Vistry set to report record profit levels despite Brexit gloom
Vistry Group PLC (LON:VTY) have told shareholders on Wednesday that they expect to deliver record full year profit.
The firm, who is formerly known as Bovis Homes as mentioned the political and economic uncertainties as a stagnating factor on the British property market.
Despite these complications, it seems that Vistry have managed to shake off the storm and continue to successfully trade.
“As previously reported, market uncertainty surrounding Brexit and the general election led to some increased pressure on pricing in the second half resulting in a c. 1-2% reduction in underlying sales prices for that period. This was, in part, offset by a combination of the Group’s own build cost savings and a lack of cost inflation. “
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.
BlackRock to focus on ESG and climate change in 2020
BlackRock (NYSE:BLK) CEO Larry Fink’s 2020 letter has focused on climate change and outlined plans for the world’s largest asset manager to reduce investments in those companies that damage the environment.
Many investors have recently focused on the impact of sustainability of their portfolios and the 2020 letter signals a shift in major asset management.
“Because sustainable investment options have the potential to offer clients better outcomes, we are making sustainability integral to the way BlackRock manages risk, constructs portfolios, designs products, and engages with companies,” the firm’s global executive committee, which includes Fink, wrote in its letter to clients Tuesday.
“We believe that sustainability should be our new standard for investing.”
This has been caused by a rise in awareness of how sustainability-related factors can affect economic growth, asset values, and financial markets as a whole.
In the update, the firm said that it would be looking to help clients navigate towards this trend of ESG investing, nothing that sustainable investment options have the potential to offer clients better outcomes.
The asset management firm said as the standout headline that sustainability would be the new standard for investing, something which has hit the market by storm over the last few years.
BlackRock have said that they will make sustainability the main offering in solutions, noting that clients may have to learn further about ERISA regulation for those who are inexperienced with ESG investing.
Notably, the firm said that they will be offering sustainable solutions at fees comparable to traditional solutions, which means that investors will not incur further costs to make the shift into ESG Investing.
This will allow investors to have an easier way to access a sustainable portfolio at good value in a single ETF, something which could differentiate BlackRock from its competitors.
Currently, every active investment team at BlackRock considers ESG factors in its investment process and has articulated how it integrates ESG in its investment processes.
Active Portfolios
By the end of 2020, all active portfolios and advisory strategies will be fully ESG integrated – meaning that, at the portfolio level, our portfolio managers will be accountable for appropriately managing exposure to ESG risks and documenting how those considerations have affected investment decisions. The firm gave an example of the thermal coal market, saying that this is an industry which is significantly carbon intensive and environmentally degrading. BlackRock added that this means it is highly exposed to regulation because of its environmental impacts, which may deter ESG investors into this field. With regards to this sector, BlackRock have said that they will remove public listings of companies that generate more than 25% of their revenues from thermal coal operations, showing an emphasis on the shift to address environmental and sustainable investor needs. BlackRock’s alternatives business will make no future direct investments in companies that generate more than 25% of their revenues from thermal coal production and are looking to cut down in investing into companies that go against environmental concerns The asset manager said today that they want to promote both ESG and Impact Investing to both clients and investors as it allows a new brand of investing to take the market. The firm already provides data on their website for iShares that display an ESG score and the carbon footprint of each fund, which will make it easier for shareholders to weigh up investments based on environmental data analytics provided by BlackRock, which has given BlackRock the edge over its competitors. By the end of 2020, the firm intend to provide transparent, publicly available data on sustainability and environmental factors, including data on carbon footprint and emissions for BlackRock mutual funds – by the end of the year the rise to ECG and impact investing may mean that these data sets are the most important for investors.Increased Access to Sustainable Investing
BlackRock have reassured the market and investors that they will do all they can to improve access to sustainable investing to allow investors as much exposure to the field. As many clients may not understand this, the work that the asset management firm are doing to both educate investors and improve accessibility is certainly noteworthy. There has been a clear need for naming conventions for ESG products industry wide, giving investors a clear transparent picture whilst allowing differentiation from ESG investments compared to traditional ones. BlackRock note that they are planning to double the choice and range of ESG ETF’s over the next few years, which have included sustainable versions of current products. This was done so that clients have more choice for how to invest their money and understand the businesses which they are putting their money into. Next there will be an emphasized effort to simplify and expand ESG iShares, which will include ETF’s with a Fossil Fuel Screen. This will allow clients to integrate ESG into their existing portfolios with ease, and make the transition process more efficient. Notably, this will mean that BlackRock require three ESG ETF suites in the USA and EMEA. Firstly, one that enables clients to be able to filter certain sectors and businesses which are not appealing to investors, allowing the selection process to be more specific and tailored towards the client. Secondly, another that enables clients to improve ESG scores whilst having the opportunity to weigh up and look at other standardized market indexes, which ensures that the database that BlackRock have is continually being improved and updated. Finally, another type that enables clients to invest in companies with the highest ESG ratings, which gives clients an opportunity to study all the data provided along with profiles of the company allowing an all round assessment before investing. Following on, there will be ensured plans to work with index providers to improve choice of sustainable indexes, providing a wider variety of sustainable investment options with the data backing it up for investors. BlackRock have really focused on giving new ESG investors all the information when making the transition – something which is very important for those who are not well versed in the field. BlackRock have also recently brought about a new department which deals with impact investing, that offers clients a range of companies chosen on their positive impact to society. This has led to a commitment to launching a dedicated impact investing team, which will begin with the launch of a Global Impact Equity fund this quarter which will excite those involved in the field of impact investing. Impact investing solutions will be aligned with the World Bank’s IFC Operating Principles for impact Management, assessing what areas a particular firm is looking to address and how their business needs and goals match up to this. It seems that BlackRock have joined the bubble of ESG investing at a time where environmental and social responsibility have never been so important.ESG Multi Asset Fund
BlackRock now provide an ESG Multi-Asset Fund among other sustainable offerings. Notable facts from this fund show that the size of the fund is €780.798 million, with 553 holdings. This fund has a risk level of 4 out of 7 which is provided on BlackRock’s website, showing that it is a medium risk investment and investors should be expecting rewards in the media range. Notable holdings in this fund include Microsoft Corp (NASDAQ:MSFT) who have also made a pledge to ramp up their environmental concerns. The fund has returned 5.08 on an annualized basis over the past three years against a benchmark of 5.99%.Blackrock Global High Yield ESG and Credit Screened Fund
The size of this fund is $178.44 million, having a holdings total of 541. BlackRock have used this fund to create a safety net fund, which has a risk rating of 3 out of 7 where low rewards are expected but this is more consistent than their counterparts. Notable holdings include Xerox (NYSE:XRX), QWest Corporation (NYSE:CTAA). Notably, the fund has high exposure to the United States, which would attract investors looking to gain exposure in America.BSF Impact World Equity Fund
With regards to the impact investing arena, BlackRock offer clients the BSF Impact World Equity Fund. The size of the fund is $215.836 million, and as of December 31 has 451 holdings. As this is an impact investing fund, BlackRock have given it a slightly higher risk rating of 5 out 7 on their scale. Notable holdings in this fund include Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Visa (NYSE:V). The fund has returned 25.99 on an annualized basis over the last four years, against a benchmark of 55.84%.Fidelity ESG Investing
Another firm in Fidelity (NYSE:FIS) are also making the shift towards ESG investing. The firm have said that they are becoming more engaged in the ESG ratings of the companies that they invest and offer to clients, as this has become one of Fidelity’s highest priorities of late. Fund managers in the sustainable, ethical and socially responsible investing (SRI) space are now starting to value these factors when looking at investment opportunities. Fidelity have said that they want to find the balance between finding the right investment opportunities whilst looking at the social and philanthropic values of the company, in a time where environmentalism has become important Following a study by Fidelity, they found that companies who take pride and value social issues, taking into account ECG are better companies with more potential and attract more investment, and that there will be an ensured effort to promote both ECG and impact investment. Interestingly, the firm noted that there was a middle ground between impact investing companies and companies that do not prioritize ESG values, which was highlighted in their research Fidelity noted that there is a rise in investors who are looking to engage with companies to help them become more sustainable, and that investors are now playing a more active role in allowing companies to be have more corporate responsibility. Fidelity engaged with 780 companies in 2018 on issues such as governance and remuneration, and have made a pledge to increase this as the investment scene looks to get to grips with environmental concerns of investors. This shows the effort that both Fidelity and BlackRock are making to expand their portfolios, and it may be the case that before 2020 many more strides are made to shift into the ESG arena. Certainly, the world of Impact Investing and ESG investing is young. However it seems that BlackRock and its competitors are keen to make a statement and prioritize ESG in a time where environmental and social values have never been so important.Donald Trump attacks Apple following privacy regulations
The President of the United States has launched an attack on Apple (NASDAQ:AAPL) over privacy regulations.
We are helping Apple all of the time on TRADE and so many other issues, and yet they refuse to unlock phones used by killers, drug dealers and other violent criminal elements. They will have to step up to the plate and help our great Country, NOW! MAKE AMERICA GREAT AGAIN.
— Donald J. Trump (@realDonaldTrump) January 14, 2020
The President has slammed the multinational for refusing to allow access to the iPhones “used by killers, drug dealers and other violent criminal elements.”
Trump had his say on twitter following the decision from Apple to decline requests from US Attorney General William Barr and the FBI in allowing access to an iPhone.
The case in question invalid a man who killed three sailors in a shooting last month in Florida at an Air Force base.
Barr also made his frustration public as he said “We call on Apple and other technology companies to help us find a solution so that we can better protect the lives of Americans and prevent future attacks,”
Apple in all global cases, where it has involved local police, the FBI or even the British MI5 have defended the privacy of its users.
The new profound vision of privacy has been something which Apple have developed and used as a marketing point in the latest release of iPhones, iPads and other devices.
Apple have defended the right to privacy by saying that this was a fundamental human right, as alluded to by CEO Tim Cook in 2018.
Apple has pushed back against suggestions it isn’t cooperating with authorities on the Pensacola case, saying in a statement Monday that it “responded to each request promptly … with all the information that we had.”
“We have always maintained there is no such thing as a backdoor just for the good guys. Backdoors can also be exploited by those who threaten our national security and the data security of our customers,”
“Today, law enforcement has access to more data than ever before in history, so Americans do not have to choose between weakening encryption and solving investigations. We feel strongly encryption is vital to protecting our country and our users’ data.”
Apple have been involved in their faIr share of legal battles, and faced a similar situation in 2016 when they refused to attend to a court order to unlock the iPhone of a shooter involved in the San Bernardino killing.
However, many of the big tech firms globally such as Facebook (NASDAQ:FB), Google (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) were quick to defend the actions of Apple, which shows the emphasis on the importance of privacy to these multinationals.
Certainly, President Trump has a lot to ponder over. With the current state of affairs in Iran, combined with the planned impeachment procedures there will be a lot changes within American politics over the next few weeks.
Quiz shares crash over 11% following slow festive trading period
Shareholders of Quiz PLC (LON:QUIZ) have seen their shares crash following a poor update from the firm.
Shares in Quiz trade at 16p having crashed 11.58% on the announcement. 15/1/20 13:27BST.
The firm today gave an update on its festive trading, and shareholders will be worried about the statistics provided.
In the seven week period, which ended on January 4 the firm reported that revenue had fallen 9.3% compared to a year prior.
The company did say that it was pleased with its Black Friday sales, however trading wasn’t strong enough to suffice shareholders, as shares are still in red.
There has been a general downward trend in the British retail market, however Quiz also noted that their online sales fell 15% comparing the figures year on year.
The company noted that this was due to the ending of partnerships with third party sellers.
However, when considering just Quiz online sales from its website, shareholder would have been pleased that this sector saw a 5.9% growth in the seven weeks.
Quiz said “As previously indicated, during the Group’s current financial year QUIZ’s stores and concessions have experienced a reduction in footfall compared to the prior year. This trend continued during the Period resulting in revenue from the Group’s UK standalone stores and concessions decreasing by 7.0%.”
The firm also added, “Over the past 12 months, the group has terminated unprofitable revenue streams through a number of third-party website partners. As a result of these actions as well as weaker sales through some of the group’s remaining partners, revenues generated from third party online partners declined significantly against the prior year.”
Quiz cite challenging backdrop
Tarak Ramzan, Chief Executive Officer, commented:
“Whilst the trading backdrop has remained challenging, it is disappointing to report a decline in revenues in the Period. We were pleased that revenues through our own websites grew in the Period with less promotional activity than in the prior year, which underpins our confidence in the health of the QUIZ brand.
“We have continued to make good progress in improving gross margins and reducing costs in line with the strategic priorities set out by the Board last year. With our cash position, we remain confident that we can improve our financial performance and grow revenues. We have a clear customer focus and a flexible model that the Board continues to believe will enable QUIZ to adapt to the changing retail environment and return to profitable growth in the medium-term.”
Not much progress from half year loss
Just before Christmas, Quiz gave another disappointing update to shareholders.
The retailer said that, for the six months ended 30 September, loss before tax amounted to £6.8 million, down from a profit of £3.8 million recorded for the same period a year prior.
Meanwhile, group revenue declined 5% to £63.3 million, down from last year’s £66.7 million figure.
The company highlighted that the pressures surrounding the UK retail sector have hit its results.
“Much of the UK retail sector has remained under pressure during the period impacted by macro-economic uncertainty well as the accelerating structural shift to online retailing,” Quiz said in its results.
Boohoo captivate the market
Clothing retailer Boohoo (LON: BOO) have taken the market by storm, and posted another impressive update just yesterday.
For the four month period, which ended on December 31, the firm said that its revenue had jumped 44% to £473.7 million from the £328.2 a year ago.
Boohoo said that it expects revenue growth for its financial year, which ends on February 29 to be between 40% and 42% ahead of their previous guided range of 33% to 38%.
The firm added that t expects adjusted earnings before interest, taxes, depreciation and amortisation margin to be 10% to 10.2%, beating its previous guidance of around 10%.
Also in the update, the firm said that it had appointed former JD Sports (LON:JD) chief financial officer as its new deputy chair in the figure of Brian Small.
There is a lot of work to do for Quiz, as trading has been slumping over the last few months.
Shareholders will hope that Quiz management can restructure and develop a long term plan to put them in the market against rivals such as Laura Ashley (LON:ALY) and Boohoo.
Just Eat complete deal with Greggs for exclusive delivery rights
Just Eat (LON:JE) have updated the market on Wednesday about an exclusive partnership with Greggs (LON:GRG) for a delivery service.
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.
Just Eat’s UK Managing Director Andrew Kenny said: “We’re proud to be the only food delivery app that can bring you the likes of the Greggs vegan sausage roll wherever you are. This is an exciting exclusive partnership for Just Eat.
“Greggs has proved extremely popular with our customers, especially during breakfast, demonstrating that as a nation we love the convenience of getting our favourite food delivered – be it a Greggs bacon baguette and coffee on a Tuesday or your local Thai at the weekend.”
No surprise that Just Eat looked at Greggs
Greggs have seen a very successful trading year in 2019, and a notable update came in November. 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. “Trading performance in the fourth quarter to date has continued to be very strong, despite the strengthening comparators seen in 2018,” Greggs said in a trading update on Monday. “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.Just Eat takeover deal
Just Eat themselves have been grabbing news headlines as two firms are competing in a proposed takeover deal. Just Eat have been flirting with rumors of a potential takeover deal, however Prosus (JSE:PRX) and Takeaway.com (AMS:TKWY) have been locked in a vicious battle to make the acquisition permanent. Just Eat updated the market by saying that they are reviewing the increased offer from Prosus and are advising shareholders to hold off from accepting the proposition. Prosus, increased its offer for London-listed Just Eat to 740 pence per share, giving Just Eat a value of £5.1 billion. The all-cash offer represents a 26% premium to Just Eat’s closing price on October 21, the day before Prosus’s first bid for the company. However no formal deal has been completed and shareholders from all three parties are speculating over the future of Just Eat. Certainly the battle for Just Eat will continue to heat up, however the deal with Greggs today seems to have captured a market which may have benefits for both firms.Resolute Mining sell Ravenswood gold mine to EMR and Golden Energy consortium
Resolute Mining (LON:RSG) have confirmed that they have sold their Ravenswood gold mine in Queensland.
The sale was confirmed after rumors hit the market on Monday, however today shareholders have been fully notified with confirmation.
On Monday, it was announced that Resolute were in talks with private equity firm EMR Capital Management Ltd, and today the mine has been sold to EMR Capital Management and Golden Energy and Resources (SGX:AUE).
Resolute said EMR is a “leading” resources-focused private equity company with “outstanding” credentials.
GEAR has coal assets in Indonesia as well as investments in two Sydney-listed miners, Westgold Resources Ltd (ASX:WGX) and Stanmore Coal Ltd (ASX:SMR).
Resolute have said that they will receive AUD100 million in cash and notes for the initial sale of the mine.
Subject to further terms of the deal, a further AUD200 million could be sent Resolute’s way dependent on gold production figures and gold prices.
The sale of Ravenswood comes at no real surprise as the firm was conducting a strategic review of these operations, however Resolute did say that it hopes the mine will produce 200,000 ounces of gold for 15 years from 2022.
in 2019, Ravenswood produced around 55,000 ounces and therefore this could be a good acquisition.
Resolute delighted with the deal
Resolute’s Managing Director and CEO, Mr John Welborn, was delighted with a strongly value accretive transaction:
“The sale of our Ravenswood Gold Mine on the terms announced today provides the opportunity for exceptional value for Resolute shareholders. We have strengthened our balance sheet with a combination of immediate cash and the potential for future upside as well as removing the requirement of a large near-term capital investment. The divestment has strong strategic merit for Resolute. We have delivered on our objective of ensuring a new long-life future for Ravenswood under a world-class operator and can now focus our attention and energy on our African portfolio and the abundant opportunities our experience provides for further growth and value creation.”
“The transaction delivers a fair share to all parties from the future value of the Ravenswood Expansion Project and effectively balances risk and reward. Our modelling at current gold prices demonstrates the expansion project at Ravenswood will be highly successful for EMR Capital and GEAR, and that the maximum value of A$300 million will be generated for Resolute. EMR Capital and GEAR are world-class mine developers and operators with outstanding track records of value generation. The EMR Capital and GEAR consortium are ideal parties to undertake the development of the Ravenswood Expansion Project. The upside sharing arrangement we have agreed aligns the interests of Resolute shareholders with those of EMR Capital and GEAR.”
“Ravenswood has been a consistent performer for Resolute for more than 15 years. Since acquisition in 2004, Resolute has mined and processed over 40 million tonnes of ore and produced almost two million ounces of gold. I congratulate the Resolute team, both past and present, for our performance at Ravenswood. We are proud of our achievements at Ravenswood and the significant economic benefits we have provided to the local community, the Queensland Government, and Resolute shareholders. We are confident Resolute’s legacy, and the interests of all stakeholders in Ravenswood, will be protected and enhanced by the new consortium.”
Resolute grow from strength to strength
It seems that the good news and optimism is surrounding Resolute right now.
On Monday, the firm saw its confidence pay off as it guided for a larger production capacity in 2020 in an update on Monday.
Resolute have announced a target of 500,000 ounces of gold in 2020 which shows a 30% rise on the 383,731 figure reported last week.
With the Syama operations, the firm has said that forecast is expected to around 260,000 ounces which shows a 7% appreciation from the 243,058 figure in 2019.
Resolute outlined an all-in sustaining cost figure of $1,090 per ounce for 2020, however this figure is still being calculated.
At Resolute’s other mine, Mako in Senegal, the company sees mining and processing carrying on at similar rates in 2020 to 2019, though grades will be lower due to depletion of higher-grade stockpiles.
Gold production at Mako is guided at 160,000 ounces in 2020, from 87,187 ounces in 2019.
Additionally, power supply agreement with Aggreko PLC (LON:AGK) is giving the chance for Resolute to make good progress.
The plans come into action following an ensured effort to lower operating costs for Resolute, and the new plans will help reduce power costs by around 40%.
It is fair to say that Resolute over the last few weeks have struck gold, and shareholders should remain thoroughly engaged with the future workings of the company.
Shares in Resolute trade at 62p (-0.18%). 15/1/20 12:54BST.
Hochschild Mining note production fall in fourth quarter update
Hochschild Mining (LON:HOC) have given their shareholders an update regarding their performance in the final quarter of 2019.
The firm gave a mixed update to shareholders however shares have stayed in green.
Shares in Hochschild trade at 168p (+2.44%). 15/1/20 12:24BST.
The firm said that its gold production totaled 78,050 in the three month period, however this saw a dip of 4.1% compared to the 81,370 total which was reported in the third quarter.
On a better note for shareholders, gold production figures were higher than a year ago where the fourth quarter figure in 208 was 73,100.
This was driven by a “better than expected” performance from the Inmaculada mine in Cusco, Peru.
Looking at silver production, fourth quarter production once again fell by 12% giving a total figure of 4.6 million ounces. In the third quarter, the figure delivered was 5.3 million and on a worse note, year on year silver output fell by over 20%.
On an overall basis, 2019 production for gold was 570,500 gold equivalent ounces and 46.2 million silver equivalent ounces, both down 3.0% year-on-year.
Hochschild told shareholders for 2020 that it will expect a production guidance of 422,000 gold equivalent ounces and 36.0 million silver equivalent ounces.
The firm added that total sustaining and development capital expenditure will be expected to be approximately $115-130 million including $22 million expansion of tailings storage facility at Inmaculada.
Ignacio Bustamante, Chief Executive Officer said:
“I am pleased to report that we have delivered a stronger than forecast final quarter. Consequently, the overall 2019 production figure of 38.7 million silver equivalent ounces is comfortably ahead of the 37.0 million ounce target and includes record contributions from our Inmaculada and San Jose mines. Furthermore, our costs for 2019 are expected to be in line with guidance. We have also substantially improved our financial position with strong free cashflow generation and the refinancing of our short-term debt with a new low cost $200 million loan.
“At Inmaculada, we have continued to deliver exciting drill results that are further adding to the resource base. In addition, our 2020 brownfield drilling programme is set for an early start in Peru with the welcome news that we have secured permits to drill at the exciting Pablo Sur and Cochaloma targets close to Pallancata. We will provide updates on progress at these and other campaigns as our exploration programme advances.”
Production cuts give shareholders advanced warning
At the end of November, the firm saw their shares plummet as it announced it would be cutting its 2020 guidance for its Pallancata project in Peru. Hochschild said it is still “firmly on track” for its 2019 output guidance of 457,000 gold equivalent ounces or 37 million silver equivalent ounces. Hochschild added that its overall production target for 2020 is 432,000 gold equivalent 35.0 million silver equivalent ounces ounces, which includes a drop in Pallancata’s expected production to 7 million silver equivalent ounces.Anglo American – a fellow Peruvian Miner
Anglo American (LON:AAL) are another firm that operate in Peru, and work on copper mining. The firm followed in a similar fashion to Hochschild Mining, where they saw their 2020 output volume expectations reduced in December. Anglo American’s copper production guidance for 2020 has been cut to 620,000 tonnes to 670,000 tonnes, with the upper limit of the range previously 680,000 tonnes. Diamond output guidance for 2020 fallen to between 32,000 carats and 34,000 carats, from 33,000 to 35,000 carats before. Additionally, Iron ore production guidance from Kumba Iron Ore Ltd (JSE:KIO) in South Africa has been fallen to between 42 million to 43 million tonnes from 43 million to 44 million before. Additionally, it was reported that the firm was posing a question to Sirius Minerals (LON:SXX) over a merger deal. Talks of the deal are still young, however Anglo have reportedly offered 5.5p per share for Sirius, giving a total valuation at £386 million. The strategic review conducted by Sirius outlined the development plan for a project in North Yorkshire, as the firm looked at their funding options. Sirius also noted that they were on the search for a partner firm to sustain this project and henceforth Sirius said they will slow the development of its polyhalite mine. Shareholders of Hochschild should not be so concerned with the production figures being lower than expected as it seems that the firm has a concrete vision going forward for 2020, and this could see long term rewards.Revolution Bars see a strong festive period as shares jump over 5%
Revolution Bars Group PLC (LON:RBG) have seen their shares jump over 5% following an impressive update.
The firm reported a seventh successive year of record Christmas sales and this lead to a rise in first half revenue.
Additionally, shareholders were further impressed as the firm announced a deal with real estate landlords to surrender its lease on five struggling sites, and have rent reductions at four other units.
In the four weeks to December 31, the firm saw a 4% rise in like for like sales, as weekly sales during the period averaged £65,000.
In the first half period, ending December 28 revenues grew 3.4% to £81.2 million from £78.5 million on year ago, as like for like sales also rose by 1.2%.
First-half adjusted earnings before interest, tax, depreciation and amortisation, pre-IFRS16, are expected to rise in line with market expectations. The adjusted measure also excludes bar opening-costs and share-based payments.
Revolution announced that they close three under performing stores which were located in Swansea, Wood Street and Liverpool.
Rob Pitcher – Chief Executive Officer said:
“I am delighted with our Christmas trading and the steady improvement in our like-for-like* sales performance over the first half is further evidence that our key initiatives are driving both operational and financial improvement. Considerable strides have been made in rebuilding customer loyalty and driving sales and profit from the existing estate, creating a stronger business with significant cash generation. Whilst external cost pressures persist, we will continue to manage cautiously, using excess cash to reduce indebtedness below one times EBTIDA before we will consider further expansion opportunities”
Loungers – a competitor to keep an eye on
A competitor in the form of Loungers (LON:LGRS) is a firm to keep an eye on.
In December, the firm gave a very impressive update to the market and looked to rival established names such as Fuller Smith & Turner (LON:FSTA) who have recently struggled.
The firm posted another “another strong” set of interim results, with revenue rising over 20%, which built upon a prior update provided in the middle of 2019.
Loungers own 161 bars, cafes and restaurants across England and Wales, and are a vastly expanding brand.
For the 24 weeks to October 6, Loungers revenue climbed 22% on the year before to £79.8 million, with the pretax loss narrowing to £2.5 million from £4.3 million. On a like-for-like basis, revenue growth was 5.4%, a figure Loungers said was “sector leading”.
Loungers reported an adjusted pretax profit of £2.6 million, after a £4.3 million loss the year prior.
It is on track to open 25 new sites during its current financial year, and has a “strong” pipeline further ahead. The target is for 25 new sites to open per year.
Shareholders of Revolution will be thoroughly impressed with the firms performance and will expect the good run of form to continue into 2020. Shares in Revolution trade at 89p having jumped 5.74% on Wednesday. 15/1/20 11:59BST.Tullow Oil place faith in their strategic review following hectic few weeks
Tullow Oil (LON:TLW) are continuing their strategic review, as the firm updated shareholders on Wednesday.
The firm announced that they would be undergoing a strategic and operational review in December, and have faced troubles over the last few weeks.
Tullow today have said that progress is being made in this review and that the firm is still looking for a CEO.
Tullow said: “The Board’s business review covering all areas of Tullow’s operations, cost-base and reporting is progressing well. The Board is confident that the outcomes will deliver significant improvements to the Group’s organisational structure, major reductions in G&A and a more efficient and effective business. Actions taken in December included the implementation of a smaller, more focused interim Executive team and initial restructuring of the next level of leadership. Since then, work has focused on simplifying the structure of the organisation and these changes will be implemented in the coming months. The next phase of the review will focus on the investment plans for each of the Group’s major assets.”
“One of the decisions already made by the Board is to align the Group’s reporting calendar to that of its E&P peers and, going forward, the Group will report its Full Year Results in March and its Half Year Result in September. The 2019 Full Year Results will be released on 12 March 2020. The new timetable will enable Tullow to report on the key outcomes of the ongoing business review in its Full Year Results and its 2019 Annual Report and Accounts.”
“The recruitment of a new Chief Executive Officer is well under way with the assistance of an executive search firm.”
A few weeks back, Tullow reset their production guidance with regards to their operations in Ghana. Initially, it guided around 87,000 barrels of oil per day for 2019, and for between 70,000 barrels and 80,000 barrels in 2020.
However, the oil firm confirmed that production in 2019 was 86,700 barrels of oil per day, and it reaffirmed the 2020 guidance, which was something for shareholders to take as a positive in what has been a hectic few weeks for the firm.
Tullow guided for revenue in 2019 of approximately $1.7 billion, gross profit of around $700 million, and capital expenditure around $490 million.
Free cash flow is seen at approximately U$850 million, with net debt falling to $2.8 billion. As of June’s end, net debt was $2.9 billion.
Tullow expects to report pre-tax impairments and exploration write-offs of $1.5 billion primarily due to a $10/bbl reduction in the Group’s long-term accounting oil price assumption to $65/bbl and a reduction in TEN 2P reserves.
Dorothy Thompson, Executive Chair, commented today:
“Tullow has ended 2019 with average production of 86,700 bopd and free cash flow generation of c.$350 million. Since our December announcement, Tullow’s senior team has been working hard on a major review focused on delivering a more efficient and effective organisation. The fundamentals of our business remain intact: recent reserves audits demonstrate that we have a solid underlying reserves and resources base in West and East Africa, our producing assets continue to generate good cash flow and we retain a high-quality exploration portfolio. The Board and senior management are confident of the long-term potential of the portfolio and see meaningful opportunities to improve operational performance, reduce our cost base, deliver sustainable free cash flow and reduce our debt.”
United Oil Deal
Yesterday, both United Oil and Gas (LON:UOG) and Tullow confirmed that they would be extending a deal in Jamaica.
The two parties have furthered talks for the Walton Morant offshore asset in Jamaica.
United holds a 20% interest in Walton, and said that the initial exploration period with Tullow has been extended to July 31 as it was due to expire at the end of this month.
Tullow on the other hand hold the remaining 80% stake, and have the ultimatum as to whether they would “drill or drop” the asset.
At the Colibiri project, United Oil have expressed interest that the joint von sure will bring an additional partner to drill in 2021.
United Oil Chief Executive Brian Larkin said: “We are very pleased with the extension that has been granted. We have seen additional interest in the licence towards the end of 2019, and this extension will allow those parties to fully evaluate this excellent opportunity.”
Chief Executive Departure and Ugandan complications
The firm had started December in a dispute over their operations in Uganda.
The Ugandan Government had been in lockdown with firms such as Total (EPA: FP) and CNOOC (HKG: 0883) over the taxes assed on Tullow’s plans to sell part of its stakes in Ugandan oil fields, however the governmental disputes seem to have progressed last week.
Additionally, at the start of December, the firm saw their shares plummet as the Chief Executive announced his departure within a hectic week of trading for the firm.Pat McDade, along with exploration director Angus McCoss, said they had quit the firm. The board said it was “disappointed by the performance of Tullow’s business”.
Tullow Oil saw more than £1.05 billion wiped off their market value on December 9, which left the company only valued at £801.7 million.
Certainly, Tullow will have tried to turn around fortunes in a busy few weeks for the firm.
Shareholders of Tullow can be optimistic with the update today, however the share price has not really recovered since that hectic Monday morning.
Shares in Tullow trade at 60p (+3.15%). 15/1/20 11:15BST.
Persimmon expect profits to meet expectations, however revenues decline
Persimmon (LON:PSN) have told shareholders that it expects a decline in full year revenue, however profit will meet expectations.
Shares in Persimmon trade at 2,823p (+0.97%). 15/1/20 10:47BST.
Across the annual period, the firm said that revenue is expected to total £3.65 billion, a 2.4% fall from £3.74 billion last year.
Notably, new housing revenue dropped 3.5% year-on-year to £3.42 billion with new legal completion volumes down 3.6% to 15,885 from 16,449.
The firm said that average selling prices remained consistent with 2018, in a year of political uncertainty which has hampered the property development market.
Average selling prices edged 0.1% higher to £215,700 from £215,563.
In Westbury Partnerships, which sells social housing to housing associations in the UK, the unit’s average selling price rose 1.3% year-on-year to £119,150 from £117,653.
Westbury Partnerships contributed 21% of group sales in 2019, Persimmon said, up from 19% in 2018.
The firm looked at the new year and told shareholders that it enters 2020 with froward sales totaling £1.36 billion, 2.9% down year-on-year from £1.40 billion.
Persimmon added that they have 365 developments in construction, which remains flat year on year and plans to open 80 new sites in the first half of 2020.
Dave Jenkinson, Group Chief Executive commented
“Persimmon continues to make good progress with the implementation of its customer care improvement plan. Central to this plan is putting customers before volume, with new home legal completions for 2019 being 4% lower than last year.
“Delivering the maximum benefit to our customers from our quality and service improvement initiatives will continue to be my top priority for 2020. I am pleased with the progress we have made in 2019 and there is more to do. Action taken to maintain our increased levels of work in progress investment, the increase in quality assurance and customer service resources, and our plans for the implementation of the recommendations of the recent Independent Review, will all add to our momentum.
“While our plans for delivering a sustained improvement in quality go far beyond a focus on the criteria of the HBF customer satisfaction survey, our current rating, which is trending strongly ahead of the Four Star threshold, is tangible evidence of the improvement we are making. I am determined that we will make further headway this year, supported by the introduction of Persimmon’s customer retention scheme from July 2019, which was a first for the industry.
“I am encouraged by the enthusiasm and commitment with which the whole Persimmon team is making the step change necessary to deliver higher levels of quality and service to our customers. When combined with Persimmon’s strong forward build and sales position, robust liquidity and industry-leading land holdings, I am confident of the Group’s future success.”
The firm also announced that Claire Thomas will step down as a Non-Executive Director to pursue other interests. Thomas will leave Persimmon on 1st February 2020.
Thomas who joined the Persimmon board in August 2019, said: “I have valued being part of the Persimmon Board and the experience it presented but it has also made clear to me my preference for working in a large scale complex global business environment. In my time on the board I have seen clear and determined efforts to transform the business and I wish Persimmon the best in their ongoing efforts.”
Roger Devlin, Chairman, said: “Claire has made a strong contribution to the board during her time and we are disappointed to see her leave. We wish her every success for the future.”