Domino’s boast fourth quarter growth in UK and Ireland
Domino’s Pizza Group PLC (LON:DOM) have seen fourth quarter revenue growth in their most recent trading update published today.
Domino’s, known for their mouth watering pizzas, range of sides and the notorious “two for Tuesday” deals have seen a mixed period of trading, however the update today will please shareholders.
The firm reported fourth quarter revenue growth, which was driven by better performance in the UK and Irish market.
Domino’s also noted that there are procedures that are currently taking place which involve the disposal of their international operations, which was the subject of headlines a few months back.
The firm said: “In October, we announced that Domino’s Pizza Group would be exiting our directly operated international markets, with the intention of finding more suitable owners for these businesses, ensuring the Domino’s brand remains and thrives in these countries. Since this announcement, the Board’s focus and priority has been on Norway, given the significant operating losses in this market. Once we have agreed a transaction for Norway, we will focus on progressing transactions for our businesses in Sweden, Switzerland and Iceland. We are focused on securing the best possible terms for shareholders and are working closely with Domino’s Pizza Inc throughout. We will update the market in due course.”
In the 13 weeks to December 29, group sales were 3.7% higher year-on-year at £352.0 million from £339.6 million, one impressive statistic to take from today’s update.
On an organic metric, at constant currency and excluding acquisitions and disposals, sales climbed 4.1% from the year prior.
In the UK and Ireland, sales jumped 4.4% from £312.9 million to £326.7 million, on organic measures this also showed a 4.5% rise.
Like-for-like sales in the UK alone were 3.9% higher during the quarter, though in Ireland, they were down 1.0%.
Internationally, Domino’s have struggled and business has slumped. Once again this sentiment was reflected in the figures from today’s update.
Looking at international business, sales were down 4.9% to £25.3 million from £26.6 million. Domino’s said its disposal program is “progressing” and added that it is focusing on offloading its Norway operations.
David Wild, Chief Executive Officer, said:
“I am pleased with the performance of our core UK and Ireland markets, with system sales up 4.4% and UK like-for-likes up 3.9%, against a strong comparative and a competitive backdrop. This performance was driven by the power of our brand, our strong digital capabilities and the operational expertise of our franchisee partners.
“At the end of the period we announced the tragic passing of our CFO, David Bauernfeind. David will be deeply missed by all who knew him and worked with him. He leaves behind a high-quality finance team who have shown remarkable resilience and dedication over the past month, and we are well advanced in the search for an interim CFO.
“We look forward to announcing our preliminary results next month and updating the market on strategic progress made over the last few months.”
Babcock CEO announces departure after 4 year stint
Babcock International Group PLC (LON:BAB) have told shareholders about a couple of changes to their senior board on Wednesday.
The firm said that Chief Executive Officer Archie Bethel will be stepping down from his role, and will depart when a suitable replacement is found.
Bethel has held his role for four years, and has been with Babcock for 16 years since his initial appointment since 2004.
Ruth Cairnie, Chair, said: “On behalf of the Board, I want to thank Archie for his service to Babcock, during which time he was instrumental in growing Babcock from a small cap to a leading defence business. Archie has been a proven and respected leader, whose knowledge and understanding of the sector is second to none.”
Archie Bethel, Group Chief Executive, said: “Having served at Babcock for 16 years, I feel that this is the right time to retire. In the meantime, I am focused on positioning the Company for further success in the future. It has been an honour and privilege to serve at Babcock and I am proud of what the Company has achieved.”
Babcock also announced that it would be appointing United Utilities Group PLC’s Chief Financial Officer Russ Houlden as non-executive director with effect on April 1.
Houlden has held his role at United Utilities for ten years since 2010, and has also held senior roles on the reporting committee of the 100 Group.
“Russ has been an integral part of the work we have done in recent years to transform the organisation, helping us to deliver best ever levels of customer service, a more resilient network and real gains in operational performance and efficiency. Alongside this, Russ has helped secure a robust and sustainable financial profile for the company, including securing a fully funded pension scheme on a self-sufficiency basis,” said United Utilities Chief Executive Steve Mogford.
Transition period for Babcock
Babcock have seen a steady period of growth across the last few months, and in November the firm saw interim profit growth. For the six months to September, the firm reported pretax profit of £152.5 million, which was a huge rise from the £65.1 million figure a year ago. However on an underlying basis the figure dropped by 18% to £202.5 million from £245.5 million. Revenue meanwhile dropped by 2.7% to £2.19 billion from £2.25 billion the prior year, with underlying revenue also slipping by 4.7% to £2.46 billion from £2.58 billion. Babcock said that the revenue dropped because of the step downs in its Queen Elizabeth Class aircraft carriers contract, which contributed heavily to the falling revenue figures. Statutory pretax profit benefited from the lack of exceptional charge of £120.4 million, which alluded to the restructuring of the oil and gas division. Bethel leaves at a time where Babcock look like they are in good footing and in a period of transition, and the firm will take rigorous checks to make sure a suitable successor is found. Shares in Babcock trade at 598p (-0.63%). 5/2/20 10:57BST.Smurfit Kappa bounce back and swing to a profit in 2019
Smurfit Kappa Group Plc (LON:SKG) have swung to an annual profit and given shareholders an impressive update on Wednesday.
The Dublin based firm said that it had reached an annual profit across its financial year and as a result has lifted its final payout.
Notably, the firm said that one of costs across 2018 and issues with its Venezuelan business didn’t repeat, which allowed a strong performance across 2019.
Smurfit Kappa reported a pretax profit of €677 million, swinging from 2018’s €404 million loss, certainly impressive considering the struggles that the firm faced in 2018.
Looking at its 2018 business, the FTSE 100 lister said that it reported €1.34 billion in exceptional items relating to structural and operational issues in Venezuela.
Following these problems, the Venezuelan government took control of Smurfit Kappa Carton de Venezuela in the third quarter of 2018.
As a result, the firm dissolved its operations in the country, which seems to have been a blessing in disguise from the update today.
Smurfit raised its final dividend by 12% to 80.90 cents a share, taking its full-year payout to 108.80 cents, up 21% from 89.90 cents.
Smurfit bounce back in 2019
Following the strong results posed this morning, CEO Tony Smurfit commented “2019 represents another period of strong delivery and performance for SKG. EBITDA was €1,650 million, a 7% increase on 2018 with an increased EBITDA margin of 18.2%. Our vision is to be a globally admired company, dynamically delivering secure and superior returns for all stakeholders. Our recent performance shows progress towards the realisation of our vision. “Across 35 countries, we continue to create market leading innovative solutions for over 65,000 customers, delivering sustainable and optimised paper-based packaging. The 2019 outcome also reflects our performance culture, which has, at its core, an unrelenting customer focus. “During the year, we continued to strengthen our integrated model, following the acquisition of Reparenco in 2018, and our more recent acquisitions in France, Bulgaria and Serbia. These acquisitions significantly enhance our business and further expand our geographic reach. As with previous mergers and acquisitions, the new teams have integrated well and further strengthen the depth and quality of the Group. “Our European business continued to perform strongly, delivering an EBITDA margin of 19.0%. Demand growth was ahead of the market and in line with our expectations for the year with particularly good performances in Iberia and Eastern Europe. “The Americas region continued to perform well, delivering an increased EBITDA margin of 17.5% up from 15.7% in 2018. Our three main countries of Colombia, Mexico and the US had strong financial performances with demand in Colombia particularly strong. “A central element of our continued success is the quality of our people. To ensure SKG attracts, retains and develops the best talent, we partner with leading global business schools such as INSEAD to develop global training programmes across our business. In the last three years alone, over 1,400 have participated in these programmes across the Group with many thousands more on local educational training programmes. “Through our unique market offering, our ESG credentials, and a suite of industry leading applications that are impossible to replicate, SKG is increasingly well positioned to capitalise on the industry’s long-term growth potential. Our product is renewable, recyclable and biodegradable and is the most effective transport and merchandising medium for our customers, while improving their environmental footprint. The consistency of our delivery strategically, operationally and financially, through our recent Medium-Term Plan, reflects both the quality of our people and our world-class asset base. “From a demand perspective, the year has started well and, while macro and economic risks remain, we expect another year of strong free cash flow and consistent progress against our strategic objectives. “Reflecting the Board’s confidence in the unique strengths of SKG and its prospects, the Board is recommending a 12% increase in the final dividend to 80.9 cent per share.”Smurfit win eco-trends market
In October, the firm saw its shares in green once again as Smurfit looked to captivate the eco-friendly green trend which has been flooding business strategies. The Dublin based packaging firm said it delivered a “strong performance” in the year-to-date. For the nine months, ending on September 30th revenue was up 3% to€ 6.85 billion and earnings before interest, tax, depreciation and amortisation 11% higher at €1.26 billion. The FTSE100 listed firm also reported that Ebitda margin increased 140 basis points to 18.3%. Notably, American operations also grew approximately 2% with continued EBITDA and EBITDA margin improvement year-on-year.Raparenco acquisition
A while back back, Smurfit also reported that that they had struck a deal with Dutch paper and recycling firm Raparenco in a €460 million acquisition. The transaction is designed to be earnings accretive, with the addition of Raparenco expected to lead to savings of over €30 million. Including an Ebitda of €72 million, Raparenco’s Ebitda and synergies equate to a transaction multiple of less than 4.5. The update from Smurfit Kappa today is impressive, and the firm have bounced back with a rigid growth strategy coupled with a shrewd acquisition. Shares in Smurfit Kappa trade at 2,900p (+6.70%). 5/2/20 10:44BST.Imperial Brands dives over 7% on issuance of profit warning
Imperial Brands PLC (LON:IMB) have seen their shares dive on Wednesday morning following the issuance of a profit warning from the firm.
The tobacco multinational has seen a mixed period of trading over the recent months, however the update today has led to shares diving over 7%.
Shares in Imperial Brands trade at 1,807p (-7.46%). 5/2/20 10:23BST.
The FTSE 100 listed firm said that tobacco trading has remained steady and that expectations are set to me on Wednesday morning.
“Tobacco trading remains in line with expectations, with a weighting to the second half as previously guided. However, following the US FDA’s ban on certain flavours of cartridge-based vapour devices and weaker than expected consumer demand for vapour, we now expect constant currency full year Group net revenue to be at a similar level to last year and adjusted earnings per share to be slightly lower than last year”, the firm said.
However, group constant currency net revenue is now at a similar level to last year which has led to adjusted earnings per share being slightly lower than the comparable figure one year ago.
The firm told the market that the US Food and Drug Administration had placed regulation and bas on certain flavors of cartridge-base vapor devices, as well as weaker-than-expected consumer demand for vapor.
Additionally, Imperial said that it expects a currency headwind on net revenue and adjusted earnings per share of 1% for the half year period, and 3% for the full year.
First half adjusted earnings per share are expected to be down around 10% at constant currency, which the company said is due to the phasing of inventory write-downs, “primarily relating to the US flavor ban”.
Imperial said half-year adjusted operating profit will take a £45 million bruising from the inventory write-down, which Imperial said is in line with its previous estimates, as shareholders were quick to latch onto this as reflected in this mornings share price movement.
The firm gave shareholders something to be pleased about looking at their tobacco business, saying the following:
“Our Tobacco business has had a good start in the first three months of the year with market share trends across the majority of our priority markets. The Europe division has benefited from price/mix gains, which have largely offset weaker volume trends. Our US business remains strong, although financial delivery has been temporarily affected, as anticipated, by wholesaler destocking following the year end price increase. The Africa, Asia and Australasia division has delivered revenue growth reflecting a strong volume performance and the sell-through of the Australian duty paid inventory.”
Imperial elect new Chief Executive
On Monday, Imperial announced that they would be appointing a new Chief Executive. The tobacco company said that car dealer Inchcape PLC’s current Chief Executive Stefan Bomhard will join in a future date. Notably, the firm said that Aliso Cooper who is their Chief Executive has stepped down with immediate effect now that an adequate replacement was appointed. The update today will have given shareholders a shake up and slight worries, however with the new changes to the board Imperial will hope that this can take them in the right direction.Alumasc profits fall but foundations laid for strong second half
Sustainable building and engineering product supplier Alumasc Group (LON:ALU) posted a slight downturn in its half-turn results, due to challenging market conditions. However, the company’s outlook appears more positive.
Owing to operational changes and political tensions, the group had to content itself with ‘resilient’ results.
The company’s revenue narrowed to £41.1 million for the six month period ended 31 December 2019, down from £44.3 million for the same period a year earlier. Similarly, the Group’s statutory profit before tax dropped from £3.4 million to £2.1 million, while underlying profit before tax remained flat at £2.3 million at the end of both half year periods.
Further, Alumasc net debt widened from £5.1 million as of 30 June 2019, to £6.6 million at the end of the calendar year.
However, the company were pleased to announce its underlying operating margin had improved to 6.1%, up from 5.4%, and its triennial pension deficit valuation at 31 March 2019 was ‘significantly lower’ at £22.4 million, versus £33.0 million in 2016.Alumasc comments
Responding to the posting of the results, company Chief Executive Paul Hooper, stated:“In light of the challenging market conditions in 2019, we acted swiftly to restructure and reposition the Group in the second half of our last financial year. This underpinned a resilient H1 profit performance.”
“The Group’s pension deficit and cash funding requirement are significantly reduced.”
“With an increased order book of £23.6 million, up over 10% on six months ago, strong contract pipelines and the Group’s usual seasonal trading bias towards the second half referenced in the Outlook Statement, the Board’s expectations for full year performance remain unchanged.”
“The Board remains confident in prospects for the medium and longer-term performance of the Group in view of our leading specialist market positions in water and energy management, addressing climate change and the growing sustainability agenda.”
Strong second half expected
Looking ahead, the company’s outlook statement read:
“Group order books in the six months to 31 December 2019 were up by £3.0 million to £23.6 million, with encouraging trends across the Group, except for Levolux where we are being deliberately selective and cautious with order intake in line with the turnaround plan. Contract pipelines are strong at both Alumasc Roofing and Gatic, with a £1m project recently secured by Alumasc Roofing expected to deliver a positive impact in the second half year.”
“We anticipate that Alumasc should benefit from its usual seasonal second half trading bias. This could be more marked in the current financial year as we expect Levolux to return to profit in the coming months as it trades out of underperforming contracts from a significantly lower overhead base.”
“More broadly, with around two-thirds of Group revenues relating to the management of the scarce resources of water and energy in the built environment, and circa 75% of the Group’s products sourced from recycled or recyclable materials, the Group should benefit from the growing sustainability agenda as well as from increasing business confidence and positive market indicators in the UK economy following the recent General Election and EU Withdrawal Agreement.”
Investor notes
Following the update, the company’es shares rallied 5.14% or 5.50p to 112.50p per share 04/02/20 17:07 GMT. Analysts from Peel Hunt echoed the positive Alumasc outlook, upgrading their stance from ‘Add’ to ‘Buy’. The Group’s p/e ratio stands at 8.63, their dividend yield is generous at 6.53%.Numis equities trading performance “very strong” post General Election
For the four month period ended 31 January 2020, institutional stockbroker and corporate advisor Numis Corp (LON:NUM) posted strong results, with performance ahead of the comparable period the year before.
Revenue was in line with management expectations. Despite the pause in corporate activity caused by the General Election, Investment Banking revenues were materially ahead of the prior year based on a material increase in average deal fees.
The company added that while transaction volumes for the year-to-date remain broadly in line with the previous year, they expected activity to pick up as the year progressed.
The real highlight came with the Group’s equities trading, which was ‘significantly ahead of the comparable period’. Strong market activity post General Election saw the company’s Institutional Income and trading book deliver consistently during the four month period.
Numis added that following its recent engagement with institutions, it thought its payments for Research and Sales for the full-year would be broadly in line with expectations.Numis looks ahead
Discussing its strategy and outlook, the company’s statement read:“We remain focused on executing our strategic objectives and establishing Numis as a diversified investment banking business. Private markets transactions have delivered a meaningful contribution to our Investment Banking revenues since the start of the financial year following the completion of a number of transactions for both UK and international companies. In addition our Equities business has now launched an electronic trading product which is targeted at capturing incremental revenue from new and existing clients, as well as enhancing our execution capabilities beyond UK Equities.”
“Our investment across the business over recent years alongside our strong corporate client base assists in ensuring Numis is well placed to capitalise on an improvement in market conditions and deliver revenue and profit growth.”
Investor notes
Following the update, the company’s shares dipped 1.38% or 4.00p to 285.00p per share 04/02/20 16:35 GMT. The Group’s p/e ratio stands at 32.84, their dividend yield is moderate at 4.15%.SEC Newgate rallies 13% – results meet expectations following merger
Research, communications and advocacy group SEC Newgate SpA (LON:SECG) announced on Tuesday that it expected to post strong full-year results following its merger with Porta Communications in September 2019.
It said results for the joint group were expected to be in line with management expectations.
Forecast unaudited consolidated total turnover is EUR 47 million, alongside consolidated unadjusted Operating Profit of c. EUR 2.3 million and consolidated unadjusted PBT of c. EUR 1.6 million.
The company added that its net debt at the year’s end was expected to be c. EUR 9.0 million, excluding the impact of IFRS 16 adjustments.
SEC Newgate comments
Fiorenzo Tagliabue, Group CEO, stated:
“The unaudited consolidated figures reflect the significant progress we have made since the merger in September 2019. Our three-year Strategic Plan is being implemented, an example of which was our replacement €3 million banking facility secured with Deutsche Bank S.p.A., on preferable terms with no security or covenants, reflecting the improved financial stability of the Group.”
“Our agile teams are now working together across the communications spectrum building and protecting brands, reputations and business. We are committed to creating positive change for our people, clients and shareholders and have had a strong start to the new financial year.”
Investor notes
Following Tuesday’s announcement, the SEC Newgate shares were up 13.70% or 5.00p, to 41.50p per share 04/02/20 11:50 GMT. The Group’s p/e ratio is 4.71, their market cap stands at £9.70 million.Western Equities salved by WHO statement on Coronavirus
Western equities were soothed by the WHO statement on Coronavirus on Tuesday afternoon, which stated that ‘we are not in a pandemic’.
After worries of a potentially deadly virus spreading across the Eurasian land mass, the trends so far appear to suggest the illness lacks the potency of previous pandemics such as Ebola, and doesn’t emulate the contagious potential of well-known illnesses such as mumps and measles.
At present, some 425 people have been killed by the virus, with over 20,000 infected.
The World Health Organisation has attempted to deflate the hysteria surrounding the illness, instead opting to focus on offering advice and reassurance, alongside advice for reducing the risk of Cancer on World Cancer Day.
Responding to the relative calm of health experts, Western market indices crept upwards, before being buoyed by the Dow Jones’s lively start. British Foreign Secretary, Dominic Raab, has encouraged British citizens to leave China if possible, and said the government were continuing their efforts to evacuate UK nationals from Hubei province, where possible. Speaking on the Coronavirus and the reaction of Western equities to today’s developments, Spreadex Financial Analyst Connor Campbell stated,Q: Who can catch the #2019nCoV? A: https://t.co/j6HsqP9iJb pic.twitter.com/dVqRhnKIxH
— World Health Organization (WHO) (@WHO) February 4, 2020
“With the Dow Jones joining in with the rebound, there was no reason for the European markets to slow down on Tuesday.”
“Sentiment was helped by the World Health Organisation stating that ‘currently we are not in a pandemic’. Add onto that another injection of $71.5 billion into the banking system by the People’s Bank of China, and the country’s continued attempts to halt the transmission of the coronavirus, and the Western indices were free to go on rebounding.”
“The Dow Jones was clearly feeling much healthier. In one massive leap it reclaimed more than 400 points, almost taking it back to the 29900-plus levels struck before its 2% plunge last Friday. This surge came despite Alphabet’s (NASDAQ:GOOGL) 4% decline, investors upset at the Google-parent’s slowing ad revenue growth in the fourth quarter.”
“The DAX and CAC rose 1.6% and 1.4% respectively, like the Dow recovering the brunt of last Friday’s losses. The FTSE, meanwhile, rose 1.2%, the buoyancy provided by its swelling commodity stocks countered somewhat by sterling’s own rebound.”
“The pound rose 0.2% against the dollar and 0.4% against the euro, investors tentatively buying the currency at its recent lows after it was dealt a blow by last week’s conflicting trade statements from Boris Johnson and Michel Barnier.”
Escape Hunt solves recreation market puzzle and books a strong full year
Escape Hunt (LON:ESC) tapped into the strong demand for escape rooms among friends looking for an alternative to a normal night out, and work dos with a twist, posting good progress across its full-year fundamentals.
Across its owner-operated sites, the group’s unaudited revenue bounced from £1.1 million to £3.8 million year-on-year for the full year.
Additionally, the company’s most mature sites delivered like-for-like sales growth of 34% during the final quarter of FY19. During December, like-for-like sales jumped 70% across all eight of the group’s owner-operated sites.
The company added that its EBITDA was ahead of management’s expectations, and its number of UK game rooms widened from 38 to 49 during the year.
Regarding its franchise estate, the company delivered revenue of £1.0 million, which was in line with 2018. Its EBITDA was in line with expectations and ‘good progress’ was made with its US franchise partner.
Escape Hunt comments
Company Chief Executive Richard Harpham commented:“We are pleased with our progress in FY19. The performance of our owner-operated sites continues to give us confidence in the proposition and opportunity in the UK. The signing of the US franchise deal marked a significant step in accelerating the growth of our franchise business. Finally, we have made significant steps towards reducing the average unit build cost underpinning our confidence in the underlying returns profile for the business.”
“Our ambitious growth plans are centred on driving growth in our existing sites and expanding our footprint, which is underpinned by leveraging our market-leading brand. We remain excited by the significant opportunities ahead of us.”
Investor notes
Following the update, the company’s shares have dipped 5.97% or 0.93 p to 14.58p per share 04/02/20 15:04 GMT. The Group’s market cap stands at £4.11 million, Peel Hunt analysts downgraded their stance from ‘Buy’ to ‘Hold’ on the company’s stock. Escape Hunt performed well in 2019 with demand for escape rooms gaining momentum over time. The increasing diversity of activity-focused recreation and leisure opportunities, and the potential for the trend bubble to burst, both perhaps weigh on investors’ confidence in the company going forwards.Arc Minerals confirm copper mineralization in Zambia
Arc Minerals Ltd (LON:ARCM) have told the market about a new discovery at their Zambia copper operations.
The firm said that recent drilling at the Musweme prospect has confirmed the presence of copper mineralization. Interestingly, this brings the number of mineralized targets at Zamsort up to four, which was a pleasing take for shareholders.
As a result of the update, shares have jumped on Tuesday afternoon. Shares in Arc Minerals trade at 2p (+3.80%). 4/2/20 15:02BST.
The exploration company also said additional assays from its Cheyeza East prospect showed further near-surface intersections of copper mineralisation.
Nick von Schirnding, Executive Chairman of Arc stated:
“The identification of Muswema as another mineralised target is excellent news and confirms that our license areas are developing into a potentially significant source of copper. Additionally, the fifth hole at Muswema has intersected significant amounts of sulphide mineralisation at depth, assays for which are still pending, and importantly it’s the first time we have seen sulphides on this scale in our drilling to date on our licenses. This important development means Muswema becomes another key focus of our drilling strategy when we recommence shortly following the end of the rainy season.
It is also pleasing to report another set of strong results from Cheyeza East. The weathering profile now extends down to over 80m in places which means these near surface copper intersections would in effect not require any drilling or blasting to be excavated nor much crushing and grinding, which will have a significant positive impact on the overall economics for this prospect.”
Arc Minerals’ deal with Zaco Ltd
In July, the firm saw its shares rally after it acquired a 5% interest in Zaco Ltd.
“Following the discovery of the large West Lunga target (as per the announcement dated 4 July 2019), Arc Minerals has purchased a further 5% interest in Zaco from Rémy Welschinger, a Non-Executive Director of Arc, for a total consideration of 1,414,000 New Ordinary Shares of no par value in the share capital of the Company (“New Ordinary Shares”).”
The deal with Zaco reinforces the hungry nature of Arc to develop and grow, which will please shareholders. In the update, Arc highlighted the benefits of this interest and shareholders will note that the firm is constantly looking for opportunities to expand its’ horizons.November success
A few months on, Arc added to their recent run of good news as they tapped into further high-grade copper assays.
ARC Minerals Ltd announced othat it had discovered additional near surface, high grade copper assays from its maiden diamond drill exploration programme at its Cheyeza East project in Zambia.
The Group also posted a series of highlight high grade copper assay segments, the most impressive of which was 3.67% Cu over 5m from 34m.
Certainly, Arc Minerals have had a good few months and shareholders should be excited for the development and growth that is to be seen across 2020.