Three FTSE 100 listed firms that provide a measurable impact on the environment
Environmental policies have never been so important for businesses. Issues such as climate change and global warning are now becoming increasingly more avid as firms look to shift their operating strategy to combat climate change.
I have picked out three FTSE 100 listed firms, who I feel are providing a measurable impact on the environment through their policies, actions and responsibilities.
Rotork shares rally on boosts to its profits and dividend cover
British industrial flow control equipment Rotork (LON:ROR) saw its shares bounce during the Tuesday session, following the publication of its positive full-year results.
Despite the fact its revenue narrowed 3.8% year-on-year, to £669.3 million, the company led a concerted cost-saving campaign and ended up booking healthy profits for the full year.
Its adjusted operating profit bounced 3.4% on-year to £151.0 million, while its adjusted PBT jumped 2.9% to £148.1 million. Alongside this, the company also reported a 160 bps rise in its adjusted operating margin, up to 22.6%.
The real headline for many though, was that Rotork improved its income-making potential for its shareholders. During FY19, its adjusted basic EPS per share grew 3.2%, to 13.0p, while its full-year dividend saw an impressive 5.1% on-year increase, to 6.2p per share.
Rotork response
Reacting to its positive results, company Chief Executive Kevin Hostetler, commented,“Our Growth Acceleration Programme is on track and progress in 2019 was very encouraging. The year was about margin improvement, cash generation and laying the foundations for sales acceleration. We made excellent progress on all pillars of the Programme, including sales force re-alignment to end markets, lean initiatives, purpose and values launches and our IT solution design. We remain committed to delivering sustainable mid to high single digit revenue growth and mid 20s adjusted operating margins over time.”
“Looking ahead, it is too early to assess fully the potential impacts of COVID-19. Absent these, we were planning for modest sales growth on an OCC basis and margin progress in 2020, driven by further benefits of our Growth Acceleration Programme albeit with margin progress more gradual, reflecting our investment plans.”
Investor notes
Following the company’s announcement, its shares rallied 7.40% or 20.70p during Tuesday trading, up to 300.60p per share 03/03/20 14:49 GMT. Analysts from Peel Hunt reiterated its ‘Buy’ stance on Rotork stock. The Group’s p/e ratio is 22.21, their dividend yield is modest at 1.96%.Serabi Gold give operational update on Sao Chico
Serabi Gold PLC (LON:SRB) have given an operational update to shareholders today which has led to shares receiving a boost.
Shares in Serabi Gold trade at 83p (+3.75%). 3/3/20 14:18BST.
The gold miner told the market today that it had begun a 9,600 metre step out drill programme in the fourth quarter of 2019.
This operation was to test the east and west continuity of the orebody at the gold project.
Serabi have remained confident that the results from this drilling program can produce results at the Sao Chico orebody.
On the west side, drilling has been undertaken 300 metres beyond the current western limit of the mine, and the intersections are indicative of being able to extend this mine limit
Notably, the CEO Mike Hodgson added: “To the east we have also intersected high grade mineralization with the most easterly hole returning an intersection of 11.7 g/t Au over 1.2 metres. This result is located 220 metres to the east of the current eastern limit of the mine and therefore the orebody remains open to the east and justifies additional step out drilling to test this eastern extension.”
The firm noted that they have completed forty percent of the planned drilling program – and that this will continue until mid 2020.
Hodgson concluded: “The results from this drilling campaign are very encouraging. When the Sao Chico orebody first went into production drilling had been limited to testing of the orebody directly below the original artisanal workings. Subsequent terrestrial geophysics programmes undertaken in 2017 and 2018, highlighted the potential to extend the orebody to the east and west.
“Perhaps the most encouraging result is, however, what is now the deepest intersection at Sao Chico, where hole 19-SCUD-333 has reported a gold grade of 25.37g/t over a width of 4.08 metres. This hole is approximately 200 metres below the current lowest development level in the mine and therefore nearly 500 metres from surface. An intersection of this quality provides us with strong encouragement of continuity of the Sao Chico orebody at depth and therefore potential further resource growth and extended life of the operation.
We have now completed approximately 40 per cent of the planned drilling programme which will continue until mid-2020 following which the Company intends to undertake a new mineral resource estimate during the second half of the year. Results from the remainder of the drilling campaign will be issued as they become available over the coming months.”
Serabi Gold see positive few weeks
In January, the firm told the market that it had seen a productive fourth quarter. Production in Q4 was up to 10,223 ounces, which topped off annual production at 40,101 ounces, which represented a 7% improvement year-on-year, from 37,108 ounces during 2018. The company added that during the quarter, it mined a total of 44,092 tonnes of gold at 6.69 g/t of gold, as well as completing 2,908 metres of horizontal development. Operationally, it stated that it had undertaken electrical and mechanical testing of an ore sorter, which was in the ‘final stages’ of installation between the Group’s crushing and milling sections. Serabi’s year-end cash holdings stood at US $14.3 million, it anticipates full-year production in the region of 45,000 and 46,000 ounces.Begbies Traynor rallies 10% with trading in line with expectations
Business recovery, financial advisory and property services consultancy Begbies Traynor (LON:BEG), saw its shares rally during the Tuesday session, as it reported healthy performance during its third quarter,
For the period ended 31 January, the company said it:
“continued to trade well in the quarter with results showing strong growth in revenue and profit compared to the prior year.”It said this performance, alongside its positive first half, left it feeling confident about achieving full-year results ‘at least in line’ with expectations.
Begbies Traynor said its property advisory, transactional services and new acquisitions had all been trading in line with expectations, and that the integration of the Ernest Wilson business sales agency was ongoing.
It added that its recovery and financial advisory business performed will, benefiting from both organic growth and contributions from its current year acquisitions. The company said the insolvency market remained favourable, with a year-on-year increase of 7%, to 17,196 for 2019.Begbies Traynor response
Executive Chairman of the company, Ric Traynor, reacted to the results:“The group has delivered strong organic growth, complemented by good performances from our recent acquisitions. This, combined with continuing favourable UK insolvency market conditions, gives us confidence in delivering results at least in line with current market expectations for the full year. “
“We continue to increase the scale of our business recovery practice and extend our property services offering, and our strong financial position leaves us well placed to further build upon our track record of organic and acquisitive growth.”
Investor notes
Following the update, Begbies Traynor shares bounced 9.96% or 7.77p to 85.77p per share 03/03/20 14:03 GMT. The Group’s p/e ratio is 15.92, their dividend yield stands at 3.04%.Ryanair and Wizz Air release February passenger figures
Budget airline carriers, Wizz Air Holdings (LON:WIZZ) and Ryanair Holdings (LON:RYA) hav released their monthly passenger figures.
2020 has been a tough year for the airline industry. The ongoing coronavirus epidemic has meant that many travel restrictions have been enforced, and rivals such as IAG (LON:IAG) have suspended flights both ways into China.
Following the updates on the coronavirus, this week’s news headlines reported that the pathogen had hit Italy. Interestingly, both Ryanair and Wizz Air have operations in Italy – and so both firms have speculated on results going forward.
Looking at February passenger figures however – both firms were not significantly affected by the coronavirus, as results have shown progress.
Ryanair noted that passenger numbers rose 9% year on year in February, with a total of 10.5 million.
Notably, performance from its Austrian subsidiary Lauda was noted – as this division saw a 67% rise to 500,000 passengers. Ryanair’s group load factor was 96%, with a 96% factor for Ryanair and 94% for Lauda.
Looking on an annual rolling basis, the Irish budget airline also added that group passenger numbers climbed 8% to 153.8 million with a 96% load factor.
Turning to Wizz Air, the FTSE 100 listed firm reported that passenger numbers rose 26% to 2.4 million, against a year on year basis.
Wizz Air saw their passenger numbers rise 20% on a yearly rolling basis, to 41 million. Additionally, load factor rose to 93.7% from 92.6%, with capacity up 18%.
The future looks rather speculative for the airline industry at the moment. The UK Government today announced plans that would be put in place to contain the spread of the coronavirus – however further travel restrictions could be enforced, which may further bruise trading within the airline industry.
For both these firms, the worrying thing could be that the coronavirus is now affecting countries in Europe. Yesterday, Italian health officials released figures that showed the number of coronavirus linked deaths rising from 18 to 52.
As both firms drum up revenue from short haul flights to and from Europe – as travel legislation gets passed, this could sent a pessimistic tone within both Wizz Air and Ryanair.
Following the crash that the FTSE 100 faced last week, it was no surprise that airlines were hit the hardest. However, in the short term both Ryanair and Wizz Air will remain cautious as the full scale of the coronavirus is yet to be fully understood.
SkinBioTherapeutics widen loss in first half due to higher R&D costs
SkinBioTherapeutics PLC (LON:SBTX) have reported a mixed first half update on Tuesday, however shares have jumped.
Shares in SkinBioTherapeutics trade at 9p (+2.53%). 3/3/20 13:22BST.
The firm reported that its loss had widened across the first half of its financial year – as research and development costs tied in with operating expenses surged.
“During the first half of the financial year, the Company began its transition from one of scientific focus to progressing opportunities to commercialize its technology. SkinBioTherapeutics seeks to harness the microbiome for human health and has identified five channels in which it intends to develop its focus, encompassing both existing and new technology.”
The life sciences firm told shareholders that it had seen a pretax loss of £889,002 within the six month period which ended on December 31.
Notably, looking at an annualized metric – this was widened from the £632,279 loss recorded one year ago.
Looking at operating expenses, SkinBioTherapeutics noted that these costs rose 81% to £433,950 from £240,372.
Additionally, research and development costs also contributed to the widened loss – where these rose 16% from £391,907 to £455,052.
SkinBioTherapeutics added that no revenue had been generated across the half year, as the firm is still looking to commercialize its product range.
Stuart Ashman, CEO of SkinBioTherapeutics, said:
“The first half of the year has been focused on refining and starting to deliver on our strategy to commercialise the SkinBiotix® technology. The five pillars of the strategy comprise SkinBiotix®, AxisBiotix™, MediBiotix™, CleanBiotix™ and PharmaBiotix™ demonstrating our belief in the applicability of our technology.
“From talks initiated by Prof. Cath O’Neill, we have concluded agreements around two of the pillars already – SkinBiotix® and AxisBiotix™ – with Croda and Winclove respectively. Both companies are specialists in their fields and we believe both deals offer good growth and value opportunities to the Company, whilst aligning with our current cash position and timeline.
“As we integrate these initial agreements into our day to day working practices, we continue to seek other commercial partners as well as furthering the scientific base behind our technology.”
SkinBioTherapeutics agree deal with Winclove Probiotics
A couple weeks back, SkinBioTherapeutics told the market that they had agreed a treatment deal with Winclove Probiotics BV for development of a product. The company said that its subsidiary AxisBiotix Ltd has signed a development agreement with Winclove Probiotics BV, which would involve the treatment of psoriasis. SkinBioTherapeutics said that the companies had collaborated to help manage the symptoms of skin condition, psoriasis. Both firms will look to combine their knowledge and expertise to develop a probiotic blend of bacterial strains, based on the modifying properties of specific bacterial species on known psoriasis disease pathways. The blend will then be developed into a probiotic food supplement which will be named AxisBiotix. The life sciences and medicinal firm also said that it will take responsibility for the identification and selection of the bacterial strains and patient testing. Winclove, the other pattern will take control for the formation and manufacturing of AxisBiotix.IWG’s pretax profit triples across 2019, as revenues also surge
IWG PLC (LON:IWG) have given shareholders a strong update on Tuesday, which has given shares a boost.
The office space provider noted that it had also increased its share buyback program to £100 million following the rise in profits.
The FTSE 250 listed firm added that pretax profit had tripled across 2019 to £430.1 million from £138.7 million in 2018.
Revenue also surged 10% to £2.65 billion from £2.4 billion, however on a constant currency basis revenue increased slightly lower at 9.2%.
IWG noted that its pretax profit figures did include profit from the signing of master franchise agreements during the year, however these have been reported under discontinued operations.
Looking at pretax profit from existing operations, this measure slipped to £55.9 million from £109.6 million – the firm said that this was due to changes in accounting standards.
Notably, without the change to IFRS16 – IWG said that pretax profit rose by 9% year on year.
Following the confidence results, IWG lifted its final dividend by 10% to 4.8p – giving an annual payout of 6.95p.
Mark Dixon, Chief Executive commented: “2019 has been a transformational year for IWG. We made significant progress in our pivot towards becoming a franchised organisation and delivered strong revenue growth and record profits. We continue to see strong demand globally and to welcome more great partners to the business. As organisations increasingly seek ways to address the challenges of climate change, we believe that more and more are recognising the role to be played by remote, distributed and flexible working strategies.
The outbreak of COVID-19 has led to brief closures of our centres in China and we are closely reviewing the ongoing developments worldwide. Whilst we cannot be certain how long this situation will last; we continue to monitor the situation and will act swiftly where necessary to help ensure the safety and wellbeing of our customers and employees. We are extremely grateful for the incredible effort of our teams in dealing with this global health emergency.
We will continue to work closely with our partners, develop our network and invest in our people, our brands and our services, to ensure that we remain the leading player in our industry. Even in this period of global, political and economic uncertainty, we are confident that the Group will continue to deliver strong returns for all our stakeholders, and this is reflected in the increased proposed dividend and new £100m share repurchase programme.”
IWG continue to expand
In November, IWG reported revenue gains after opportunities for business expansion in its franchise department came to bloom. IWG reported a 9.4% increase in revenue to £692.3m in the three months to 30 September, driven by the Europe, Middle East and Africa (EMEA) and US markets. This comes after the news that IWG had sold its Swiss business in a £94 million deal, to a joint entity owned by private banking group J. Safra Group and real estate investor P. Peress Group. During the third quarter, IWG reported that company added 66 new organic locations to its network with net growth capital investment of £64.4 million. The FTSE 250 listed firm also reduced debt to £301.2 million from £433.9 million, which capped a strong update for IWG. Shares in IWG trade at 353p (+2.27%). 3/3/20 13:16BST.Can ‘Boris bounce’ in construction PMIs withstand Brexit & the Coronavirus crunch?
The UK’s construction PMIs recovered from a slow start to 2020, with its best monthly performance since 2015.
The ‘Boris bounce’ describes an influx of demand for housebuilding and commercial building work since the breaking of the political deadlock last December, with the highest rate of new construction orders since 2015.
This brought about the headline PMI figure of 52.6 for february, up from 48.8 for the previous month. The research, carried out by IHS Markit and the Chartered Institute of Procurement & Supply, showed the first growth in new orders in nine months, with scores over 50 representing growth. It was also said that new infrastructure projects, such as HS2, have had a positive impact on housebuilding sentiment and could potentially increase demand in areas outside of London.
Speaking on February’s positive construction PMIs, Kate Kirby, Construction & Infrastructure Partner at global legal business, DWF, commented,
“Following a nine-month period of decline, UK construction companies indicated a return to business activity growth during February, the sharpest rise in new orders since December 2015 and the strongest growth since end of 2018. This is likely due to the anticipated post general election ‘bounce’ and is a welcome boost for the sector.”
The Coronavirus fear pandemic
According to most, the main downside weighing on sentiment the world over, will likely be Coronavirus. It has already been documented that the world’s over-dependence on Chinese manufactured goods has been laid bare by the outbreak of the illness, and the disruption caused to supply chains looks likely to affect the flow of construction materials. This could mean that the current, fragile turnaround in property sector sentiment could be undone sooner rather than later, as companies look to put plans on hold.Echoing this solemn outlook, Kate Kirby continued,
“The question now is around the impact the coronavirus outbreak will have on the global supply chain of construction materials and workforce, which is likely to result in significant delays to projects. With investors speculating the global economy could grow at its slowest rate since 2019 due to the coronavirus outbreak, are we likely to see the same growth reported in the coming months? Probably not.”Brexit bullishness in construction?
According the the IHS Markit survey, building firms said activity began to pick up following the completion of Brexit, which was seen as a source of uncertainty. The greatest rebound came from residential construction, which saw its best performance since July 2018. To me this seems entirely counter-intuitive. Granted, the symbolic Brexit deadline has been passed and we’re one step closer to closing this political chapter, but surely the worst uncertainty is yet to come? Analysis of a potential trade deal with the US has yielded little but a pessimistic outlook for British growth, and with other deals on economic alignments yet to be dreamt up – as well as discussions about the movements of people and goods – I can’t see how there won’t be a dip on the horizon. At the very least, it seems intuitive to me that the time to buy isn’t now. Brexit hasn’t yet thrown its final blow to market sentiment, and I believe it doesn’t take much to say there will be more struggles for the UK in the not-too-distant future, and that’ll be the time to take advantage of shaky sentiment. That being said, we can enjoy these construction PMIs while they last, and encourage buyers to fill their boots.Market recovery hangs in the balance despite Dow Jones mega rally
After inklings of monetary policy responses began trickling out of central banks over the weekend, in an effort to fight the effects of the Coronavirus threat, the huge rallies enjoyed during the Monday session were somewhat hampered by the best efforts of international organisations.
The WHO fulfilled its usual obligation – remind everyone the situation is bad – and the effect this had was to snap equities back to reality, with all but the FTSE somewhat revising their early session exuberance.
The British market continued its rally not because of any particular virtue other than the fact it had dipped to its lowest level in 4 years during the last week of February, which was already a slow month for the index – and thus it took its chance to catch up.
Not to be outdone, the Dow Jones recorded its greatest ever rally on Monday night, which acted as the catalyst for a positive start to Tuesday trading across global equities.
This positive start will likely be revised as the G7 publishes what Reuters (TSE:TRI) expects to be an unambitious plan of ‘attack’ on Coronavirus, which will only redouble fears the virus and its supply-side implications, are here to stay for a while.
Speaking on market opening movements during the Tuesday session, Spreadex Financial Analyst Connor Campbell stated,
“There are rallies, and there are rallies – and boy did the Dow Jones RALLY on Monday night, posting its greatest ever points gain on the hopes that the world’s central banks can muster a co-ordinated response to the coronavirus this Tuesday.”
“It is a sign of just how bad the final week of February was that the Dow’s 1,297 point – or 5.1% – increase still leaves it almost 3,000 points off of where it was on Valentine’s Day.”
“Nevertheless, after a weekend full of stimulus-suggesting statements, news that the central bank chiefs and finance ministers of the G7 would be having a conference call to discuss an action plan – like a fiscal version of the Avengers – designed to combat the coronavirus crisis was enough to point the markets in the right direction.”
“It helped that the Reserve Bank of Australia has already given the G7 an example of what they can do, cutting its cash rate by 25 bps to a record low of 0.5%.”
“Following a thoroughly mixed Monday, the European indices shared in the Dow’s optimism, without getting quite as excited – after all, any enthusiasm will have been tempered by the WHO warning the world is in ‘uncharted territory’.”
“The FTSE, which was the best performer in Europe on Monday, added another 2.2%, pushing it back towards 6800. After missing out on yesterday rebound, the DAX rose 270 points to cross 12100, while the CAC added 2% as it neared 5450.”
“The danger, of course, is that if the world’s financial bigwigs fail to announce a coherent, co-ordinated plan of attack – and Reuters is reporting that the draft statement currently being worked on doesn’t call for such action – these gains could unravel double-quick.”
Intertek see higher profits in 2019, but speculate over coronavirus impact
Intertek Group plc (LON:ITRK) have seen their shares in green, following a steady set of final results.
Shares in Intertek Group trade at 5,434p (+2.07%). 3/3/20 12:16BST.
The firm noted that its’ profit was higher in 2019, as divisional growth proved strong and the profits were boosted by an acquisition late in 2019.
The quality assurance firm posted a pretax profit figure of £445.1 million across 2019 – notably this saw a 10% climb from the 2018 figure of £404.5 million.
On a better note, revenues also rose 6.8% to £2.99 billion from £2.8 billion.
Looking at organic revenue, the firm told the market that this increased by 3.3% at constant rates, whilst revenue also rose following the acquisition of Check Safety First Ltd in December 2019 for a £17.1 million consideration.
Breaking down the performance by division, the firm also added that Products, Trade, and Resources all reported higher revenue.
Products revenue jumped 7.1% from £1.68 billion to £1.80 billion, whereas Trade revenue rose 5.8% to £679.4 million compared to the 2018 figure of £642.1 million.
Finally, Resources saw their revenues spike 6.7% to £510.9 million from £478.9 million. On the back of these strong results, the firm lifted its annual dividend to 105.8p from 99.1p – representing a 6.8% climb.
Andre Lacroix, Chief Executive Officer commented: “2019 is the fifth consecutive year of revenue, EPS and cash progression which is a testament to our strong operating platform enabling the group to deliver sustainable value creation for all stakeholders. In the last five years we have made significant progress both on strategy and performance and we are extremely well positioned to seize the exciting growth opportunities ahead capitalising on the core strengths of Intertek: Our Total Quality Assurance (TQA) superior customer service, our powerful portfolio, our high margin and highly cash generative earnings model, our passionate customer-centric organisation and our disciplined performance management.
Our purpose to bring quality, safety and sustainability to life is truly meaningful to our clients given the increased complexity in their operations. We are benefiting from higher demand from our customers for our industry-leading TQA solutions that provides leading Assurance, Testing, Inspection and Certification (ATIC) services that are mission-critical to our customers across multiple industries through our global network of subject-matter experts and over 1,000 state-of-the-art facilities in over 100 countries.”
The firm also speculated going forward about the coronavirus epidemic, where may businesses have suffered.
We are entering the third month where the coronavirus has been haunting global trade, however Intertek remained confident but realized that the firm may face some hardship going forward.
The CEO added: “Prior to the outbreak of the Novel Coronavirus, we were targeting the Group to deliver continuous progress in 2020 with broad based good organic revenue growth at constant currency, good organic growth in Products and Trade and robust growth in Resources, moderate margin progression and strong cash conversion. However, Intertek is not immune to the impact of the Novel Coronavirus and our 2020 performance will be affected by the temporary disruption to the supply chains of our clients in China and any impact it might have on global trade activities. It is too early to quantify the impact of the Novel Coronavirus.
Moving forward, we are well positioned to seize these attractive growth opportunities, underpinned by the increased complexities of corporate supply chains and the associated challenges of maintaining a high level of quality assurance end-to-end.
We are on track on our ‘good-to-great’ journey, making progress on both performance and strategy and I am excited about the Group’s growth prospects ahead, both organically and inorganically.”