Dividend cut would not be problem for Saga

Andrew Hore
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Dividend cut would not be problem for Saga

Saga (LON: SAGA) is considering whether to reduce its dividend, but this is not necessarily a bad thing. The debt burden is significant, and this does not help the share price.
Saga talks in its recent trading statement about capital allocation. This is financial speak for considering whether to maintain the dividend.
The insurance, travel and cruising company is keen to reduce the debt on its balance sheet and cutting the dividend will certainly help. The current yield is 8.9%.
Dividend
The 2018-19 dividend was 4p a share and it has been assumed that this would be maintained for 2019-20 and ...

Coronavirus: reactions

Dina Caruso
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Coronavirus: reactions
News emerged on Wednesday that British Airways (LON:IAG) has suspended all of its direct flights to and from China. American Airlines (NASDAQ:AAL) has also cancelled routes. Indeed, fears over the deadly coronavirus are rising as cases have been reported outside of China. The virus outbreak has killed 132 people in China, with almost 6,000 people infected. We took a look at some reactions to the coronavirus on Twitter: https://platform.twitter.com/widgets.js https://platform.twitter.com/widgets.js https://platform.twitter.com/widgets.js The World Health Organisation tweeted a live video from Geneva on the outbreak of the virus: https://platform.twitter.com/widgets.js The World Health Organisation also answered some questions on the coronavirus: https://platform.twitter.com/widgets.js Meanwhile, the Department of Health and Social Care provided an update on the situation in the UK: https://platform.twitter.com/widgets.js UK Investor Magazine will provide updates as more news emerges.

Boeing posts annual loss following 737 MAX crash

Dina Caruso
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Boeing posts annual loss following 737 MAX crash

Boeing (LON:BOE) posted an annual loss on Wednesday as its results continue to be significantly hit by the grounding of its 737 MAX planes.

Shares in the company were trading over 3% higher on Wednesday afternoon. Boeing said that net loss for 2019 amounted to $636 million, compared to a profit of $10.5 billion recorded in 2018. This is the company’s first annual loss in over two decades. Meanwhile, the company recorded a full year revenue of $76.6 billion, down 24% from the $101.1 billion figure recorded the year prior. The company’s reputation has been plagued by two deadly crashes of its 737 MAX planes, occurring only five months apart. This lead to the grounding of the 737 MAX model, as fears over the safety of the plane increased. “We recognise we have a lot of work to do,” David Calhoun, the company’s President and Chief Executive Officer, said in a statement. “We are focused on returning the 737 MAX to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public,” David Calhoun said. “We are committed to transparency and excellence in everything we do. Safety will underwrite every decision, every action and every step we take as we move forward. Fortunately, the strength of our overall Boeing portfolio of businesses provides the financial liquidity to follow a thorough and disciplined recovery process.” Boeing is not alone in feeling the effects of the grounding of its planes. American Airlines (NASDAQ:AAL) revealed a $350 million blow last year from the Boeing 737 MAX grounding. Shares in Boeing Co (LON:BOE) were up on Wednesday, trading at +2.40% as of 16:12 GMT.

Apple continue to break records, as festive trading sales surge

Ishen Patel
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2
Apple continue to break records, as festive trading sales surge

Apple (NASDAQ:AAPL) have seen a strong period of festive trading, as the firm has reported a surge in demand for its iPhone 11 mobile device and other accessory products.

The technology giant told the market that it had seen record sales and profits over the recently ended Christmas period.

Tim Cook CEO did have his say on the current crisis with the vast spread of the Coronavirus, which has been hitting the globe with a shock.

Having sourced many of their products and materials from China, this has led to worries and concerns about the risk of the Coronavirus spreading outside of China.

Apple boss Tim Cook also said it was “closely monitoring” the coronavirus outbreak, which has made forecasting for the next quarter difficult.

The company has limited travel and reduced store hours in China, while its suppliers’ factories remain closed longer than expected. “The situation is emerging and we’re still gathering data,” Mr Cook said.

Looking at their trading however, the picture is nothing but impressive to say the least.

At a time where competitors have really ramped the pressure on Apple. With Samsung releasing a new set off in ear wireless headphones and a new Fold device, which seems to have changed the nature of how consumers understand technology, Apple have not been phased.

The firm said sales in the last three months of 2019 rose 8% year-on-year to $91.8 billion, while net profits increased 11% to reach $22.2 billion.

The tech titan praised the strong demand for its iPhone 11 device, whilst sustained strong demand for the watch tied in with a recent release of AirPods drove consumer spending.

In the quarterly update, Apple said that iPhone sales had climbed 8% with sales of wearables such as watches and AirPods surging 44%.

The demand was simply so high that the iPhone retailer said that they experienced shortages of stock in areas, and this is something which certainly sends a statement out to the market.

Overall, Apple said it made about $79 billion from products and $12.7 billion from services, which includes Apple Pay, new streaming service Apple TV+, game service Apple Arcade and the App store.

Shares in Apple trade at $317 (+2.83%). 29/1/20 12:38BST.

Travis Perkins praise strong Wickes performance ahead of propsed demerger

Ishen Patel
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0
Travis Perkins praise strong Wickes performance ahead of propsed demerger
Travis Perkins PLC (LON:TPK) have said that their Wickes home improvement firm have seen a strong fourth quarter performance. In the quarterly period, which ended on December 31 Wickes saw sales rise by 3.4% on a year on year basis, whilst sales also jumped 4.5% on a like for like basis. For the whole of 2019, Wickes had 7.7% sales growth, or 8.7% like-for-like, Travis Perkins said. Notably, the Core unit, meaning the DIY stores, had a 5.7% sales rise in 2019, or 6.5% like-for-like. The Do-It-For-Me division, which gives customers a tailored service, had a 13% sales climb in 2019. On a like-for-like basis, DIFM sales were 14% higher in 2019.

Travis Perkins delighted with Wickes

David Wood, Wickes CEO, commented: “I am delighted to report a strong sales performance for Wickes in Q4 and for the full year, setting us up well for the intended demerger from Travis Perkins, which remains on track for Q2 2020. “I would like to thank all my colleagues for their hard work, dedication and focus on delivering for our customers, which has driven excellent performance across the year. We are looking forward to our future as a standalone business, building towards our vision of a Wickes project in every home, allowing us to create long-term value for all our stakeholders. “We have great confidence in our strategy, which is centred around our strong brand, a distinctive and hard to replicate customer proposition, a uniquely balanced business and a low cost and efficient operating model. We are pleased with the growth Wickes is delivering and confident in our ability to continue to grow. We look forward to providing more detail on this at today’s Capital Markets Day.”

Travis Perkins demerger deal with Wickes

In December, Travis Perkins updated the market by saying that the proposed demerger with Wickes was ‘progressing well’. The demerger was announced in July 2019, and a few weeks back the Company said it is ‘progressing well’, and would be completed during the second quarter of 2020. The decision to emerge from Wickes came as a result of Travis Perkins wanting to focus on trade customers to simplify its business. Certainly, Wickes is a brand which holds reputation and status among the British high street mainstays. The decision to demerge with Wickes, could be costly for Travis Perkins looking at the strong trading update today. Shares in Travis Perkins trade at 1,600p (+1.91%). 29/1/20 12:19BST.

Brewin Dolphin see 7.8% quarterly rise in funds, as Chief Executive announces retirement

Ishen Patel
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0
Brewin Dolphin see 7.8% quarterly rise in funds, as Chief Executive announces retirement

Brewin Dolphin (LON:BRW) have told the market about two updates to operations on Wednesday.

The first update comes in the form of a trading statement, and has reported progress for the wealth and asset manager.

Brewin Dolphin said that they have seen their total funds rise 7.8% over its first quarter period, which ended in September.

Total funds rose to £48.5 billion, and without new acquisitions funds rose 1.8%. Notably, discretionary funds rose 4.2% in the quarterly period to £41.8 billion.

The wealth and asset manager said that total quarterly income was 15% higher year-on-year at £89.6 million.

Discretionary income also rose 15% from a year before to £76.5 million due to growth in funds and higher commission income, while financial planning income jumped 37% to £8.5 million, helped by acquisitions.

The firm said that total quarterly income amounted to £89.6m seeing an increase of 15.3%, including £4.0m as a result of recent acquisitions.

Another statistic to take was that financial planning income grew 37.1% to £8.5m assisted by recent acquisitions and growth in 1762 from Brewin Dolphin.

David Nicol, Chief Executive said:

“I am pleased with our performance in the quarter, particularly our positive organic net inflows in challenging market conditions. We have diversified our business mix through building more client choice and client-centric propositions, which is supporting our growth. We remain on-track with the implementation of both our new client management system and core custody and settlement system. The integration of our acquisition in Ireland is progressing well and we remain confident about the long-term growth opportunities. Market sentiment appears to be improving and we look forward to capitalising on this as the year progresses.”

Brewin Dolphin announce Chief Executive retirement

The second update on Wednesday told shareholders that Chief Executive, David Nicol would be retiring later this year.

Nicol has been head of Brewin Dolphin since 2012. He will step down on June 14, but will stay on until July 29 to help with the transition.

The firm have said that Robert Beer will step in his place, as Beer currently serves as head of the company’s intermediaries, charity, professional services, and digital businesses.

Beer originally joined Brewin Dolphin in 2008, having previously worked at National Australia Bank Ltd, Gerrards, and Barclays PLC.

Simon Miller, Chairman, said: “On behalf of the Board, I would like to thank David for his outstanding contribution to Brewin Dolphin’s success. He has demonstrated great professionalism, re-focused the Group’s strategy, improved the quality of the organisation and built a strong team. Under his leadership, Brewin Dolphin has seen funds under management almost double from £26.0bn to £48.5bn. Our client proposition has deepened, we have invested in our office network, and both client satisfaction and employee engagement are at record levels.

“At the same time, we are delighted to announce Robin’s appointment as David’s successor. Robin understands both the broad landscape in which we operate and has a deep knowledge of our business and culture. Since joining the Executive Committee in 2016, he has been a key member of the executive team and is the ideal person to continue the execution of our successful strategy, while sustaining and nurturing our well-established client-focused approach.”

David Nicol said: “It has been a great privilege to lead Brewin Dolphin. After seven years as Chief Executive, and with the business well positioned for the future, I feel that now is the time for me to hand over to my successor. I am very pleased with the selection of Robin and I have every confidence in his future leadership.”

Robin Beer said: “I am delighted to be chosen to lead the business at this juncture and I look forward to continuing to build on David’s achievements to drive the business through its next phase of development.”

Shares in Brewin Dolphin trade at 360p (+0.24%). 29/1/20 11:58BST.

Is Brexit actually happening?

Ishen Patel
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10
Is Brexit actually happening?

Could Brexit be finally done? This is a question which has been dominated news headlines since 2016, when Britain finally decided that they wanted to retract their membership from the European Union following David Cameron’s choice to delegate this decision to the British people.

Today, advances on Brexit negotiations have been made and it seems that the process of exiting the EU could finally be underway, something of massive relief to all parties involved within the Brexit process.

The European Parliament is expected to approve the terms of PM Johnson’s new deal for Brexit, as a vote will take place today to determine Britain’s future with the EU.

In total, 751 representatives will be debating the Brexit Withdrawal Agreement in Brussels, and it seems that politicians, legislators and representatives seem confident for this to deal to land.

Britain has seen a host full of leaders try and get the Brexit process done, since the resignation of David Cameron in 2016.

Theresa May had a crack and was not successful, then Boris Johnson took control, and had to beat a fragmented Labour party in the December election in order to gain a legitimate mandate to govern.

The vote today will represent the final stage of the ratification progress, ahead of the proposed exit time of 23:00GMT on Friday 31st January.

Many political commentators have already made their conclusions, deducing that the results of the vote have already been decided.

It seems that a clear majority are in favor of Britains’ Brexit deal, and there is growing confidence that Britain will be leaving the European Union on Friday, in time with the proposed deadline.

A copy of the withdrawal agreement, signed by the UK foreign secretary, Dominic Raab, was deposited in Brussels on Wednesday morning.

Raab said: “Signing the instrument of ratification of the withdrawal agreement is an historic moment that will legally bring an end to our membership of the European Union, and delivers on the promise we made to the British people.

“It is the start of a new chapter for an independent, sovereign Britain, looking forward to a decade of renewal and opportunity. Whether we are reducing trade barriers between nations, tackling climate change, or improving lives around the world, our vision of a truly global Britain will be a force for good.”

After three tireless years of voting, elections and negotiations it seems that PM Johnson has managed to deliver his main promise to the British people.

It must be said that the British people however seem rather disengaged with the whole Brexit issue, and many do not seem bothered about the historic nature of today’s vote.

With the Brexit deal now being signed, there will be a new phase of economic and political control for the United Kingdom. Politicians, businesses and citizens will all have to get used to the new form of governance.

Progress made today will certainly please the British people, not neccesarily on the terms of the new deal but rather the simple fact that Brexit is now “being done”.

Fresnillo see quarterly production rise, but just miss annual targets

Ishen Patel
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0
Fresnillo see quarterly production rise, but just miss annual targets
Fresnillo Plc (LON:FRES) have seen a quarterly rise in gold output, however annual production has fallen short of expectations. As a result of the shortcoming, shares of Fresnillo have slipped on Wednesday morning. Shares in the firm trade at 592p (-3.36%). 29/1/20 11:12BST. Fresnillo, who were a former FTSE 100 listed firm told the market that they had produced 233,744 ounces of gold in the fourth quarter of 2019, 11% higher on the previous quarter and 0.7% higher year-on-year. Whilst the firm has seen a production rise across this period, shareholder were not so optimistic as they were told that annual expectations had been missed, which was seen as shares slipped. Looking on an annualized basis across 2019, Fresnillo saw gold production fall 5.1% to 875,913 ounces. In December, it had set guidance at 885,000 ounces, from previous guidance of 880,000 ounces to 910,000 ounces. The Mexican gold miner said that fourth quarter results were boosted by better performance as the Herradura mine, offsetting lower throughput and grades at Noche Buena. Notably, production volumes fell due to lower output at Noche Buena and lower grades at San Julian. Despite the slip in performance, Fresnillo forecasted as they expect total gold production for 2020 to be within the 815,000 ounces and 900,000 ounces range. In the silver production sector, fourth quarter production was impressive standing at 13.8 million ounces. Silver production did see a 3.7% climb from third quarter production, however this figure did represent an 11% fall on the figure on year ago. In 2019, the figure was 54.6 million ounces, 12% lower year-on-year. Fourth-quarter production improved on the third quarter due to higher quarterly grades at San Julian and Saucito, but fell on the prior year due to a year-on-year fall in grades at Saucito and lower volumes at San Julian. Fresnillo concluded by saying that that they expect silver production to be between 51 million and 56 million ounces.

Fresnillo remain determined

Octavio Alvídrez, Chief Executive Officer, said: “Silver and gold production is up on the previous quarter as we begin to see the impact of our performance improvement plan, which includes intensive infill drilling to improve the certainty of the geological model, dilution control and raising development rates, together with actions to address contractor productivity and equipment availability. Full year silver and gold production is in line with our updated guidance. “As we set out at our capital markets day in December, we are determined to drive better performance from our core assets and we will continue to implement our mine improvement plan throughout the year. Though grades remain variable as we update and refine our geological models, we continue to process higher volumes of ore on a consistent basis, and as a result, our 2020 forecasts are unchanged.”

Third Quarter results

In October, Fresnillo updated the market with their third quarter results which saw lower output and shares once again in red. The precious metals miner reported that gold and silver production on an annual scale would be at the lower end of its target. In the three months to the end of September, silver production fell 14.5% from the third quarter of last year to 13,283 kilo ounces and gold production was down 6.9% to 209,752. Fresnillo said that the low production rates for silver was due to expected lower ore grade at the Saucito mine and lower ore grades at Fresnillo and San Julián. Subsequently, the lower gold production was attributed to lower grade and volume of gold produced at both Herradura and San Julián veins, and a lower volume of ore processed at Noche Buena. Fresnillo will be disappointed with their results looking on an annual scale. However, management have remained confident and an ensured effort to turn fortunes around does seem to be in place.

BA suspends all flights to China as coronavirus fears rise

Dina Caruso
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4
BA suspends all flights to China as coronavirus fears rise
News broke on Wednesday that British Airways (LON:IAG) has suspended all of its direct flights to and from China. Shares in International Consolidated Airlines Group were up during trading on Wednesday. The suspension of flights comes as fears over the coronavirus mount. The virus outbreak has killed 132 people in China, with almost 6,000 people infected. The coronavirus was first reported in Wuhan City, China. The World Health Organisation has warned travellers to avoid coming into close contact with people suffering from acute respiratory infections, as well as avoiding close contact with live or dead farm or wild animals. Earlier this week on Tuesday, the Foreign & Commonwealth Office advised against all travel to mainland China, unless it is absolutely essential. It added that British people who currently find themselves in China should make a decision based on their own personal circumstances as to whether or not they should remain. It warned that travel may become increasingly difficult over the next few days. Indeed, British Airways’ decision to suspend all direct flights to and from mainland China shows how airlines are trying to contain the spreading of the virus. “Due to the increasing travel restrictions and the public health situation, we now advise against all but essential travel to China,” Foreign Secretary Dominic Raab commented on the situation. “We are also working urgently to finalise arrangements for an assisted departure from Hubei Province for British nationals this week, and are in contact with people in Hubei to ensure they register their interest and that we can keep them updated,” Foreign Secretary Dominic Raab continued. “The UK continues to be guided by the latest medical advice about the coronavirus outbreak. The safety and security of British people will always be our top priority.” Shares in International Consolidated Airlines Group (LON:IAG) were up on Wednesday, trading at +0.68% as of 11:13 GMT.

Wizz Air soar to a third quarter profit, as annual forecast is lifted

Ishen Patel
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Wizz Air soar to a third quarter profit, as annual forecast is lifted
Wizz Air Holdings (LON:WIZZ) have seen their shares in green on Wednesday, as the firm lifted its full year profit guidance. In the quarterly update, Wizz Air said that they had seen passenger numbers climb across its financial quarter, which led shares to jump 1.58%. Shares in Wizz Air trade at 4,174p (+1.56%). 29/1/20 10:53BST. 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. The swing follows a successive chain of strong results for Wizz Air having seen their passenger numbers rise over the last few months and the resilient nature of the firm should please shareholders. 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%. József Váradi, Wizz Air Chief Executive said: “Wizz Air again reports a record financial performance in the third quarter as our low-fare, low-cost business model delivered a net profit of €21.4 million compared to a broadly breakeven operational outcome in the same period last year. We have delivered unit cost reduction ahead of expectations with ex-fuel CASK improving 5.6% year-on-year. Whilst growing passenger volumes by an industry leading 23% in the third quarter, we have achieved both higher load factors and improved yields. In short, it has been another quarter of significant achievement. Wizz Air is the lowest cost, lowest emission airline in Europe and the largest airline in the growing CEE market, a market that continues to show exciting growth dynamics. We believe that the company is uniquely positioned for long term value creation. We will continue to enhance our market-leading positions with the roll out of the game-changing, attractively priced and financed A321 neo aircraft which will enable Wizz Air to continue widening our cost advantage over our competitors, providing passengers with the reassurance that they are making the right choice to fly with Wizz Air as we have the lowest impact on the environment of any airline.” The company previously had guided net profit between €335 million and €350 million for the current financial year, however the fact that this has been raised will certainly appease shareholder interest. Speaking further on the results and future plans, the chief executive further commented: “In the third quarter, Wizz Air announced its first airline to be established outside of Europe in Abu Dhabi, the capital of the UAE. Wizz Air Abu Dhabi will be an incremental path of growth for Wizz Air, built on our successful ultra-low cost business model, bringing affordable travel to ever more customers. We believe the new airline which is expected to be operational in the second half of 2020 has the potential to be a significant player in the region operating over 50 aircraft within ten years.” “As previously announced at our H1 results, Wizz Air has reinvested some of its outperformance of the first half in the third quarter, and will grow even faster in the fourth quarter, delivering an industry leading growth rate of 24%. The Company will benefit from this additional growth in the next financial year as new routes will be in place ahead of the all-important summer period. Wizz Air also confirms that the current trading conditions continue to be favourable with a relatively benign competitive environment, stable fuel prices and a positive yield environment. Despite our additional investment in growth in the fourth quarter, the Company is today raising its net profits guidance to a range of between €350m to €355m for the full year.”

Wizz Air see steady growth

In November, the airline reported that it had seen its November passenger figures rise, which was impressive as it managed steady growth across the last few months. Wizz Air reported a November capacity increase of 27% to 3.2 million from 2.6 million, while load factor rose 92.8% to 91.2%. Available seat kilometres was up by 21% to 5.2 million from 4.3 million and revenue passenger kilometres grew by 4.9 million from 3.9 million in November 2018. On a rolling annual basis, capacity is up 15% to 41.8 million, total passengers up by 17% to 39.1 million with load factor up 1.3 percentage points to 93.6%. During November, the Hungarian carrier added 11 new routes, which included 4 in Poland, 2 in Ukraine and 1 in the UK. The form was further continued in December, where passenger numbers further increased. The budget airline saw a capacity increase of 24% to 3.7 million from 3.0 million a year before, while passengers increased by 25% to 3.3 million from 2.7 million. On a rolling annual factor, Wizz Air saw their capacity ruse by 16% to 42.5 million, passengers 18% to 39.8 million and load factor from 93.6% to 92.4%. Additionally, the available seat kilometres grew by 18% to 69.4 million, and revenue passenger kilometres by 20% to 65.2 million. The results from today’s update are impressive, as this has been reflected in Wizz Air’s stock price movement.
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