Just Eat orders surge 58% in Q4

Safiya Bashir
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Just Eat orders surge 58% in Q4

Just Eat orders soared by an impressive 58% in the fourth quarter of 2020.

The takeaway delivery group saw delivery orders in the UK jump by 387% in Q4 compared to the same period in 2019, as people spent the festive period at home amid tighter lockdown restrictions.

Jitse Groen, chief executive of Just Eat Takeaway.com, said: “The fourth quarter of 2020 marks our third consecutive quarter of order growth acceleration. Our investment programme is very successful and has led to significant market share gains in most of our countries.”

“In 2021, we will continue to invest in price leadership, improving our service levels and expanding our offering to restaurants and consumers,” he added.

Global orders at Just Eat increased by 57% and the total Q4 revenues rose over 60% to between €720m (£643m) and €740m (£661m).

Dan Thomas, Senior Analyst at Third Bridge, commented on the results: “Conditions this year were supportive of better operating performance with customers making more frequent orders, larger in size, and at a higher density which potentially means that riders weren’t travelling so far per delivery.

“An expanded delivery capability should enable Just Eat to bring on fresh inventory to the platform, which had heretofore largely relied on restaurants that could fulfil their own orders. Just Eat looks to be taking the fight to large, dense urban centres where Deliveroo and UberEats have typically enjoyed more dominant market positions.”

“Uber Eats and Deliveroo have both been investing in voucher driven customer acquisition, which has an impact on average order profitability over time. A key unknown for 2020 will be the scale with which consumers adopt grocery. All three platforms will be keen to capitalise on the category’s growth during 2020, especially as grocers have struggled to scale their own delivery capabilities. Another important factor will be the performance of the newly acquired Grubhub business in 2021 and beyond,” he added.

In June, the group agreed to buy Grubhub, which means the combined group will be the biggest food delivery company outside of China.

Shares in Just Eat Takeaway.com are -4.53% at 8.658,00 (0904GMT).

Oil hits 11-month high as Brent Crude jumps 1%

Safiya Bashir
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Oil hits 11-month high as Brent Crude jumps 1%

Oil has continued its rally and has hit an 11-month high.

The price of Brent Crude jumped 1% and is over $57 per barrel. The price is expected to pick up as demand surges once the vaccine rolls out and the pandemic comes to an end.

The rally in oil price comes following reports that Saudi Arabia has cut supplies and plans to hold back on production. The kingdom recently pledged that it would cut production by 1m barrels a day in February and March.

Saudi Energy Minister Prince Abdulaziz bin Salman told Bloombeg after an OPEC meeting: ”We have the responsibility of looking after the market, and we will take all necessary actions. I have said this repeatedly and even advised that no one should bet against our resolve. Those who have listened are now bearing the fruits; the others — good luck with their ouching.”

Connor Campbell from SpreadEx commented on this move after announced: “With Saudi Arabia agreeing to a cut in output, oil was able to strike an 11-month high, prompting some rather larger gains for BP, up 4.4%, and Shell, rising 2.5%. And when those giants are in a good mood it tends to bode well for the FTSE – the UK index rose close to 1%, returning to the 10-month peak it fell from on Monday following the announcement of Lockdown 3.0.”

The price of oil also jumped earlier this week, after Goldman Sachs said that it expects Brent prices to reach $65 per barrel by this summer.

Unemployment higher than official figures suggest

Bronte Carvalho
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Unemployment higher than official figures suggest

The governor of the Bank of England, Andrew Bailey, has suggested that the UK’s unemployment rate may actually be higher than official figures currently show as the coronavirus pandemic continues to drive a surge in redundancies.

In a speech to business leaders at the virtual Scottish Chambers of Commerce conference, Bailey acknowledged that the UK economy is in “a very difficult period” as it navigates a third national lockdown.

Echoing comments by Chancellor Rishi Sunak on Monday that the economy “is going to get worse before it gets better”, Bailey added that it would definitely bounce back, but only after the current lockdown ends and the freedoms afforded by mass vaccination begin to materialise.

“[We’re] in a very difficult period at the moment and there’s no question that it’s going to delay, probably, the trajectory,” Bailey said, but maintained that the shape of the UK’s recovery would largely follow the projections made the Bank’s monetary policy committee (MPC) last November.

Commenting on unemployment rates, Bailey estimated that some 2.2 million Brits are currently out of work – about 6.5% – which is noticeably higher than the official figure of 4.9%. However, the latest figure only covers the three months leading up to October 2020, not taking into account the November national lockdown nor the one which began earlier this month.

Bailey said that the figure is already higher despite the extra measures that Sunak has announced – including a further £4.5bn last week for the hospitality sector – stating: “Our best guess nationwide is probably it’s around 6.5%”.

The Bank’s MPC is due to meet early next month to discuss how the central bank can help to boost the economy during the current lockdown, including whether or not interest rates should be cut to below zero, but Bailey has already said that a cut from the current all-time low of 0.1% could make the situation worse.

He added there were “lots of issues” with cutting interest rates into negative territory and that the move could hurt banks, despite the fact that Japan and parts of the eurozone have already initiated a similar policy.

“In simple economics and maths terms, there is nothing to stop it at all,” Bailey said, “however there are a lot of issues with it”.

Contrasting with Bailey’s official stance, on Monday one of the MPC’s nine committee members – Silvana Tenreyo – said she believed negative rates would benefit the UK economy and help it make a faster recovery.

Consumer spending down 2.3% in December

Bronte Carvalho
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Consumer spending down 2.3% in December

Consumer spending declined 2.3% year-on-year in December – the largest decline since June 2020 – as tightened coronavirus restrictions resumed their chokehold on UK retailers and hospitality.

Figures collated from a report by Barclaycard revealed that the hospitality sector was particularly hard hit, with spending at bars and pubs down by 71.4% and restaurants by 65.4%. New measures brought in towards the end of December saw millions of Brits cancel their festive social plans, with bars and pubs suffering from curbs on gatherings and restaurants forced to return to takeaway-only services in the run up to the New Year.

Online retail, on the other hand, increased by 52.2% as Brits shopped from home, continuing the ongoing trend towards online shopping which saw retailers enjoy a surge in online sales during the Christmas period. Specialist retailers (such as toy shops, jewellers and gift shops) and clothing all enjoyed “significant growth online”, rising 61.9% and 34.0% respectively, as shoppers turned to online stores for last-minute gifts and pre-Christmas sales.

Brits also continued to make the most of their time indoors, purchasing new boxsets, downloading new video games and ordering takeaways, with eating and drinking up 81.0% and digital content and subscriptions up 41.4% amid “strong online increases”.

Local shops continued to perform well, with specialist food and drink retailers such as butchers, bakeries and off-licenses recording a 43.7% increase, as more than half (54%) of Brits say they will “do what they can to support” local businesses during 2021.

However, tighter restrictions on how and when people can leave their homes towards the end of the year saw in-store retail drop 8.3%, with department stores and clothing seeing declines of 15.2% and 7.3% respectively. Airlines and travel agents, however, saw slight improvements in consumer interest as vaccine optimism continues to buoy hopes of a sustained recovery.

While overall travel contracted by 63.8%, there was an “improvement” in spending across some categories in the sector. Airlines saw a less steep decline of 58.1% in December compared to the previous month’s decline of 73.6%. Additionally, travel agents recorded a smaller drop this month of 72.3%, as one in five Brits (22%) say they are “already making plans for a big holiday” at some point in 2021, fuelling optimism for a potential recovery later in the year.

While Brits’ confidence in the economy remains low at just 22%, confidence in household finances is currently at 68%, with almost a quarter of Brits “feeling more confident about spending on non-essential items than they have been for a long time”. Support provided by Chancellor Rishi Sunak’s furlough scheme – extended to at least April 2021 – has no doubt contributed to this faith.

Out of those feeling more optimistic about their finances, 40% say that this is because they have “saved more than normal” recently.

Raheel Ahmed, Head of Consumer Products at Barclaycard, commented:

“Changing restrictions continue to have an impact on our spending habits – which was particularly acute across the high-street and hospitality sectors in December, with restaurants, pubs and bars hardest hit during a low-key festive season in the majority of the UK. As a result of further restrictions, online grocery spend surged and fuel declined as the majority cancelled their plans and stayed home for the holidays.

“Additionally, many still continued to support their local shops where possible, spending more time in their local community. Small businesses have continued to remain agile to these changing consumer habits – with many going online for the first time. From dog walking services to subscriptions of weekly meal kits, small businesses are exploring new ways to reach their customer base.  

“With the latest government guidance to stay at home and a vaccine roll-out on the horizon, we are all hopeful of a brighter and more prosperous year ahead. Yet for now, the reality of lockdown life remains and it’s once more a hugely challenging time for high-street retailers as well as the hospitality, leisure and travel industries”.

BlueRock Diamonds shares surge on Q4 update

Bronte Carvalho
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BlueRock Diamonds shares surge on Q4 update

Shares at AIM-listed diamond producers BlueRock Diamonds (LON:BRD) have surged almost 7% after the company released an optimistic Q4 and FY production update, citing “strong results in a challenging year” as its processed tonnes increased by 25% year-on-year.

Despite its mine being closed due to COVID-19 for a period of 50 days starting on 24 March 2020, BlueRock’s total processed tonnes still exceeded the year prior, and the firm estimated the increase over the year would have been approximately 45% “assuming a constant run rate during the period of closure”.

Tonnes processed during Q4 were “lower than anticipated” due to abnormally high and early rains in late 2020 (238mm in December 2020 compared with 70mm in December 2019) at its Kareevlei Diamond Mine (‘Kareevlei’) in the Kimberley region of South Africa, but production was still higher than the year earlier and is nonetheless a “remarkable achievement in a very difficult year”.

BlueRock is expecting to open a new plant in the near future, and once production is completed, processing is expected to be “significantly less impacted” by the rainy season.

The firm’s carat production was up 10% year-on-year, with carat sales also growing on the back of increased production, although the value per carat of USD295 was “around the bottom end of the Company’s guidance for 2020 and 26% down on FY 2019, due largely to the impact of COVID-19 on the marketing chain and the reduced incidence of higher value diamonds in 2020 compared with 2019”.

The latter, BlueRock explained, is partly due to the development of the the Kareevlei’s Main Pit, which required a “large tonnage of higher level and near edge ore to be mined” as the company continues to prepare for the expansion of its operations in 2021.

BlueRock estimates that the like-for-like reduction in pricing is approximately 10 to 15%, in what the firm described as a “decent result in what was a very difficult market environment”. In particular, BlueRock cited an increased reliance on “private sales to a limited number of buyers” as the tender system was not in operation for much of the year.

Executive Chairman, Mike Houston, commented on BlueRock’s update:

“Given the problems of operating in the COVID-19 world, I am very encouraged by our outturn for Q4 2020 and the full year as the management team has delivered in the areas that it can control with production tonnes and sales carats significantly up on the 2019 figures.

“The fall in the value per carat is unfortunate as it has reduced the impact of the improved production output, but we are now seeing signs of recovery in general pricing and early signs of an increasing incidence of the high value stones.

“A major focus for much of 2020 has been the preparation and development of our exciting expansion project, which was initially delayed by the COVID-19 lockdown and then the ongoing impact it had on the global supply chain.

“The plan to transition to the new operation by running both plants during Q1 will minimise the disruption on production in early 2021. Despite having to deal with the ongoing exceptionally poor weather conditions and, weather permitting, the project is still expected to be fully commissioned by the end of Q1 but may push into early Q2. Our guidance for 2021 remains at 850,000 to 1,000,000 tonnes and 34,000 to 46,000 carats”.

BlueRock’s shares bounced on the news, up 6.90% to 62.00p at midday on Tuesday.

92% of businesses say vaccines are “golden ticket” to recovery

Bronte Carvalho
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92% of businesses say vaccines are “golden ticket” to recovery

Vaccines are increasingly being seen as the key to a sustained recovery for UK businesses.

New research has revealed that 92% of owners of independent public-facing companies across the retail, hospitality and travel sectors believe that vaccinating British consumers is the “golden ticket” to a post-pandemic recovery, and are reportedly considering inviting back the customers who can prove their vaccination status “as soon as possible” as firms battle to save their businesses.

The research was conducted across 500 businesses owners between 19-21 December 2020 by myGP – the UK’s largest independent GP booking and healthcare management app – which has reported being “inundated with enquiries from small business owners” after announcing its plans to provide English customers with a “simple, clear means of communicating their verified vaccination status, via their smartphone”. 

Currently planned for release next month, myGP has developed a “TICKet” to allow businesses whose “viability depends upon operating at capacity” – such as the retail, leisure, the arts and hospitality sectors, which have widely struggled to operate during the pandemic – the ability to open either full or part-time to vaccinated individuals, without the need to observe social distancing rules.

In addition, myGP has stated that its “TICKet” technology will help to “reduce the administrative burden” on GPs, who will likely be “busy with requests for verification of vaccination status as people begin to return to everyday life around the country”.

Since the start of the pandemic, myGP has regularly undertaken patient research to “gauge feelings and intentions regarding their health, access to primary care, and their intentions regarding the Covid-19 vaccine”.

In December last year, myGP asked 2,000 adults if they intended to receive a Covid-19 vaccine, of which 31% said no. However, out of this group, 23% said they “could be swayed” to have the vaccine if it meant they could “attend live events and other activities” without strict social distancing measures in place.

While the nationwide Covid-19 vaccination drive continues, it is still expected to take some time for life to return to any semblance of normality, and businesses are increasingly eager to adopt so-called “vaccine passports” which would allow inoculated customers and staff to bypass the current lockdown restrictions on the premise of reduced risk of infection.

Despite last month’s comments by Michael Gove that there are currently “no plans” to introduce vaccine passports for places such as pubs and restaurants, interest in implementing similar schemes is rapidly growing. Last week, Denmark announced it is in the process of developing a digital vaccine passport to enable safer and more efficient travel, with the Health Ministry stating “it is expected that there may be requirements from other countries to present vaccine documentation upon entry”.

Invesco launches new Japan-focused ‘ESG Momentum’ ETFs

UK Investor Magazine
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Invesco launches new Japan-focused ‘ESG Momentum’ ETFs

Invesco have launched a new Japan and Asia Pacific focussed ETFs to add to their existing suite of ESG ETFs. The ETF will track a customised versions of MSCI ESG indices in the same way Invesco’s existing ESG Equity ETFs track indices in Europe and the US.

Invesco builds their ESG ETFs by taking MSCI Indices and removing companies involved in controversial, conventional or nuclear weapons, civilian firearms, oil sands, thermal coal, tobacco or recreational cannabis. Companies that have had consistently poor ESG ratings are also removed in a careful balancing act between improving the ESG credentials of the ETF portfolios whilst tracking the originals MSCI Index as closely as possible.

“Different investors will often vary in their objectives, and this is most evident in the ESG space. Generally speaking, the more you exclude from an index, the more likely the performance will deviate from the base index. While that is acceptable for some investors, it’s not for others,” said Chris Mellor, Head of EMEA ETF Equity and Commodity Product Management at Invesco.

“Many want to reduce their portfolio’s carbon footprint and improve other ESG characteristics but at the same time maintain their overall risk and expected returns. We designed these ETFs to provide investors with materially significant ESG improvements for their core equity exposure.”

ESG ETFs

Invesco launch their new range of Japan and Asia Pacific focused ETFs after a 2020 that saw ESG ETFs flows soar to record levels and produce some of the best returns for investors.

“With 60% of all equity ETF flows last year going into funds with an ESG objective, demand is clearly strong. We believe ESG will be embedded even more broadly into portfolios with investors no longer needing to sacrifice their investment objectives to follow their principles'” said Gary Buxton, Head of EMEA ETFs and Indexed Strategies at Invesco.

“Our suite of MSCI ESG Universal ETFs offers investors low-cost tools to construct diversified equity portfolios. We will continue building out our ESG offering in response to market opportunities and driven by investor demand.”

OnePlanetCapital launches fund to invest in businesses tackling climate change

Safiya Bashir
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OnePlanetCapital launches fund to invest in businesses tackling climate change

OnePlanetCapital has revealed plans to launch a specialist sustainability EIS Fund to invest in businesses tackling climate change.

The sustainably driven investment house announced the plans as Prince Charles urges firms to do more to protect the planet. The fund is focused on climate change, the environment and consumer sustainability.

OnePlanetCapital was founded in 2019 by Matthew Jellicoe and Ed Stevens, together with Tony Flanagan of Wilton Group.

The EIS fund is underpinned by a strong ESG framework looking at environmental impact, social purpose and corporate governance in its investee companies. It will screen for both positive and negative factors in all companies.

Why is the sustainability EIS Fund so important? New data has shown that the global economy must slash its carbon intensity five times faster than current levels if the world will keep global temperature increases to the 1.5C limit that were set out by the Paris Agreement.

“By unlocking the positive impact of early-stage companies as they grow, an investment into the fund is not only an investment into our collective future but also a growth opportunity as the world pivots to a low carbon economy.”

Matthew Jellicoe, Co-founder of OnePlanetCapital, commented: “In 2019 the UK became the first major economy to pass laws to end its contribution to global warming by 2050. This target requires a paradigm shift in the UK economy and enormous amounts of investment into the businesses of the future.

“Unprecedented change is required to our global economy. We are on the verge of a green industrial revolution and the world is waking up to the substantial changes needed to tackle the climate issues we face. This has been amplified by numerous lockdowns over the last 11 months which have underlined the fragility of the world as we know it. Decarbonisation is now being backed by all major developed economies including the US and China and huge amounts are being invested in green energy, green technology and services. Consumers are also becoming increasingly driven by sustainability and becoming more aware of a business’ green and social purpose credentials. 

“It is now clear that investment performance does not need to be sacrificed in order to tackle the environmental problems of the day, with UK sustainable funds likely to outperform the market over the short, medium and long term.

“We founded OnePlanetCapital to be more than an investment house. We’re part of a growing, global movement, and are focused on unlocking the positive impact of early-stage companies as they grow. As a team we’re spearheading the green industrial revolution and disrupting the status quo to create a positive global impact.”

Deliveroo to expand to 100 new UK locations

Safiya Bashir
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Deliveroo to expand to 100 new UK locations

Deliveroo is expanding to 100 new cities and towns across the UK.

Following strong demand over the past year, the food delivery service will lead to an additional 4m customers available for the app.

Deliveroo already operates in 200 locations. The full list of expansion has not yet been shared, however, on the list is East Kilbride, King’s Lynn and Scarborough.

Over the past, thousands of new restaurants were added to the app. Major supermarkets including Aldi, Morrisons and Sainsbury’s were also added in order to deliver groceries to people who are self-isolating.

Starting from the convenience store in Hammersmith, Sainsbury’s shoppers are able to purchase up to order from more than 1,000 products through the Deliveroo app and have them delivered within 20 minutes.

Ajay Lakhwani, who is the vice president of new business at Deliveroo, said: “Deliveroo’s on-demand grocery partnerships have proven vital for so many people during this difficult period, allowing families to get the food and household items they need and want quickly.”

Carlo Mocci, Deliveroo’s chief business officer for UK and Ireland, commented: “We are pleased to announce that we expect to launch in around 100 new towns and cities across the UK and expand our reach in existing areas throughout 2021 with the aim of reaching almost two-thirds of the population.

“With further lockdown measures now in place across the UK, we want to do everything possible to help households get the food they need and want and play our role to make sure families across the country have a wide selection of amazing food, drink and household products to order in as little as 30 minutes.”

Johnson Matthey shares up on new CFO

Bronte Carvalho
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Johnson Matthey shares up on new CFO

Shares at British chemicals and sustainable technology firm Johnson Matthey plc (LON:JMAT) have risen more than 1% on the back of the announcement that new Chief Financial Officer Stephen Oxley will join the board on 1 April, with Karen Hayzen-Smith stepping down as interim CFO and continuing in her role as Group Financial Controller.

Oxley joins Johnson Matthey from KPMG, where he is currently a partner, and boasts experience working with a variety of FTSE 100 and private companies in audit and advisor roles across sectors including healthcare, natural resources, and industrials.

He has also been responsible for leading KPMG’s correspondence with the UK investor community on the firm’s performance, climate change, and Environment, Social and Governance (ESG) matters.

A qualified chartered accountant, Oxley has worked at KPMG for almost 30 years, and has been welcomed by Johnson Matthey CEO Robert MacLeod as a valuable addition as the company strives to meet its climate-conscious targets:

“I am extremely pleased that Stephen will join JM in April, and I am looking forward to working with him. I would also like to thank Karen for her valuable contributions and ongoing support over the past few months.

“Stephen’s extensive experience in working with large global companies on major strategic programmes will enable him to make an immediate contribution to JM as we progress our transformation and deliver our growth opportunities to create a cleaner, healthier world”.

Oxley himself added: “I am delighted to be joining JM at such an exciting time. The company’s sustainable technologies are right at the heart of tackling climate change and I am looking forward to working with Robert and the rest of the executive team to deliver the strategy and create value for all our stakeholders”.

Shares at Johnson Matthey are up 1.25% to 2679.00p at 09:40, following a turbulent year which has seen its price dip 10.18% over the past 12 months. Recent gains, however, have seen shares rally 8.71% over the last few weeks. The company has a modest dividend yield of 2.08% and a P/E ratio of 13.28.

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