Greatland Gold widen loss as exploration costs surge
Greatland Gold plc (LON:GGP) shares are in recovery today, as the firm released its’ interim results yesterday.
The firm noted that its’ loss had widened across the first half – as exploration and development costs had surged.
Greatland Gold said that it had seen a pretax loss of £2.6 million across the six month period which ended on December 31.
Notably, this was deeper than the figure one year ago which saw a £1.5 million loss recorded.
Exploration expenses formed the main driver of the widened loss – as these costs rose from £937,732 in 2019 to £1.9 million.
Greatland Gold added that their cash stood at £4 million, and since then has received another £2 million of net funds from warrant conversions.
Gervaise Heddle, Chief Executive Officer, commented:
“The first half of the financial year was an exciting period for Greatland, which saw our Havieron project establish itself as a significant gold-copper discovery. During the period, Newcrest completed the first stage of the Farm-in, expanded the camp, accelerated drilling at this highly strategic asset with eight rigs now in operation, and provided plans for a further 20,000-30,000 metres of drilling over the next two quarters to support a potential maiden resource by the end of the calendar year.
“Looking ahead, we will continue to focus on moving our portfolio of assets up the value curve, especially in the Paterson, which we regard as the leading frontier in Australia for the discovery of tier-one, gold-copper deposits. Beyond the exciting progress at Havieron, we have identified over a dozen targets in the region, many of which display similar geophysical signatures to Havieron, and drilling of these targets represents a strategic priority for Greatland in 2020. Our team has spent the last few months planning a comprehensive campaign across these targets and we are well capitalised to make further strong progress throughout the year.”
Shares in Greatland Gold trade at 4p (+2.41%). 10/3/20 10:45BST.
Global equities lick their wounds after Black Monday
Black Monday offered volley upon volley of bad news for investors, with the worst dip in global equities since the financial crash, and the biggest Dow Jones dip in its century-and-a-half-long history.
With Brent Crude diving by a third and the Dow shedding 2,000 points after the open, Monday offered little in the way of good news. Several bluechip equities shed 10-20% of their share price value, and the commodity-laden FTSE had a day to forget.
As markets opened on Tuesday, there was room for some insipid green across indexes, with opportunists looking to snatch up the bargains offered by Monday’s casualties.
The positive start was bolstered by a slight recovery in oil prices, and promises of economic stimulus from Donald Trump, though the longevity of the positive start will likely be dependent on how the Dow chooses to open during the Tuesday session.
Speaking on the recovery of equities after Black Monday, Spreadex Financial Analyst Connor Campbell stated,
“There were a couple of things behind Europe’s green start. Firstly, a fall as great as that seen on Monday is always going to attract a few vultures, swooping in to pick at the market’s bloody carcass – remember, the global indices are now heavily discounted from the all-time highs struck just a month ago.”
“Then there was Donald Trump, attempting to gee-up investors by suggesting he was preparing a ‘major’ economic relief package in the US, one that would potentially include a payroll tax cut and provisions to protect hourly workers. This likely gave further justification at those looking to enter the market at a potential bargain price.”
“At the same time Italy is now in complete lockdown, with internal travel restrictions stretching far beyond the initially quarantined northern part of the country. A serious reaction to a serious situation, which is good. But boy will it be costly.”
“Buoyed by a 6.4% jump from Brent Crude, which in turn helped out the battered BP (LON:BP) and Shell (LON:RDSB), the FTSE was Europe’s best performer, adding 100 points to graze 6100. The CAC, meanwhile, rose 1.2% as it tried to reclaim 4800, with the DAX crossing 10800 as it added 1.2%.”
“Crucial to the longevity of [the European equities recovery] will be the US open. Currently the Dow Jones is set to take back around 800 points when things get underway on Wall Street, a rise that would just about push it to 24600. For context, that’s around 1000 points off of Monday’s lows.”
Cairn Energy swing to profit across 2019
Cairn Energy PLC (LON:CNE) have swung to a profit in their recently ended financial year – which rounds of an excellent year for the firm.
The oil exploration firm noted that its’ strong production performance drove the update published today.
Cairn said that their pretax profit totaled $119.5 million across 2019 – this sees a massive improvement on the loss of $1.21 billion posted in 2018.
Looking at revenue, this also rose from $410.3 million to $533.4 million – which should certainly spark investor confidence.
Across 2018 – the FTSE 250 listed firm noted that it expects net production to be between 19,000 and 23,000 barrels of oil per day in 2020.
Simon Thomson, Chief Executive Officer, Cairn Energy PLC said:
“Cairn’s strong operational performance in 2019 was delivered through production and cash flow generation at the top end of guidance and the Group ended the year with an increased net cash position and undrawn debt facilities.
A significant milestone was achieved in Senegal with a Final Investment Decision taken for the Sangomar development. Reserve additions were made in both Senegal and the North Sea and the Company encountered exploration success alongside Eni in Mexico.
The sale of Cairn’s Norwegian business, combined with exits from exploration positions in Ireland and Nicaragua, demonstrate continued focus on capital allocation as the company seeks to generate further value for shareholders on a sustainable basis.”
Cairns’ production figures
In January, Cairn Energy told the market that it had reached the upper end of production guidance. The firm said that 2019 production in the Catcher and Kraken fields in the North Sea averaged 23,000 barrels of oil per day, at the upper end of the 21,000 barrel to 23,000 barrel per day guidance. Early in 2019, Cairn had guided for between 19,000 barrels to 22,000 barrels per day – however this was comfortably passed. Production across 2019 rose by 31% on a year on year basis, and notably Cairn hold a 20% interest in the Catch field tied with roughly 30% in Kraken. Oil and gas revenue for the year was $504 million, at an average price of $64.52 a barrel. This revenue figure is 27% higher than in 2018, though the realised price was over 5% less. Looking at capital expenditure for 2019, the firm reported a total figure of $245 million, and speculated $595 million of capex in 2020. Cairn added that they expect to be spending $135 million on exploration and appraisal within the next year.Senior Board change
In a separate announcement today, Cairn said that Erik B. Daugbjerg would be appointed as an independent non-executive director with effect from 14 May 2020. Cairn noted that Todd Hunt is set to retire as a non-executive director immediately following the Company’s Annual General Meeting. Ian Tyler, Chairman of Cairn, said: “I am delighted to welcome Erik Daugbjerg to the Cairn Board. Erik’s many years of experience in the oil and gas industry, together with a strong background in business development and corporate transactions will be an important asset to the Board. We look forward to working with Erik as the Company continues to deliver on its strategic objectives. On behalf of the Board, I would also like to thank Todd Hunt for his valuable contribution as a non-executive director over a number of years.” Shares in Cairn Energy trade at 86p (+1.58%). 10/3/20 10:29BST.DFS shares dip as interim results affected by ‘challenging environment’
DFS Furniture PLC (LON:DFS) have seen their shares dip following the announcement of their interim results.
The homeware provider said that its’ profit within the first half had dropped, however they had seen an ‘encouraging’ start to the second half.
Shares in DFS Furniture trade at 202p (-3.11%). 10/3/20 10:07BST.
Across the half year period, which ended on December 29 – DFS said that pretax profit totaled £15.9 million.
Notably, revenue also dipped 5.7% to £488 million from £517.6 million.
DFS were quick to say that challenging market conditions and wider macroeconomic challenges affected results, as consumer confidence was still fragile.
’Trading performance in the first half of our financial year reflected not only the strength of the comparative period but also the challenges of a market environment that saw political uncertainty and low consumer confidence levels feeding through into lower footfall.
We mitigated some of the footfall decline by converting a higher percentage of customers, particularly in DFS and Sofology, relative to the prior year and by growing our Group online revenues. However, these trading conditions have ultimately fed through into our results for the first half.’
Online Growth was strong for DFS, as sales rose 4.5% from £112 million to £117 million.
On a slightly better note for shareholders, the firm left its interim dividend flat at 3.7p per share.
Tim Stacey, Group Chief Executive Officer said:
“We continue to make progress on our strategic agenda focused on driving the DFS core business, further developing our Group platforms and setting Sofology up for future growth. Despite the challenging retail environment, and excluding some isolated systems disruption in Sofa Workshop, our performance over the first half has been as expected, given the exceptional prior year comparative driven by latent demand. In particular we have seen a good performance by the DFS brand in driving conversion and margins and continued online sales growth.
Trading in the second half for the Group has also started satisfactorily with performance in the DFS brand particularly encouraging, with order intake growth year-on-year and good gross margins”.
DFS also added that the firm will not speculate on its’ full year performance due to the recent coronavirus outbreak.
The firm noted that their supply chain should remain steady across the rest of the financial year, and recent changes in trading have only been noted recently.
“However, given the uncertainty as to how the current COVID-19 situation will develop it is not possible to give guidance with any certainty for the full-year out-turn. At present we believe our supply chain position should normalise before the financial year end, and it is only in very recent days that we have observed any change in consumer footfall to our showrooms.
While any disruption to order intake over the key trading periods of Easter and the May Bank Holidays is likely to impact our financial year 2020 results, it is reasonable to believe this may ultimately be transitory in nature; following periods of subdued demand we typically see much of that latent demand returning.
Notwithstanding the uncertain short-term outlook, we remain confident in the Group’s financial strength and relative track record of performance in all environments. Furthermore, we believe our leading market position will allow us to drive long term attractive value creation for our shareholders.” – Stacey concluded.
DFS see mixed start to 2020
In January, DFS updated the market by giving shareholders a pre-warning on their interim results. The firm said that interim sales fell, however they reiterated the fact that they expect full year results to be in line with expectations. The company said forecast profit before tax and brand amortisation for the financial year ending June 28 remains in line with market expectations at £51.2 million, up from £50.2 million in financial 2019.Global equities destroyed by oil price crash and coronavirus fears
Global equities were obliterated on Monday as oil prices sank and fears of a coronavirus induced recession led to one of the worst days for equities in history.
The FTSE 100 opened down over 7% and the selling continued sending London’s leading index to one the worst day since the financial crisis.
Front month WTI Oil was down 30% in the Asia session overnight after Russian President Putin took aim at the US shale gas industry and Saudi Arabia.
Putin raised fears of an oil price war as he rejected OPEC proposals to cut oil production.
While this takes on the Saudis in a scrap for market shares, the US oil industry will likely be the ones that suffer.
Many shale gas operations simply cannot produce oil profitably at such low levels.
This, however, was not of great concern to Donald Trump who pointed to the lower petrol prices consumers would enjoy.
In addition to the fall out of Putin’s moves, the rise of coronavirus increased chances of a coronavirus Despite sharp declines being followed by some interest in buying, some analysts were sceptical of the bounce being sustained.Good for the consumer, gasoline prices coming down!
— Donald J. Trump (@realDonaldTrump) March 9, 2020
There is an awful lot of bargains out there now. But suspect most of them will become even better bargains in coming weeks.
— Chris Beauchamp (@ChrisB_IG) March 9, 2020
FTSE hit as commodities stocks dip on Russia-OPEC loggerheads
Today Brent Crude was down 7% to $46.25 per barrel, a $25 price cut from the first week of 2020, and representing its lowest price since mid-2017. This came on the back of fresh talks between OPEC and Russia, on potential production cuts, with Russia apparently refusing to agree to a deal. The effect this has had in real terms, has been another hit to already-flustered commodities stocks, with knock-on effects to oil-laden indexes such as the FTSE.
The FTSE fell to post-Brexit referendum levels, closely followed by its European peers falling around 4%, while the Dow Jones fell by around 2% – after receiving a better-than-expected nonfarm jobs report.
Speaking on OPEC, Russia and commodities, Spreadex Financial Analyst Connor Campbell stated:
“There was no solace to be found this Friday, the session getting increasingly ugly as a deal between OPEC and Russia failed to materialise.”
“With the Russians reportedly refusing to agree to the latest round of production cuts, Brent Crude lost its head, [with oil down] 7% to $46.42 per barrel. That’s its worst price since mid-2017, and close to $25 dollars a barrel off the levels struck in the first week of the year.”
“Understandably the commodity-heavy FTSE was hit hard. As BP (LON:BP) and Shell (LON:RDSB) lost 4.4% apiece, the FTSE dropped 260 points, sinking to 6450 – a price last seen in the weeks after Britain voted to leave the EU. Further harming the UK index was a nasty 9% decline from Anglo American – the worst of an already bad set of mining stocks – and a sharp 0.7% rise from cable.”
“Like the pound, the euro took advantage of the dollar’s weakness, climbing 1.2% to cross €1.133. This as a collapse in US government bond yields left the dollar facing its worst week is around 4 years.”
“The euro’s gains also did a number on the Eurozone indices. The DAX lost 420 points as it fell to 11550, while the CAC shed 4%, taking it to 5150.”
“Though not quite as dramatic as its European peers – it was aided by a better than forecast nonfarm jobs report – the Dow Jones nevertheless lost 2%, slipping back to 25650. That is, however, still a bit higher than the sub-25000 lows struck earlier in the week.”