UK Household Finance Index up in January
The UK Household Finance Index rose to a 12-month high on Monday, new data revealed.
Indeed, the IHS Markit UK Household Finance Index rose to 44.6 in January, up from 43.2 recorded in December and the highest it’s been in 12 months.
The survey measures households’ views on financial wellbeing.
The figure is “indicative of an easing of pressure on UK household finances,” the report said.
The new year has begun with some form of political stability, following the chaotic nature of the UK’s political landscape last year.
Indeed, 2019 saw several extensions to the Brexit deadline, an attempt to prorogue parliament and a general election, with political and economic uncertainty hitting various sectors.
The UK retail sector was one of the many to be hit by uncertainty. Data revealed in January that UK retail experienced its worst year in 2019.
“Latest survey data certainly show some post-election bounce for UK households, with the headline index up to a one-year high and house price expectations at their strongest since October 2018,” Joe Hayes, Economist at IHS Markit, which compiles the survey, provided a comment.
“That said, cooling inflation was most likely the real driving force, propping up real earnings and disposable incomes,” Joe Hayes continued.
“A rising proportion of UK households showed that they are in tune with the downbeat message from several monetary policymakers in the last couple of weeks, with almost one-in-four now expecting the Bank of England to cut interest rates as their next move.”
Joe Hayes said: “It therefore seems the case that, while falling living cost pressures are stimulating purchasing power, UK households are aware that weak economic conditions have led to an increased likelihood of lower interest rates. How this will impact consumer spending behaviour will be crucial to the UK’s growth prospects.”
Coca-Cola set to transition to a circular economy and invest heavily into France
Coca-Cola HBC AG (LON:CCH) have announced that they will be heavily investing into France to support sustainable development.
The firm said that alongside Coca-Cola European Partners PLC (LON:CCEP) they will invest as much as €1 billion over the next five years.
At the Choose France Summit, Coca-Cola’s chair and chief executive in James Quincey announced a new “major investment plan” which expanded on the next five years.
Quincey and the French authors are set to discuss the deal on Monday, which will be pleasing for the French president.
Quincey said that the investment will be primarily used to add new products within the French market and support innovation.
The money will also go towards the expansion of Coca-Cola European Partners’ manufacturing plants, as the firm makes an active effort to promote environmentally friendly investing and sustainability.
Coca-Cola European Partners intends to “transition to a circular economy”, altering its packaging as part of this effort.
Having added a bottling line for glass bottles only in 2019, it will invest in its Socx, Dunkerque plant to add a “state-of-the-art aseptic bottling line in mid-2020” to meet higher demand for its ready-to-drink tea brand Fuze Tea and for Tropico juice.
“Additional investments across all five CCEP plants in France will enable the introduction of a higher quantity of recycled material in bottles and cans and the replacement of plastic by cardboard for secondary packaging,” said Coca-Cola.
Quincey concluded: “Coca-Cola has been part of France for a century, and our presence today includes more than 2,800 people who work for Coca-Cola in France, plus many more across our entire value chain.
“Today’s announcement shows continued commitment to France, helping to build the French economy and contributing to sustainable French communities for years to come.”
Coca-Cola steps up efforts to promote sustainability
In November, the multinational said that they will be stepping up to ensure that their practices are in line with sustainability measures.
The move comes as part of Coca-Cola’s European strategy to expand environmental friendly policies and increased use of recycled plastic.
The drinks producer announced that the switch at the Jordbro factory near Stockholm would allow the reduction of 3,500 tonnes of newly produced plastic.
“That means a 25% reduction of CO2 emissions annually compared with before the transition, when the portfolio consisted of around 40% recycled plastic,” it said, referring to its Swedish operations.
Along with Coca-Cola, rivals such as PepsiCO (NASDAQ:PEP) are attempting to promote the use of recycled plastic as firms respond to plastic waste pollution worries.
The move as the first step in ensuring that all PET bottles are produced from 100% recycled plastic by the end of 2023.
At group level, Coca-Cola’s recycled plastic ratio is 11% currently, and in western Europe, 27%, Keane said.
Last year, Coca-Cola pledged to collect and recycle a bottle or can for every one it sells globally by 2030.
Markets flat as Martin Luther King Day removes Dow Jones from play
European equities looked slow off the blocks on Monday as they mulled over the absence of their trend-setter. The Dow Jones will get to enjoy a day of reflection upon last week’s successes, alongside time to remember and heed the messages of one of the seminal figures in civil rights advocacy, Dr Martin Luther King Jr.
One index which will be sad to have lost its momentum on Monday morning is the FTSE. Last Thursday was testing, with Pearson (LON:PSON) plunging nearly 9% and Whitbread (LON:WTB) falling 5%, though Primark (LON:ABF) performed well. Friday saw the British market hit a six-month high; it will hope to control any fall from grace today.
Speaking on the week’s early knockings, Spreadex Financial Analyst Connor Campbell said,
“With the US off for Martin Luther King Day, it could be a quiet session, the European indices losing their de facto leader in the Dow Jones.”
“It doesn’t help that on top of its absence, the Dow ended last week by pulling back slightly from its all-time highs, the index seeming to settle at 29300. That means the momentum that seemed to be building has, for now, fizzled out, leading to a rather drab open.”
“The FTSE, which hit a 6-month peak on Friday, dipped 10 points after the bell, drifting from that high without going into a full reversal. The DAX was flat at 13500, a level it has hit its head on a few times in the last week or so. The CAC, meanwhile, slipped 0.2%, unable to keep up its assault on 6100.”
“As January 31st grows ever closer, the pound may see more and more mornings like this. Cable fell 0.3%, once again falling under $1.2985, while against the euro sterling shed the same amount, dipping below €1.1705.”
“It is probably going to take something unexpected – a rogue comment from a Davos attendee, perhaps – to prevent the session from being one to forget.”
Fever-Tree shares plunge after “challenging” Christmas
Fever-Tree (LON:FEVR) shares plunged on Monday after the business said that the Christmas trading period was a “challenging” one in the UK.
Shares in the producer of premium drink mixers were down over 20% during Monday morning trading.
The company revealed that group revenue is expected to amount to £260.5 million. However, Fever-Tree said that this result is below what it expected and reflects the “subdued” trading over Christmas in the UK.
Fever-Tree highlighted that the wider retail environment in the UK was hit by a “challenging” Christmas.
It said that the mixer category was “not immune” from the weak consumer confidence and slowdown in spending.
“Whilst Fever-Tree remained the clear market leader, the expected improvement in trading during this important period did not materialise with the macroeconomic uncertainty leading to a subdued end to the year across both the On and Off-Trade,” the business said in a statement.
Tim Warrillow, CEO, commented on Monday’s update: “Despite the subdued end to the year in the UK, we have delivered a strong performance across many of our regions in 2019 and begin 2020 with real momentum in a number of key growth markets.”
“Whilst the UK mixer category has clearly not been immune from the consumer belt tightening seen in recent months, we remain the clear category leader and have a strong platform to return to growth during 2020 and beyond,” the CEO continued.
“However this is a global opportunity which remains in its relative infancy in many markets.”
The CEO said: “The trend towards premium spirits and premium long mixed drinks continues to gather momentum around the world. Fever-Tree is the no1 premium mixer globally and our performance in 2019 across US, Europe and as far afield as Australia and Canada highlights the fast-growing international strength of the business.”
Fever-Tree had already given some indication of what to expect. The company warned at the end of November last year that “short-term headwinds” in its UK market were set to hit its revenue for the full year.
In the past, Fever-Tree has benefited from the UK’s unquenchable thirst for gin. Indeed, the business has been boosted by the nation’s gin craze as its premium tonic water is often paired with the alcohol.
Shares in Fevertree Drinks plc (LON:FEVR) were down on Monday, trading at -21.56% as of 10:07 GMT.
Rent in London soars
Data revealed on Friday that 75% of income is required to rent in the nation’s capital.
The latest research by the lettings and sales agent Benham and Reeves revealed that the amount of net income needed to pay rent has increased to 45.5% in England, and accounts for 74.8% of the average salary in London.
At the start of the millennium, the average rent made up 28.7% of the average income in England, and 41.1% of income was needed to cover the cost of rent in London.
The political and economic uncertainty to prevail in the UK over the past year has caused concern for the housing market. Indeed, with several extensions to the nation’s Brexit deadline, an attempt to prorogue parliament and a general election all happening in the space of one year, the UK’s political landscape has been rather chaotic, to say the least.
The housebuilding company Taylor Wimpey (LON:TW) said earlier this week that it welcomes the “increased political stability” to come following last year’s events.
“There’s been plenty of positive changes to the rental market in the last 20 years with better codes of practice and improvements through technology allowing for a fairer, more transparent process for both landlords and tenants,” Marc von Grundherr, Director of Benham and Reeves, said in a statement.
“Unfortunately, the one thing this can’t address is the huge demand for rental properties and the resulting increase in the cost of renting as a result and with wage growth failing to keep pace, the proportion of our earnings required to cover rent has spiked notably since the turn of the millennium,” the Director of Benham and Reeves continued.
Shares in Taylor Wimpey plc (LON:TW) were up on Friday, trading at +0.81% as of 09:22 GMT.
Dow Jones beats expectations and leaves European indices in the dust
I can already picture the excited hand gestures from POTUS Donald Trump as he lauds the Dow Jones success story on Thursday. The index hit 29,200 points, beating the record set the day before and exceeding the 29,100 projection set by analysts before trading began.
This followed yesterday’s completion of phase one of the US-China trade deal, which, although very expected, was an opportunity for the US to blow its own trumpet.
The real challenge now will be seeing whether either the US or China will have the appetite for further negotiations, and the potential for more substantive – rather than superficial – terms. For now, though, President Trump will enjoy his victory lap, and milk phase one for all it’s worth.One of the greatest trade deals ever made! Also good for China and our long term relationship. 250 Billion Dollars will be coming back to our Country, and we are now in a great position for a Phase Two start. There has never been anything like this in U.S. history! USMCA NEXT!
— Donald J. Trump (@realDonaldTrump) 16 January 2020
Unfortunately, European equities couldn’t match the excitedness of their peers over the pond. One of the sad cases was the FTSE, doubling back on its modest early gains on account of poor company news, a stronger Pound and corporate updates. Speaking on the Dow Jones and other movements on Thursday, Spreadex Financial Analyst Connor Campbell stated,The farmers are really happy with the new China Trade Deal and the soon to be signed deal with Mexico and Canada, but I hope the thing they will most remember is the fact that I was able to take massive incoming Tariff money and use it to help them get through the tough times!
— Donald J. Trump (@realDonaldTrump) 16 January 2020
“Flaws be damned! The Dow Jones decided to keep celebrating the signing of the US-China ‘phase one’ trade deal, with momentum firmly on the index’s side. The same couldn’t be said for its European peers, however.”
“Additionally bolstered by a strong core retail sales figure – jumping from 0.0% to 0.7% month-on-month as the regular reading remained unchanged at 0.3% – the Dow added 165 points after the bell. That allowed it to strike 29200 for the first time in its history, sparking ripples of excitement that it could well reach 30000 before the month is out (Trump permitting, perhaps).”
“Normally Europe takes its cue from the US. However, investors across the pond just couldn’t muster the same level of enthusiasm. The DAX nudged 0.1% higher, continuing to lurk between 13400 and 13450, while the CAC added a handful of points.”
“The FTSE actually went into reverse, dropping half but just about clinging onto 7600. Part of the problem was that the pound’s rebound gathered strength as the session went on. A 0.2% against the dollar put cable at $1.305, while a 0.4% increase against the euro left sterling above €1.172. This as Swedish foreign minister Ann Linde claimed Britain and the EU could reach some kind of trade deal before the end of 2020.”
“Adding to the FTSE’s misery was a raft of weak corporate update. Chief among the losers was Pearson (LON:PSON), which plunged nearly 9% after it warned operating profits would fall once again in 2020. Whitbread (LON:WTB) was also on the losers pile, dropping 5% thanks to regional weakness at Premier Inn. At least Associated British Foods softened the blow to the UK index, climbing 5% thanks to a decent showing at Primark (LON:ABF) and a sweet performance from its Sugar division.”
Atalaya Mining strikes record quarterly copper production
Copper mining company Atalaya Mining (LON:ATYM) marked an impressive end to FY19 with the publication of its Q4 results.
The Company reported record copper production of 13,527 tonnes during the fourth quarter, up from 11,172 tonnes year-on-year and 10,568 tonnes the previous quarter.
This allowed the full year to end on a high. Full-year copper production bounced 6.7% on-year, from 42,114 tonnes to 44,950 – which was at the upper end of the company’s guidance.
The Group did note, however, that its annual copper recovery rate dropped from 88.30% to 87.09%, which was driven by lower recovery rates during Q4, which it attributed to the ramp-up of the SAG mill.
Atalaya Mining comments
CEO of the company, Alberto Lavandeira, stated,
“We are pleased to have completed the expansion at Proyecto Riotinto which is now successfully operating at the increased annualised capacity of 15Mtpa since January 2020. We are also pleased to have delivered production rates at the higher end of our expectations in the final quarter of the year. This track record gives us confidence in our ability to achieve our increased 2020 production forecasts.”
Investor notes
Elsewhere in mining; Serabi Gold (LON: SRB) finished with its highest quarterly production, AMG Advanced Metallurgical Group N.V. (AMS: AMG) announced a new appointment, ARC Minerals Ltd (LON: ARCM) uncovered high-grade copper assays and Lucara Diamond Corp (TSE: LUC) was pessimistic in its revenue guidance. Following the update, Atalaya Mining shares rallied 1.15% or 2.24p to 196.24p 16/01/19 14:41 GMT. Peel Hunt reiterated its ‘Buy’ stance on the stock, the Company’s p/e ratio is 8.93.Cloudcall report revenue growth of 30% within impressive financial year
Cloudcall Group PLC (LON: CALL) have told shareholders that they have had a brilliant year where the Chief departed but business has grown.
The firm said that it has seen double digit growth in revenue and user numbers, which contributed to a year of growth and progress for the firm.
CloudCall is a software and unified communications business that has developed and provides a suite of cloud-based software and communications products and services.
The firm added that revenue, cash and losses before tax adjustments are expected to be in line with market expectations.
Cloudcall said its revenue for 2019 grew by 30% to £11.4 million, with the US continuing to perform particularly strong, helped by a larger customer.
Total users also surged by 35% to over 42,300 year on year, which showed a net monthly user growth of 917 which was a 41% rise from 2018.
The average recurring revenue per user remained constant during the year, Cloudcall said, at £28 per user per month.
Simon Cleaver, Chief Executive Officer of CloudCall, commented:
“2019 has been another outstanding year for CloudCall. Not only has the Company once again delivered organic revenue growth of 30%, it also successfully raised new capital to fund future growth and strengthen the balance sheet.
The two standouts for the year are the quantum increase in interest from enterprise companies and the over-50% growth we delivered in the US.
It is worth noting that the US is now responsible for approximately 40% of our total revenue and with nearly half of the total funds raised in the recent placing coming from US investors, I have little doubt there is a huge, largely untapped, opportunity for CloudCall in the US and this is a key focus of our sales and marketing expansion.
CloudCall has a clear strategy to become the leading provider of ‘integrated communications’. We will continue to build out our product, integrate with more CRMs, expand our geographic reach and engage with ever larger customers – our 4 pillars of growth.
We are entering 2020 with significant opportunities and a well-funded balance sheet that is strong enough to capitalise on those opportunities. The Board continues to be confident in the future outlook for the Company.”