Micro Focus resumes dividend payment

Liam Roche
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Micro Focus resumes dividend payment

Micro Focus one year through three-year turnaround plan

Micro Focus, the FTSE 250 listed IT company, has resumed its dividend payment following “solid progress” towards its three-year turnaround plan.

The company reported a fall in earnings of $1.2bn for the year ending in October 2020, which was towards the upper end of expectations. This figure is down from the $1.4bn fall in earnings reported the year before. 

Total revenue dropped by 10% to $3bn.

On account of a better than expected cash performance, Micro Focus decided to reinstate its dividend to 15.5p per share. 

In March 2020 the company decided not to pay out a dividend in order to protect itself against the oncoming pandemic. This caused shares in the company to plunge by 15.6% to 340p. 

Upon today’s news of the dividend being resumed, the Micro Focus share price jumped up by over 4% to over 517p. 

Stephen Murdoch, the chief executive of Micro Focus, praised the company’s performance over the year, while reaffirming that the company is only one year into its turnaround plan. 

“We are now 12 months into our three-year turnaround plan and whilst there remains a great deal to do, we have made solid progress in delivery of our key strategic objectives and improvements in operational effectiveness. 

We continue to work closely with our customers around the world enabling them to build on their existing IT investments with the latest innovations to help accelerate their digital transformation programmes,” Murdoch said.

Micro Focus’ most recent dividend payment of over 46p per share came in September 2019.

Bellway builds record number of homes

Liam Roche
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Bellway builds record number of homes

Bellway revenue up by 12%

The FTSE 250 housebuilder Bellway built a record number of homes in the first half of the year, with its output up 6.3% to 5,321 new homes. 

The company’s revenue also shot up by more than 12% to £1.72bn over the same period, up from £1.52bn the year before. 

Bellway’s trading update outlined a “robust forward sales position” of 5,889 homes valued at £1.63bn. This figure is up from £1.16bn a year prior.

Bellway shares opened over 3% higher on Tuesday morning as the company’s positive trading update was reflected on the FTSE 250. 

John Honeyman, chief executive of Bellway, put the company’s strong performance during the first half of the year down to strong underlying demand, despite a challenging economic environment. 

“While uncertainty remains in the wider economy, the underlying demand for quality new homes remains robust and we have therefore made further, disciplined investments in attractive land opportunities,” said Honeyman. 

Honeyman’s outlook for the second half of the year was positive on account of Bellway’s forward order book numbers. 

“Looking forward, we have a sizable forward order book, which provides a solid platform for the second half of the financial year and beyond. In addition, our balance sheet is strong, with significant cash resources and this provides the Group with the necessary resilience and flexibility to respond positively to the evolving economic environment,” Honeyman said.

Bellway’s update comes on the back of news emerging that house prices in the UK fell in January for the first time in seven months as the government discontinued its stamp duty relief.

Ocado sales jump 32.7% as lockdowns drive shoppers online

Liam Roche
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Ocado sales jump 32.7% as lockdowns drive shoppers online

Landscape for shopping is changing says Ocado CEO

Ocado improved its sales by 32.7% over 12 months driven by a mass exodus to online shopping during the pandemic according to the company.

Following a surge in demand for Ocado’s food delivery service, the company also narrowed its losses from £214.5m to £44m.  

Despite positive financial results, Ocado’s share price dropped by over 3% on Tuesday’s early morning trade to 2,630p per share. 

Ocado’s share price has come under pressure recently over fears of taxes imposed on e-commerce companies that experienced increased demand as a direct result of lockdowns.

Tim Steiner, chief executive of Ocado, put the company’s results down to the pandemic creating demand for the online retailer. 

“The rapid acceleration of many pre-existing trends in business and society has been a feature of the Covid-19 crisis and the dramatic channel shift in grocery is a clear example of this,” Steiner said.

Although supermarkets have stayed open throughout the pandemic, many consumers have chosen to get their shopping delivered. 

Ross Hindle, analyst at Third Bridge, believes the lockdowns have worked to Ocado’s advantage. 

“Ocado couldn’t have asked for better trading conditions, as customers clamoured to secure online shopping slots like never before. The question now is how much of that growth will stick, and how much will slip away as lockdowns ease,” said Hindle.

A report found that the number of UK shoppers who do their weekly shop online doubled since the first coronavirus lockdown. 

Steiner expected a continuation of this trend beyond lockdowns as consumer habits change permanently. 

“The landscape for food retailing is changing, for good. As we look ahead to a post-vaccine world and a return to a new normality, Ocado Group is very well placed to enable our grocery partners,” said Steiner.

Bitcoin over $44,000 as Tesla buys $1.5bn worth

Liam Roche
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Bitcoin over $44,000 as Tesla buys $1.5bn worth

Tesla will also accept payments in bitcoin

Tesla announced on Monday that the company has purchased $1.5bn worth of bitcoin. 

Tesla has said it established its bitcoin holding for “more flexibility to further diversify and maximize returns on our cash,” in a filing with the Securities and Exchange Commission. 

Furthermore, Tesla will be accepting payments in the form of bitcoin in exchange for its products.

The revelation has caused a surge in the price of the digital currency to a record high of $44,100.  

Elon Musk has spoken out in favour of bitcoin on numerous occasions via his social media platforms. At the end of January the Tesla CEO caused the price of the crypto currency to jump up to $37,000 when he changed his Twitter bio to “bitcoin”. 

Analysts are viewing the move by Tesla as a potential watershed moment in bitcoin’s journey. 

“I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move,” said Eric Turner, vice president of market intelligence at cryptocurrency research and data firm Messari. 

“One of the largest companies in the world now owns Bitcoin and by extension, every investor that owns Tesla (or even just an S&P 500 fund) has exposure to it as well,” Turner said.

Tesla’s investment into bitcoin is a significant portion of its overall cash holdings. According to Tesla’s most recent filing, the company has in excess of $19bn in cash or an equivalent.

The news means more of the same for bitcoin’s rising yet volatile price. At the beginning of 2020 one bitcoin was valued at under $10,000.

Investment bank JP Morgan has recently revealed a long-term price target of $146,000 for bitcoin.

The FTSE 100 rises in risk-on trade on stimulus hopes

Liam Roche
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The FTSE 100 rises in risk-on trade on stimulus hopes

The mood is risk-on this morning on the FTSE 100. The index made solid gains during the morning session as positive news regarding oil prices and Joe Biden’s stimulus package emerged over the weekend.

“The FTSE 100 started a new week with solid gains built on optimism over the vaccine-led fightback against the pandemic, strong gains in Asia and US stimulus hopes,” said Russ Mould, investment director at AJ Bell. 

“US Treasury Secretary Janet Yellen’s weekend claim that the country could return to full employment if Congress were to pass President Biden’s $1.9 trillion stimulus package gave markets a window into what such significant action could mean for the world’s largest economy,” Mould added. 

The positive sentiment comes despite concerns over the efficacy of vaccines against new variants of the coronavirus.

FTSE 100 movers

A number of FTSE 100 companies made solid gains before lunchtime on Monday. Among the biggest risers were Anglo American (4.68%), Evraz (3.78%) and Mondi (3.34%). 

At the bottom end, Informa (-1.72%), Smurfit Kappa Group (-1.49%) and Rolls-Royce Group (-1.19%) were among the top fallers.

Oil

Looked to as a barometer for the outlook of the world economy, oil rebounded to pre-pandemic levels today. Brent crude oil was valued this morning at $60 per barrel for the first time since January 2020.

“The biggest driver for the latest surge in prices seen through last week was a sharp upturn in expectations for economic and oil demand recovery on signs that the coronavirus may finally be in retreat,” Vandana Hari, founder of Singapore-based oil markets data firm Vanda Insights told the BBC.

Boohoo

Online fashion retailer Boohoo reached an agreement to buy high street fashion brands Dorothy Perkins, Wallace and Burtons. The deal to acquire digital assets and intellectual property rights, and not any physical stores, is worth £25.2m.

Boohoo’s deal follows Asos’ takeover of Topshop, Topman, Miss Selfridge and HIIT last week.  It is the latest stage of the break-up of Sir Philip Green’s Arcadia fashion empire which fell into administration last November.

Oil prices rebound to pre-pandemic levels

Liam Roche
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0
Oil prices rebound to pre-pandemic levels

Oil price increase a sign the recovery is in sight

Having reached an all-time low in April 2020 due to worldwide lockdowns, oil has climbed back to its pre-pandemic level.

Brent crude oil was valued this morning at $60 per barrel for the first time since January 2020. 

The news is a continuation of the commodity’s resurgence throughout February. Since the final day of last month, the value of Brent crude oil has risen by around $5, a 10% jump. 

The price of oil is looked to as a barometer of activity as the world economy continues to cope with the ongoing coronavirus pandemic. 

After worldwide lockdowns first came into effect in early 2020, oil prices plummeted into negative territory. Producers who did not have adequate storage capacity, were paying buyers to take the commodity off their hands.

“The biggest driver for the latest surge in prices seen through last week was a sharp upturn in expectations for economic and oil demand recovery on signs that the coronavirus may finally be in retreat,” Vandana Hari, founder of Singapore-based oil markets data firm Vanda Insights told the BBC.

Other factors, including efforts to restrict supply by OPEC nations, especially Saudi Arabia, have helped the price of oil to rebound. 

Russ Mould, investment director at AJ Bell, views the news as a sign investors are now looking ahead to a recovery in demand. 

Mould added that it could unleash a new turn of events in the industry as big oil companies seek alternative business models. 

“This could help add fuel to M&A chatter in the industry after it emerged ExxonMobil and Chevron had held talks over a combination last year,” said Mould. 

“The last round of mega-mergers came a little over 20 years ago. However, this time round tie-ups could just double businesses’ problems given the need to transition away from the traditional oil and gas assets which dominate their portfolios as part of a global transition away from fossil fuels.”

New Greatland Gold CEO Shaun Day takes charge

Liam Roche
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New Greatland Gold CEO Shaun Day takes charge

Shaun Day brings a wealth of experience to Greatland Gold

Greatland Gold has today confirmed its new chief executive Shaun Day has taken up his position at the helm of the company. 

Day has replaced Gervaise Heddle who will remain as a board member until March 12 to ensure a smooth transition. 

Shaun Day is a Chartered Accountant with over 20 years of experience across various industries, from mining and infrastructure to investment banking. 

Day left his post as chief financial officer at Salt Lake Potash Ltd, a company listed on both the AIM and the ASX.  

Previously Day worked at the Australian gold producer Northern Star, where he oversaw the company’s market capitalisation growth from AU$700m to $8bn. 

Greatland Gold’s new CEO outlined his vision for the company in a statement released today. 

“I join Greatland at a very exciting time for the business and with a strong platform in place to drive further growth. Greatland will continue to progress its core strategy – advancing Havieron while pursuing value from our other exploration targets with tier-one potential,” Day said.

“Beyond this, I intend to apply my experience from growing major mining companies to oversee the development of Havieron and to scale-up the wider business.”

While Greatland Gold’s share price dropped during mid-morning trade, it has been a positive last 12 months for the precious metals company. 

On February 10 2020 the company’s share price was around 5p. Fast forward a year and shares in Greatland Gold are valued at over 25p each, including a surge to over 37p at the end of 2021.  

The year began on a positive note for Greatland Gold as the company divulged an expansive drilling program in Australia.

Greatland Gold recently shared an update on Newcrest’s drilling campaign at the Havieron deposit in the Paterson region of Western Australia.

In an update, Greatland Gold 2021 growth drilling programme includes plans for approximately 65,000 metres of drilling within the next six months and will focus on South East Crescent and Breccia, expansion of the existing Inferred Mineral Resource in Northern Breccia, and drill testing and interpretation of the geological and mineralisation controls in Eastern Breccia.

Boohoo buys high street brands from Arcadia

Liam Roche
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0
Boohoo buys high street brands from Arcadia

Boohoo deal the latest in a string of sales by Sir Philip Green

Boohoo has reached an agreement to buy high street fashion brands Dorothy Perkins, Wallace and Burtons. 

The deal to acquire digital assets and intellectual property rights, and not any physical stores, is worth £25.2m. 

Boohoo’s deal follows Asos’ takeover of Topshop, Topman, Miss Selfridge and HIIT last week. 

It is the latest stage of the breakup of Sir Philip Green’s Arcadia fashion empire which fell into administration last November.

None of the buyouts mentioned above include the purchase of physical stores putting thousands of jobs in doubt. 

The Boohoo deal is in addition to the company’s recent acquisition of Debenhams for £55m. 

Boohoo shares dipped at market opening on Monday by 3.5% upon news breaking of the company’s acquisitions. 

Boohoo has said the deal will allow the company to bolster its market share across a broader range of shoppers. It also said the takeovers conducted over the last year from Arcadia would provide an additional two million active users. 

Chief executive of Boohoo John Lyttle outlined the company’s strategy following its takeover of Dorothy Perkins, Wallace and Burton. 

“Acquiring these well-known brands in British fashion out of administration ensures their heritage is sustained, while our investment aims to transform them into brands that are fit for the current market environment,” Lyttle said. 

“We have a successful track record of integrating British heritage fashion brands onto our proven multi-brand platform, and we are looking forward to bringing these brands on board.”

Despite well publicised controversy over the company’s factory conditions, Boohoo’s pre-tax profits rose towards the end of 2020 to £68.1m, up from £45.2m.  

Burton, at its peak, employed over 10,000 people in 400 physical stores across the UK, sitting comfortably on the FTSE 100. However, following the takeover by Sir Philip Green and changing market dynamics, its position did not last.

Moonpig’s impressive debut

Andrew Hore
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Moonpig’s impressive debut

Moonpig (LON: MNPG) got off to an impressive start in its first week on the London market. The placing price was 350p, which was at the top of the indicated range, and the share price ended the week at 423.85p.
The company raised £20m in the placing and £9m went on the costs of flotation. The selling shareholders raised £454.8m in the initial placing. An additional 14 million shares were sold by shareholders as part of the over-allotment option.
Moonpig is the market leader in online cards in the UK. There is a continuing trend from offline to online cards and gifting. Lockdowns have boosted t...

BlueRock increases diamond resource

Andrew Hore
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0
BlueRock increases diamond resource

BlueRock Diamonds (LON: BRD) has revealed a significantly increased resource at the Kareevlei diamond mine in South Africa. This means that the mine has at least ten years life even before additional exploration.
There was a 49% increase in resource to 10.4 million net tonnes and a 53% increase in net carats to 516,200. The overall grade has edged up to 5 carats per tonne.
There was also 19% of the resource upgraded to indicated resources. The indicated resource from the KV1 and KV2 pipes is 108,600 and it was nil previously.
BlueRock plans to produce one million tonnes per annum. Last year th...

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