IG Design shares +13% thanks to Q2 recovery
IG Design shares (LON: IGR) have surged over 13% on Monday as the group said its interim performance was ahead of expectations.
In a trading update, the manufacturer of craft, and stationery products, revealed that it is expected to deliver a 40% year on year increase in reported revenue to approximately $435m.
Revenues at IG Design for the six months to 30 September 2020 was down 8.3%, reflecting the impact of the pandemic. The group said the second quarter showed a strong recovery.
IG Design has significantly reduced net-debt from $106.1m to $23.2m. The group commented: “This very strong performance reflects effective cash management across the Group during the first half of the year with the team remaining focused on all aspects of working capital including inventory which was lower than last year (proforma), and reduced receivable balances reflecting the focus on managing credit risk and collections.”
Looking ahead, IG Design said they remain cautious in relation to a full-year outlook. The Company expects to report its interim results at the end of November.
IG Design shares (LON: IGR) are currently trading +13.14% at 470,68 (1255GMT).
FTSE 100: What contributed to Monday’s rise?
The FTSE 100 rose 0.3% after the bell on Monday amid news that the US stimulus bill might be possible.
Despite the small rise, increases in the blue-chip index remained muted fears of new Coronavirus restrictions and Brexit concerns.
The FTSE 100 had slower growth as the pound shot 0.3% higher against the dollar and 0.4% against the euro after Michael Gove claimed that the door is still ‘ajar’ for a post-Brexit trade agreement between the UK and EU.
Investors were positive over the news that Nancy Pelosi, speaker of the US House of Representatives, setting a 48-hour deadline for a bi-partisan stimulus deal to be agreed upon if a package is to be put in place before the election.
Stocks in Ocado and Next helped bolster the FTSE on Monday’s opening. Shares in property groups including British Land, Land Securities and Rightmove also rose, thanks to the continued boom in the housing market.
In China, stocks were also higher as new figures showed the economy to have grown by 4.9% between July and September.
It is the second consecutive quarter of growth and whilst it is lower than analyst expectations of 5.2%, the figures suggest economic recovery from the pandemic.
Connor Campbell, financial analyst at Spreadex, commented: “The Chinese economy grew by 4.9% in the third quarter, well up from Q2’s 3.2% increase, and Q1’s 6.8% contraction. And though that was notably below the 5.5% forecast, any ill-feeling was tempered by improving industrial production and unemployment rate numbers, and, crucially, a far better than expected retail sales reading.
“That metric – which, after the GDP figure, is the most important for investors – surged from 0.5% in August to 3.3% in September, marking the 2nd positive reading in a row.”
Aeorema Communications swings to loss, shares down
Aeorema Communications shares (LON: AEO) fell almost 5% on Monday as the group swung to a loss for the year ending 30 June 2020.
The AIM-traded live events agency reported a pre-tax loss of £175,043, compared to last year’s profit of £384,483.
Revenues at Aeorema Communications fell from £6.8m to £5.5m.
Amid the pandemic, the group has said they are increasingly focusing on digital and hybrid events.
“We have launched a robust and flexible technology platform to help run virtual events and this has had a very positive response from clients,” said Aeorema Communications.
The company’s cash position remains strong with in excess of £1m. However, given continuing uncertainties, the Board has not recommended the payment of a full-year dividend.
The group’s chief executive said: The development of the Group’s offering to now include strategy and virtual experiences as chargeable avenues has reignited opportunities across the board. Excitingly and off the back of this, we are seeing bigger conversations and a bigger ‘piece of the pie’ with returning and new clients alike.
“I am optimistic that the momentum already seen in Q1 2020-2021 reflects continued positive growth ahead for both operating businesses. A strong finish to a challenging year, we continue to make waves in the UK and globally as Game Changers in purpose, strategy, creative and value,” he added.
In March this year, Aeorema Communications acquired Eventful Ltd, which provides venue sourcing, strategic event planning and management and incentive travel services.
Aeorema Communications shares (LON: AEO) are -1.43% at 20,70 (1047GMT).
Boohoo shares down 13% after PwC steps down
Boohoo shares (LON: BOO) fell after the group released a statement revealing that PricewaterhouseCoopers (PwC) had stepped down.
Shares at the retailer are down over 13% as the group said it was on the search for a new auditor.
Boohoo said in a statement that it “would like to place on record that PwC is still the Group’s auditor at this time. The Group’s Audit Committee has recently launched a competitive tender process for the Group’s audit, and will update shareholders at its conclusion.
“PwC signed an unqualified opinion on the Group’s 2020 Financial Statements and having served as the Group’s auditor since 2014, is not participating in this process,” the statement continued.
It was reported by the Financial Times over the weekend that PwC have stopped working with Boohoo for reputational reasons.
The fashion retailer found itself in a scandal earlier this year when a workers’ rights group flagged serious abuses at Leicester garment factories where employees were paid £3.50 an hour.
Analysts at Jefferies said in a note: “It seems unclear to us which came first, the launch of a competitive tender process by BOO or the indication by PwC of its intention to resign. Regardless, we see no suggestion of any financial impropriety and would be inclined to view this as short-term noise.”
The group has faced many criticisms over its labour practices.
Despite the controversy, Boohoo raised its full-year forecast in September after reporting strong sales over lockdown. Revenue growth targets were upgraded from 25% to 28%-32% for the full year.
Boohoo shares (LON: BOO) are trading -12.33% at 276,68 (1016GMT).
Tristel shares increase on “solid performance”
Tristel shares (LON: TSTL) were up on Monday morning after the group shared results for the year ending 30 June 2020.
The group delivered a “solid performance” with a 21% increase in turnover to £31.7m – up from £26.2m in the year previous.
Overseas sales at the manufacturer of infection prevention and contamination control products grew 32% to £19m whilst dividend per share for the full year increased by 12% to 6.18p.
Operational highlights for the year ending 30 June include progress towards North American market entry, regulatory approval received in India for Tristel Duo for Ultrasound, and an additional 23,000 square foot warehouse and office building completed and occupied.
Pre-tax profit at Tristel before share-based payments surged 27% from £5.6m to £7.1m.
Paul Swinney, Chief Executive of Tristel plc, said: “We delivered another very sound performance in a year turned on its head by COVID-19, the impact of which was a reduction of GBP0.5m in medical device decontamination sales and an increase of GBP2m in hospital surface disinfectant sales.
“During the first quarter of the current financial year we have experienced a gradual recovery in demand for our medical device products in all our markets as hospitals resume levels of non-COVID care. Since February, we have acquired a significant number of hospital customers for our surface disinfectant products. We expect this build-up of our hospital surface disinfection business to continue throughout this and future years. It is a key strategic focus of the Company.
“All our twelve overseas subsidiaries had record years. Together with the contribution of our 35 international distributors, 60% of global revenue was generated outside of the United Kingdom – the highest level ever. Our Malaysian subsidiary started trading in July and we will commence sales in India this year. We have made our first submission for regulatory approval to Health Canada, and we are progressing well with our FDA submission. International expansion will continue to be a key growth driver for the Group.”
Tristel shares (LON: TSTL) opened 3.14% higher and are currently trading +3.01% at 513,00 (0939GMT).
Housing market: Average asking price hits record high
The average asking price for homes in the UK hit a record high in October, according to new figures from Rightmove.
The average price for a home in Britain has increased by 1.1% last month to £323,530. The cost of a house on the website is a 5.5% increase from a year ago – the equivalent of £16,818.
The new data from Rightmove comes amid a booming housing market, where the temporary stamp duty holiday and people wanting more space has led to higher asking prices.
“Prospective buyers are seeing properties selling fast and prices rising as they search for their next home adding to momentum and spurring them on to act quickly,” said Tim Bannister, Rightmove’s director of property data.
“With the number of buyers contacting agents still up by two-thirds on a year ago, there is plenty of fuel left in the tank to drive further activity in the run-up to Christmas and into next year.”
“Agents are commenting that some owners’ price expectations are now getting too optimistic, and not all properties fit the must-have template that buyers are now seeking,” added Bannister.
“Not only is the time left to sell and legally complete before the March 31 stamp duty deadline being eaten away by the calendar, but more time is also needed because the sheer volume of sales is making it take longer for sales that have been agreed to complete the process.
“Sellers and their agents should therefore be wary of being too optimistic on their initial asking price, as whilst activity levels continue to amaze, there are some signs of momentum easing off from these unprecedented levels.”
The high activity in the housing market, however, may be tailing off. September saw the number of sales surge by 70% compared to the same period a year ago but October sales fell to 58%.
in addition to the higher number of sales at higher prices, Rightmove also confirmed in new data that the amount of time it takes to complete a sale has also fallen.
The number of days it took to sell an average home in October was a record 50 days – 12 days faster than the same period a year ago.
China: Economy grows 4.9% in Q3
The latest figures from China have shown the country’s economy to have grown 4.9% between July and September.
It is the second consecutive quarter of growth and whilst it is lower than analyst expectations of 5.2%, the figures suggest economic recovery from the pandemic.
In the first three months of the year, China’s economy fell by 6.8% when the country closed factories and manufacturing plants.
The chief market analyst at CMC Markets UK, Michael Hewson, said: “While Europe appears to be battling a slowing economy, and the prospect of a surging second wave, the Chinese economy finally appears to be gaining traction, after months of sub-par consumer spending.
“This outperformance raised expectations that retail sales in September would finally start to show signs of life after months of weak readings.
“The performance of the Chinese consumer hasn’t been the same since the country came out of lockdown at the end of February, though optimism in the summer started to improve as a result of positive data from the auto sector, with reports from the likes of Daimler, as well as Apple talking of some decent rebounds in their Chinese markets,” added Hewson.
Compared to the same period a year ago, the industrial sector grew by 5.8%, the service sector was up by 4.3%, and the retil sector grew by 0.9%.
Liu Aihua, a spokeswoman for China’s National Bureau of Statistics, commented: “So far we can say consumption has already climbed out from the pandemic’s deep shock. The recovery is underway.”
China’s Shanghai Composite rose slightly before the announcement, however, it fell 0.3% lower afterwards.
British Airways fined record £20m from ICO
British Airways has been issued a £20m fine by the Information Commissioner’s Office (ICO).
The fine has been reduced from £183m as investigators took into account the airline’s financial difficulties amid the pandemic. Despite the reduction, it is still the largest fine issued by the ICO.
The fine is after the 2018 incident where over 400,000 customers’ personal details were compromised by hackers.
Elizabeth Denham, the information commissioner, said: “People entrusted their personal details to BA and BA failed to take adequate measures to keep those details secure.
“Their failure to act was unacceptable and affected hundreds of thousands of people, which may have caused some anxiety and distress as a result. That’s why we have issued BA with a £20 million fine – our biggest to date.
“When organisations take poor decisions around people’s personal data, that can have a real impact on people’s lives. The law now gives us the tools to encourage businesses to make better decisions about data, including investing in up-to-date security,” Denham added.
A spokesman from British Airways said: “We alerted customers as soon as we became aware of the criminal attack on our systems in 2018 and are sorry we fell short of our customers’ expectations.
“We are pleased the ICO recognises that we have made considerable improvements to the security of our systems since the attack and that we fully cooperated with its investigation.”
Shares in British Airways owner IAG (LON: IAG) are steady on Friday, trading at 96,02 (1610GMT).