Ocado reports sales boom and “exceptional demand”

Safiya Bashir
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Ocado reports sales boom and “exceptional demand”

Ocado (LON: OCDO) has posted a boom in sales over the nation’s second lockdown.

The group has raised its full-year forecast as the retailer benefitted from the move to online shopping and saw sales surge 35% in the three months to 29 November.

Retail revenue jumped to £579.6m and the average order spend across the period grew to £133.

Ocado is jointly owned by Marks & Spencer, its own range proving to be most popular.

Ocado Retail chief executive Melanie Smith said: “We continue to make good progress bringing even greater choice, quality and value to our customers following the switchover to M&S at the beginning of September.”

“Despite exceptional demand during the period, we have high rates of on-time customer delivery and low rates of substitutions.”

To deal with the growing sales, Ocado has three new warehouses that will contribute to operations next year and add 40% capacity.

Earnings before interest, tax, depreciation and amortisation is expected to increase from last years £60m to £70m.

Shares in the group opened lower on Thursday’s trading update, however, is expected to grow throughout the day.

John Moore, senior investment manager at Brewin Dolphin, said: “While there are indicative figures to suggest customer demand and volumes are beginning to normalise, the direction of travel remains positive and there is a lot of evidence that the shopping habits people have taken on in lockdown will endure beyond it.”

“The addition of extra capacity will help Ocado support its growth and, with a strong balance sheet and buoyed by the super-accelerated shift towards e-commerce… the company remains in a great position going into the key Christmas trading period.”

Ocado shares (LON: OCDO) are currently trading -4.85% at 2.213,11 (0948GMT).

ONS: Economy rose just 0.4% in October

Safiya Bashir
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ONS: Economy rose just 0.4% in October

The UK economy rose just 0.4% in October, according to new figures from the Office for National Statistics.

As a second lockdown halted economic recovery and shutdown the hospitality sector, GDP growth fell from September’s 1.1%.

The GDP is 7.9% lower than pre-pandemic levels and whilst October was the sixth consecutive month of growth, it is the slowest rate of recovery since June. GDP is 23.4% higher than its April low.

“The pace of growth has fallen considerably since the relative highs seen in August and September – with accommodation and food services continuing to face significant difficulties,” said James Sproule, chief economist of Handelsbanken.

“The spike in restaurant activity in August, driven by the ‘eat out to help out’ program, was successful in driving revenues up at the time. This rate of recovery was clearly not sustainable and we are seeing all face to face activities lagging. The wide-spread roll out of the vaccine is clearly going to be necessary for a full recovery.

“The November GDP numbers will reflect the impact of the secondary lockdown and only as we look at the data post this can we begin to assess the impact of the UK’s departure from the EU. A rocky few months ahead seems certain,” he added.

Production was up by 1.3%, construction grew by 1.0%, whilst the services sector grew by just 0.2%.

ONS deputy national statistician Jonathan Athow said: “The UK economy has now grown for six months running but still remains around 8% below its pre-pandemic peak.

“Public services output increased, while car manufacturing continued to recover and retail again grew strongly. However, the reintroduction of some restrictions saw services growth hit, with large falls in hospitality, meaning the economy overall grew only modestly.”

The OECD recently predicted that the UK’s economic recovery would be among the slowest across the world, due to the high number of Coronavirus cases and the potential of a no-deal Brexit.

Sports Direct reports surge in sales

Safiya Bashir
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Sports Direct reports surge in sales

The Sports Direct owner has raised the lower end of its annual forecast thanks to strong sales since the end of lockdown.

The group is now expecting bottom end growth to be between 20% to 30%.

Sports Direct traded well over the pandemic, despite having to close many stores. Leisure wear sales were boosted over the pandemic as people bought clothing online.

For the six months to 25 October the group reported a EBITDA of £226.3m, which was an increase from the previous year of £181.2m for the same period in 2019.

The group is currently in talks to save Debenhams from collapse.

Frasers, the owner of Sports Direct, said in a statement: “it is in negotiations with the administrators of Debenhams’ UK business regarding a potential rescue transaction for Debenhams’ UK operations”.

“While Frasers Group hopes that a rescue package can be put in place and jobs saved, time is short and the position is further complicated by the recent administration of the Arcadia Group, Debenhams’ biggest concession holder. There is no certainty that any transaction will take place, particularly if discussions cannot be concluded swiftly.”

Frasers shares (LON: FRAS) are trading +6.10% higher at 465,80 (0821GMT).

Bitcoin miners’ monthly revenues surged to $551m

Jamie Gordon
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Bitcoin miners’ monthly revenues surged to $551m

Data provided by Dutch financial services platform, Bankr , showed that between November 9 and December 8, Bitcoin miners collected a total of $551.45 million in revenue, with a daily average of around $18.38 million.

The highest daily figure corresponded with a Bitcoin surge, which saw revenues hit $21.76 million on December 3. Meanwhile, the lowest earnings booked during the period were on November 14, at $15.59 million.

According to Bankr Editor, Justinas Baltrusaitis, “miners earned money by successfully creating the next block of transactions, making both the built-in subsidy as the combined fees paid alongside the transactions included in the block.”

Bitcoin mining fees have risen through 2020, much as they did during the previous crypto spike back in 2017, where the alternative currency hit its all-time high, just short of $20,000. With fees being what they are, and Bitcoin hitting $19,700 in early December, miners’ earnings over the last 30 days have been among the highest in around three years.

Between institutional investors seeking to obtain holdings in Bitcoin – as a diversification away from fiat currencies – and payment giants like PayPal expressing their support for cryptos, there has been a lot of tangible momentum driving the recent price surge.

Speaking on the Bitcoin mining state of play and outlook, Mr Baltrusaitis added that: “It is worth mentioning that the Bitcoin mining revenue is encouraging, considering that the industry witnessed a decline in profitability over recent years. Small miners made losses as institutional miners built large arrays to mine. The continued growth of large-scale miners, mainly from China, has led to the wiping out of small-scale miners.”

“Analysts continue to project that bitcoin’s current rally is sustainable with the strong possibility of continued upward price movement. In this case, miners are looking at continued revenue growth through the end of 2020. Notably, the current mining revenue figures and hash-rate recovery mirrors well for the bull market’s continuation. Bitcoin proponents continue to predict another all-time high for the asset before the year ends.”

JPMorgan Japanese IT boasts 41% total returns

Jamie Gordon
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JPMorgan Japanese IT boasts 41% total returns

Despite COVID uncertainty, FTSE 250 listed JPMorgan Japanese Investment Trust (LON:JFJ) boasted ‘very strong returns’ during the financial year ended 30 September 2020.

The company said that its benchmark, the TOPIX, had fallen by as much as 30% by late March, having hit an all-time-high just four months prior.

Despite this, the company reported that its return on assets was +35%, which it said represented a ‘remarkable outperformance’ of the benchmark which only returned +2%. Likewise, its share price to NAV narrowed, seeing its discount ratio fall from 11.4%, to 7.0%. These two developments mean that – with dividends accounted for – existing JPMorgan Japanese Investment Trust (JIT) shareholders saw a total return of 41.8% for the full-year.

Meanwhile, the company also noted that during the February/March sell-off, its portfolio fell by around 23%, though it said this kind of drop represented around half of that experienced by equivalent trusts. The fund added that this performance means that it has now achieved a three, five and ten-year cumulative NAV outperformance of the TOPIX, of +49.1%, +74.7% and +168.2% respectively.

JPMorgan JIT continued, saying that its achievements are being increasingly recognised by analysts. For instance, Morningstar awarded the company its highest Analyst rating and Sustainability rating among Japanese investment trusts, while Citywire awarded it the ‘Best Japanese Equities Trust’.

Speaking on its outlook for the future, following a successful year, JPMorgan JIT’s management report said: “Whatever challenges lie ahead, Japanese companies remain relatively well positioned with their robust net cash balance sheets. This is even more true for your Company’s holdings. The companies we have invested in have strong structural growth outlooks and we are positive about their prospects on a long-term basis. We believe they are well positioned to benefit from future trends, many of which COVID-19 and government policy may well accelerate.”

“Even though the Company has delivered very strong returns this year, we still believe that the long-term outlook for the stocks we own is materially better than for those that we don’t own. The portfolio differs substantially from the benchmark index, so there will be times when our relative performance suffers. However, we are confident that, over the long term, our positioning should deliver better returns than the benchmark and will continue to reward patient investors wishing to invest in the next generation of Japanese ideas.”

The JPMorgan JIT has an ongoing charges figure of 0.68% and an annual charge of 0.65%. Its shares are currently trading down 0.17% on Wednesday, at 711.01p apiece. The Marketbeat community offers a 57.80% ‘outperform’ rating on the fund.

SigmaRoc Plc reveals “very strong” performance, shares rise

Safiya Bashir
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0
SigmaRoc Plc reveals “very strong” performance, shares rise

SigmaRoc shares (LON: SRC) are trading over 5% higher on Wednesday after the group’s revenue surged by 78%.

The construction materials group posted a rise in revenue to £114m for the 11 months to the end of 30 November 2020.

Full year underlying results are expected to be ahead of current market expectations, commenting in an update: “The Group is optimistic as to the potential normalising market conditions in 2021 and has been buoyed by the UK Government’s commitment to infrastructure investment as part of its COVID-19 recovery strategy.”

SigmaRoc has reported strong cash generation, which has resulted in an increase in cash and equivalents to £14.5m at 30 November 2020, subsequent to acquisition of the remaining 60% equity interest in GDH from cash reserves.

The company plans to repay £250,000 in UK funding assistance.

The SigmaRoc chief executive, Max Vermorken, commented: “The Group’s performance for the eleven months to 30 November 2020 is very strong given the context and risks we faced. The Group has continued to demonstrate that a decentralised business model focussed on local markets is a robust approach in our industry, particularly in challenging times. The Group is supported by a solid asset base and will continue to confront all challenges head-on while executing on its buy-and-build strategy to deliver further shareholder value.”

SigmaRoc shares (LON: SRC) are trading +6.07% higher at 55,95 (1437GMT).

FTSE 100 & pound see gains on vaccine and Brexit hopes

Safiya Bashir
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0
FTSE 100 & pound see gains on vaccine and Brexit hopes

The FTSE 100 is trading higher on Wednesday amid Brexit deal hopes, vaccine optimism and US stimulus talks.

Although still 13% down for the year, the blue-chip index hit its highest level since early March today thanks to top risers including BP and Royal Dutch Shell.

In Europe, stocks were also looking positive with Germany’s DAX up 1% and France’s CAC trading 0.6% up.

Neil Wilson of Markets.com commented on the vaccine news and how it is impacting the markets: “As the UK’s vaccination programme begins, the Oxford University and AstraZeneca vaccine has been confirmed as being safe and effective in a Lancet study. The news further underpinned confidence in the reopening trade.

“Meanwhile the FDA has confirmed the efficacy and safety of the Pfizer/BioNTech vaccine, clearing the way for its imminent approval for use in the US.”

The pound is also continuing to climb and has up almost a cent against the US dollar.

The pound is likely to be impacted by today’s talks with Boris Johnson and Ursula von Der Leyen.

“It’s clear that some political impetus will be required for the talks to make any more progress. If we can make progress at a political level it may allow Lord Frost and his team to resume negotiations over the coming days. But we must be realistic that an agreement may not be possible as we will not compromise on reclaiming UK sovereignty,” said a UK government source.

British American Tobacco raises full-year revenue guidance

Safiya Bashir
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0
British American Tobacco raises full-year revenue guidance

British American Tobacco (LON: BATS) has raised its full-year revenue guidance.

Previously, the group estimated a 3% fall in revenue. The expected fall in revenue is now 2.5%. Meanwhile, global cigarette and tobacco sales are expected to fall by a smaller 5%.

Jack Bowles, the group’s chief executive, said in a statement: “We are transforming our business in order to build A Better Tomorrow. Reducing the health impact of our business through providing a range of enjoyable and less risky products is the
greatest contribution we can make to society. We continue to be clear that combustible cigarettes pose serious health risks, and the only way to avoid these risks is not to start or to quit.

“British American Tobacco encourages those who would otherwise continue to smoke to switch completely to
scientifically substantiated reduced risk alternatives. We are growing our New Category
business as fast as possible and we are proud to now have around 13 million non-combustible
product consumers. We are continuing to increase investment in our three New Categories of
potentially reduced risk cigarette alternatives, capitalising on our momentum, while continuing
to deliver on our financial commitments.”

British American Tobacco has seen strong trading in the US market with continued strong value share performance.

The group has announced a dividend pay-out ratio of 65%.

British American Tobacco shares (LON: BATS) are trading 0.14% at 2.898,00 (1044GMT).

Stagecoach shares rise as sales recover

Safiya Bashir
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0
Stagecoach shares rise as sales recover

Stagecoach Group profits plunged from to £65.9m last year to £5.4m in the six months to 31 October.

The bus operator posted a fall in revenue from £800.2m to £454.6m, as the group was hit by the pandemic and the group was forced to close of regional bus and tram services.

Since the initial lockdown, the group is seeing significant improvement. Regional buses are currently operating around 91% of prior year vehicle mileage and with commercial sales have recovered to almost 60% of prior year levels.

Stagecoach will not pay an interim dividend due to “continuing uncertainties”.

Martin Griffiths, the Stagecoach chief executive, said: “The safety and wellbeing of customers and our people remains our absolute priority as we continue to navigate the COVID-19 pandemic. While the situation remains fluid, we have made progress in the restoration of our networks to close to pre-COVID levels and in growing passenger volumes safely.

“We have a strong business, with good liquidity, devolved operating companies closely focused on our customers and local communities, and a supportive relationship with government and our local authority partners.

“We welcome the UK, Scottish and Welsh governments’ recognition of the importance of bus and tram services, as evidenced by the sector-specific actions they have taken to support the continuation of vital services during the COVID-19 pandemic. We are working closely with our government and sector partners on a new framework to ensure the country’s public transport networks adapt to new working and travel patterns, are fit for the post-COVID world, and meet the continuing needs of our customers and communities.”

Stagecoach shares are trading +8.18% at 80,00 (1013GMT).

Ripple Energy – helping you create a greener, brighter future

UK Investor Magazine
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Ripple Energy – helping you create a greener, brighter future

The UK Government recently announced it wanted enough offshore wind farms to power every home in the UK by 2030. But how can households actually play their part?  Switching to a ‘green tariff’ may seem the obvious choice, but most green tariffs on the market will do very little to make it happen.

Step in Ripple.  

Ripple enables consumers to part own new wind farms and solar parks and have the green, low cost electricity they produce supplied to their homes. It enables people to make a real impact with their energy choice.

Find out more here.

The global shift to zero carbon energy system is well underway and is set to accelerate over the next 10 years.  The UK, China, Japan, the EU and South Korea have all set net zero targets.  When it rejoins the Paris climate agreement, America will too.  

Yet the barriers to ownership of the world’s clean energy assets remain high. Too high for household consumers.  Ripple wants to change that.  

Until now, consumers had been excluded from owning energy assets, except for expensive, small scale technologies like rooftop solar.  It can cost up to £8,000 to install solar on a house, and it’s not a viable option for those who rent, live in flats or plan to move home. 

Ripple’s clean energy ownership platform enables everyone to part own large scale, low cost renewable energy assets and have the green, low cost electricity they generate, supplied to their home via the grid.

It’s a simple, flexible and easy way for people to act on climate change and share in the benefits of clean energy ownership direct.

Sarah Merrick, CEO and founder of Ripple, had the idea when she led the wind industry’s strategy group looking at the post-subsidy world. Sarah recalls “The industry was keen to sell their electricity to Google and Facebook.  That’s great, but wind had just become the UK’s cheapest source of electricity. I thought it was unfair that big corporates could access the cheapest electricity around, but ordinary household consumers couldn’t.  I thought someone would plug the gap in the market, but a year or so went by and still no one had. So I decided to do it myself and set about launching Ripple.”

Ripple launched the first, pilot wind farm in summer 2020. Once operational, it will be the UK’s first wind farm to be owned by the consumers it supplies. 

Ripple estimates customers will save around 25% on their electricity bill over the 25 year lifetime of the wind farm, for an upfront cost of £1800, roughly 65% cheaper than the equivalent rooftop solar system.

So far the platform has handled over £1.1m of transactions from more than 500 consumers. Having been selected from over 850 global startups to take part in the Free Electrons program, Ripple is exploring opportunities with ESB in Ireland and Origin in Australia to launch further pilot projects.

According to Bloomberg, $11tr of investment in wind and solar will be required globally by 2050 to meet net zero targets. Ripple is enabling consumers to access the market direct for the first time ever.

Voted Startup of the Year 2019 by both Seedrs investors and Business Green Technology Awards, Ripple is currently fundraising to continue its growth, launch its second project and expand its offering to business customers.

Interested to learn more, take a look at Ripple’s latest campaign on Seedrs. 

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