are forecast to generate just $914 million – almost 3.5 times less than in 2021 – as governments from poorer countries are likely to seek cheaper and less logistically challenging alternatives.

Moderna has already enjoyed global interest in its vaccine, which boasts a 94.1% efficacy rate based on Phase III clinical trials last year, and has already booked a request of 17 million doses from the UK government. Unlike the BioNTech-Pfizer vaccine, Moderna’s only needs to be stored at standard refrigerator temperatures, between -25°C and -15°C. The American pharmaceutical firm behind it is expected to generate $3.5bn in revenue in 2021 alone – $400 million more than its competitor.

Already approved in the UK, US, EU, Canada and Israel, statistics show that Moderna’s vaccine could generate annual sales revenue of $2.9bn over the next two years.

Leading the pack in terms of total ordered doses, however, is the UK’s much-touted Oxford University-AstraZeneca collaboration. By the beginning of this year, almost 3 billion doses had been preordered by a slew of countries around the world, largely due to the fact that it is so far the cheapest vaccine to produce – at about £3 per dose – and that it does not need to be stored at ultra-low temperatures.

And, although still in phase III of clinical trials and without regulatory approval, American vaccine development firm Novavax’s (NASDAQ:NVAX) offering is the second-highest by the number of orders worldwide at almost 1.3 billion.

Data already shows the BioNTech-Pfizer vaccine hit 816 million ordered doses as of last week, with rivals in Russia’s Gamaleya, Anglo-French Sanofi/GSK, and Moderna following with 727 million, 712 million, and 441 million orders respectively.

Deliveroo appoints Next CEO onto board

Safiya Bashir
-
0
Deliveroo appoints Next CEO onto board

Deliveroo has appointed Lord Simon Wolfson to its board as a non-executive director.

Lord Wolfson is the Next chief executive and started on the board this week ahead of the delivery service’s stock market floatation.

Will Shu, founder and chief executive, said: “We are looking forward to working with him as we continue to innovate, developing new tech tools to support restaurants, to provide riders with more work and to extend choice for customers, bringing them the food they love from more restaurants than ever before.”

Wolfson said the company was an “exciting, innovative and fast-growing company that, like Next, relies on advanced technology to deliver a market-leading proposition”.

Deliveroo has been valued at more than $7b ahead of the floatation, after the group secured another $150m in funding from shareholders.

Shu commented on Deliveroo’s performance over the past year: “We’ve demonstrated our model is profitable. We also saw our existing customers looking to order more often, also ordering for the family more frequently, we saw average basket sizes increase, and also ordering a wider range of products.”

Last year, Amazon bought a 16% stake in the company. The money is being spent on “new tech tools to support restaurants, provide riders with more work and extend choice for customers.”

“We are really pleased our shareholders see the opportunity and growth potential ahead of us,” added Shu.

Superdry revenue falls 52%

Safiya Bashir
-
0
Superdry revenue falls 52%

Superdry shares fell 11% on Tuesday after the group warned over its future amid the pandemic.

In the 11 weeks to 9 January, revenues fell 52% as stores closed amid new restrictions. In the six months to 24 October, the company posted a pre-tax loss of £18.9m, compared to the £4.2m loss a year previously.

Superdry co-founder said: “Covid-19 has brought substantial challenges to Superdry as with many other brands, and this has continued through the first half and into the second with renewed lockdowns in our key markets.

“While revenue and underlying profit have been impacted by the external conditions, the brand has continued to focus on the reset, however, with over 70% of stores currently closed and having to shut a significant number over peak, it will take time to see the benefits of all our hard work flow through to the results.”

In a statement, the retailer said: “The group directors noted that the risks set out … indicate that a material uncertainty exists and may cast significant doubt on the group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.”

Net cash reserves remained strong over the year and stood at £54.8m as of 9 January.

“We continue to have a total of over £130m of available liquidity at hand. Our £70m asset-backed lending facility remains available, having not been used in the year to date, and is currently still undrawn,” said the retailer.

The board has not declared an interim dividend.

Superdry shares are trading -17.08% at 199,00 (1105GMT).

Centamin shares rise on strong revenue

Safiya Bashir
-
0
Centamin shares rise on strong revenue

Centamin shares rose on Tuesday morning after the group posted a strong 2020 performance and a rise in revenue.

Group revenue for the year rose 25% from $658.1m to $829m. Gold sales for the quarter dropped 42% as the group mined lower grade material.

Martin Horgan, CEO of Centamin, said: “Today’s quarterly and subsequent full year 2020 results were delivered in-line with the revised guidance we issued in October.

“This follows the capital markets event we hosted in December, where we presented the conclusions of the Phase One Life of Asset review and three-year outlook, detailing clear cost-saving, exploration and productivity initiatives, forming part of our plans to unlock Sukari’s potential.”

Last year, Endeavour Mining ended merger talks with the group.

“We remain convinced about the strategic rationale of combining Endeavour and Centamin to create a diversified gold producer with a high-quality portfolio of assets,” said Endeavour Chief Executive Sebastien de Montessus.

“The quality of information received during the accelerated due diligence process has been insufficient to allow us to be confident that proceeding with a firm offer would have been in the best interests of Endeavour shareholders.”

Centamin shares are trading +3.07% at 119,76 (0958GMT). In the year-to-date, shares have fallen from highs of 233,30.

AO World shares down despite surge in revenue

Safiya Bashir
-
0
AO World shares down despite surge in revenue

AO World reported a 67.2% surge in revenue after the group saw a strong demand in electrical sales over the Christmas period.

The online electrical retailer saw revenue in the third quarter jump to £457.3m. Sales in Germany alone surged by 77% to €73.6m.

AO World will invest in new staff and infrastructure to meet demand. The group hired 1,500 employees in 2020 and staff in warehouses, vehicles and drivers.

Founder and chief executive John Roberts said: “I believe we’ve seen ten years of change in ten months, and experienced our strongest ever peak trading period… We look forward to the last quarter and the next financial year with confidence as the structural shift to online is cemented in consumers’ minds.”

“Now that customers have experienced a better, digital-first way to shop for electricals, I believe the majority will never look back.”

Despite the positive trading update, shares were down 7% in early trading.

Analysts at Shore Capital commented: “This is an upbeat trading update, which shows the continued momentum given both the structural shift online and the benefit as other brands physical electrical stores remain closed, as they are not deemed essential retailers during lockdown 2.0 and now lockdown 3.0.”

“This is AO World’s moment to shine given that the online market has seen a structural shift that could be permanent by consumers… The big challenge will be whether the revenue momentum can continue during the first quarter in financial year 2022 given the tough comparatives that the business will start cycling.”

AO World shares are trading -5.30% at 357,50 (0929GMT).

1...1,0201,0211,022...1,784Page 1,021 of 1,784