Almonty Industries Virtual Investor Presentation

UK Investor Magazine
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Almonty Industries Virtual Investor Presentation

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Almonty Industries is a Tungsten-focused miner specialising in unlocking value in global Tungsten operations and is currently developing the world’s largest Tungsten mine outside of China. With applications ranging from semi conductors to space rockets, Tungsten is classed as a critical raw material by the EU due to potential supply risks and the high economic importance of the metal.
Key presentation topics include:
  • Classic pattern of mining stocks
  • Almonty’s portfolio of Tungsten operations
  • Almonty’s high potential in the global Tungsten market
  • Exploration of other critical raw materials

Experian shares continue rally with improved second quarter expectations

Jamie Gordon
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Experian shares continue rally with improved second quarter expectations
Consumer credit reporting company Experian plc (LON:EXPN) saw its shares bounce by around 4% after the bell on Tuesday, as the company upwardly revised its second quarter trading expectations, for the three months ended September 30th 2020. In July, the company had predicted that its organic revenue for Q2 FY21 would either remain flat or fall by as much as 5%, with organic costs remaining steady.

Instead, what transpired was stronger than anticipated trading during July and August, which has prompted the company to offer more optimistic predictions of its Q2 results.

Experian now expects its organic revenue to grow between 3% and 5% during the quarter. It believes that its interests in the US mortgage sector will contribute as much as three percentage points to revenue growth, while it stated that the ‘strength in the services’ it provides to consumers and the ‘naturally resilient qualities’ of parts of its portfolio will also be aiding factors.

It added that due to continued investments in innovation and expanding its profit range, it now anticipates a rise in organic costs between 2% and 3% during the first half of FY21.

Experian finished its update by stating that its final set of results for the period will be published on Tuesday the 17th of November 2020.

Following the update, the company’s shares now sit 2.00% or 56.00p up on where they started, up to 2,855.00p per share 08/09/20 12:00 GMT. Though its rally somewhat tapered off during Tuesday morning trading, its share price trajectory has been largely in the green since March, and largely avoided the big slump most company’s shares saw in July.

Its current price level is ahead of its 12-month consensus target price, which stands at 2,820.03p a share, but it is also shy of its year-to-date high, where it hit 2,914.00p in June. Its current level represents an 8.51% growth on its price on the same date last year.

The company’s p/e ratio stands at 35.76, its dividend yield is 1.30%.

Ashtead shares prove resilient despite 38% decline in first quarter profits

Jamie Gordon
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Ashtead shares prove resilient despite 38% decline in first quarter profits
Industrial equipment rental company Ashtead Group plc (LON:AHT) saw its shares rally during Tuesday morning trading, in spite of what might have been viewed as a bad but ‘not as bad as it might have been’ first quarter. The company boasted that its 7% year-on-year decline in overall revenue, and 8% year-on-year fall in quarterly rental revenue – from £1.17 billion to £1.08 billion – illustrated its impressive resilience during the pandemic. However, with underlying profit before tax falling by 35%, and profit before tax falling by 38% during the same period year-on-year – from £305 million to £192 million – there is only so much positivity that can be drawn from Ashtead’s first quarter results. Further, the company’s EBITDA fell by 14% during the same period comparison, from £627 million to £548 million, while its quarterly operating profits fell from £358 million to £249 million. The situation was equally bleak for the company’s shareholders, with underlying earnings per share falling 33% year-on-year frm 51.4p to 34.7p, and EPS on a statutory basis falling 35%. Although, there were some glimmers of hope looking ahead. First, the company announced that it had resumed its greenfield opening programme with three openings during the first quarter. Second, the company booked ‘record’ cash flow despite the pandemic, with free cash flow during the first quarter increasing from £161 million to £447 million year-on-year.

Ashtead response

Commenting on what he viewed as a period of impressive resilience in trading, company Chief Executive Brendan Horgan stated:

“In these challenging markets, the Group delivered a strong quarter with rental revenue down only 8% at constant exchange rates. This resilient performance illustrates the successful execution of our long-term strategy, which we embarked upon after the last recession, to broaden and diversify our end markets and strengthen our balance sheet. This positioned us to capitalise on our ever increasing scale, while remaining agile, particularly during these unprecedented times. The actions we took to optimise cash flow, reducing capital expenditure and operating costs, resulted in record free cash flow for the first quarter of £447m (2019: £161m) contributing to reduced leverage of 1.8 times compared to 1.9 times at year end.”

“Looking forward, the strength of our business model and balance sheet positions the Group well in these more uncertain markets. Assuming there is no significant COVID-19 second wave leading to major market shutdowns, like we experienced earlier this year, we expect full-year Group rental revenue to be down mid to high single digits when compared with last year on a constant currency basis. The benefit we derive from the diversity of our products, services and end markets, coupled with ongoing structural change, enables the Board to look forward to a year with free cash flow in excess of £1bn, continued strengthening of our market position and the medium term with confidence.”

Investor notes

Following the update, Ashtead shares rallied 1.89% or 51.00p, to 2,744.00p a share 08/09/20 11:00 GMT, with markets likely factoring in the possibility of more bleak-sounding quarterly fundamentals. This is shy of the company’s year-to-date high of 2.802.00p per share, but ahead of analysts’ consensus 12-month target of 2,650.00p a share. The current price also represents a 20.19% growth from its price one year ago on this date. The Group’s p/e ratio stands at 15.31, its dividend yield is 1.48%.

JD Sports shares rise despite profit plunge

Safiya Bashir
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JD Sports shares rise despite profit plunge
JD Sports (LON: JD) has reported a fall in profits for the first six months of the year. The group has also warned of a continued hit to sales as a decline in footfall is hitting the fashion retailer. Pre-tax profit slumped £96.7m from £158.6m, whilst revenue was down 6.5% over the same period. Since stores has reopened post-lockdown, sales have increased by 20% compared to the same period last year, however, the group has said the costs of health and safety measures have hit profits. JD expects full-year profits of £265m – up from the previous expectations of £96m-206m. JD shares rose over 8% in early trading. They have fallen 14% this year, however, have recently rallied back to stronger figures. On the fall of sales from the post-lockdown boost, the group said: “That boost was generally short lived with footfall into physical retail continuing to be significantly weaker than historic levels in all of our geographies but particularly across Europe.” “Some of the weakness in footfall has been offset through better conversion and higher average transaction values as those consumers who visited physical retail did so with greater intent.” “Nonetheless, we remain absolutely confident in our strengths in consumer engagement, key brand relationships and globally consistent multichannel retail standards. These, combined with an agile operational infrastructure, provide us with a robust platform for further positive development.” Analysts from CMC Markets said: “While JD Sports’ share price might be down on the year, it’s having a remarkable run of form right now. In the 31 days to 4 September, JD Sports’ share price soared 7.5% and, with a [Relative Strength Index] of 72, it seems that there could be more upwards momentum left in the stock.” JD Sports shares (LON: JD) are currently trading +6.99% at 775.26 (0859GMT).  

DWF shares up on strong trading

Safiya Bashir
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DWF shares up on strong trading
DWF shares (LON: DWF) rose 7% after the law firm revealed strong trading in the first quarter on the year. The listed law firm released its first-quarter trading update, which showed a 20.3% growth in revenue to £84.3m. The strong results for the first-quarter had helped offset the impact of the COVID-19 pandemic. Pre-tax profit at DWF jumped over 200% to reach £7.4m. The group has proposed a final dividend per share of 0.75p. “The strength and resilience of the Group and our differentiated model has been evident in the first three months of the 2021 financial year,” said Sir Nigel Knowles, the group’s chief executive. “We have seen strong activity levels generating positive momentum across the business resulting in revenue and Ebitda being materially ahead of the prior year. “Trading through the majority of FY20 was strong and the Group made significant investments to support its growth objectives. The sudden and far-reaching impact of Covid-19 had a material effect on the final quarter with a resulting impact on profitability,” he added. DWF shares (LON: DWF) are currently trading +4.90% at 62.41 (0844GMT).

Travis Perkins shares fall on 80% profit plunge

Safiya Bashir
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Travis Perkins shares fall on 80% profit plunge
Travis Perkins shares (LON: TPK) shares fell on Tuesday after the group revealed an 80% fall in profits for the first six months of the year, as the Coronavirus pandemic halted construction work. The builders’ merchant saw revenue fall 20% from the same period last year to £2.8bn. Travis Perkins has over 2,000 sites and branches across the UK, which closed during lockdown – putting construction on pause. The group has said that an ongoing restructuring programme will save £120m annually. This include shutting 165 branches and axing 2,500 jobs. The company has said it will not pay an interim dividend. Nick Roberts, the group’s chief, commented: “Throughout the pandemic, the health and safety of our colleagues and customers has been our primary concern. “Customer interactions have changed significantly resulting in changes to the way we do business, from increased activity through digital channels through to alterations to our physical store formats in order to maintain safe working practices. “Although our financial performance in the first half of 2020 was impacted by the Covid-19 pandemic, and we have had to undertake a restructuring programme in light of the challenging outlook for the Group‟s end markets, we have made significant strategic and operational progress against the four strategic priorities we outlined at our full year results in March 2020. “Although considerable uncertainty around the impact of the COVID-19 pandemic remains, the actions we have taken to adapt and innovate in our businesses mean that the Group is well 2 placed to continue to service our customers, support our colleagues, outperform our markets and generate value for our shareholders,” he added. Travis Perkins (LON: TPK) shares fell on Tuesday morning by 6% (0832GMT).  

FTSE soars as the Pound falls on No-Deal Brexit jitters

Jamie Gordon
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FTSE soars as the Pound falls on No-Deal Brexit jitters
UK prime minister Boris Johnson hinted that he might renege on January’s Withdrawal Agreement, and in doing so, renewed predictions that a No-Deal Brexit would be the most likely outcome of negotiations with the EU. Also on Monday, a Europe-wide equities rally was led by a booming FTSE. The index had been somewhat spurred on by a fall in the Pound Sterling – which was hampered by the rising tensions between Downing Street and Brussels. Following the news of more diplomatic loggerheads, the pound sank 0.7% against the euro, down to 1.11, and 0.8% against the dollar, falling to 1.32. The latter fall sees cable at its worst price in over two weeks, with plenty of legroom to sink lower still. With the start of the week undoing much of the good work done by the Pound Sterling during August, further discussions over the sensitive Irish border issue will no doubt prolong the awkwardness of the increasingly likely outcome (Britain leaving without a deal). Despite the political bitterness and the glumness of the Pound, the FTSE proved eager to lead the pack in the Monday equities rally. With the US taking a day off, the FTSE bounced off of the news of Chinese exports hitting a 17-month-high and the Pound sinking, and booked a noteworthy 2.5% rally, up to 5935 points. Still shy of its its recent 6500 point high in mid-June, political tensions will now dictate how much wiggle room the British index has to move upwards. Unfortunately, with Coronavirus likely ceding some media attention to renewed Brexit coverage, any hopes of recovering to the January 7,600 point highs in the near future, seem like little more than a fool’s hope. Speaking on wider market sentiment and progress in Eurozone equities, Spreadex Financial Analyst Connor Campbell stated:

“The Eurozone indices were no slouches themselves, even when factoring in the euro’s gains against the pound. That Chinese export news helped, and the absence of the US, helped erase some of the bearish sentiment that arose at the end of last week, pushing the DAX and CAC up 2.3% and 2.2% respectively.”

“Now Europe needs to hope that the Dow Jones et al. are feeling similarly perky when they return from their Labor Day weekend break tomorrow.”

 

UK house prices hit record high, new report says

Bronte Carvalho
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UK house prices hit record high, new report says
A widely-followed monthly report by money-lender Halifax has revealed that the average UK house price has risen to a record high of £245,747 in August 2020, making it the largest monthly leap since 2016. Halifax’s House Price Index showed that house prices had risen 1.6% since July 2020, and overall 5.2% on this time last year. The property market has seen a marked boom in recent months with a surge in demand following the easing of lockdown restrictions and the introduction of Chancellor Rishi Sunak’s stamp duty holiday. An estimated total of 89% of all property sales in the UK are eligible for the scheme, as part of a drive to lift the property market out of the coronavirus-induced stalemate. Last week, Yahoo Finance reported that rival lender Nationwide had published figures stating that house prices had hit the highest point in 16 years, as mounting evidence suggests an emerging “mini-boom” in the market. Bloomberg also stated that property firm RightMove said “the value of agreed sales jumped to the highest in a decade in July and Bank of England data showed mortgage approvals rising”. As many as 1 in 7 homes are selling in just one week – more than double the rate at this time in 2019. Larger houses were also selling especially well, with RightMove citing the increasing move towards working from home as the driving force behind buyers seeking additional office space, as well as coastal and rural properties to get away from the city. Three bedroom, semi-detached and four bedroom detached houses are currently seeing the greatest demand. Meanwhile, Sunak’s attempts to jumpstart the market have failed to fuel movement in London, where properties are taking the longest to sell. The recent surge in activity is unlikely to last, however, with Halifax’s managing director, Russell Galley, urging caution over hopes that the upward trajectory may be exponential: “A surge in market activity has driven up house prices through the post-lockdown summer period, fuelled by the release of pent-up demand, a strong desire among some buyers to move to bigger properties, and of course the temporary cut to stamp duty. “Notwithstanding the various positive factors supporting the market in the short term, it remains highly unlikely that this level of price inflation will be sustained. The macroeconomic picture in the UK should become clearer over the next few months as various government support measures come to an end, and the true scale of the impact of the pandemic on the labour market becomes apparent”. “It remains highly unlikely that this level of price inflation will be sustained,” Galley insists. “With most economic commentators believing that unemployment will continue to rise, we do expect greater downward pressure on house prices”.

Rumours swirl of Thomas Cook relaunch “within days”

Bronte Carvalho
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Rumours swirl of Thomas Cook relaunch “within days”
According to an article by Sky News this afternoon, doomed travel agent Thomas Cook could be set to make a revival as soon as this month, as Chinese owner Fosun toys with relaunch plans. An announcement is expected in the coming days, but is highly subject to the “introduction of any further quarantining restrictions on British citizens” as well as needing to secure the required regulatory approvals. If the relaunch does go ahead, it would roughly mark the 1-year anniversary of Thomas Cook’s collapse last September, when the brand was bought out of administration by Fosun for £11 million. The subsequent chaos led to the UK government having to step in amidst the largest peacetime repatriation effort – and the largest overall since World War II – to organise travel for millions of stranded British citizens around the world. Back in January, The Times reported that there were existing plans to rebrand Thomas Cook as an “online travel agent”, with the aim to relaunch sometime during June this year. With the enormous impact of the coronavirus pandemic on the aviation and travel industries, it was largely expected that Fosun would shelve its plans – or at least significantly postpone them – until demand returned to pre-Covid levels. News of the relaunch therefore has come as a bit of a surprise, with a source close to Thomas Cook telling Yahoo Finance that there is “still a huge amount of uncertainty surrounding the timing”. “The travel industry has been battered by the COVID-19 pandemic and fast-changing travel restrictions in the UK have created headaches for operators”. Nevertheless, the source emphasised that there had been “no secret” that Fosun were seeking to relaunch Thomas Cook as an online brand at the earliest opportunity, and told Sky News that plans for the brand to reemerge with a “refreshed” image are already at an “advanced stage”. The relaunch would likely mean that Thomas Cook would not operate its own airline, high street stores or hotels, and would be “closely watched by rivals” for its performance in its maiden months as travel demand slowly creeps back to pre-pandemic levels. A spokesperson for the brand declined to respond to Sky News on request.

Pizza Express to close 73 stores amid major restructuring

Bronte Carvalho
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0
Pizza Express to close 73 stores amid major restructuring
High street Italian chain Pizza Express (HKG:3396) has revealed that it is set to close 73 stores across the UK – jeopardising as many as 1,100 jobs – as part of a major restructuring plan after creditors approved a rescue deal. The brand is owned by Beijing-based Hony Capital, which bought Pizza Express for £900 million in 2014. Last month it was reported that the chain was in talks to announce a company voluntary agreement (CVA) – a form of insolvency – to discuss repayment of its hefty £1 billion debt with creditors on more favourable terms. The family favourite brand had already planned to shut 67 of its 449 outlets worldwide, but the new arrangement requires that 73 UK sites close their doors for good – including the flagship Pizza Express restaurant in London’s Soho, which opened back in 1965. Creditors voted 89% in favour of the CVA deal, stating that it would potentially create a further 9,000 jobs in the UK, but admitted that more than 1,000 roles would be lost as collateral amid the restructure. According to an article in The Guardian, the restructure is expected to help cut the firm’s debt down to £319 million, as well as potentially “hand control to its bondholders in a debt-for-equity swap”. An additional £144 million will be pumped in to help reopen sites which were forced to shut in March after the UK government imposed lockdown restrictions on the hospitality industry. In early August, Pizza Express revealed that it had sought advisors from financial advisory firm Lazard to help secure a sale – orchestrated separately from the restructuring plan – with the hope of selling its business in China amid a drive to open more sites on the mainland. The company has assured that it will be looking for redeployment opportunities for staff affected by the closures.
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