Games Workshop shares rally over 11% as it rolls the dice with online sales focus

Jamie Gordon
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Games Workshop shares rally over 11% as it rolls the dice with online sales focus
Wargame manufacturer and retailer Games Workshop (LON:GAW) saw their shares rally over 11.55% on Thursday morning, following news that the company had outperformed in sales during the three months to the end of August. The company stated that trading during the period was ahead of Board expectations, with estimated sales of around £90 million considerably ahead of the £78 million recorded for the same period last year. Similarly, the company booked an estimated operating profit of £45 million, up from £28 million year-on-year. Further, Games Workshop expects royalty income for the three month period to come in at £3 million, 50% higher than the £2 million sum for the same period a year prior. The company attributed this success to an expansion in its online sales and trade channels, which likely allowed the group to tap into the demand for stay-at-home entertainment. It did add, however, that its retail outlets are still in a process of recovery, with the long-term impact of the pandemic remaining unclear. Restating its hesitant celebration of the recent period’s trading, the company statement read: “The Board recognises that this performance is better than the prior year but is also aware that it is still early in the financial year. A further update will be given as appropriate.”

In an effort to confer a fair share of this recent success back to its shareholders, the company said it would be paying a dividend of 50 pence per share on 23 October 2020 for those who have registers by 18 September.

Following the update, Games Workshop shares are now up by 8.02% or 700.00p, to 9,425.00p per share 10/09/20 12:20 GMT. Analysts’ consensus 12-month price target for the stock stands at 9,500.00p per share, with today’s price representing a 110% increase on where it stood a year ago today.

The Group’s p/e ratio is 39.89, their dividend stands at 0.32%.

Greatland Gold shares stagnant before exploding higher on positive Havieron results

Jamie Gordon
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Greatland Gold shares stagnant before exploding higher on positive Havieron results
Australian mining company Greatland Gold plc (AIM:GGP) watched its shares sit still in early trade on Thursday before closing the day significantly stronger on a positive update from Newcrest (ASX:NCM) at Greatland’s Havieron deposit.

The company said that the newly-identified Breccia zone has continued to be expanded with further drilling, with the Northern Breccia zone now measuring 300m X 100m X 300m and highlighting a bulk tonnage target.

The company stated that infill drilling results had shown that higher grade zones demonstrated ‘massive’ sulphide mineralisation. It added that these new results also indicate the potential for additional mineralisation at the Northern Breccia region.

Recent tests yielded five assay segments with estimated gold contents ranging from 116.2m and 2.6g/t, to 29.8m at 6.7g/t. Similarly, the group recorded copper assays including 0.65% at 607m and 0.33% at 551m.

Greatland continued, saying that it was still on track to deliver an initial resource at Havieron in Q4 2020. It added that potential commencement of decline at the project might occur between the end of 2020 and start of 2021, with the potential to achieve commercial production around two to three years after that.

Greatland Gold response

Commenting on the new data, company CEO, Gervaise Heddle, stated:

“The expansion of the new Northern Breccia zone is an important development that highlights the potential for a bulk tonnage mining operation at Havieron. Significantly, excellent results from step out drilling to date indicate the presence of higher-grade, massive sulphide mineralisation within the breccia bodies, which are yet to be fully defined by drilling and remain open at depth.”

“As Newcrest’s ongoing exploration programmes continue to define the extent of the mineralised system, we are also pleased to confirm the expected delivery of an initial resource at Havieron in Q4 2020. Alongside the progress at Havieron, we are continuing with our exploration plans at our other assets in the Paterson region and look forward to providing the market with further updates.”

Investor notes

Following the update, Greatland Gold shares fluctuated between rallying and dipping, currently down by 0.26% or 0.045p, to 17.26p a share 10/09/20 11:30 GMT. Greatland Gold shares closed Thursday higher at 19p. Shares in the miner are now up over 990% in 2020 alone. The company currently has one ‘Buy’ rating and a p/e ratio of -170.09. Opinion is split down the middle on whether the company deserves an ‘Underperform’ or ‘Outperform’ rating, though a 12 month target price of 12.00p would indicate a potential 29.40% downside.

Dunelm skips final dividend but posts strong summer sales

Safiya Bashir
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Dunelm skips final dividend but posts strong summer sales
Dunelm (LON: DNLM) has reported a 13.3% fall in pre-tax profits for the year ending in June. However, the retailer remains confident and it saw strong trading for July and August of this year, sales grew by 59% and 24% respectively. Dunelm will not be paying a final dividend this year. Chief executive Nick Wilkinson said: “We made good progress before the onset of Covid-19, building our digital capabilities, extending our product choice and value, and broadening and deepening our customer base.” “Whilst the year to date performance has been materially ahead of our initial expectations, it is very difficult to provide any meaningful guidance on the future outlook given the uncertainty in the wider economy and the potential impact of further regional or national lockdowns. “However, we remain confident in our ability to adapt to the environment and are well positioned to continue to grow market share,” he added. Analysts at house broker Peel Hunt said in a note: “The short-term strength in online sales (up 130% in current trade) and stores (up double-digit LFL) is unlikely to end in three weeks as our forecasts might suggest.” “However, we are more interested in how Dunelm’s customer base is broadening, driven by rising brand awareness and increased digital interactions. Store only customers are also shifting online, which should lead to a rising base of active customers shopping more categories, more frequently.” Dunelm shares (LON: DNLM) are trading -2.32 at 1,429.08 (0929GMT).

Dixons Carphone shares jump on strong online sales

Safiya Bashir
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Dixons Carphone shares jump on strong online sales
Dixon Carphone shares (LON: DC) rose over 9% in early trading on Thursday as the group revealed strong sales and increased online demand. In the 17 weeks to the end of August, the group reported a 12% rise in electrical sales across Ireland and the UK, as well as a 16% like-for-like rise in international revenue. Whilst in-store sales plunged 90% over the course of the pandemic and led to the group revealing plans to shut all standalone Carphone Warehouse stores, online sales in Greece and the Nordics surged by 115% and 49% respectively. Following its strong performance in the Nordics, Dixon Carphone has said it is considering a stock market listing for its Nordics business. Alex Baldock, the chief executive, said that the decision would “shine a light on the value of the Nordics business whilst retaining it as part of the group”. “We’ve started the year well, but nobody knows what the future holds and, like many, we remain cautious in our outlook,” Baldock added. The mobile market remains tough, despite the rise in online sales. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, praised the group Shoplive platform, which allowed customers to book online appointments from home. “That helped online sales triple while stores were closed, and it’s very encouraging to see that since Dixons Carphone flung open the doors once again, online sales tills have continued to ring at double the rate they did last year,” she said. Dixons Carphone shares (LON: DC) are trading +7.08% at 87.70 (0914GMT).    

Morrisons shares fall on dent to profits

Safiya Bashir
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Morrisons shares fall on dent to profits
Morrisons shares (LON: MRW) fell this morning after the supermarket revealed a dent in profits. Despite an 8.7% growth in like-for-like sales for the first six months of 2020, pre-tax profit fell 25.3% to £148m due to costs related to COVID-19 safety measures. Total revenues at Morrisons were down 1.1% £8.73bn. The safety costs surrounding COVID-19 cost the supermarket a total of £93m – which was offset by business relief rates to cost a reduced £62. During the lockdown period, the group hired an additional 45,000 employees. The supermarket will pay an ordinary dividend of 2.04p. Shares sank 4.5% in morning trading. Chief executive David Potts said: “From the start of the pandemic we stepped up and put the company’s assets at the disposal of the country to help feed the nation.” “Morrisons is at the heart of local communities and responded quickly when it mattered most, and we are very grateful for the British public’s appreciation of all the vital work our colleagues are doing. I believe we are seeing the renaissance of British supermarkets. “We are now looking forward to holding on to what we created in the first half, building on our colleagues’ inspiration and innovation, and sustaining the momentum of a broader, stronger Morrisons. I’d like to again thank every Morrisons colleague for their incredible efforts: you’ve earned your key worker status several times over.” Speaking of the results revealed by Morrisons today, Richard Hunter, head of markets at Interactive Investor, said: “Contrary to popular belief, the pandemic was not an automatic home run for the supermarkets and the 25% drop in pre-tax profits for Morrisons is proof positive that additional sales come at an additional price.” “Overall, the reduction in profit for the period and an overall decline in revenues are understandable, but unfortunately both light of expectations,” he added. Morrisons shares (LON: MRW) are currently trading -4.15% at 186.90 (0900GMT).

AstraZeneca shares slip as vaccine trial put on hold

Bronte Carvalho
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AstraZeneca shares slip as vaccine trial put on hold
Shares at Cambridge-based pharmaceutical firm AstraZeneca (LON:AZN) have slipped 1.55% as its coronavirus vaccine trial is put on hold after a participant suffered a suspected adverse reaction. The firm has suspended all clinical trials of its proposed COVID-19 vaccine – which had been in the final stage of human tests – while it routinely reviews the incident before the study is allowed to resume. The exact nature of the participant’s reaction has not been revealed, but AstraZeneca has indicated that they are expected to make a full recovery. The company is currently one of the leading agents in the race to develop a vaccine for the novel coronavirus, and had been on track to release one by the end of the year until the delay was announced. It is not yet clear how costly the setback will be, but a spokesperson confirmed that delays to the initial estimate should be expected. AstraZeneca is said to be “working to expedite the review of the single event to minimise any potential impact on the trial timeline. “As part of the ongoing randomised, controlled global trials of the Oxford coronavirus vaccine, our standard review process triggered a pause to vaccination to allow review of safety data. “This is a routine action which has to happen whenever there is a potentially unexplained illness in one of the trials, while it is investigated, ensuring we maintain the integrity of the trials”. Clinical trials are often paused due to events of this nature, but few studies have attracted as much media attention as this one, and the setback will no doubt leave many anxious that AstraZeneca may be falling behind. Shares at the company slipped 1.55% to 8219.00p at BST 13:05 09/09/20, but have already made a significant recovery after a nearly 8% plummet when markets opened this morning.

RedX Pharma shares rally 29% on research collaboration with Jazz Pharmaceuticals

Jamie Gordon
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RedX Pharma shares rally 29% on research collaboration with Jazz Pharmaceuticals
Cancer and fibrosis focused drug development company RedX Pharma plc (AIM:REDX) saw its shares rally by almost 29% to around 90.00p a share during Wednesday morning trading, after it announced that it had signed a research collaboration agreement with Jazz Pharmaceuticals plc (NASDAQ:JAZZ). The partnership has the aim of discovering and developing drug candidates for two cancer targets on the Ras/Raf/MAP kinase pathway. RedX Pharma said that its role would involve it being responsible for research and preclinical development activities up to Investigational New Drug (IND) submission. Under the agreement, Jazz Pharmaceuticals will pay RedX an upfront sum of $10 million with a subsequent $10 million in the second year, provided research is still ongoing. After an IND-ready molecule has been delivered, RedX will be eligible to receive and additional $200 million from Jazz in development, regulatory and commercial milestone payments. For each tier, Red is also eligible for tiered royalties in ‘mid-single digit percentages’, subject to future sales. Jazz will own all of the intellectual property, and will be responsible for the development, manufacture, regulatory activities and commercialisation of any IND-ready molecule.

This new collaboration follows a previous sale of RedX’s preclinical pan-RAF inhibitor programme to Jazz in July 2019. Following the sale, RedX says the pan-RAF collaboration between the companies has been ‘progressing well’.

RedX Pharma response

Commenting on the collaboration agreement, company Chief Executive Lisa Anson stated: “We are extremely pleased to announce this new collaboration with Jazz, which expands on our already strong working relationship, built through a year of collaboration on the pan-RAF inhibitor programme. This new agreement reinforces Redx’s strong position as a successful research partner and its expertise in medicinal chemistry and drug design. We look forward to collaborating with Jazz on new targeted therapies for patients who need them.” Further, R&D Executive Vice President for Jazz Pharmaceuticals added: “We are excited to collaborate with Redx on two oncology programs in the Ras/Raf/MAP kinase pathway. Redx has established itself as a strong partner for Jazz, given the continued momentum in our existing collaboration on pan-RAF, and we look forward to this new collaboration and access to Redx’s small molecule discovery capabilities. We are strategically targeting this cancer pathway with multiple experimental approaches while further strengthening our targeted oncology pipeline. These programs in the Ras/Raf/MAP kinase pathway are highly complementary to our growing R&D portfolio of innovative and targeted oncology therapies.”

Investor notes

Having rallied by almost 30%, the RedX Pharma share price rally lost some steam and settled for a 10.69% or 5.61p jump, up to 58.11p a share 12:30 GMT 09/09/20. Similarly, Jazz Pharmaceuticals rallied by 4.99% or 6.57 USD, up to 138.27 USD a share 09/09/20.

Pizza Hut announces plans to slash 29 sites, 450 jobs

Bronte Carvalho
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2
Pizza Hut announces plans to slash 29 sites, 450 jobs
Pizza Hut has become the latest restaurant chain in the UK to announce a spate of closures, as the firm prepares to file a company voluntary agreement (CVA) and initiate a major restructuring scheme. The pizza chain – owned by American fast food tycoon YUM! Brands, Inc (NYSE:YUM) – has struggled to pay off its debts due to the “significant disruption” of the coronavirus pandemic, which left the restaurant industry essentially paralysed during lockdown. Although Pizza Hut had reportedly performed better than usual before the pandemic took hold in March, the company has admitted that its sales are not expected to fully recover until “well into 2021”. The CVA is to be handled by New York-based consultancy firm Alvarez & Marshall, and could go ahead as soon as Wednesday evening. Along with 29 restaurant closures across the UK, as many as 450 jobs are set to be lost amid a major restructuring which will see the chain renegotiate rent with landlords to a less demanding “turnover” model – meaning rent would be paid based on the revenue of each individual site. A spokeswoman for Pizza Hut commented on the news, stating: “We are committed to doing the right thing, and in order to secure as many jobs as possible and continue serving our communities, we are working to reach an agreement with our creditors. “While we are likely to see 29 Hut closures and 450 job losses, any measures we take aim to protect about 5,000 jobs at our remaining 215 restaurants, as well as the longevity of the business. “We understand this is a difficult time for everyone involved. “We appreciate the support of our business partners and are doing everything we can to help our team members during this process, including speaking with those affected by the consultation”. Pizza Hut delivery services are not expected to be affected by the move, as these are handled by a separate firm – Pizza Hut UK – which oversees food delivery across an additional 380 sites nationwide.

Amryt Pharma shares spike 51% with treatment passing rare skin disease trial

Jamie Gordon
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2
Amryt Pharma shares spike 51% with treatment passing rare skin disease trial
Global biopharmaceuticals company Amryt Pharma (AIM:AMYT) saw its shares shoot up over 50% during Wednesday trading, as it announced that its FILSUVEZ treatment had successfully passed phase three of the EASE trial. As stated by Amryt Pharma, FILSUVEZ is designed to treat dystrophic and junctional Epidermolysis Bullosa (EB), which is a “rare, chronic and distressing genetic skin disorder that causes the skin layers and internal body linings to separate and affects infants, children and adults”. The condition currently affected as many as 30,000 individuals in the US and more than 500,000 people worldwide, with an estimated incidence for EB being around 1 in 20,000. The company predicts that the marekt opportunity for EB treatments is in excess of $1 billion.

The EASE trial

The EASE trial is noted to be the largest trial conducted that focuses on patients with EB. It was performed across 58 sites in 28 countries, with 223 patients enrolled – including 156 pediatric patients.

In a double-blind test lasting 45 days, the efficacy of FILSUVEZ was measured versus a control gel. The company stated that within this period, its treatment achieved statistical significance, which represents the first ever successful phase three top line readout in EB. It is also the fourth time that the treatment has illustrated its capacity to accelerate wound-healing in a phase three trial.

Going forwards, the company will evaluate data from the trial and present its results at an upcoming scientific symposium. Amryt Pharma stated that it intends to complete the submission of its rolling New Drug Application to the US Food and Drug Association and request a priority review for FILSUVEZ.

Amryt Pharma reaction

Commenting on the news, company CEO Joe Wiley stated:

“This positive outcome of the Phase 3 EASE trial marks another significant milestone for Amryt as we seek approval for FILSUVEZ ® and represents a potentially important advancement for patients and families living with this rare and distressing disorder. If approved, we intend to leverage our existing global infrastructure to commercialize FILSUVEZ.”

“We are proud to present these positive and encouraging results, demonstrating that FILSUVEZ could make an important difference to the lives of patients. We would like to extend our gratitude to all of the patients, their families, carers and physicians for their participation in the EASE trial and we look forward to working with regulatory authorities to make FILSUVEZ available as the first approved therapeutic treatment for EB patients. All of the team at Amryt are very excited by today’s news and the impact this may have in our efforts to help patients with this very distressing condition.”

Investor notes

Following the announcement, Amryt Pharma shares rallied by 51.25% or 82.00p, to 242.00p per share 09/09/20 12:00 GMT. This price is far-and-away a new record for the company’s shares, and far ahead of its year-to-date nadir of 90.00p a share. The company’s p/e ratio is -1.80, earnings per share currently stand at -86.00p.

Pound Sterling hits six-week low as it continues fall against Euro and Dollar

Jamie Gordon
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1
Pound Sterling hits six-week low as it continues fall against Euro and Dollar
Continuing much as it began the week, the Pound Sterling continued to drop against its major counterparts, taking both the pound-to-euro and pound-to-dollar exchange rates to respective six-week lows. The exchange rate for the former now stands at a mere 1.1001, while the latter sits at 1.2941. This follows the Pound having consistently rallied against both the euro and dollar throughout August, with this rally having ended with renewed international political tensions from the beginning of this week. Today’s renewed dip, however, was also spurred on by political factors within the UK, which redoubled pressure on the Pound’s downward trajectory. As stated by Spreadex Financial Analyst Connor Campbell:

“As sterling nervously awaits the unveiling of Boris Johnson’s international law-breaking UK Internal Market Bill, the FTSE continued to celebrate the currency’s bout of Brexititis – a long-dormant condition that has recently seen a serious flare-up.”

“Tuesday was a rough one for the pound – against the dollar it was down 1.55%, with a 1.14% decline against the euro. Further losses on Wednesday – 0.3% and 0.2% against its respective peers – leave sterling at its worst price for 6-weeks, erasing all of the spirited growth it managed over a Brexit-ignorant August.”

There was perhaps a bright side to this dip, when we consider that correspondingly, the FTSE continued its Monday rise with a Wednesday morning rally. Having been the least-affected by the Labor Day hangover on Tuesday, the index rallied 0.89% or 53 points on Wednesday, taking it to just shy of the 6,000 mark. This small positive was somewhat overshadowed, however, as the FTSE was outdone by the DAX rallying 1.03% and the CAC not lagging far behind with a 0.83% rise. Ultimately, the continued decline of the Pound may have spurred the FTSE, but on balance this trade-off isn’t worth it.
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