Shanta Gold exceed production targets across productive Q4

Ishen Patel
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0
Shanta Gold exceed production targets across productive Q4

Shanta Gold (LON:SHG) has updated shareholders about its operations in Tanzania.

The firm said that full-year production at the New Luika mine in Tanzania has beat its target output range with annual tonnes mixed rising to a new company record.

For the year ended December 31, production rose by 3.2% year-on-year to 84,506 ounces, edging above the 80,000 ounces to 84,000 range.

In the fourth quarter, Shanta reported that output fell by 14% on a quarterly basis to from 22,726 ounces to 19,550 ounces.

Looking forward the firm saids that it expects annual production to be between 80,000 ounces and 85,000 ounces

On a good note for shareholders, all sustaining costs toiled $779 per ounce in 2019 which met the guided figure in its $740 to $780 range.

In 2019, Shanta’s net debt was trimmed to $14.3 million from $20.7 million the year before. It is setting its sights on achieving a net cash positive position in 2020.

Shareholders will be further pleased as the firm said it would be boosting its exploration budget in 2020 to $5 million.

Eric Zurrin, Chief Executive Officer, commented:

“The Company has achieved a number of important objectives in 2019, with gold production exceeding guidance and net debt expected to soon move to net cash.”

“I’m pleased to report that through low-cost exploration drilling we were able to add new reserves to the mine plan which more than replaced production during the year. Mine life at New Luika continues to be a priority and the Board have approved a significantly increased exploration budget for 2020 as we look to upgrade resources and identify new ounces.”

“The Company is well-positioned for another strong year and we anticipate entering a net cash position during 2020 as our deleveraging strategy enters its final phase.”

Shanta build on third quarter positivity

In October, the firm told shareholders that it had begun “rapidly paying down its debt” during a productive third quarter, which saw the Group’s production volumes and sales expand.

The Company booked an impressive reduction in net debt, dropping 23% during the quarter to US $20.7 million. Further, the Group’s net debt narrowed 15% during the same period, to $25.7 million.

This progress was led by improved production volumes, with 22,726 oz produced during Q3, up from 19,856 oz the previous quarter. Shanta Gold added that the average head grade of this output was also superior, at 4.5 g/t compared to 3.9 g/t for the previous period.

Further, while the Group reported that forward sales had dipped by 2,000 oz to 43,000 oz, their operating costs narrowed by $90 per oz to $474 per oz and adjusted EBITDA spiked from $10.5 million to $16.5 million.

Shanta Gold will be pleased with the results across the fourth quarter, and with the expanding exploration budget the firm has entered the new year with a motivation to drive forward across 2020.

Shares in Shanta Gold trade at 10p (-1.44%). 16/1/20 15:08BST.

Oil prices see stability following Trump’s Phase 1 deal with China

Ishen Patel
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0
Oil prices see stability following Trump’s Phase 1 deal with China

Global Oil prices have recovered on Thursday following a hectic few weeks involving Brexit negotiations, Chinese-US relations and tensions in Iraq.

Many analysts were initially skeptical as to whether the United States and China could hash out a trade deal following months of tariffs leading to business slumps and supply issues.

However, despite the odds a Phase 1 deal has alleviated the pressure on the oil markets, however any gains made hit the ceiling which the International Energy Agency said it expected oil production to surplus demand.

The phase 1 deal which Donald Trump announced to the media yesterday involved China committing to buy over $50 billion more of US oil, liquefied gas and other energy related products over a two year period.

There has been a period of stability for global oil prices, after the world had seen a feud between the US and Iran over the assassination of Qasem Soleimani which heightened political tensions between the two superpowers.

The International Energy Agency said that rising oil production from non-OPEC involved states tied in with abundant global reserves will allow the market to brush off further political tensions between the US and Iran.

The IEA also said it expected production to outstrip demand for crude from the Organization of the Petroleum Exporting Countries (OPEC) even if members comply fully with a pact with Russia and other non-OPEC allies to curb output.

Significantly, oil prices did see a dip yesterday following the EIA report showing that inventories across the country fell by 2.55 million barrels for the week ending January 10, this was a significant fall from the 474,000 figure expected by analysts.

UBS (SWX:UBSG) said in a note “provided Middle East tensions do not intensify and cause production disruptions, Brent should decline toward the bottom of a $60–65 per barrel trading range in 1H20 before recovering to the top of it in the second half of the year”.

In the weekly update provided by the EIA yesterday, gasoline inventories jumped by about 6.7 million barrels, compared with expectations for a build of about 3.4 million barrels.

Additionally, distillate stockpiles, jumped by about 8.2 million barrels, which crushed expectations of a rise in the figure of 1.2 million barrels. This was the biggest weekly build in distillates since September 2017.

The EIA also noted that US crude oil refinery inputs averaged 17 million barrels per day which was a rise of 76,000 from the previous week’s average. Refineries operated at 92.2% of their operating capacity last week.

U.S. crude oil imports averaged 6.6 million barrels per day last week, down by 179,000 barrels per day from the previous week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.5 million barrels from the previous week.

Independent Investment Trust dips despite swinging to profit

Jamie Gordon
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0
Independent Investment Trust dips despite swinging to profit
Financial services provider Independent Investment Trust (LON:IIT) saw its share price dip despite swinging from a full-year loss, to a full-year profit, year-on-year. The Company reported that it swung from a loss on its investments of -£41.75 million during FY18, to a positive return of £17.34 million for FY19. Additionally, it swung from a net return on regular activities before tax of negative £35.90 million for FY18, to positive £24.77 million for the full-year just gone. Its administrative expenses also narrowed from £751,000 to £740,000 on-year. Independent Investment Trust shareholders fared similarly well. Net returns per share swung from negative 64.74p to positive 44.34p, while the Company’s dividends increased from 10.00p to 13.00p on-year.

Independent Investment Trust comments

Speaking on the Group’s performance, the Chairman’s Statement read,

“Over the year to 30 November 2019, our Company produced a net asset value (NAV) total return of 8.5%. Over the same period, theoretical investments in the FTSE All-Share Index and the FTSE World Index would have produced total returns of 11% and 13.1% respectively. It is particularly disappointing that, after an encouraging first half, we failed to match the return on either index. Poor stock selection, notably since the EU referendum, is largely to blame, with the Eddie Stobart debacle a particularly painful example.”

“A further erosion of the rating of our shares saw the discount move out from 1.2% at 30 November 2018 to 9.4% at 30 November 2019, producing a share price total return of -0.5%. By 14 January 2020 the NAV had risen to 612p and the share price to 589p, reducing the discount to 3.8%.”

“Economic activity over the last year has tended to disappoint with the result that the nascent tightening of monetary policy highlighted in our report a year ago has given way to renewed stimulus. Markets, in the tradition of Pavlov’s dog, have responded well to this. The UK market underperformed the world market over the period as many investors chose to stay out of the market owing to the various uncertainties attending Brexit and the political situation.”

Investor notes

Elsewhere in financial services and asset management; Charles Stanley Group (LON: CAY) enjoyed a boost to its FUM, AJ Bell PLC (LON: AJB) posted a strong full year, Monks Investment Trust PLC (LON: MNKS) underperformed, and Investec plc (LON: INVP) sells its asset management division. After a slight recovery, Independent Investment Trust shares were down 1.92% or 11.25p, to 574.75p per share 16/01/19 14:11 GMT. It currently has a dividend yield of 1.20%.

Cairn Homes give confident expectations following successful 2019

Ishen Patel
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2
Cairn Homes give confident expectations following successful 2019

Cairn Homes (LON:CRN) have given shareholders a confident outlook going forward into 2020.

The firm alluded to strong growth in sales and revenue in 2019, in a time where the property market has hit been hit Brexit complications and external shocks.

In a trading update for the year ended December 31, the company said its revenue grew 29% to €434 million from €337 million a year before.

Cairn told the market that they expect to report 1,080 closed unit sales which sees a surge of 34% from 2018.

Further pleasing for shareholders was the stat that said operating profit is expected to increase by 28% to €68 million from €53.2 million in 2018.

The Irish home builder said that strong demand for new homes in 2019 has been undermined the competitiveness of its average selling price of €372,000, compared to €366,000 the prior year, with first-time buyer starter home average selling price of €314,000.

Michael Stanley, Co-Founder and CEO of Cairn, commented:

“2019 was another year of exceptional execution by our talented team at Cairn. We increased our revenues to c. €434 million, moved 1,080 customers into their new homes and we start 2020 with 740 homes already forward sold. With more certainty around Brexit, the robust performance of the Irish economy and the fact that housing supply still falls significantly short of demand, we believe our business model is well positioned to take full advantage and we look forward with real confidence to 2020 and beyond.”

“We expect to generate c. €500 million in free cash to the end of 2022 and our announcement today that we are increasing our current share buyback programme to €60 million demonstrates our longstanding commitment to creating value for our shareholders. We will continue our policy of progressive ordinary dividends and will declare a final dividend in March 2020.”

British Homebuilders – Vistry

Yesterday, Vistry (LON:VTY) told shareholders that it expects to deliver record full year profit.

The firm told shareholders on Wednesday that full year profit before exceptional items is expected to rise above market forecasts of £181.6 million.

This is an impressive expectation, and shows growth from 2018 figure of £168.1 million with operating profit before exceptional items at £174.2 million.

The company has only recently changed its name following two acquisitions from Galliford Try PLC (LON:GFRD).

Looking at 2019 trading figures, the firm said that it had completed 3,867 new homes, 2.9% more than 3,759 in 2018 which would have pleased shareholders.

Notably, the average selling price was £279,000, up 2.1% from £273,200 the year before.

Taylor Wimpey see stable performance

At the start of the week, Taylor Wimpey (LON:TW) told the market that they expect results to be aligned with expectations.

The FTSE 100 trader said that the housing market remained stable in the last year, however there were challenges faced in London and the South East.

Taylor Wimpey noted that total house completions in 2019 has increased by 5% to 15,719 which included joint ventures.

2019 ended with a record total order book valued at £2.17 million, which showed a ruse from the £1.78 figure a year ago.

The house builder said that it remains cash generative and intends to return £610 million to shareholders in a dividend form.

Cairn Homes have the statistics which back up their strong expectations and confidence and shareholders will remain keen to see how the firm performs across the year.

Shares in Cairn Homes trade at €1.32 (+1.54%). 16/1/20 14:27BST.

Shell and CNOOC announce deal to build first polycarbonate production plant in Huizhou

Ishen Patel
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0
Shell and CNOOC announce deal to build first polycarbonate production plant in Huizhou

Royal Dutch Shell Plc (LON:RDSA) have updated the market about their operations in China.

The firm said on Thursday that they signed a memorandum of understanding with China National Offshore Oil Corp (HKG:0883) to build its first commercial scale polycarbonate production plant.

The plant will be the first of its kind, will be situated in the South of China in a city called Huizhou.

“(Huizhou city government) is in touch with Shell and CNOOC for detailed investment and production plans,” said Liu Ji, mayor of Huizhou, on the sideline of a conference in Guangzhou on Thursday.

The deal that has been reached aims to build more production equipment at the new site in Huizhou and shows an active effort by the multinational to invest into China.

Shell have already made headways in Singapore for another plant in similar fashion to the one mentioned today, and this is being built at its Jurong Island Chemicals Plant as an interim step.

“(…)We have an advantaged route to production and are looking at investment in a number of commercial-scale units to serve the growing number of polycarbonate customers,” Thomas Casparie, Executive Vice President of Shell’s global chemicals business, said in the statement.

Shell’s December update

The firm told shareholders just before Christmas that it would cut its oil production sales.

The firm said that it can expect impairment charges off around $2.3 billion, in the fourth quarter.

Additionally, Shell trimmed its forecast for quarterly oil production sales as the firm has seen itself in tricky waters over the last few weeks.

The firm also added that it expects oil production sales of 6.5 million barrels of oil equivalent per day and 7 million boepd for the fourth quarter, compared with its earlier estimate of 6.65 million boepd to 7.05 million boepd.

The company had seen a slump in its third quarter trading, did report strong oil and gas trading however. Shell said that higher taxes would be bruising earnings by $500 million to $600 million in the fourth quarter.

New Credit Facility

Just a few days before the fourth quarter update, the firm announced that it would be constructing a new credit facility.

The firm updated shareholders about a $10 billion new credit facility. The new facility has been agreed with a total of 25 banks and replaces the existing framework valued at $8.84 billion.

It will also, in a first, have interest and fees linked to Shell’s progress in reached its short-term net carbon footprint target. Shell has targeted reduce its footprint by 2% to 3% by 2021.

Shell has set an ambition to reduce the Net Carbon Footprint of the energy products by around 50% by 2050 and by 20% by 2035 in a time of high environmental awareness.

“Bank of America and Barclays Bank (LON:BARC) acted as joint coordinators for the facility”.

The update that has been given is impressive, and could have benefits for both parties involved.

Shell seem to have made an active effort to promote efforts to invest into China in a time of tense global relations, however this is a move in the right direction for the FTSE 100 listed firm.

Finsbury Food see increasing sales domestically but overseas slowdown

Ishen Patel
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1
Finsbury Food see increasing sales domestically but overseas slowdown
Finsbury Food (LON:FIF) have told shareholders that they are are trading in line with expectations, in a stable update provided on Thursday. The firm said that first half sales have been rising year on year, as the baker and food producer has been seeing declines in other sectors. In the six months to December 28, Finsbury Food’s sales rose by 4.7% from a year before to £159.4 million. In its UK Bakery division, sales grew by 5.8% year-on-year during the first half, but in its Overseas division, they declined by 3.5%. Looking at the UK, Finsbury told the market that it had received licensing agreements with Walt Disney Co (NYSE:DIS) in order to produce themed cakes. This is an impressive achievement for Finsbury Food, and will certainly attract a new segment of the market which will please shareholders of Finsbury Food. The firm also said that other agreements had been reached with Thorntons Chocolate Brand and Retailer, Nutella and Ferrero Rocher-owner Ferrero SpA which are pretty impressive accomplishments for the firm. Additionally, Finsbury owns the Johnstone’s Just Desserts cake supplier business, which it rescued from administration in 2015. The Group will announce its Interim Results for the six months ended 28 December 2019, on Monday 24 February 2020. The firm said “Notwithstanding the Group’s continued momentum, management are cognisant of the difficult trading environment and wider macro-economic uncertainty, and remain focused on innovation, efficiency and investment.”

Finsbury remain confident following turbulent few months

In November, the firm saw its shares slip despite reporting higher sales in a recent update. The firm outlined strong trading figures by saying that sales were up in the first half of its current financial year and expects to meet market expectations. Speaking at the baker’s annual general meeting, Non-Executive Chair Peter Baker said the company has maintained momentum from its previous financial year, which ended June 29, with “strong” core business growth. In the first four months of the new financial year, which ends in June 2020 the firm saw a 6.4% climb in sales to £101.5 million which will please shareholders in an uncertain market. The firm dedicated the sales rise to its UK retail and food service performance, plus new business victories and further innovation across the group and company.

Gregg’s – the main rival

The biggest titan in the baking industry comes in the shape of Greggs (LON:GRG) who are continuing to impress and dominate the market. The firm in November defied the high street gloom and produced a bullish update. For the six weeks to 9 November, total sales were up 12.4%. Additionally, company-managed shop like-for-like sales increased 8.3% over the six week period. “Sales growth continues to be driven by increased customer visits and has been stronger than we had expected given the improving comparative sales pattern that we saw in the fourth quarter last year,” Greggs continued. Notably, yesterday Just Eat (LON:JE) told the market that they had agreed an exclusive delivery deal with Greggs. The FTSE 100 listed firm told shareholders that they intention on having Greggs’ bakery food products on delivery by the end of 2020. Greggs delivery has been trialled on Just Eat in London, Newcastle and Glasgow and plans to launch the service in Birmingham and Bristol are set to commence this week. In the update, it was also noted that services in Manchester, Leeds, Sheffield and Nottingham will all be ready in Spring. Certainly, Finsbury Foods can remain optimistic, the deals that have been mentioned before are significant and give the firm a big chance to expand their presence in a highly competitive industry. Shares in Finsbury Food trade at 96p (-2.83%). 16/1/20 13:06BST.

Microsaic Systems boasts emphatic second half performance

Jamie Gordon
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0
Microsaic Systems boasts emphatic second half performance
Scientific research and equipment provider Microsaic Systems (LON:MSYS) has cause for celebration this Thursday, with impressive performance in its latest update and a noteworthy share price rally to match. The Company said that its full-year revenues are expected to be up by 50% year-on-year, from £0.58 million to £0.87 million. This impressive progress was led by strong sales in the second half, up 66% from the first half. The Company also saw gross margins improve from 32% to 43%, bringing its full-year to 39%, which was slightly below the 42% reported for FY18.

It continued to give reasons for praise, stating that it made ‘significant progress’ with its strategy for the traditional ‘small molecule’ market by signing four new agreements during the year, “specifically an additional OEM agreement with Biometrics Technologies Co, Ltd for its 4500 MID® MS detector to be integrated with high performance liquid chromatography equipment and distributed in Southeast Asia, South Korea and India.”

It added that it signed three exclusive distribution agreements for, “the distribution of the 4500 MID® MS detector with CM Corporation Ltd. for South Korea, Chromatec Scientific Pty. Ltd for Australia and New Zealand and with ST Japan Inc., for the Japanese market.” It added that it achieved significant progress in its strategy for the biopharmaceuticals market, and among other developments it launched its MiD® ProteinID product.

Microsaic Systems comments

Reacting to the update, Company CEO Glenn Tracey, said, “I am very pleased with the progress in 2019, and excited by the growing pipeline of opportunities ahead of us, which the Board believes will deliver significant growth in the short to medium term. In particular, our new product releases in 2020 will significantly change our business outlook, as we transition to a complete solution provider, while still maintaining our unique ‘compact’ value proposition.”

“Our business development pipeline has increased momentum, and, in 2020, we expect to grow our targeted direct sales channel as well as sign more deals with partners.”

“Finally, we are delighted to have extended our collaboration with CPI as announced in December. To our knowledge, there is no other MS technology that can offer a complete suite of product and process analysis in bioprocessing, while simultaneously controlling the biomanufacturing process. We have a potentially game changing technology, applicable to all areas of high value drug production, and indeed for many other types of chemical production where real-time analysis is critical to reducing production costs and reducing the costs of non-compliance and failure.”

Investor notes

Elsewhere in health and pharmaceutical news; Beximco Pharmaceuticals (LON: BXP), IMCD N.V. (AMS: IMCD), Amryt Pharma Holdings Ltd (LON: AMYT) and Curetis NC (AMS: CURE) also boasted financial progress. Following the update, the Company’s shares jumped 21.82% or 0.24p to 1.34p per share 16/01/19 10:07 GMT. Neither a p/e ratio nor a dividend yield are available for Microsaic Systems stock, their market cap is £5.7 million.

Pearson expect a 15% decline in 2020 operating profit

Ishen Patel
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3
Pearson expect a 15% decline in 2020 operating profit

Pearson (LON:PSON) have told shareholders that they are expecting up to a 15% decline in operating profit for 2020.

The firm alluded to the changing preference of learners as one of the reasons for the gloomy forecast, as shares declined.

Shares in Pearson trade at 572p (-7.50%). 16/1/20 12:24BST.

Pearson updated the market back in December, alluding to the sale of Penguin Random House for $675 million to Bertelsmann SE & Co KGaA, the deal valued Penguin at $3.67 million.

Looking at its 2019 figures, Pearson reported underlying revenue remained flat whereas adjusted operating profit was £590 million, within the guidance range, and up 8.1% from £546 million in 2018, which was something positive to report within the update.

US Higher Education Courseware revenue declined by 12%, though there was “modest” growth in digital revenue, this followed a sway of print products to digital formats as campus bookstores told Pearson of the changes towards eBooks from its physical counterpart.

Looking forward to 2020, Pearson expects to deliver adjusted operating profit between £500 million to £580 million, including the 25% stake in Penguin Random House.

Pearson added that they expect trends seen in 2019 in US Higher Education Courseware to continue with heavy declines in print partially offset by modest growth in digital as more products are added to the GLP.

Notably, incremental restructuring benefits of £60m as plan will come to an end.

John Fallon, Chief Executive said:

“We have secured flat revenue this year and delivered operating profit within the guidance range, with much weaker sales in US Higher Education Courseware offset by a strong performance in the broader 76% of Pearson.

“Pearson is now a simpler, more efficient company, with strong financial foundations. This enables us to continue to invest in digital innovation and platform-based products. The future of learning will be increasingly digital and consumer defined. Experience, outcomes and affordability will all matter and while there is still much to do we are well placed to benefit from these trends to achieve future, sustainable growth.”

Pearson see different story from one year ago

Just under a year ago, in February the firm reported that its profits grew 8% for the year, despite a fall in sales, as cost-saving initiatives took effect.

The educational publisher said adjusted operating profit for the year to 31 December 2018 was £546 million, despite underlying revenue declining 1% on a year-on-year basis.

The fall in revenue was attributed too “portfolio changes”. The firm is in the midst of a restructuring its business, as it turns it focus more towards digital publishing.

The firm also said it expects adjusted operating profits of between £590 million and £640 million in 2019.

Retailer – The Works

Interestingly, The Works (LON:WRKS) saw their shares spike this morning as the firm saw record trading over the Christmas period.

The Works is a book retailer and has seen a strong period of trading, which is interesting looking at the update from Pearson.

The stationary retailer said to shareholders that like for like sales in the 11 weeks period rose by 1.5%, notably this showed an impressive period of trading across Christmas as the period ended on January 13.

For its first-half, the six months to October 27, revenue climbed by 5.4% year-on-year to £96.4 million from £91.5 million. On a like-for-like basis however, sales were 3.6% lower during the period.

Its pretax loss narrowed to £8.5 million from £9.1 million last year which has been reflected in todays share price surge.

The Works also noted that 33 new stores were opened and five were closed, bringing the total estate to 525 stores as at 27 October 2019. Two stores were relocated during the Period and a further net 13 stores were added following the period end.

It seems that Pearson may have to evaluate the shift to eBooks over their traditional counterpart if they are to see higher volumes of sales, however the firm has demonstrated its ability to bounce back in the past.

ProPhotonix shines following a productive second half

Jamie Gordon
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0
ProPhotonix shines following a productive second half
Designer and manufacturer of LED light and laser diode modules, ProPhotonix Ltd (LON:PPIX) booked glowing full-year results, following a bright second half to their full-year.

After a moderate first half, the Company switched on in the second period, with orders flickering upwards by 30%, from $7.1 million to $9.3 million. ProPhotonix revenues also shone, up 9% to $7.8 million.

Due to its second half performance, the Group’s full-year figures were illuminated. Year-on-year orders were up from $16.1 million to $16.5 million. Revenue dipped from $16.4 million to $14.9 million, but this was in line with the Company’s guidance. It added that, “Importantly, much of this increase was from the Group’s larger and more important customers, albeit not yet having recovered to 2018 run-rate levels.”

Prophotonix sheds light on their results

Company CEO, Tim Losik, commented,

“The Board is pleased with the rebound in business in the second half of the year following a resumption of orders from the Group’s largest laser module customer and increases in orders from and shipments to other major customers. Despite this improved customer activity, there remain a number of key accounts who have yet to resume their activity to the levels in 2018. However, following recent discussions with many of these other customers, the outlook for 2020 is more positive than 2019.”

“Our strategy, to support our significant OEM customer base and to make continued investments in new product introductions, continues to be a priority for the Board. We continue to invest in production and technical capability as we take on new customers and develop products. These investments, which will occur in advance of realized revenue, will allow us to complete the production build out necessary for OEM and UV LED products.”

Investor notes

Elsewhere in the tech sector; Rosslyn Data Technologies PLC (LON: RDT) lauded its contract wins, Bigblu Broadband plc (AIM: BBB.L) debt widened, Falanx Group (AIM: FLX) saw their losses widen and ULS Technology plc (AIM: ULS) suffered in a challenging market. Following the update, the Group’s shares bounced 15.13% or 0.23p, to 1.78p per share 16/01/19 12:03 GMT. Neither a dividend yield nor a p/e ratio are available for the stock, their market cap is £1.54 million.

Halfords report growth across Christmas trading however financial year sees minor slowdown

Ishen Patel
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1
Halfords report growth across Christmas trading however financial year sees minor slowdown

Halfords (LON:HFD) have seen their shares surge on Thursday afternoon as the firm gave shareholders an impressive update.

Halfords who work in the automobile and motoring sector reported an earnings rise in its third quoter which accounted for the festive trading period.

Notably, the revenue earned from its Autocentres servicing unit grew over 30%.

Retail saw a like-for-like improvement in the Cycling segment, by 5.9%, though in Motoring, like-for-like revenue was 2.7% lower than last year.

When studying the figures from its financial year, which cover 40 weeks the results are not as impressive.

Total revenue has shrunk 0.2% year on year, and has seen a slump of 1.2% on a like for like basis.

For the full-year, Halfords maintained its guidance of underlying pretax profit, in the range of £50 million and £55 million. The measure is also on a pre-IFRS 16 basis, an accounting standard governing the financial treatment of leases.

Graham Stapleton, Chief Executive Officer, commented:

“I am pleased with our overall performance in Q3, with total revenue growing nearly 5% in the quarter. Our results reflect the positive actions we have taken across the Group to deliver on our strategy, particularly Motoring Services, which grew strongly.”

“Within Retail, Cycling performed particularly well, as customers responded to our innovative product ranges and differentiated proposition. Approximately 85% of our bike range is unique to Halfords, including our successful partnership with Disney and the development of an innovative range with Trunki, both of which helped to sell a record number of Kids bikes in the period. In addition, our ability to provide customers with a unique, free, build and storage offer was met with strong demand, as we built 86,000 bikes in the week before Christmas.”

“As National Garage Chain of the Year in 2019, Autocentres has continued to demonstrate good sales growth, organically and through acquisition, and remains well on track to deliver a 3rd year of profit growth.”

“Though pleased with our performance, market conditions remained subdued and we are not anticipating a near-term improvement. We will continue to focus on improving our customer proposition, building our services business and managing our costs and operations tightly. In the context of the current retail market I am pleased to be reporting a positive L4L performance and to reconfirm profit guidance for the full year.”

Halford’s financial outlook

“Alongside a solid sales performance, the Group has delivered continued gross margin growth. Good product ranging and innovation has negated the need for either heavy or early discounting. Further margin upside was delivered through service revenues attached to product sales. In addition, we have remained focused on tight cost control and improved operational efficiencies, with underlying operating expenditure in line with the previous year, despite upward cost pressures.

As a result of these actions, we reconfirm our expectation that FY20 underlying profit before tax, on a pre-IFRS 16 and 52-week basis, will be in the range of £50m to £55m.”

Progress from one year ago

Around this time a year ago, Halfords saw a very different situation.

The retailer said that expected profits have fallen from the previous estimate of £70 million down to between £58 million and £62 million this year.

“This has been a challenging third quarter for the business, driven by exceptionally mild weather and ongoing weak consumer confidence. Together, these factors have led us to reduce our profit expectation,” said Graham Stapleton, the chief executive.

“Halfords is a robust business and we firmly believe that the strategy we outlined in September is the right direction for the business,” he added.

The group’s last profit warning came in May last year when the bike specialist said profits would come in flat. In September, the retailer said that profits would not rise in 2020.

Halfords shareholders can be pleased with the update regarding Christmas trading, however the final period of the financial year will have to be impressive to see growth.

Shares in Halfords trade at 157p (+7.9%). 16/1/20 12:14BST.

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