Rentokil shares up on a “strong” Q3 performance
Rentokil shares (LON: RTO) opened higher on Thursday morning as the group posted a 10% rise in revenue.
The group saw a growth in demand for hygiene services, which offset the lower demand for pest control sales.
Rentokil revealed a 17.4% year-on-year increase in revenue to £343.4m for the period in the North America division.
Andy Ransom, Chief Executive of Rentokil, commented on the results: “The Company performed very strongly in the third quarter and today’s results further demonstrate the resilience of our Pest Control and Hygiene businesses across the world. We have consistently delivered year-on-year revenue growth each month since the declines in April and May during the peak of the crisis.
“This performance has been achieved through a combination of a return to more regular levels of service provision across our categories, continued high demand for one-time disinfection services and the benefit of acquisitions made in 2019.
“It remains impossible to predict the future development of the COVID-19 pandemic. It could have a direct impact on our trading performance, including resurgence of global cases of COVID-19, new and continued Coronavirus restrictions, potential customer insolvencies and bad debt, as well as indirectly depending how demand for our services is impacted by the economic consequences of the pandemic.
“In addition, we anticipate demand for disinfection services will reduce as businesses return to more normal trading conditions and as service frequencies potentially decrease.”
The group has said it expects full-year expectations to be in line with expectations, despite disruption and uncertainty around the pandemic.
The FTSE-100 firm will be providing full-year dividends in February.
Rentokil shares (LON: RTO) are trading 2.40% higher at 529,40 (0814GMT).
Quinyx acquires AI platform Widget Brain to optimise workforce management
Workforce management tech company, Quinyx, announced on Wednesday that it has acquired Widget Brain, a company that uses AI to automate and optimise workforce scheduling.
The company said that the acquisition will allow it to help organisations automate their labour optimisation, by using Widget Brain’s to increase business performance, labour law compliance, and reduce overall labour spend.
“After several years of partnering with Widget Brain, we saw the benefits of a deeper integration of the company’s disruptive and forefront technology with our own software solutions,” said Erik Fjellborg, Quinyx’s CEO and founder.
He continued: “AI and automation is the future for companies needing ROI across their WFM process. This acquisition will catapult our product offering, accelerate our progress and offer ‘best-in-class’ WFM AI solutions to the market.”
Joachim Arts, Widget Brain’s CEO added: “We built an awesome piece of AI that helps our customers make better employee schedules. It’s really taking automation in operational decision-making to the next level. In Quinyx, we have found the perfect partner who is as passionate as we are about giving employees and employers the best schedules ever made.”
According to Quinyx, the Widget Brain service allows companies to create schedules which suit employees’ preferences, which results in higher retention and engagement.They also add that the Widget Brain team and offices will be integrated with Quinyx. And that the acquisition will bring new brands, such as Facilicom and Royal Vopak, to Quinyx’s existing portfolio, which includes shared global customers like Domino’s Pizza and Wello.
Mr Fjellborg adds: “We already share a close relationship, customers and a common vision to help businesses revolutionise their labour scheduling. This merger was a natural fit and we cannot wait to leverage Widget Brain’s outstanding machine learning and AI know-how to deliver the best and most innovative offering to the market.”
Manchester United reports £23m loss
Following the disruption caused by the Coronavirus pandemic, Manchester United revealed a £23m loss.
For the year ending 30 June, the football team reported a 20% fall in revenue after most games were cancelled during the fourth quarter.
Loss of ticket sales and deferred sponsor payments also caused Manchester United’s debt to more than double to £474m.
Broadcasting revenue fell almost 42% down to £140.2m. Matchday revenue fell 19% to £89.8m.
“Our focus remains on protecting the health of our colleagues, fans and community while adapting to the significant economic ramifications of the pandemic,” said executive vice-chairman, Ed Woodward.
“Within that context, our top priority is to get fans back into the stadium safely and as soon as possible.”
“We are also committed to playing a constructive role in helping the wider football pyramid through this period of adversity, while exploring options for making the English game stronger and more sustainable in the long-term,” he added.
“This requires strategic vision and leadership from all stakeholders, and we look forward to helping drive forward that process in a timely manner.”
Due to the continued uncertainty around social restriction measures, Manchester United have said they will not be issuing revenue guidance for the 2020-21 financial year.
BPC plc presents at the UK Investor Magazine Virtual Conference
BPC is a Caribbean and Atlantic margin focused oil and gas company, with a range of exploration, appraisal, development and production assets and licences, located offshore in the waters of The Bahamas and Uruguay, and onshore in Trinidad and Tobago, and Suriname.
Download the presentation slide here
Antofagasta reduced workforce sees copper production fall by 7%
FTSE 100 listed metals mining company, Antofagasta (LON:ANTO), saw its shares dip as it reported reductions in its copper and gold production volumes during the year-to-date.
Copper production fell by 7.3% during the year-to-date, down to 541.3kt. Similarly, YTD molybdenum production fell by 4.3%, from 9.3kt, to 8.3kt. The big hit, though, came with gold, which saw volumes drop by 34.1% year-on-year for the first nine months of the year, down to 149.4koz.
These trends were pretty much mirrored in what was a disappointing third quarter, which saw copper production slide by 4.6%, down to 169.6kt, and gold production drop by 16.7%, down to 38.3koz. One positive, though, was molybdenum production rising by a notable 9.7%, up from 3.1kt, to 3.4kt.
Alongside these rather underwhelming production figures, Antofagasta also saw their overheads increase during the quarter of 2020, with net cash costs rising 5.3% from Q2, from 1.13$/lb to 1.19$/lb. However, for the year-to-date, progress is being made on costs, with net cash costs for the first three months down 2.6% year-on-year, from 1.17$/lb, to $1.14$/lb.
The company stated that while COVID numbers peaked in June in Chile, it has decided to keep pandemic protocols in place for the ‘foreseeable future’. It added that approximately two-thirds of its staff are on-site, with the rest working from home or in preventative quarantine. Further, its Los Pelambres Expansion project workforce has built up to 75% of the originally planned numbers and will remain at this level until COVID restrictions can be relaxed.
Antofagasta remains on course
Though not an ideal scenario, company CEO, Iván Arriagada, says that the company remain within guidance, He adds that:“Our copper production and cost control performance during the quarter were in line with expectations. For the year to date production was 541,300 tonnes at a net cash cost of $1.14/lb.
“We remain focused on the health and safety of our employees and contractors, and the communities near our operations. Although the rate of infections of COVID-19 in Chile fell during this quarter, we remain vigilant and continue to apply all the health protocols we have put in place. Following the temporary and precautionary suspension of the Los Pelambres Expansion project in Q2, approximately 75% of the original planned numbers are now working on site and all COVID-19 protocols are being followed. Similarly, work has also started at the Esperanza Sur and Zaldívar Chloride Leach projects.”
“For the full year 2020 we continue to expect production to be at the lower end of the original 725-755,000 tonnes guidance range, and net cash costs are now expected to be below the originally guided $1.20/lb. In 2021 we expect production to be in the range of 730-760,000 tonnes of copper, as grades increase at Centinela Concentrates, and we conservatively assume that COVID-19 health protocols will stay in place for the whole year.”
Investor notes
Following the news, the company’s shares dipped by a modest 0.38%, down to 1,042.50p a share. This price is around 12% above analysts’ target of 917.69p, but is short of its six-month high of 1,148.50p, seen in August. Analysts currently have a consensus ‘Hold’ stance on the company’s stock; its p/e ratio of 26.64 is below the basic materials average of 37.53; and the Marketbeat community currently has a 71.91% ‘Underperform’ stance on the company.William Hill: new restrictions will hit profits
William Hill (LON: WMH) has said that it expects profits to be hit by the new lockdown restrictions.
As lockdown eased, the group saw an “encouraging” third quarter and reported a 9% fall in revenue.
The 9% drop in revenue was an improvement to the 32% decrease for the first six months of the year.
Despite footfall increasing and live sport back in action, William Hill said that new restrictions would have a big impact.
“We estimate that, on average, the closure of 100 shops for four weeks would reduce EBITDA [an earnings measure] by circa £2m,” said the group.
Ulrik Bengtsson, the chief executive, commented “We are very pleased with the trading performance of the Group, which has been borne out of the commitment, resilience and hard work of our teams across the business. I could not be prouder of them.
“We have moved the company forward with our relentless focus on our customers, enhancing the competitiveness of our product, and maintaining player safety as one of our highest priorities. We have reinvigorated the leadership team and they, in turn, have empowered their teams to deliver on our plans,” he added.
William Hill is currently undergoing a £2.9bn takeover by the US casino company Caesars. Caesars is paying £2.72 per William Hill share in cash. Tom Reeg, the chief executive of Caesars, said on the deal: “William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to better serve our customers in the fast-growing US sports betting and online market.” William Hill shares (LON: WMH) are steady, trading at 280,00 (1212GMT).SEGRO acquires central London warehouse from Schroders for £133m
FTSE 100 listed property development and investment company, SEGRO (LON:SGRO), announced on Wednesday that it agreed to pay £133 million to acquire the 13-acre urban warehouse estate in Canning Town, from Schroders (LON:SDR).
The company boasts that the estate is in a prime location, close to Canary Wharf and London City Airport, as well as being close tot he A12 and A13 main roads which connect it directly with the rest of central London. SEGRO adds that it is within ‘walking distance’ of three Zone 2 and 3 London Underground stations, which will allow workers easy access to the estate.
The company also state that Electra Park offers 21,200 sq metres of lettable space across ten units, of which nine are currently let and the final unit is currently under offer.
The average weighted average unexpired lease term on the let space is 4.3 years to break and 6.4 years to expiry. The estate expects to generate £3.4 million in topped-up passing rent, which SEGRO says reflects a low average in-place rent of around £14 per square foot, with an estimated rental value of £21 per square foot.
Illustrating these presently low rental levels and the potential of what the company described as an ‘unusually central location’, the topped-up net initial yield upon acquisition is 2.3%, which will rise to 2.6% once the vacant unit is let out.Speaking on the Electra Park takeover, SEGRO’s Greater London Business Unit Director, Alan Holland, said:
“This acquisition is an exciting opportunity for SEGRO to consolidate its leading London footprint and is a strong fit with its well established prime urban warehouse portfolio. Situated on the edge of Zone 2, at the gateway between Central London and the rest of our East London assets, it is in an area that is currently undergoing significant redevelopment and modernisation. This should further improve the already attractive supply/ demand dynamics and create the potential for strong rental growth, as we have seen happen in other inner London markets.”
“Electra Park helps us to build further scale in an area where we have made great progress through the East Plus partnership in conjunction with the Greater London Authority. This enables us to improve choice and provide an excellent customer experience as well as represents an opportunity for us to create value by applying our asset management expertise and knowledge of the local market.”
Following the update, and its seemingly positive Q3 results, SEGRO shares dipped by 1.19% or 11.20p, to 926.60p a share 21/10/20 11:45 BST.Avast shares insecure despite 8% organic revenue growth
FTSE 100 listed cybersecurity giant, Avast (LON:AVST), saw its shares flatline despite a seemingly positive set of financial results for third quarter trading.
At actual rates, adjusted revenues were up 2.6% year-on-year during the third quarter, up from £220.3 million, to £226.0 million. Meanwhile, on an organic basis – excluding acquisitions, disposals, and currency changes – Q3 revenues jumped by 8.6% year-on-year, up from £209.2 million, to £225.1 million.
The year-to-date comparison illustrated pretty much the same trend. While adjusted revenues, on face value, were up by 1.9% from £647.1 million to £659.1 million, organic revenues were up 7.3%, from £613.9 million, to £654.8 million.
Avast said that its customer trends normalised as countries moved out of lockdown, and that adjusted revenue percentage growth overtook adjusted billings percentage growth in Q3.
The company added that its consumer desktop business continues to perform well and in line with pre-pandemic levels. It also said that adjusted EBITDA rose by 3.3%, to $126.0 million, during the third quarter, with adjusted EBITDA also increasing by 2.5% during the year-to-date, up to $367.3 million.
Avast stated that strong cash generation also enabled it to accelerate deleveraging, with a voluntary repayment of $100 million in debt during Q3. It added that its liquid balance sheet will allow it to take advantage of additional development opportunities.
Speaking on the results, company Chief Executive, Ondrej Vlcek, said: “As cyber-attackers have intensified their efforts through the pandemic to exploit digital vulnerabilities, Avast has been on the front line in protecting people’s personal information and privacy. The value of Avast’s services and technologies is reflected in the company’s resilient financial performance, which underpins continued investment in our growth and focus on innovation.”
Looking ahead, the company’s outlook read: “As a result of the strong demand in the second quarter, revenue growth is expected to continue to outpace billings growth in the second half of the year. The Group reaffirms its FY 2020 outlook for Adjusted Revenue to be at the upper end of mid-single digit growth, and a broadly flat Adjusted EBITDA margin percentage.” Following the update, Avast shares dipped notably, before recovering, to a modest dip of 0.19%, at 512.00p 21/10/20 11:30 BST a share – though it could end up either in the red of green by the day’s end. AT this price, it is currently more than 5% below analysts’ target price of 539.85p, and beneath its six-month peak of 600.00p a share. At present, analysts have a consensus ‘Buy’ stance on the stock; its p/e ratio of 20.14 is beneath the computer and tech sector average of 66.38; and, the Marketbeat has a 69.18% ‘Outperform’ rating on the stock.
