Legal and General outlook remains strong despite dip in profits

Liam Roche
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Legal and General outlook remains strong despite dip in profits

Legal and General (LON:LGEN) confirmed on Wednesday that its profits fell for the financial year gone although the firm says it is still on course to meet its five-year ambitions.

The asset manager announced its operating profit fell by 3% to £2.2bn, while profit before tax was dipped by 12% to £1.6bn.

The FTSE 100 company put these figures down to lower interest rates and market movements.

Legal and General paid out a full year dividend of 17.57p per share despite the pandemic and in line with its five-year ambitions.

The company’s assets under management rose by 7% to £1.3bn, up from £1.196bn in 2019.

Legal and General announced its insolvency ratio fell to 177%, down from 184% the year before, however the company estimated a ratio of 192% on March 5.

Nigel Wilson, chief executive at Legal and General, commented on the results, as well as the company’s shift to an ESG mindset.

“Legal & General delivered a robust and resilient performance for all stakeholders, providing stability to our people, customers and shareholders.  Our balance sheet remains strong, with the Solvency II coverage ratio currently over 190%, and trading remains consistent with delivering our growth ambitions which are supported by six long term growth drivers.  Our commitment to Inclusive Capitalism, ESG and investing in climate change means we intend to play an important role in the post pandemic recovery.”

Just Eat to increase its market share in 2021 after pandemic aids takeaway company

Liam Roche
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Just Eat to increase its market share in 2021 after pandemic aids takeaway company

Just Eat orders soared due to lockdown restrictions

Just Eat Takeaway (LON:JET) confirmed on Wednesday that it anticipated additional growth in 2021 after an increase in orders due to the coronavirus pandemic allowed the company to meet its expectations for 2020.

Demand for food-delivery services soared by 42% to 588m orders during 2020 as lockdown restrictions kept customers away from restaurants.

Just Eat also expects to increase its market share in 2021 in the UK on the basis of an 88% increase in orders over January and February of this year.

The takeaway company’s sales increased by 54% to €2.4bn in 2020, in line with analysts’ expectations.

Just Eat’s EBITDA, also known as adjusted earnings before interest, taxes, depreciation and ammortization, rose to €256m, up from €217m the year before.

Dan Thomas, analyst at Third Bridge, said the pandemic created ideal conditions for Just Eat.

“The pandemic has created ideal business conditions for food delivery platforms and this is reflected in both strong order growth and restaurant onboarding for Just Eat Takeaway.”

“Just Eat Takeaway.com is currently sacrificing profitability in order to scale its UK delivery capabilities. Expansion may be coming at a considerable cost, but it remains a vital route to new customers in a fierce marketplace, where Deliveroo is poised to IPO,” Thomas added.

Just Eat has announced plans to last year to buy US-based app Grubhub in a $7.3bn (£5.8bn), making it the biggest food delivery company outside China.

The company also pushed up its investment in the second half of 2020, including its marketing push which involved paying a reported £5m to Snoop Dogg to appear in its TV adverts.

He added that the firm had ramped up investments in its Just Eat business significantly in the second half of the year.

Jitse Groen, chief executive at Just Eat, commented on the results and the company’s outlook for 2021:

“2020 was an exceptional year for Just Eat Takeaway.com. Right before the completion of the merger between Just Eat and Takeaway.com, the world was hit by Covid-19. This brought unprecedented challenges to our restaurants, consumers as well as to our organisation and staff, but it also created tailwinds for our business.”

“In the second half of the year, we increased our investments into the legacy Just Eat business significantly, building on our position as one of the largest food delivery companies in the world. Our revenue2 grew 54% in 2020, and we expect a further acceleration of our order growth in 2021 compared with last year.”

Argo Blockchain raises funds to boost investment in Pluto Digital Assets

Liam Roche
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Argo Blockchain raises funds to boost investment in Pluto Digital Assets

Argo intends to pursue strategic opportunities

Argo Blockchain (LON:ARB) confirmed on Monday that it had finalised a fund-raising to allow the company to complete an investment in Pluto Digital Assets.

In addition, Argo intends to pursue strategic opportunities in crypto mining, capital investment, decentralised finance (DeFi) and Web 3.0 initiatives.

Following yesterday’s market close, Argo confirmed it has raised £26.8m via the placing of 9.6m new shares to investors. The cryptocurrency miner also offered a subscription of 361.977 shares to a number of US investors, as well as a subscription of 3.4m shares by PrimaryBid, each prices at 200p, a discount of 20%.

Argo Blockchain has struck an agreement to invest £7.3m in Pluto’s current funding round to secure its 25% shareholding. Argo will receive 121m shares issued a 6p per share, along with 121m warrants exercisable at a price of 12p each.

Argo Blockchain chief executive, Peter Wall, commented on the fundraising and the company’s expansion:

“We are pleased to announce this fundraising which presents Argo with the opportunity to further invest in and expand its mining infrastructure. It will also allow the company to diversify its investments within the cryptocurrency and blockchain ecosystem through our follow-on investment in Pluto Digital Assets,” Argo chief executive Peter Wall said in a statement.

“Argo’s anchor investment in Pluto demonstrates the company’s desire to operate at the forefront of new blockchain technologies which are revolutionising the sector. We are also very excited to be able to open this round to existing retail shareholders and institutions that have been so supportive of us to ensure that as many of our shareholders as possible are able to invest in the company during the fundraising,” he added.

Since the turn of the year, Argo has seen a sharp upturn in the value of its stock. 

Nasdaq jumps up 3% in early trading as Tesla soars

Liam Roche
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Nasdaq jumps up 3% in early trading as Tesla soars

Tech stocks push the Nasdaq index up

Nasdaq index jumped by 3% in early trading on Tuesday, gaining 379 points to 12,988.

Some of the major tech stocks clawed back following recent downward spirals. Tesla is up by 9.11%, while Apple and Amazon are up by 3.63% and 3.54% respectively. Nio, the New York-listed electric vehicle manufacturer, made an 11.9% gain to round off an excellent start to the morning for tech stocks.

The news comes in the wake of mass sell-offs of tech stocks in recent weeks which brought doubt over the sector, and growth stocks more generally.

Russ Mould, investment director at AJ Bell, noted a recent shift by investors towards value stocks.

NASDAQ Composite slid into correction territory, just over 10% below its mid-February closing peak, to once more raise the issue of whether investors are now preferring ‘value’ stocks – which potentially offer rapid growth today – over ‘growth’ names, which are usually seen as offering increases in profits and cash flows well into the future,” said Mould.

However, as US bond yields fell back, investors returned to the deflated technology stocks, reversing a recent trend of moving towards value stocks.

10-year Treasury bond yields slid back to 1.54% after edging towards a 13-month high of 1.613% yesterday.

Rising bond yields have put pressure on the stock market in recent weeks, in particular tech stocks.

“Tech stocks are overdue for some kind of bounce after the downfall they have had so far with most investor maintaining a positive outlook on tech stocks in the medium to longer term,” said Michael Sheldon, chief investment officer at RDM Financial in Westport, Connecticut.

“Potential headwind for the market is if interest rates rise further from this point over the short period … since they have risen too fast in too little time.”

Is silver the next asset class to fly?

Liam Roche
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Is silver the next asset class to fly?

Silver rallied on Monday and into the Tuesday session, edging towards the $26 level. Earlier in the year, the devil’s metal rose by 15% to $30, its highest level in eight years. This came as Reddit investors flocked to silver by following comments on the WallStreetBets’ forum. Over the last 12 months, the precious metal is up by 52.8%.

Silver

The precious metal could yet again rally as analysts are even predicting a super cycle. One such firm is JP Morgan which has said signs of inflation support this view. “We believe that the new commodity upswing, and has started,” the JPMorgan analysts said. “The tide on yields and inflation is turning.”

A question mark arises over whether or not silver will be a part of this rally. According to analysts, it will.

“Silver is used in solar panels significantly. It hasn’t grown as much as wind and hydro, but it is an important component within the solar industry. If you do look at the longer-term dynamics, it will benefit as a result,” Hynes explained. 

The metal has the potential to reach $60 this year according to Jon Deane, CEO of Trovio.

“Short-term, silver is your best trade. There is a lack of silver around the world. There is not much silver at any refineries and getting your hands on physical silver is difficult. There is still a risk of a real silver squeeze,” Deane told Kitco News. 

Deane also makes the case that the metal will outperform gold in 2021.

“Silver will outperform gold this year. There’s a lack of available silver, plus it got the climate angle. Silver could trade in the $40-$50 range and potentially even hit $60 at some point this year.”

Swiss investment bank UBS has announced that it expects silver to outperform gold in 2021, following a year which saw “safe haven” precious metals hit record highs and reap the benefits of global stock market volatility.

Triple Point Social Housing REIT acquires seven new properties

Liam Roche
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Triple Point Social Housing REIT acquires seven new properties

Triple Point Social Housing REIT (LON:SOHO) announced on Monday that it completed the acquisition of seven new supported housing properties.

The newly purchased sites, made up of 68 individual units, will cost around £12.1m.

The properties are located across the UK, including the North West (24 units), the North East (23 units), Yorkshire (10 units), the East (7 units) and the South East (4 units).

Triple Point Social Housing REIT has entered into new FRI leases in respect of each of the properties for a minimum period of 20 years with the ability to extend.

The leases are with specialist charities or housing associations regulated by the Regulator of Social Housing, including Blue Square Residential, Care Housing Association, Chrysalis Supported Housing and Independent Housing.

Triple Point Social Housing REIT was one of three organisations that presented investment opportunities at February’s UK Investor Magazine Virtual Investor Conference. 

The trust’s aim is to allow investors to get a solid long-term return while having a positive impact on society. Their mission is geared towards addressing the ongoing housing crisis by investing in the UK social housing sector.

Hargreaves Lansdown six ISA strategies for volatile times

Liam Roche
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Hargreaves Lansdown six ISA strategies for volatile times

Worry about market volatility due to the Brexit process was the reason 29% of people chose not to put money into their stocks and shares ISA this year. This was the second most common reason after not having the money to spare.

The FTSE All Share index has dropped by 9% from pre-pandemic February last year. However, in the meantime, it has dropped 31%, before climbing 27%, dropping and then rising again.

Sarah Coles, personal finance analyst at Hargreaves and Lansdown, outlined the behaviour of investors during the pandemic. “When markets plummeted at the outset of the pandemic, some investors were worried into selling up and retreating into cash. Others held back from investing this year’s ISA allowance. However, being put off by volatility means missing out on potential long-term growth. The FTSE 100 is down less than 10% from the pre-pandemic levels, plenty of funds and markets are up over this period, and we’re only a year down the line.”

Below, Coles outlines six strategies for investors during volatile times.

Diversification

Diversification allows an investor to manage risk and reduce the overall volatility of an asset’s price movement. Coles advises to “ensure you have a diverse portfolio that matches your objectives, and then hold on through the volatility for the long-term growth.”

“However, don’t assume your portfolio is diverse: revisit it. Over time, growth in some areas and falls in others can unbalance it, so check you’re comfortable with your holdings,” Coles adds.

Buy Into Long-term Growth at a Good Price

When there is a market-wide dip, even high quality businesses are likely to experience a drag. This can be a good opportunity to purchase undervalued stocks.

“Some will have had their prospects fundamentally altered by the course of the pandemic, but those with sound fundamentals offer a potential buying opportunity,” Coles argues.

Protect Your Allowance

Even if you don’t want to invest any or all of your money right away, you can secure your ISA immediately. Coles adds: “You can open a stocks and shares ISA and park the money in cash, then gradually drip feed it into stockmarket investments when it suits you best.”

Drip Feed

If you are only able to contribute a certain amount per month, Hargreaves and Lansdown offers a regular savings plan. “You can make payments from £25 a month, and then top up with lump sums throughout the tax year when it makes most sense for your finances,” says Coles.

Open a Lifetime ISA to Bag the Bonus

Even if you invest a minimum amount, opening a LISA (Lifetime ISA) can help you to keep your options open, according to Sarah Coles. “If you’re 39, open a LISA and put a small sum of cash in it. You may not have plans to buy a first property, you may own a home, you may already be saving in a pension, and you may be worried by market movements – and all of those things may have put you off. However, taking out a LISA now protects your right to have one, and pay into it any time before the age of 50. It keeps your options open in case your plans change and you want to take advantage of the government bonus. Failing to take one out before the age of 40 means you have lost the opportunity altogether.”

Consider ISA Income Alternatives to Pension

Dividends from pension funds have dropped over the past year, therefore it could be wise to look for an alternative source of income. Drawing money from one’s pension every month could be risky, says Cole: “You’re eating into a larger percentage of your pot when prices fall, and this will continue to have an impact even when it recovers. If you have ISAs alongside your pension, it gives you far more flexibility. You can draw the income tax free from stocks and shares ISAs to boost your income, or you could dip into cash ISAs to make up the shortfall, and refill the coffers when better times return.”

FTSE 100 holds steady as investors breathe a sigh of relief

Liam Roche
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0
FTSE 100 holds steady as investors breathe a sigh of relief

FTSE 100 edged up on Tuesday by 0.37%, sitting at 6,744.03. Today’s steady rise followed an attack on a facility in Saudi Arabia which propped up the index yesterday.

“The FTSE 100 made a steady but unspectacular start to trading on Tuesday – likely a relief to investors who have seen some big gains and substantial losses in recent days as levels of panic over rising inflation have ebbed and flowed,” says AJ Bell investment director Russ Mould.

“Monday’s significant rally suggested that noises from central bankers aimed at calming fears about spiralling bond yields and rising prices had succeeded in giving investors the comfort blanket they needed to start buying again.”

FTSE 100 Top Movers

M&G (5.14%), Kingfisher (4.03%) and JD Sports (3.37%) are the day’s top risers on the index so far.

At the bottom of the FTSE 100 during morning trading is Pearson (-4.77%) along with mining companies BHP Group (-2.11%) and Rio Tinto (-1.65%).

M&G

M&G the UK insurance company and asset manager, confirmed a 31% fall in its operating profit to £788m. The results, which came on Tuesday, were M&G’s first since becoming a stand alone company and were ahead of expectations. 

Having split from Prudential in 2019, the FTSE 100 firm said the results were a reflection of its first full year as a listed company, including head office and debt interest costs. The company confirmed a dividend of 12.23p per share, in line with its policy of a stable or increasing dividend.

Standard Life Aberdeen

Standard Life Aberdeen has cut its dividend by a third following a dip in profits last year, while its chief executive has promised a return to growth. Standard Life Aberdeen confirmed a profit before tax of £487m for 2020, down 16.6% on the year before, while its fee-based revenue fell by £0.2bn to £1.4bn.

The FTSE 100 company reduced its full-year dividend by one third to 14.6p per share, a move that was in line with analysts’ expectations.

Greatland Gold secures $50m of development funding

Liam Roche
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Greatland Gold secures $50m of development funding

Greatland Gold well capitalised to push forward with further exploration

Greatland Gold (AIM:GGP), the precious and base metals mineral exploration and development company, today announced its interim results for the six months ended 31 December 2020.

At the Havieron project, the company delivered its initial Mineral Resource estimate and secured $50m of development funding.

Greatland’s upcoming 2021 exploration season will focus on a “three-pronged strategy” in the Peterson region, according to a statement released by the company on Monday.

The company also confirmed it is well capitalised to push forward with exploration programmes in 2021 with cash equivalents of £5.9m.

Greatland Gold is finalising plans to conduct further exploration across the company’s 100% owned licences (Scallywag, Rudall, Canning) in the highly prospective Paterson region.

Shaun Day, chief executive of Greatland Gold, commented on the company’s results and outlook:

“We are very pleased with developments in the first six months as we worked with our partners to reach key milestones at Havieron – delivering the initial Inferred Mineral Resource estimate and securing US$50 million of development funding via a Loan Agreement with Newcrest.”

“At Havieron, additional mineralised zones were identified and further drilling returned the best intercept recorded to date. This gives us great excitement for the significant, 65,000m growth drilling programme now underway. It is an affirmation of the quality of our projects and our team that Newcrest agreed to a second joint venture with us, the Juri JV, in the Paterson region.”

“Looking ahead, Greatland has three elements it is actively progressing in the Paterson region and these will be the focus as we enter the 2021 exploration season. Alongside the potential for rapid development at Havieron, Newcrest and Greatland are preparing for the imminent launch of the exploration programme at the Juri JV which will initially focus on drilling several high-priority targets. Additionally, we will be ramping up exploration activities across our multiple 100% owned targets in the Paterson. The goal for both these campaigns will be to map out large intrusive structures similar to the Havieron discovery.”

M&G profit drops during first year as standalone company

Liam Roche
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1
M&G profit drops during first year as standalone company

M&G confirms dividend at 12.23p per share

M&G (LON:MNG), the UK insurance company and asset manager, confirmed a 31% fall in its operating profit to £788m.

The results, which came on Tuesday, were M&G’s first since becoming a stand alone company and were ahead of expectations.

Having split from Prudential in 2019, M&G said the results were a reflection of its first full year as a listed company, including head office and debt interest costs.

The company confirmed a dividend of 12.23p per share, in line with its policy of a stable or increasing dividend.

The FTSE 100 company’s IFRS profit after tax rose to £1.14bn, while its total capital generation was confirmed at £995m.

M&G’s share price rose by 5% on early morning trading to 215.5p.

John Foley, chief executive of M&G, commented on the company’s results:

“In our first year as an independent company, we have delivered a strong and resilient performance in one of the most challenging operating environments ever. This demonstrates the value of our diversified and integrated business model, both to customers and clients, and to shareholders,” said Foley.

“We laid the foundations for M&G’s return to growth, including actions to fix Retail Asset Management and the creation of M&G Wealth following the acquisition of Ascentric. As responsible stewards of £367.2 billion in Assets Under Management and Administration (AUMA), we are also pivoting the entire company to sustainable investing – a shift which we believe will benefit customers, clients and shareholders, as well as wider society and the planet.”

“As responsible stewards of £367.2 billion in Assets Under Management and Administration (AUMA), we are also pivoting the entire company to sustainable investing – a shift which we believe will benefit customers, clients and shareholders, as well as wider society and the planet.”

“Our balance sheet has remained robust throughout the COVID-19 pandemic and capital generation was strong at £995 million for the year.”

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