Paperchase nears administration amid “unbearable strain”

Safiya Bashir
-
0
Paperchase nears administration amid “unbearable strain”

Paperchase is on the brink of administration as the majority of stores were forced to close over the Christmas period.

The retailer, which has 127 stores and 1,500 employees, has filed a notice to appoint administrators from PwC. Whilst the group said that it had strong online sales, it was not “immune” to store closures over lockdown.

Normally 40% of sales come from trading in November and December.

Paperchase underwent a company voluntary arrangement (CVA) in March 2019 when it tried to cut costs.

A spokesman said: “The cumulative effects of lockdown 1.0, lockdown 2.0 – at the start of the Christmas shopping period – and now the current restrictions have put unbearable strain on retail businesses across the country.

“Paperchase is not immune despite our strong online trading. Out of lockdown we’ve traded well, but as the country faces further restrictions for some months to come, we have to find a sustainable future for Paperchase.

“We are working hard to find that solution and this NOI (Notice of Intent to appoint administrators) is a necessary part of this work. This is not the situation we wanted to be in. Our team has been fantastic throughout this year and we cannot thank them enough for their support.”

The news on Paperchase comes as Rishi Sunak announced new grants for businesses. The grants will be worth around £4bn and are expected to benefit over 600,000 business properties across the UK.

Sunak said: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.

“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring. This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

Sunak announces new government grants

Safiya Bashir
-
0
Sunak announces new government grants

The government has announced new grants for businesses in retail, hospitality and leisure.

The news comes as the UK enters a new lockdown and businesses will have to remain closed until mid-February. The grants will be worth around £4bn and are expected to benefit over 600,000 business properties across the UK.

Chancellor Rishi Sunak said: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.

“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring.

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

In addition to the business grants, the government will also give £594m to local councils to assist businesses impacted by the lockdown that are not eligible for the new payments.

Adam Marshall, the director-general of the British Chambers of Commerce, said: “While this immediate cash flow support for business is welcome, it is not going to be enough to save many firms. We need to see a clear support package for the whole of 2021, not just another incremental intervention.

“The government must move away from this drip-feed approach and set out a long-term plan that allows all businesses of all shapes and sizes to plan, and ultimately survive.”

Roger Barker, the director of policy at the Institute of Directors, said: “This new grant package is welcome, and will go some way to reassuring the worst affected businesses.

“We are particularly pleased the Treasury has taken on board our recommendation to increase the discretionary local authority grant fund. This policy has helped to reach those who haven’t been able to access other support. The government should be prepared to top up the fund if necessary.

“The chancellor must remain wary of a spring cliff-edge in business support as the furlough scheme and other support measures unwind.”

England’s lockdown rules will be reviewed in mid-February.

More employees are expected to be put on furlough under the new restrictions. The furlough scheme is now running until April.

Morrisons shares rise on strong sales

Safiya Bashir
-
0
Morrisons shares rise on strong sales

Morrisons shares (LON: MRW) opened higher on Tuesday after the group posted an 8.1% rise in like-for-like sales in the 22 weeks to the 3 January.

Including fuel, the rise in sales was 1.9%. Strong demand over the festive period saw online sales triple as sales in salmon increased by 40%, champagne sales were up 64% and mince pies sales grew by 14%.

Despite the rise in sales, Morrisons has said that profits are likely to be hit the new lockdown measures. Total Covid-related costs this year are expected to reach £280m.

Full-year profit forecast is between £420m and £440m, which remains in line with expectations despite the “extremely unpredictable current circumstances”.

Chief executive David Potts said: “The pandemic has had a severe effect on people and communities around Britain for nine months now but it has been especially hard at Christmas time.

“I’m very pleased with the way the Morrisons team has helped our customers across the nation enjoy their Christmas in the best way they could — with safe shopping, great service and outstanding stores even in the most difficult circumstances.”

Morrisons has said that it will offer its car parks to host vaccination centres. Three car parks would be hosting vaccinations this week and the supermarket will offer another 47 locations to help with the rollout.

Morrisons shares (LON: MRW) are trading -0.25% at 180.65 (1132GMT).

Next shares rise on strong Christmas sales

Safiya Bashir
-
0
Next shares rise on strong Christmas sales

Next shares soared on Tuesday after the group posted a surge in online sales.

Profits from better-than-expected sales over the Christmas period, however, are likely to be offset by losses faced over the next lockdown.

In the nine weeks to 26 December, online sales were up by 36%. In-store sales within the UK tumbled by 43%. Total sales were 1.1% lower than the same period in 2019 – this is much better than the expected 8% fall that was expected by the retailer.

Analysts have said that they’re confident of Next’s performance after the strong Christmas sales.

Richard Hunter, Head of Markets at Interactive investor, said: “Next continues to wade through treacle, with further online growth being offset by another blow to its retail business. Even so, the group is continuing to navigate a difficult time with aplomb… With its famed expertise in financial management, Next is a prime example of scenario planning and tends also to lean on the side of caution.”

Next is also facing delivery disruptions due to supply chain traffic from the Far East. Chief executive, Simon Wolfson has said that stock levels are expected to “return to more normal levels by the end of March”.

“At present, many of our deliveries are running two to three weeks late and we expect this level of disruption to continue into the new year. Our stock levels are currently down,” said the retailer.

The retailer has predicted profits of £670m for the next year.

Next shares (LON: NXT) are trading +8.42% at 7,494.00.

FTSE rises despite national lockdown

Safiya Bashir
-
0
FTSE rises despite national lockdown

The FTSE 100 rose on Tuesday morning despite the UK entering another national lockdown.

The blue-chip index was up almost 0.5% to 6,605 points. Top risers this morning was retailer Next, where shares shot up following a positive trading update.

Fallers this morning included British Land (-2.3%), Land Securities (-2.2%), AB Foods (-1.6%), Polymetal International (-1.8%) and IAG (-1.7%)

Across Europe, shares were down. The FTSE 250 is down 0.4%, Germany’s DAX fell 0.3%, France’s CAC 40 opened 0.5% lower and Spain’s IBEX is down 0.6%.

Commenting on this morning’s markets, Conner Campbell from SpreadEx said: “At points on Monday, the UK index was up 2.9%, galloping to levels last seen at the start of March 2020 following the Oxford/AstraZeneca vaccine rollout. Then it was shot down by the announcement Boris Johnson would be addressing the nation to outline the latest set of restrictions.

“It shows how keen investors were to start 2021 on the front foot that the FTSE still managed to end Monday up 1.7% despite a fresh 6-week lockdown (with the pound admittedly taking much of the flak).

“There was evidence of such again this Tuesday. While the rest of Europe started essentially flat – the DAX down 0.1%, the CAC up the same amount – the FTSE rose 0.5%, desperate to keep above 6,600. Sterling held up as well as it could, nudging 0.1% higher against the dollar but remaining unchanged against the euro. Not great, given the extent of yesterday’s fall against both rival currencies.

“How the index and currency perform throughout the rest of the day may well come down to what additional support Chancellor Rishi Sunak announces this Tuesday, ideally at least a return to the kind of aid offered during Lockdown 1.0,” he added.

Yesterday the FTSE started 2021 with strength and outperformed its European rivals to end the day up 1.7 per cent.

FTSE 100 kicks off 2021 on the front foot

UK Investor Magazine
-
0
FTSE 100 kicks off 2021 on the front foot

The FTSE 100 started 2021 with strong gains on Monday as London’s leading index jumping sharply in early trade before easing off into the afternoon.

Analyst pointed to enthusiasm surrounding Brexit as reason for the jump as markets continued to position for the consequence of the UK and EU reaching a trade deal.

“The FTSE 100 is kicking off 2021 in style, with the headline UK market enjoying an impressive 3% gain in early trade. With Brexit finally here, there are precious few signs of initial difficulties allaying some of the fears over what the eventual exit could look like,” said Joshua Mahony, Senior Market Analyst at IG.

The optimism was also evident in markets across the Atlantic as US indices headed towards all time highs in their first trading session of the season.

“A lot of people that may have missed out or sold at the wrong time last year are now saying I want to get in. The coast is clear, the vaccines are coming, and they want to start to participate in the market,” said Thomas Hayes, managing member at Great Hill Capital LLC to Reuters.

FTSE 100 shrugs of higher COVID-19 cases

The FTSE 100 rose despite record UK COVID-19 cases announced over the weekend and speculation the entire UK would once again be plunged into a lockdown.

However, with vaccine rollouts on the horizon, any economic activity is likely to confined to one or two months before the global economy can resume a form of normalcy.

Gaming M&A

Ladbrokes owner, Entain, was the FTSE 100’s top riser after the group rebuffed at takeover approach from US Casino operator MGM.

MGM proposed a £8bn takeover but the bid was rejected by Entain who said it undervalued the company.

“Entain Group understandably leads the way after a rejected takeover bid from MGM Resorts highlighted the potential for a new enhanced offer in the near future,” said Joshua Mahony, Senior Market Analyst at IG.

“With the US providing the new frontier for gambling websites, it is clear that the sector could enjoy a period of substantial growth if they successfully tap into this newly-deregulated market.”

Three UK-focused fund picks for 2021

UK Investor Magazine
-
0
Three UK-focused fund picks for 2021

iShares UK Dividend ETF

In an era of diminished dividend pay-outs due to the COVID-19 pandemic, the iShares UK Dividend ETF (LON:IUKD) offers a diversified approach to high yielding UK companies. 

With a distribution yield of 4%, this ETF provides investors with a basket of income shares with a higher yield than peer funds that track the FTSE 100 index.

For example, the iShares Core FTSE 100 ETF now yields just 3%.

iShares UK Dividend ETF achieves a higher yield than the broader benchmark by selecting the top highest yielding 50 companies from the FTSE 350, excluding investment trusts.

IUKD TOP TEN HOLDINGS %
MICRO FOCUS INTERNATIONAL PLC5.02
AVIVA4.08
IMPERIAL BRANDS3.81
PERSIMMON 3.76
EVRAZ3.40
LEGAL AND GENERAL3.27
BRITISH AMERICAN TOBACCO2.81
VODAFONE2.71
VISTRY GROUP2.67
STANDARD LIFE ABERDEEN2.45
Data as at 30th November, iShares

iShares UK Dividend ETF is listed on multiple exchanges, including the London Stock Exchange, and has a Total Expense Ratio of 0.4%.

Triple Point Social Housing REIT

The Triple Point Social Housing REIT (LON:SOHO) will provide investors with the assurance their investments are making a positive impact in 2021, whilst yielding 4.7% (share price of 111p).

The Triple Point Social Housing REIT has a portfolio of specialised social housing that accommodates some of the most vulnerable people in the UK.

As of October 2020, Triple Point operated 404 properties in the UK which are specially adapted with features such as widened hallways and full wet rooms to meet the needs of their residents.

The social housing market is a very different proposition to commercial or residential property due to the government funding of rental payments.

Demonstrating the resilience of the social housing sector, Triple Points defaults rates far outperformed that of the private residential and commercial sectors through the pandemic. 

In fact, when Triple Point Investment Director, Freddie Cowper-Coles, presented at the UK Investor Magazine Virtual Conference in October 2020, he highlighted the fund had collected 100% of their rents during the first half of 2020, despite COVID-19 ravaging the residential and commercial property sectors.

The trust’s resilience was reflected in a strong share price in 2020 that helped a Total Return of 25%.

The Triple Point Social Housing fund is structured as a Real Estate Investment Trust and trades on the LSE under the ticker LON:SOHO.

Artemis Alpha Trust 

The attractiveness of the Artemis Alpha Trust (LON:ATS) stems from a portfolio highly weighted to the UK consumer with 45.5% of the portfolio allocated to consumer services, and 24.2% to consumer goods. 

The UK economic recovery will likely be driven by increased consumption as the economy reopens post-COVID, and something resembling normal life resumes.

The top ten holdings are deftly balanced between those companies that have benefitted directly from the restrictions imposed by the pandemic, and those set the benefit from a broad economic reopening. 

Holdings such as Just Eat Takeaway, Hornby and Plus 500 are perfect examples of companies that have harnessed and benefitted from the changes to consumer behaviour during COVID-19.

In the third quarter of 2020, Just Eat processed 151 million orders globally, up 43% from the year prior whilst model-maker Hornby enjoyed a 33% jump in first-half sales as hobbyist spent more sore time in the home. Hornby investors will look forward to second half sales results – up to 60% of revenue is typically recorded in the period encompassing the festive season.

Looking to those ripe for recovery as the UK economy reopens, easyJet and Redrow exhibit cyclical characteristics in sectors that have been heavily hit by the pandemic and now presents themselves as value propositions.

Trading at 394p, the Artemis Alpha share price has a 10.9% discount to NAV.

National World acquires local newspaper titles

Andrew Hore
-
0
National World acquires local newspaper titles

Standard list shell National World (LON: NWOR) is acquiring JPI Media Publishing, which is the core of the previously quoted Johnston Press. It appears to have a bargain on its hands if it can reconfigure the business and reduce the dependence on revenues from the printed editions.
At the end of 2018, Johnston Press was placed in administration and the business was acquired by its bondholders.
National World is paying £10.2m and no debt is being taken on. JPI Media Publishing is the third largest local news group in the UK and includes titles, such as The Scotsman, Yorkshire Post, Portsmouth N...

IQGeo set for strong progress in 2021

Andrew Hore
-
0
IQGeo set for strong progress in 2021

Geospatial software provider IQGeo (LON: IQG) had a strong end to 2020 acquiring a business that fits well with the core business, winning new contracts and selling a minority stake in a former subsidiary.
Analysis and storage software provider OSPinsight was acquired for an initial $5.6m in cash and $1.1m in shares, with a further $2.2m deferred. A placing at 78p a share raised £5.3m to help pay the cash portion.
Both businesses help telecoms and utilities companies to plan and maintain their network infrastructure.
IQGeo is still losing money and that is likely to continue until 2023, but th...

Red Rock Resources swings to £5.2m profit

Safiya Bashir
-
0
Red Rock Resources swings to £5.2m profit

Red Rock Resources shares fell on Thursday after the group shared Final Audited Results for the year ended 30 June 2020.

The group reported a pre-tax profit of £5.2m, which was up from the reported loss of £1.7m in the previous year.

Red Rock said that they had mitigated the impacts of the pandemic and saw a growth in profits and received £419,000 of dividend income from its investments over the year.

“There is much that is uncertain in the world outlook. China has become so big a demand factor for many commodities, iron ore and copper included, that sharp recent price increases have been seen in these commodities. Chinese steel production for the first nine months of the year has run at 6.8% above 2019 levels,” said the group in a statement.

“Demand for copper from China also reflects the recovering economy, at a time when South American production has been interrupted by the effects of the pandemic.”

“Longer term, the forecast for copper demand is for 2% growth p.a., and copper investment to replace consumed reserves has been insufficient in recent years.

“One may also wonder whether, if the world is to be converted to alternative energy and electric cars, the implications for demand for the world’s best conductor have been fully thought through and reflected in projected prices.

“Not only do electric cars contain more copper, but the transmission network necessary to take the electricity to the point of use, substituting for all the petrol tankers in the world, will be far greater than that currently existing. Moreover, alternative power generation technologies require large amounts of copper to mitigate their inherent inefficiencies,” it added in a statement.

Red Rock Resources shares are trading -3.18% at 1.06 (1300GMT).

1...1,0711,0721,073...1,826Page 1,072 of 1,826