Starcom shares bounce as revenue jumps 14% but loss widens
Starcom PLC (LON:STAR) have seen their shares bounce on Monday following a steady set of final results.
The firm did note that its’ loss had widened across 2019, however shareholders can expect growth across the year.
Shares in Starcom trade at 1p (+5.05%). 2/3/20 11:16BST.
The media company told the market that it had seen a pretax loss of $1 million across 2019, compared to the $831,000 figure one year ago.
Starcom alluded this wider loss to rising operating expenses, as these costs rose to $3.5 million fro $3.3 million. These costs rose due to non-cash expenses including depreciation and share option provisions.
On a better note, Starcom saw revenues surge 14% to $6.8 million from $6 million year-on-year.
Adjusted earnings before interest, tax, depreciation and amortisation totalled $300,000 compared to $8,000 Ebitda loss a year ago.
Avi Hartmann, CEO of Starcom, commented, “I am pleased to report another year of progress for the Company, moving into EDITBA positive for the first time, which we believe is a turning point and a clear indication of the Company’s future performance.
“Based on our existing range of products, mature technology, global client base, recurring SaaS revenues and substantial sales pipeline, the Company anticipates continued growth in 2020. We further anticipate higher margins in the future as our product mix migrates more towards the IoT sector. One of the key focuses of 2020 is to expand our sales and marketing team to take advantage of the opportunities before us, whilst ensuring we maintain our competitive edge through continued R&D.”
Going forward the firm said that it is looking to migrate towards the he higher margin IoT products, gross margin should continue to improve.
The Chairman concluded:
“Based on the existing range of products, mature technology, global client base, recurring SaaS revenues and substantial sales pipeline, the Company anticipates continued growth in 2020. The Board also anticipates that as the product mix continues to migrate towards the higher margin IoT products, gross margin should continue to improve.
The innovative Lokies is expected to be one of the key growth engines for the Company in 2020. The agreement and the purchasing plan provided by the Russian distributer signed up in 2019 underpins this assessment. Also encouraging is the three-year OEM contract recently signed with Cubemonk for the incorporation of our Kylos Air unit into their product.
Zero is progressing with its own sales of the Starcom-inside motorbikes which may have an impact on other similar manufacturers. The Board is therefore optimistic about the prospects for the Company in 2020, particularly the opportunities presented from its relationships with Cubemonk, CropX and WIMC, as well as its North African distributor.
We plan to expand our sales and marketing team to strengthen our ability to take advantage of the opportunities we now see as well as continuing to focus on R&D to maintain and improve our competitive edge.”
Wizz Air set to expand into Abu Dhabi
Wizz Air Holdings PLC (LON:WIZZ) have announced their intentions to launch operations in Abu Dhabi.
The FTSE 100 airline firm said that operations should commence this Autumn, following the completion of a partnership agreement.
The announcement to move into the Middle East was made a few months back, in December – and the firm said that it was looking to set up a deal with Abu Dhabi Development Holding Co PJSC.
Wizz Air noted that the agreement had now bee completed, and that this means it can operate in Europe, the Middle East, Asia, and Africa from Abu Dhabi’s international airport.
József Váradi, CEO of Wizz Air Holdings, said: “Today marks an important milestone on the way to establishing our new airline in Abu Dhabi. The joint venture agreement with Abu Dhabi Developmental Holding Company to form Wizz Air Abu Dhabi underpins our long-term dedication to bringing an economically and operationally highly efficient as well as environmentally most sustainable airline business model to boost Abu Dhabi’s aviation development. Wizz Air’s mission feeds into Abu Dhabi’s diversified economic strategy as we aim to stimulate traffic by creating demand to the benefit of growing Abu Dhabi’s touristic and economic diversity. We look forward to welcoming passengers on board our young, green and ultra-efficient fleet.”
Mohamed Hassan Al Suwaidi, CEO of ADDH, added: “Tourism is a high priority in Abu Dhabi’s growth strategy. Significant investment is going not only into our airports but also the tourist infrastructure, including hotels, resorts and cultural attractions. Last year the emirate achieved a record high of 11.35 million visitors and a key driver for this is the connectivity that enables people to visit Abu Dhabi easily and affordably. Our partnerships with Wizz Air and others will help elevate the UAE’s capital as a highly competitive regional and international destination for leisure and business travellers alike.”
Wizz Air boast strong third quarter
In January, Wizz Air reported a very strong third quarter performance – which led to shares in green. In the three months to December 31, revenue was 25% higher year-on-year at €637.3 million from €511.3 million. Ticket revenue alone was 16% higher at €336.3 million, which represents significant progress for the budget airline, in an industry which has seen hardship. Notably, the firm also swung to a quarterly pretax profit of €22.4 million from a €21.2 million loss one year ago. Passengers carried also climbed 23% year on year and totaled 10 million in the third quarter, whilst load factor edged 1.1 percentage points higher to 92.5%. Shares in Wizz Air trade at 3,350p (-1.90%)/ 2/3/20 11:09BST.Hiscox lift annual dividend, despite reporting mixed 2019
Hiscox Ltd (LON:HSX) have seen their shares bounce despite the firm seeing drop in profits within their full year results.
The FTSE 250 listed firm reported that its pretax profit had sunk 61% to $53.1 million, compared to the $135.6 million figure a year ago.
Hiscox noted that its performance had been affected by ‘large catastrophes’ as the firm alluded to issues such as hurricane Dorian in the Bahamas and typhoons Faxai and Hagibis.
Notably, the firm also said that it had seen higher claims and claim adjustment expenses at $3.21 billion versus $2.33 billion.
In addition to this, expenses for the acquisition of insurance contracts totaled $944.9 million, seeing a significant rise from the $882 figure one year ago.
On a better note, Hiscox saw their total annual income grow by 9.4% to $2.91 billion from $2.66 billion the prior year. Net premiums earned also rose by 2.7% from $2.57 billion to $2.64 billion.
The firm is still assessing the impact of the current coronavirus, and added that its main area of exposure would be in event cancellations travel and personal accidents – however only small claims have been received.
Hiscox declared an annual dividend of 29.6 cents per share, giving a total of 43.35 cents – seeing a 3.6% jump from 41.85 cents across 2018.
Bronek Masojada, Chief Executive Officer, Hiscox Ltd, commented:
“Our strategy of balance, between big-ticket lines and our more steady retail earnings, provides resilience and opportunity. Our growing Retail profits and strong investment return has enabled us to weather a third consecutive year of storms. We are investing for growth as we look to capture the many opportunities we see ahead.”
Going forward, Robert Childs, Chairman added:
“We aim to balance Hiscox Retail with the higher-volatility big-ticket businesses. Looking forward, we expect our retail business to get back on track, with better growth this year than last and an improved combined ratio. We will trim the reinsurance business to suit conditions. The London Market is seeing improvements in rates and conditions. In the past these improvements have made it straight through to much better returns. We have the brand, talent and diversity of product and geography to make the most of the opportunities ahead.”
Hiscox suffer FTSE 100 demotion
In December, Hiscox looked likely to be relegated into the FTSE 250. The firm had seen a mixed period of trading over the last year, as reported in November. For the nine months to 30th September, gross written premiums grew 5.6% to $3.21 billion from $3.04 billion a year prior. Additionally, gross written premiums grew 7.3% on the year before showing strong ground made by the UK based insurance provider. Hiscox came to the $165 million claims reserve after assessing the insured market loss for Hurricane Dorian in August, Typhoon Faxai in late August and early September, and Typhoon Hagibis in October. Dorian struck Bermuda, Faxai affected Japan and Hagibis touched a number of countries including Japan and Russia. For the full year, Hiscox expected its combined ratio of between 97% and 99%. Any combined ratio below 100% means an insurer made a profit from its underwriting, which is a positive note for investors. Hiscox is targeted a combined ratio of between 90% and 95%, in the medium term and could be set to achieve this. Shares in Hiscox trade at 1,285p (+4.81%). 2/3/20 10:55BST.Boris Johnson intends to ‘drive a hard bargain’ in UK-US trade talks
Boris Johnson has told the UK that he will drive a hard bargain, following plans to negotiate a trade deal with the US.
Last week, Liz Truss welcomed Robert Lighthizer into London – as the two parties looked to sit at the negotiating table to discuss trade formalities.
Since the December election, PM Johnson has made a number of pledges including trade deals outside of Brexit.
The last few weeks have been busy for the British Prime Minister, and certainly a deal with the United States should fall at the top of his priority list.
The newly elected Conservative Government have promised to boost the British economy by almost £3.5 billion, benefit areas such as Scotland, the Midlands and also maintain food standards across the United Kingdom.
There was heavy speculation that the NHS could also be partially sold off, in an attempt to partially privatize the UK Healthcare System, in similar fashion to the US.
However – Johnson has reaffirmed his status saying that the NHS is not for sale, and that the NHS will continue to work in the interest of British people.
“We’re going to drive a hard bargain to boost British industry,” said Mr Johnson.
“Trading Scottish smoked salmon for Stetson hats, we will deliver lower prices and more choice for our shoppers.”
Talks with the US are expected to start this month – however there is more optimism that a post-Brexit deal with the United States can be struck, following the difficulties that Johnson currently faces in Brussels.
The relationship between Johnson and Trump seems to be amicable – Trump is currently embarking on his election campaign and has visited India most recently, whilst looking to capture the American vote to give himself another tenure in office.
Frances O’Grady, general secretary of the Trades Union Congress, said: “The government should be focused on getting a good trade deal with the EU – not cosying up to Donald Trump.”
Following sanctions and exports between both nations, it is difficult to speculate which direction these talks could go in.
The US is the UK’s second largest trading partner after the EU, and this is something that PM Johnson will have to bear in mind.
Following the apparent ‘decline’ of the special relationship with the USA, Boris Johnson will have to make sure that he strikes a balance between getting a good deal with the US and not hindering further relations – which could lead to tariffs, embargo and other economic sanctions.
Senior shares jump 7% on mixed final results
Senior plc (LON:SNR) have seen their shares spike following a mixed set of final results.
Shares in Senior trade at 152p (+7.65%). 2/3/20 10:12BST.
The engineering and defense first said that its’ results had been pleasing, despite the recent problems that Boeing (NYSE:BA) had been facing.
The Chief Executive noted: “Senior has delivered robust full year results for 2019 with adjusted earnings per share growth and a strong free cash flow performance. This result has been delivered in a period where the business has faced challenges caused by the grounding of the Boeing 737 MAX fleet.
The civil aerospace market has been impacted by the grounding of the Boeing 737 MAX fleet following the Lion Air and Ethiopian Airlines tragic air accidents. As a consequence, in mid-April 2019 Boeing reduced the programme build rate from 52 airplanes per month to 42 per month. In December 2019, Boeing announced the temporary suspension of 737 MAX production beginning in January 2020, pending the certification and return to service of the airplane.”
Despite the strong final results, Senior did allude to drops in revenue across 2020, however shareholders have reacted optimistically to the update provided today.
The firm reported that revenue had jumped 3% across 2019 to £1.11 billion, but without currency movements the figure saw a decline.
Looking at profit figures, Senior saw their pretax profits fall by 53% on an actual basis, tp £28.7 million.
The FTSE 250 listed firm added that they had been bruised by a £22 million loss in disposal following the sale of its Flexonics operations in France in 2019.
The aerospace division, saw their revenues increase by almost 6% to £835.4 million, however adjusted operating profit in the division dropped 8.7% to £76.4 million.
Going forward, the firm did not give such an optimistic sentiment for 2020. Senior expect Aerospace revenue to drop by around 20%, as performance will be more second half weighted.
Senior have proposed a final dividend of 5.23p per shares, giving a 2019 total of 7.51p.
Commenting on the results, David Squires, Chief Executive of Senior plc, said:
“Senior delivered robust full year results for 2019 with adjusted earnings per share growth and a strong free cash flow performance. This result has been achieved in a period where the business has faced challenges caused by the grounding of the Boeing 737 MAX fleet. It is clear that our performance in 2020 will continue to be affected by the 737 MAX situation and the Company is taking all necessary actions to mitigate the impact.
We are closely monitoring the development of the coronavirus (COVID-19), including the potential impact of any macroeconomic disruption on our end markets, our supply chain and those of our customers.
However, we entered 2020 with a robust balance sheet and a continued focus on cost, efficiency and cash generation. We are taking firm actions to restructure the business and have every confidence in returning to growth in 2021.”
Senior review their Aerostructures division
In December, the firm gave an update saying that they would be performing an internal review. Senior confirmed that it has been reviewing all strategic options for its Aerostructures business, which includes an early stage assessment of a potential divestment of the division,” the FTSE 250 listed company said. The Hertfordshire-based company added that the Aerostructures review is in line with Senior’s policy to review its portfolio and evaluate all its operating businesses in terms of their strategic fit within the group. The Aerospace unit supplies components for airplanes such as Boeing accounts for 70% off overall revenues, and the aerospace business includes divisional sections such as fluid conveyance and engines.Sage dispose Brazilian operations within £10 million deal
The Sage Group Plc (LON:SGE) have told the market that they have sold their Brazilian business on Monday.
The FTSE 100 listed firm said that the deal had been completed with local management in a deal valued at up to £10 million.
Following its annual results – which were published last year, Sage noted that it was looking to offset its Brazilian operations.
The initial deal will cost £1 million, and there could be a deferred consideration of up to £9 million.
Sage added that the business had decided to restructure their focus and strategy – more towards subscription software services and products.
The firm commented: “This divestiture is part of Sage’s strategy to focus on subscription software solutions that are in or have a pathway to the Sage Business Cloud.”
The deal is expected to be completed within the next two months – and shareholders have been pre-warned that the firm may face a loss on disposal of £15 million.
Sage concluded: “Sage expects to report a statutory non-cash loss on disposal of £15m on completion, of which £11m reflects the reclassification of foreign exchange losses from other comprehensive income to the income statement.”
Sage’s strong start to 2020 slows down
A few weeks back, the firm reported that it had seen strong trading across its North American and European business. Sage alluded to double digit revenue growth in the first quarter of its financial year, as shares took to the rise. The firm told the market that it had achieved recurring revenue of £410 million in the three month period ending in December. Notably, this was 11% higher than before and attributed the growth of software subscription by 25% to £286 million. Recurring revenue was gained from strong performance in both North America and North Europe, with strong momentum in its financial year continuing. North America recurring revenue was up 12% to £154 million, and Northern Europe rose 15% to £93 million.
Gender and ethnic diversity among the FTSE 100 company boards
Many companies in this day and age vow to encourage diversity throughout their business. But how many of these firms have boards which reflect this very mindset? We’ve taken a look at some of the most and least diverse FTSE 100 boards in terms of gender and ethnic equality.
Barclays (LON:BARC)
Let’s start with one of the world’s leading multinational investment banks and financial services companies. The board is currently made up of thirteen individuals. Of these, four are women and two are of a BAME background. That’s not a bad divide for the British bank with almost a 50/50 diversity split.HSBC (LON:HSBA)
Next we have a competitor of Barclays – HSBC. The bank’s board of directors is also made up of thirteen people. Among these directors, six are women and three are of BAME backgrounds (of which two are also women). Therefore, the firm’s board is rather diverse with the majority of positions filled by social minorities.JD Sports Fashion (LON:JD)
Let’s move on from the banks and take a look at a couple of retail companies. JD Sports is a sports-fashion retail company based in the UK, but with stores across the globe. Its board of directors consists of seven leaders, and two of these are women. The FTSE 100 lister does not have any directors of BAME backgrounds sitting on its board. Granted there are only seven members, but this is not a representative board at all for ethnic minorities.Burberry Group (LON:BRBY)
Next we have a retailer which falls under the luxury end of the fashion market. Burberry is a British luxury fashion house based in the UK; it’s products are iconic and are recognised by most for their unique print. The company has eleven people sitting on its board of directors. Five of these are women, and one of these women is from a BAME background. Burberry’s board is rather diverse in terms of gender, but it could certainly be more varied in terms of ethnicity.EasyJet (LON: EZJ)
Most of us have travelled with easyJet to reach destinations within Europe. The British airline is known for its low-cost flights and most flyers have used easyJet at least once in their travels. But how diverse is the company’s board of directors? Well, there is not a single person from a BAME background sitting on its board. Instead, there are four women and seven men. This is a rather poor show from the airline; just over a third of its management are women, but there is no ethnic diversity.Whitbread (LON:WTB)
The British multinational hotel and restaurant company, Whitbread, is the last firm on our list. Similarly to easyJet, its senior management does not include a single individual from a BAME background. Whitbread’s board of directors consists of eleven people; four women and seven men. There may be some variation in gender, but the company’s board is certainly lacking in ethnic diversity. What the majority of these companies are missing at a senior level is ethnic diversity. Gender equality seems to be growing, but there is still an absence of BAME representation on many of these boards. Back in 2017, companies were given four years to appoint at least one ethnic minority board member. The deadline is approaching, so where is the representation?3 reasons it’s the best time to buy Shell shares since 2015
Blue-chip oil extraction and refinement company Royal Dutch Shell (LON:RDSB) has long been known as a reliable sit and hold stock, but recently the company has been at the forefront of the Coronavirus-led commodities crash, with its share price falling at a rate not seen since the start of 2015.
Value for money
The company’s shares finished Thursday trading at 1,732.40p per share, down 3.00% or 53.60p 27/02/20 16:35 GMT, and a far cry from the 2,804.00p peak seen on the 18th of May last year. The company’s shares have spent most of the last decade trading at over 2,000.00p per share, with only one other notable dip, down to 1,351.50p per share on 15 January 2015. What this suggests is that the company’s share decline could have a little way to go before consolidating and/or recovering. In the grand scheme of things, though, the iron is certainly hot. The company’s shares have dipped consistently from 2,581.00p a share on the 28th of June 2019, with the current price representing a five-year nadir. What should be apparent though, is that over the last two decades, the company’s price trend clearly illustrates an ability to recover from troughs, with an largely upward direction of travel.Income not to be scoffed at
On the 30 January, the company announced a fourth quarter (FY19) dividend of US $0.47 a share, level with its dividend paid for the previous quarter. As stated earlier, Shell should be seen as a sit-tight stock. Despite having a fairly reliable upwards trajectory, its main attraction is its widely-documented income potential. At present, its dividend yield stands at 8.48%. This is extremely generous. If we’re looking for a place to tuck our money away and see a healthy income roll in, Shell is among the best equities to do this with. It’s large cap, well-known and regardless of its share price, we know that appealing dividend is being paid into the account every quarter.Even Shell have had enough of shelling out
At the end of January, Shell posted its most recent set of quarterly results, in which its CEO Ben van Beurden acknowledged a challenging trading environment, and restated the company’s commitment to buying back shares.“The strength of Shell’s strategy and portfolio has enabled delivery of competitive cash flow performance in 2019 despite challenging macroeconomic conditions in refining and chemicals, as well as lower oil and gas prices. We generated $47 billion in cash flow from operating activities excluding working capital movements and distributed over $25 billion in dividends and share buybacks to our shareholders.”
“We remain committed to prudent capital discipline supported by world-class project delivery and are looking to further strengthen our balance sheet while we continue with share buybacks. Our intention to complete the $25 billion share buyback programme is unchanged, but the pace remains subject to macro conditions and further debt reduction.”
Now, we can infer a few things from its commitment to buyback its shares (which has been backed up by two buybacks of its Class B shares and four buybacks of its Class A shares within the last week), four of which are worth noting. First, it could perhaps tell us that the company recognises the generosity of its own dividend payments and wants to minimise the ensuing costs. Dividends are a cost of equity, and buying back its own shares could give us an idea that it thinks the short-term cost is preferable to the long-term burden of pay-outs to its shareholders. Secondly, it also tells us that its the time the company are happy to buy their own shares. Buybacks occur at or around market rate, and thus to initiate a buy-back programme, even blue-chips will tend to opt for time periods where they perceive they’re getting value for money. Ergo, Shell may be telling us they think their own shares are undervalued, and this is the right time to buy. Third: fewer mouths, more pie. This one is nice and straightforward – fewer shareholders at the table, more earnings for those remaining. A company’s dividend cover – in particular its EPS – will be stretched between fewer shareholders, and thus those who hang tight will see their already generous earnings increase. Finally, share buybacks usually drive prices up. If the company continues its commitment to buying back its own shares, this could well contribute to the long-term rise in its share price. While this point is perhaps a little less strong than the others put forwards, Shell buying back its own shares could give us confidence in its ambition to maintain long-term share price growth, and at best could even express a desire to turn around the current share price dip. To wrap up: Shell may or may not have seen the end of its share price dip, but it represents good value in comparison to the prices it has spent the majority of its time frequenting over the last decade. For this reason – and its attractive income – I’d say either now or in the near future, would be a good time to buy into the company. Analysts from Berenberg reiterated their ‘Buy’ stance on the Group’s stock on Monday.