Bunzl see steady 2019 as North American business performs strongly
Bunzl plc (LON:BNZL) have told the market that 2019 was a positive period for the firm, seeing a rise in revenues across the year.
The firm alluded to tough market conditions, and wider political turbulence in their update – however it seems that Bunzl have worked through this to produce a steady set of results.
Across 2019, Bunzl reported that revenue had jumped 2.7% £9.33 billion from £9.08 billion in 2018 – this drove an increase in pretax profit by 6.7% from £424.8 million to £453.3 million.
North American businesses was particularly strong for Bunzl – where revenues climbed 3.7% to £5.47 billion.
Within their Continental Europe sector, revenues also rose 1.8% to £1.83 billion. Notably, in the Rest of the World, revenue rose by 5.6% to £781.6 million.
Commenting on today’s results, Frank van Zanten, Chief Executive Officer, said:
“Against the background of mixed macroeconomic and market conditions which prevailed during 2019 across the countries and sectors in which we operate, I am pleased to report that Bunzl has produced another resilient performance with an increase in operating margin. It is particularly good to see continued strong cash conversion and free cash flow growth.
Looking forward, although we continue to see challenging trading conditions in many of our markets, our strong competitive position, diversified and resilient businesses and ability to consolidate our fragmented markets further should lead to improved growth at constant exchange rates principally due to the impact of the good level of recent acquisition activity. Bunzl has a strong balance sheet with significant financial capacity and acquisitions remain a key element of our strategy. The acquisition pipeline is promising and a number of discussions are ongoing.”
Tracsis stays on track as first half revenues surge
Software provider for rail, traffic and wider transport, Tracsis (LON:TRCS) saw its share price rally during the Thursday session after booking significant, but expected, growth in its revenues.
For the six month period ended 31 January 2020, the company reported that its revenues had hiked up to £26 million, from £18.8 million year-on-year.
Despite the apparent significance of such jump, the company had expected this extent of change, and said trading had been ‘in line with expectations’.
While choosing not to disclose the predicted figures within their statement on Thursday, the company also said that, “adjusted Profit are also expected to be ahead of the previous year”, where they stood at £4.2 million and £3.9 million respectively.
Tracsis went on to say that its Rail Tech and Services division traded ‘well’ as a result of recurring software revenue and multi-year contract wins. It also said its recent acquisition, Bellvedi, had performed well, and its rail businesses’ involvement in ‘major tenders’ would pave the way for further growth.
It continued, saying its Traffic and Data Services division is ‘highly second-half weighted, and thus its good performance during H1 exceeded expectations. It added that its acquired businesses – CTM and Compass Informatics – provided ‘strong contribution’ towards these results.
Tracsis strategy looking ahead
Discussing its outlook, the company finished its statement by saying:“As highlighted previously, the Group continues to invest heavily in our technology base, and continues to make good progress developing the next generation of products for the transport industry.”
“The Group continues to review acquisition opportunities particularly in the Rail Technology & Services division as we seek to judiciously use cash balances to fuel growth.”
Investor notes
The company’s share price rallied 5.06% or 40.00p following the update, up to 530.00p per share 20/02/20 16:30 GMT. Analysts from finnCap reiterated their ‘Corporate’ stance on Tracsis stock. The Group’s p/e ratio stands at 27.96, their dividend yield is modest at 0.22%.Virgin Galactic shares go supersonic but the rise in shorts isn’t an anomaly
Space tourism company Virgin Galactic (NYSE:SPCE) is one of the few high profile innovators to top Tesla‘s (NASDAQ:TSLA) half-year rally, with its stock rocketing 310% in the last three months.
Continuing the comparison, Virgin Galactic has been dubbed ‘the Tesla of space travel’, though SpaceX may have something to say about that. Richard Branson’s long-awaited commercial space venture has proved a treat with wide-eyed investors, who tipped it over the $40 mark for the first time on Thursday.
The similarities between VG and Elon Musk’s company shouldn’t just end there though, I think. A prudent investor should take a similar approach to Virgin Galactic, to the one many have advised we take to Tesla.
Its growth potential is entirely subject to its innovative success, which is difficult to predict at the best of times, and even more difficult when we begin factoring in the commercial viability of new innovations. The best we can suggest is that an individual decides what their objectives are before investing. If you’re happy in the knowledge that you’re contributing to something potentially significant to society, with a chance of extreme success or complete failure, then fill your boots!
Should we expect complete doom or just a little gloom for Virgin Galactic?
On Thursday, Business Insider cited data from S3 Partners, which stated that the volume of VG stock shorted in the last 30 days had risen by 3.4 million, representing a 25% increase. Speaking on the increase in short positions, S3’s managing director of predictive analysis, Ihor Dusaniwsky, told BI: “Short interest, much like Virgin Galactic’s VSS Unity spaceship, has never seen such heights before,”“While there is no short squeeze at the moment, there is a very good chance shorts may start covering as even higher stock borrow rates make a losing trade too painful to hold onto,”
So, Dusaniwsky doesn’t think there’s a short squeeze coming in the near future. However, the unavoidable stat to note is that short-sellers have lost $440 million in mark-to-market this year. So – while I wouldn’t suggest throwing money hand over fist at VG, I would equally warn against being overly bearish on the stock, either. Its continued rise certainly isn’t a sure thing, and based on today’s analysis, if you’re not involved in Virgin Galactic I’d advise you to keep it that way.
Have Morgan Stanley sounded the death knell for VG’s rally?
Falling short of prophesying a price collapse, Morgan Stanley (NYSE:MS) prompted a temporary VG price dip as it published its analysis on Thursday.
While noting that the company were currently outstripping both Tesla and Apple (NASDAQ:AAPL) in Wall Street sales, Morgan Stanley see price consolidation on the horizon.
Speaking to CNBC, MS Analyst Adam Jonas said,
“A modest correction is overdue, and frankly, healthy, in our opinion,”
“Even Spaceships Must Return to Earth. [… Virgin Galactic] deserves a bit of a breather here,”
He added that it’s difficult “to identify significant thesis changing/accelerating events since the time of our initiation in early December of 2019.”
“The stock is trading 70% above our $22 price target with around 60% upside to our $60 bull case,”
Looking ahead, Morgan Stanley think VG has attained a fortuitous position, and that the time is right for the company to launch a capital raising campaign.
“Why not raise capital now?”
“While the company has sufficient levels of liquidity to meet the needs of launching its commercial service, investors may nonetheless ask, or even encourage, management to consider adding to the coffers, given unpredictable market conditions,” Jonas said.
Now, Virgin Galactic has 82.48 million shares in issues, its market cap stands at $5.93 billion. After a dip during the session, VG shares recovered and rallied by 2.12%, but then dropped for a second time. They’re now down by 0.59%, to $37.11 per share. Terrorist arrested following London Mosque stabbing
Scotland Yard announced they had launched an investigation into the attempted murder of the muezzin of the London Central Mosque.
The victim, who is in his seventies, was taken to a major trauma centre, but thankfully his injuries have since been deemed non-life-threatening.
A witness at the scene, Abi Watik, said the victim was a regular at the Mosque, and that the attacker, “[…] was praying behind him and then he stabbed him”. Watik added that the attacker, “was silent the whole time”.
The attack was carried out by a white male, who was wearing a red hoodie, barefoot and brandishing a knife. His appearance was revealed in footage posted on Twitter, after he was handcuffed by police.
The Met Police Service were alerted to the incident which took place at ten past three on Thursday afternoon. Following the attack, a Met spokesperson commented, “Officers attended along with paramedics from the London ambulance service. A man was found with stab injuries. “He was treated by paramedics before being taken to hospital … A man was arrested at the scene on suspicion of attempted murder. A crime scene has been put in place. Inquiries continue.” Following up on the victim’s condition, the Ambulance Service stated, “We sent an ambulance crew, a paramedic in a car and an advanced paramedic practitioner to this incident in Regent’s Park. “We treated a man at the scene and took him to a major trauma centre.” The Muslim Council expressed their concern following the incident, fearing that the UK’s Muslim community will be even more on-edge after other recent attacks.” The motive behind the stabbing has not yet been made clear, nor have the identities or possible associations between the attacker and victim been publicised. The assumption of many at this point, will likely be that the attack was politically-motivated. Two things we can be certain of, are that it was a hateful act carried out by a terrorist, and that the perpetrator should be handled with the contempt befitting that title. Many have – and continue – to work tirelessly to protect the rights and safety we often take for granted in our society. The best we can do is work together to preserve that vision, and condemn today’s events.BREAKING NEWS: We are hearing unconfirmed reports that a muadhin has been stabbed at London Central Mosque. More details to follow. pic.twitter.com/YQhU50hrBM
— 5Pillars (@5Pillarsuk) February 20, 2020
The FTSE was once again the front-runner in a forgetful session
Awaiting an eventful Friday, Thursday was almost an entirely stagnant session across global equities, with FTSE retaining its place at the top of the pile.
The Dow Jones sat shy of its all-time high mark and both the CAC and DAX didn’t move far off of their respective opening positions.
For the third day in a row, the FTSE saw the biggest gains, today lead by the continued slide of Sterling, and positive data posted by some of its largest-cap members.
Retail data was surprisingly positive, but investors wait with bated breath for Friday’s manufacturing results.
Speaking on the lack of market movements during the Thursday session, Spreadex Financial Analyst Connor Campbell commented:
“It was a forgettable session, the markets lacking direction as they wait for Friday’s manufacturing data.”
“Matching the inertia of its Eurozone peers, the Dow Jones did nothing after the bell. Opening flat, it sits at 29340 – one good session away from reclaiming its 29500-tickling all-time highs.”
“As mentioned, the Eurozone was devoid of drama this Thursday. The DAX shed a handful of points as it continued to lurk just under 13800, while the CAC was flat a bit above 6100.”
“The FTSE was the sole major index to push higher; then again, unlike the DAX and Dow, it is nowhere near its own record peak.”
“Adding 0.3%, the UK index touched 7480, boosted by the likes of Lloyds (LON:LLOY) and Smith & Nephew (LON:SN).”
The FTSE was also boosted by BAE Systems plc (LON:BA), which bounced over 3% on an 8.9% rise in year-on-year revenues.“The real difference maker, however, was sterling’s latest slide. Despite a broadly positive week for data – Thursday saw a better than forecast swing in retail sales, from -0.5% to 0.9% month-on-month – the pound is having a bit of a nightmare.”
“Cable’s 0.3% drop pushed it to a near-3 month nadir of $1.2878, while a 0.5% fall against the euro took sterling to an 8-day low of €1.19045. The currency is afflicted by a variety of issues, from the upbeat tone of the ECB’s latest meeting minutes, to the dollar’s safe-haven appeal, to the pre-trade negotiations slanging match between the UK and EU.”
Spectris shares bounce following special dividend payment
Shares in Spectris plc (LON:SXS) have jumped following a strong set of 2019 full year results.
Following these strong results, the firm has decided to pay a special dividend which has been driven by its strong performance and its restructuring program.
The Chief Executive said: “We have announced a special dividend of £175 million, in line with our capital allocation policy. 2019 has been a year of delivery upon which to build in 2020. We are intent on further improving our operating margin, to at least previous highs, and enhancing capital returns, as we continue to work on asset optimisation and managing the portfolio.”
The firm reported pretax profit of £259.3 million in 2019 – this represented a 19% growth from the £218 million figure just one year ago.
Notably, revenues also jumped by 1.7% to £1.63 billion from £1.6 billion.
On an organic, constant currency like-for-like basis, revenue increased by 0.4%, Spectris said. The sales contribution from acquisitions were broadly offset by disposals, and there was a 1.5% positive impact from foreign currency exchange movements.
The firm added that its profit improvement program lead to annualized benefits of £25.5 million, as restructuring costs incurred totaled £52.2 million.
The firm declared an annual dividend payment of 65.1 pence, which shows a 6.7% rise from 61p paid for 2018.
Spectris notably proposed a £175 million special dividend and share consolidation. The special dividend of 150p has been noted, and the firm said that in order to maintain the comparability of the company’s share price a supporting share consolidation will take place – subject to shareholder approval.
Andrew Heath, Chief Executive, said:
“2019 saw demonstrable progress in executing our Strategy for Profitable Growth. The successful delivery of our profit improvement programme, combined with an increased emphasis on deploying the Spectris Business System, enabled us to deliver increased profit and operating margin expansion, against a weakening macroeconomic backdrop …
Absent a material impact from coronavirus, for 2020, we anticipate that markets will remain challenging in the first half with a recovery only currently forecasted to emerge later in the year. We expect limited top-line growth and will, therefore, continue to concentrate on self-help initiatives to drive further cost-efficiency and ensure a more resilient and profitable business.
The combination of focusing on our customers, driving operating leverage and the repositioning and simplification of our portfolio, alongside a refreshed capital allocation framework, form the basis for delivering a significant and sustainable increase in shareholder value.”
Shares in Spectris trade at 2,874p (+5.04%). 20/2/20 13:36BST.
TBC Bank shares spike over 6% as annual profits surge 15%
TBC Bank Group PLC (LON:TBCG) have seen their shares spike following a strong set of annual results, published on Thursday.
The Georgian bank said that it had seen a double digit rise in annual profit which was the headline statistic in the annual update.
The firm praised the strong performance in its corporate lending department, as this sector drove the firm’s strong loan book performance.
Across 2019, TBC Bank recorded GEL585.5 million in pretax profit, which is a 15% climb compared to GEL510.2 million in 2018.
The firm also said that its’ net interest income rose 3% in 2019 from GEL778 a year ago to GEL801.5 million.
The bank also told the market that operating expenses rose 9.7% in 2019 to GEL450.7 million from GEL411.0 million in 2018, and, as a result, its cost-to-income ratio worsened to 39.9% from 37.8% – which was one of the dampened takes from the update.
TBC finished 2019 with a gross loan book of GEL12.66 billion, again showing a 22% rise from the GEL10.37 billion figure seen at the end of 2018. Notably, net interest margin fell from 6.9% to 5.6%.
Looking at their customer deposits, these amounted to GEL10.05 billion, up 7.5% from the year before at GEL9.35 billion.
A notable rise came from TBC’s retail loan book, where this was up 7.5% year on year. Corporate Loans grew 47% while its Micro, Small, & Medium Enterprises loan book rose 18%.
Going forward, the firm said that it had laid solid foundations for further customer initiatives and that there are ambition plans in place.
The CEO of TBC Bank commented:
“In 2019, we recorded strong financial results and made significant progress against our strategic priorities, including the development of customer focused ecosystems and international expansion in Uzbekistan. This lays a solid foundation for further development of these initiatives and I am very excited about our ambitious plans for 2020. Our leading digital capabilities, outstanding customer experience and advanced data analytical capabilities, coupled with our strong team spirit, make me confident that we are well positioned to achieve sustainable growth and to deliver superior results to our shareholders. Therefore, I would like to reiterate our medium-term targets: ROE of above 20%, cost to income ratio below 35%, dividend pay-out ratio of 25-35% and loan book growth of around 10-15%.”
TBC’s strong quarterly update
The results today show a clear plan to build, and in November the firm gave another steady update. The FTSE 250 listed bank said its net profit for the three months to September 30 increased 18% to GEL126.8 million from GEL107.4 million in the same period a year ago. Additionally, pretax profit rose 13% to GEL142.3 million. Third quarter net interest income fell 6.7% to GEL186.2 million, while fee & commission income rallied 20% to GEL47.1 million. Other operating non-interest income increased 19% to GEL46.4 million. Net interest margin for the third quarter fell to 5.0% from 6.9%. Year-to-date margin fell 1.5 percentage point to 5.5%. TBC has backed their medium-term target of return on equity of above 20%, cost to income ratio below 35%, dividend payout ratio of 25% to 35% and loan book growth of 10% to 15%. In the third quarter, the company’s return on equity fell to 20.4% from 21.2% and cost to income ratio increased to 39.9% from 37.4%. TBC Bank have clearly made an emphasis to build and grow as a firm – something which has to be admired. Shares in TBC Bank trade at 1,392p (+6.26%). 20/2/20 13:07BST.Morgan Sindall report strong 2019 as revenues climb 3%
Morgan Sindall Group PLC (LON:MGNS) have given shareholders an impressive annual update on Thursday afternoon.
The construction firm told the market that annual revenues and profits had risen across 2019 and that ‘strong results’ had reflected the quality of its work.
Shares in Morgan Sindall Group PLC trade at 1,936p (-0.10%). 20/2/20 12:36BST.
Morgan Sindall said that revenue rose 3% to £3.1 billion in 2019, compared to £2.9 billion in 2018, while pretax profit rose to £88.6 million compared to £80.6 million.
On an even better note, the firm said that secured workload in 2019 rose 14% from £6.7 billion to £7.6 billion.
Morgan Sindall noted that they had changed their strategy to improve business operations.
The change and focus to contract selectivity, operational delivery and on generally improving the overall quality of business won and delivered – and this has paid off following the strong results posted today.
The Construction and Infrastructure divisional revenue rose to £1.5 billion from £1.3 billion in 2018, while Fit Out delivered revenue of £839.0 million compared to £831.0 million a year ago.
On the back of these strong results, Morgan Sindall have increased their total dividend by 11% to 59p from 53p paid in 2018.
Commenting on today’s results, Chief Executive, John Morgan said:
“These strong results reflect the high quality of our operations and are testament to the work and commitment of all our people. Our strategic focus on construction and regeneration underpins the positive momentum across the Group and provides the platform for future progress.
Our balance sheet remains a significant differentiator allowing us to make the right long-term decisions for the business. With our average daily net cash position further increasing in the year, we have the flexibility to continue being highly selective with our bidding while also investing in our regeneration activities.
Both the volume and the quality of our secured workload have increased in the year leaving us well-positioned for the future. We are confident of another good year of progress in 2020 and the Group is in a strong position to deliver on its expectations.”
Morgan Sindall grow from strength to strength
Following the results that have been posted today, it is clear to see that the firm has been growing from strength to strength. While revenue was flat between H1 2018 and 2019, adjusted operating profit grew 18% to £37.5 million and adjusted profit before tax jumped 20% to £36.3 million. Notable divisional performances came from Partnership Housing and Urban Regeneration, up 39% and 36% respectively. Certainly this is an impressive update from Morgan Sindall – the firm should be confident to keep growing and exceed expectations.Laura Ashley unveil their interim results after hectic few days
Laura Ashley (LON:ALY) have posted their interim results on Thursday, following a busy week for the firm.
The British firm said that its performance slipped in the first half of its financial year – but has remained confident in its ability to meet expectations.
The firm said: “There have been market challenges for our business which have impacted these results during the current financial year. The decline in total revenue was due to the market headwinds and weaker consumer spending during the period, which led to a decline in sales of bigger ticket items. Whilst these results are disappointing, we believe that with the right focus and support, Laura Ashley has a strong future and can be successful again.”
The textile and clothing company reported that they had seen a pretax loss of £4 million in the six month period to December 31 2019.
The loss recorded increased from £1.5 million reported a year ago. Additionally, revenue slipped 11% to £109.6 million from £122.9 million.
On a like for like basis, retail sales also dropped by 10% – which reflects a tough British retail industry combined with a cut throat high street which has seen the collapse of a few firms over the last few months.
The firm said that margins during the first half were hurt by a weak pound against the dollar as well as an increase in UK domestic costs.
Andrew Khoo, Chairman commented:
“Over the past year there have been well documented market challenges facing the retail sector. Similarly at Laura Ashley, we have seen a combination of factors impact our results, ranging from higher costs largely driven by the Brexit uncertainty, minimum wages and business rates increases.
In the Autumn of 2019, we carried out a Strategic Review of the business to set the future direction of the company and return Laura Ashley to the great British brand that is known and cherished around the world. This review identified six areas of focus: improving our brand and customer strategy, accelerating digital, increasing store productivity, improving products and trading, growth opportunities, and focusing on our organization and culture.
We are focused on developing Laura Ashley as a true lifestyle brand that embraces and reconnects with our traditional values and our strong British heritage.”
Laura Ashley announce directorate change
In another update today, the firm also announced that Katharine Poulter, current Chief Operating Officer of the Company, will be appointed as Executive Director and Chief Executive Officer with immediate effect. Poulter will succeed Kwan Cheong Ng, who will retire as Chief Executive Officer of the Company. Mr. Ng will remain as Executive Director until 30 April 2020, after which time he will become a Non-Executive Director of the Board. The firm added: “The Board would like to take this opportunity to thank Mr. Ng for his contribution as Executive Director and Chief Executive Officer during his tenure with the Company and to wish him the very best in his retirement.”Laura Ashley’s busy week
At the start of the week, Laura Ashley saw their shares crash following intense media speculation. The announcement was made on Monday in response to “speculation regarding its financial position.” Laura Ashley said that in the 26 weeks up to 31st December 2018, total group sales were £109.6 million, which saw a 10.8% drop from £122.9 million in 2018. Notably, the firm said that the decline in total revenue was due to market headwinds and decreased consumer spending. Yesterday, the firm told the market that it had secured approval to utilize funds from its working capital facility with Wells Fago. The funds that had been approved met its immediate funding requirements, following the statement issued on Monday. Laura Ashley further reenforced their position that this did not constitute a cash injection by MUI Asia into the company. The results today have followed a week of intense speculation over the survival prospects of the firm. Shares in Laura Ashley trade at 2p (+9.47%). 20/2/20 12:26BST.Oil prices receive boost as tensions in Libya heat up
Oil prices have jumped across Thursday trading, which has extended gains from the previous session.
The price of oil derivatives has been volatile, following both demand and supply issues which have weighed down on global commodities.
The coronavirus has been the main demand side factor which has pulled oil prices down – the outbreak reported a few weeks back has hindered trading in China and has also been spreading across the globe.
Business in China has slumped, which has caused demand for commodities to slow down dampening prices. Additionally, Japan recorded an economic contraction on Tuesday – Japan is the fourth biggest consumer of oil in the globe, and this also led to oil prices flattening.
Thursday has given some rejoice for oil prices however, oil derivatives have seen a boost. This however may not have spawned from demand side, but rather supply issues.
Ongoing political tensions in Libya have led to blockades of their industrial ports and oilfields, as no signs of a resolution have yet been shown.
US Sanctions remain on Rosneft (MCX:ROSN) which could cause further supply shortages in the market.
Libya’s leader Fayez al-Serraj has not reached a middle ground in negotiations following internal action from the Libyan National Army blocking ports. Analysts have said that they estimate that these tensions could cause oil exports to decrease by one million barrels per day.
US data yesterday showed that US Crude Stocks rose by 4.16 million barrels in the week to Feb. 14, compared with analyst expectations for a build of 2.5 million barrels – which is a positive take for commodity traders.
The price of Brent Crude is currently $58.78, rising by 0.1%. Whilst WTI Crude trades at $53.61 (+0.43%).
Oil prices are still seeing their fluctuations, the constant supply cuts made by OPEC+ in an attempt to control prices are working to an extent – however the issues in the Middle East continue to weight down on the supply side.