Moss Bros expected adjusted loss to widen following tough retail environemnt

Ishen Patel
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0
Moss Bros expected adjusted loss to widen following tough retail environemnt

Moss Bros Group plc (LON:MOSB) have given shareholders a mixed update on Thursday morning.

The firm said that it expects its adjusted loss to widen within the financial year following a decline in high street retail.

The suit and tailored clothing retailer said it has made “good” progress in the 24 weeks period from July 28 to January 11, despite a challenging retail marketplace.

The retailer rather worryingly reported that it is expecting to report an adjusted pretax loss of £1 million for the second half, which ends this month.

Across financial 2019, the firm reported an adjusted pretax loss of £400,000 and in the 26 weeks period the company has just about broken even with regards to its adjusted pretax profit level.

Total sales for the recent 24-week period were 3.0% below last year and down 3.2% on a like-for-like basis, they noted that two stores were relocated and two closed giving a total portfolio of 128 stores.

Moss remain optimistic in future outlook

Brian Brick, Chief Executive Officer, said:

“As I noted at the time of our Interim Results in September, we are gaining traction across a number of strategic levers which are aligned with our longer-term strategic goals.”

“We have seen more intensive discounting from our competitors and a materially lower level of footfall across the high streets and shopping centres of the UK. Despite this, we have resisted discounting pressures, facilitated by our careful buying plans which have meant that we are holding lower levels of terminal stock to clear. This has been particularly evident in our High Street stores where we were able to focus on delivering our core purpose of styling individuals for on form moments.”

“We continue to deliver against our brand elevating customer value proposition of offering our customers the chance to “Make It Yours”, whether they wish to hire, buy or customise their outfit using our Tailor Me service, which goes from strength to strength.”

“Despite the delivery of progress against our strategic levers, we anticipate the year ahead will continue to be challenging until we see an improvement in consumer confidence and a stabilisation in footfall across UK shopping destinations combined with a re-alignment of occupancy costs to properly balance the costs and rewards of doing business in physical retail stores.”

“We remain debt free, with a strong balance sheet, and are confident in our ability to deliver enhanced returns to our shareholders over the longer term”.”

The Group will announce its Preliminary Results on 25 March 2020.

Moss slip from September Success

In September, Moss reported that they had seen revenues climb in their half year results.

Moss Bros said that, for the 26 weeks ended 27 July, total group revenue excluding VAT amounted to £65.4 million – 1.4% up on the previous year.

Meanwhile, online sales across all platforms grew by 20% when compared to the same period a year prior. Moss Bros added that online sales from all channels now represents 15% of its total sales.

However, the company added that loss before tax widened to £2.7 million, deeper than the £1.7 million figure recorded for the first half of 2018.

Additionally, the firm announced that it had appointed Ted Baker’s (LON:TED) current interim Chief Financial Officer as its new CFO.

Moss Bros said that the current interim CFO at Ted Baker (LON:TED), Bill Adams, will take over the role from Tony Bennett.

Tony Bennett has decided to step down from the company’s board for “personal reasons” and is due to leave the business early next year in February 2020.

Shares in Moss trade at 23p (+2.68%). 16/1/20 11:27BST.

Whitbread holds back FTSE with sleepy third quarter sales

Jamie Gordon
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1
Whitbread holds back FTSE with sleepy third quarter sales
British hotel and restaurant operator Whitbread plc (LON:WTB) saw its share price dip on Thursday, which saw it weigh on the efforts of AB Foods (LON:ABF) and keep the FTSE flat in morning trading. This was led by underwhelming third quarter sales growth of 0.3% during the third quarter, which brought year-to-date sales growth up to exactly 0%.

Like-for-like sales growth were the most damning area for the Company, down 1.3% year-on-year for the the third quarter and 2.2% for the YTD.

Overseas, however, Whitbread were able to make some headway. The Company were able to expand their operations in Germany, and said its open and committed pipeline had extended to almost 50 hotels. It said that in the UK, it was optimising its network and trialling its Premier Plus rooms across 19 sites. It added that its efficiency programme was in line with its plans and that it expected to deliver FY20 results in line with its expectations.

Whitbread comments

Commenting on the update, Company Chief Executive Alison Brittain, stated,

“Whitbread delivered a robust performance in the third quarter, growing total sales by 1%, despite challenging market conditions in the UK. We now have over 80,000 rooms in the UK & internationally, operating under the Premier Inn brand, with a committed pipeline of over 20,000 additional rooms. We also continue to achieve strong results from our efficiency programme, which is helping to partially offset high industry cost inflation and means we are on track to achieve our full year expectations for FY20.

The UK business achieved total sales growth of 0.3% in the third quarter. Our performance in the quarter reflects a good F&B performance and marginally declining total accommodation sales. Weak business and leisure confidence in the regions continued, which was partially offset by the strength of the central London market, where we outperformed.”

“Our growth in Germany remains firmly on target as our confidence strengthens for the long-term market opportunity. We are pleased with the performance of all three hotels we have opened to-date, in Frankfurt, Hamburg and Munich, and continue to extend the total committed pipeline in Germany. The open plus committed pipeline now stands at around 8,500 rooms across 48 hotels, including 22 hotels from the Foremost Hospitality and AcomHotel acquisitions. We will be opening around 20 hotels through the course of 2020.”

“Despite the short-term economic uncertainty, there remains significant long-term opportunities for Premier Inn in both the UK and Germany. We can access these due to our strong financial position, resilient model and ongoing investment to improve our market-leading proposition. Continuing to invest in growth and optimisation through our disciplined approach to capital allocation ensures we can create sustainable value for shareholders over the longer-term.”

Investor notes

Elsewhere in the British market, Pearson (LON:PSON) dropped 11% during early morning trade, while South32 (LON:S32) reported impressive performance. Since trading began, Whitbread recovered from its drop of over 5%, now down 4.36% or 211.00p, to 4,626.00p per share 16/01/19 11:18 GMT. Peel Hunt analysts reiterated their ‘Buy’ stance on the stock. Its p/e ratio is 28.88%, its dividend yield stands at 2.15%.

N Brown shares crash over 24% following profit warning

Ishen Patel
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0
N Brown shares crash over 24% following profit warning

N Brown Group plc (LON:BWNG) have seen their shares crash over 24% following the issuance of a profit warning.

Shares in N Brown trade at 107p (-24.59%). 16/1/20 11:10BST.

The firm issued a profit warning on Thursday morning which also saw a mixed performance within its retail operations and struggles in its financial services unit.

Within the 18 week period, Brown saw total revenue fall by 5% to January 4. Notably, womenswear saw positive growth of 1.1% year on year, as digital revenue also grew 6.7% following growth in its Simply Be brand.

The Simply Be Brand was one of the standout performers for Brown, as revenue climbed 12% from a year ago and online revenue surged 13%.

In the Womenswear sector, Brown holds brands such as JD Williams and Ambrose Williams.

In this department, both brands such year on year revenue growth of 0.4% and 7.9% respectively, however both brands saw overall revenue declines.

Notably, in the JD Williams brand segment total revenue slumped by 4% and Ambrose Wilson fell further by 9.6%.

Jacamo, one of the menswear brands that the firm holds saw a rise in digital revenue of 3.2%, which pushed overall revenue up by 2.5%.

Brown report mixed trading period

Steve Johnson, CEO, commented:

“This has been an encouraging period of peak trading for the business in a highly promotional market, as we delivered digital revenue growth across both Womenswear and Menswear with particularly strong digital growth from Simply Be and Ambrose Wilson as customers responded well to our ranges. Financial Services revenue was down, reflective of our strategic approach to the retail business and continued tightening of our lending criteria.”

“We are making good progress with our ongoing strategic review and look forward to providing further details at our full year results in April. Our work so far has highlighted the need to have a tighter brand portfolio, a sharper focus on product and a cost base appropriate for delivering sustainable digital growth. At the same time, we will continue to proactively address the accelerating and cumulative external factors which are anticipated to reduce the size of our Financial Services business over the next two years. These will significantly influence the way we will operate our Financial Services business and we are taking proactive measures to ensure that the change is managed appropriately. This is in line with our strategy of becoming a digitally focused, retail-led business.”

“Our expectations remain that the retail market will continue to be challenging and promotional, but we are focused on our clear strategy of delivering profitable digital growth.”

Change of fortunes for Brown

In October, the firm saw its shares bounces following the releasing of its half year results.

The Group, saw its profits surge on the back of a hike in online sales, which now comprise 84% of product revenue.

Despite a 5.4% contraction in Group revenue, the Company swung from a £23.8 million loss to a £14.7 million profit, in a year-on-year comparison of the six month period ended 31 August. Similarly, adjusted EBITDA rose 4.0% to £54.1 million and adjusted profit before tax grew 3.9% to £38.1 million.

The Womenswear market

When looking at the womenswear market, the stand out performer across 2019 was Boohoo (LON: BOO).

The firm lifted its annual guidance this week following strong revenue growth.

Also in the update, the firm said that it had appointed former JD Sports (LON:JD) chief financial officer as its new deputy chair.

Across 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%.

Koovs struggle

Another rival who work in the womenswear department is Koovs (LON:KOOV).

Koovs have seen a poor period of trading, and notably in December were placed into administration.

The India focused online fashion retailer said that it continued to negotiate with major shareholder Future Lifestyle Fashions Ltd (NSE:FLFL) for completing its £6.5 million investment.

“The board expects that the business and assets of Koovs will be purchased from the administrator by a company connected to the company’s largest secured creditor, Waheed Alli, ensuring the continuation of the operating business,” the company said.

“If a replacement nominated adviser is not appointed within one month, the admission of the company’s securities will be cancelled on AIM. The company has no current intention of appointing a replacement nominated adviser,” Koovs added.

The future of Koovs is still being dealt with relevant brokers and legal authorities, however it does not look so bright.

Shareholders of Brown will be worried about the update and the crash in share price.

However, Brown can take away some positives such as the performance of Jacamo within the update.

South32 warn shareholders about cautious coal market within positive interim update

Ishen Patel
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0
South32 warn shareholders about cautious coal market within positive interim update

South32 Ltd (LON:S32) have reported an impressive performance across the interim period however told shareholders that the coal sector remains cautious.

For the first half ended December, South32’s alumina production rose 4% year-on-year to 2.6 million tonnes, with Brazilian operations delivering a record performance.

Aluminium production was flat at 496,000 tonnes, which will not worry shareholders.

Nickel production did see a 2% slip in production to 20,600 tonnes whilst silver rose 2% to 6.1 million ounces.

The lead sector saw impressive growth for South32 as there was a rise in production to 55,300 tonnes seeing a 14% growth.

Additionally, Zinc production surged 24$ to 32,500 tonnes, and manganese ore production fell 3% to 2.9 million wet metric tonnes, and manganese alloy put was down 17% to 91,000 tonnes.

The coal sector, which is one of South32’s biggest operations saw production fall 2% to 12.6 million tonnes, as did metallurgical coal output declined by 7% to 2.9 million tonnes.

The miner alluded to tough market conditions for coal across the last few months, which has reduced activity in South Africa.

Shareholders will take note that the firm said that for coal output it expects production to be towards the bottom end of its guidance.

Graham Kerer, CEO of South32 commented

“We continued our strong start to the year, delivering record year to date production at Brazil Alumina and maintaining production guidance across the majority of our operations.

“We have acted decisively during the quarter in response to market conditions, reducing contractor activity at South Africa Energy Coal and higher cost trucking at our South Africa Manganese business.

“Our disciplined approach to capital allocation has enabled us to maintain our strong financial position and return a further US$331 million in the December 2019 half year with the continuation of our on-market share buy-back and payment of our ordinary dividend in respect of the prior six months.

“We have taken further action to reshape and improve our portfolio. We exercised our option to acquire a 50% interest in the base metals focussed Upper Kobuk Mineral Projects in Alaska, entered into a binding conditional agreement for the sale of South Africa Energy Coal and progressed the review of our manganese alloy smelting exposure.”

Planned sale of South African coal

The firm said that it will sell its subsidiary coal unit for ZAR100 million in an upfront payment deal, in November.

The miner’s 92% holding in SA Coal Holdings Proprietary Ltd will be bought by a subsidiary of South African coal miners Seriti Resources Holdings Proprietary Ltd, a local community trust, and an employee trust.

Each trust will take a five percent stake each, with Seriti holding 82%.

The remaining eight per cent not included in the deal, is held by industrial investors Phembani Group Proprietary Ltd.

Seriti will make an up-front cash payment of about 100 million rand ($6.8 million), based on an enterprise value of 1.25 billion rand, to acquire South32 SA Coal Holdings Proprietary Ltd, South32 said in a statement.

South African mining scene

A big titan in the mining industry, Rio Tinto (LON:RIO) also operate in South Africa, in similar fashion to South32.

Rio Tinto who are one of the blue chip miners have made announcements that they have worked with Savannah Resources (LON:SAV) to win licenses for operations outside of South Africa.

However, Rio have seen their operations slowdown in South Africa. Rio Tinto gave shareholders a cautious outlook over safety concerns at its Richard Bay Minerals unit in South Africa.

The firm said it has shut down the project over fears for the safety of its employees due to an “escalation in violence in the communities surrounding the operations”.

“There has been an escalation of criminal activity towards RBM employees and one was shot and seriously injured in the last few days. As a result, all mining operations at RBM have been halted and the smelters are operating at a reduced level, with a minimum number of employees now on site. Construction of the Zulti South project has also been temporarily paused,” Rio said.

The miner said it will contact its customers to “minimise potential disruptions”.

As a result of this, Rio said its titanium dioxide slag production in 2019 will be at the bottom end of the guided range of 1.2 million tonnes to 1.4 million.

South32 can be pleased with the update given today, and the firm will be looking to produce a finer string of results across 2020.

Shares in the firm trade at 149p (-1.01%). 16/1/20 10:52BST.

Dow Jones set to beat all-time high despite superficial phase one

Jamie Gordon
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Dow Jones set to beat all-time high despite superficial phase one
Following a protracted session of posturing and taunts, the ‘phase one’ of the US-China trade deal was signed on Wednesday. This was met with a measured reaction from most, except the Dow Jones, which hit 29,000 points for the first time in its history. Despite the giddiness of this news having already been priced into global equities, and the substance of the deal being largely cosmetic, the Dow Jones is expected to beat yesterday’s highs and peak out around 29,100. The bullish predictions should be somewhat tempered, though, when we remember the difficulties in reaching this largely symbolic checkpoint, and we imagine the challenge of more substantive progress during phase two. Giving his view on market movements this morning, Spreadex Financial Analyst Connor Campbell commented, “Though analysts failed to muster too much enthusiasm for the signing of the US-China trade deal – instead focusing on the multitude of issues not covered by the agreement – the Dow Jones nevertheless struck a fresh record high in its aftermath.”

“Crossing 29000 once again, the Dow is actually set to push past 29100 for the first time in its history later this Thursday. This despite a persistent sense of dissatisfaction surrounding what the ‘phase one’ deal failed to achievement, and the difficulties of facing the superpowers ‘phase two’ – if there is even the appetite from Washington and Beijing to begin another set of negotiations.”

“With the Dow setting the tone last night, the European indices chose to indulge in a bit of positivity. The DAX once again neared 13500 as it jumped half a percent, while the CAC climbed to 6060 as it rose by the same amount.”

“Lagging behind was the FTSE, which at best added 0.1%; enough to send it to a 3-week high of 7650, but still a disappointment.”

“There were a few things pinning the UK index back. Firstly, the pound rebounded after what has been a week of bad data and rate cut chatter, rising 0.3% against the dollar and 0.2% against the euro.”

“Then there was another wave of weak post-Xmas earnings for the FTSE to swallow. Pearson (LON:PSON) fell 11% following its latest update, investors troubled by both 2019’s operating profit being at the bottom of the firm’s guidance, and the prospect of a further £10 million to £80 million decline in 2020.”

“Whitbread (LON:WTB), meanwhile, tumbled 4.7% as a 1.3% drop in third quarter like-for-like sales drew focus from a 1% rise in total sales growth, alongside a London-driven 0.3% increase in UK business.”

“Providing something of a buffer for the FTSE was Associated British Foods (LON:ABF), which climbed 2.8%. This as like-for-like growth at Primark took the heat off a dip in operating profit margins, while AB Sugar and AB Agri saw 5% and 10% sales growth respectively.”

AB Foods hails strong Primark Christmas performance in stable update

Ishen Patel
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AB Foods hails strong Primark Christmas performance in stable update
Associated British Foods plc (LON:ABF) have given shareholders an impressive update on Thursday morning. The firm reported a sales rise at its Primark store portfolio over the 16 weeks period, which included the festive trading session. The update also told shareholders about an impressive rise in their sugar unit, and the ingredients sector also saw revenues increase. AB noted that the Grocery unit did not see as significant growth as other sectors, with sales remaining flat year on year. Primark was the standout department for the firm, were sales grew 3% year on year, which the firm attributed to a rise in Primark selling space. In the UK, Primark sales saw growth of 4% year on year, however on a like for like basis there was marginal decline. The company noted that it has improved its like for like sales across the entirety of its Primark Group, however exact figures were not provided. Since its financial year end on November 14, retail selling space grew by 200,000 square feet. At January 4, Primark had 15.8 million square feet, up from 15.1 million square feet the year before. AB told shareholders that they wanted to add even more trading space for Primark retail, which goes against the trend of other British retailers. A rise in EU sugar prices also helped sugar revenues climb 5% year on year, which was another notable take from the update.

AB Foods continue the good run

“Retail selling space increased by 0.2 million sq ft since the financial year end and, at 4 January 2020, 376 stores were trading from 15.8 million sq ft which compared to 15.1 million sq ft a year ago. Three new stores were opened in the period: Seville Lagoh in Spain, Kiel in Germany and Milan Fiordaliso in Italy. In addition, we relocated to larger premises in Norte shopping centre in Porto, Portugal, the Norwich store in the UK was extended and selling space was reduced in two stores in Germany.” “We now expect to add a net 0.9 million sq ft of additional selling space in this financial year. We expect to open 18 new stores together with a number of relocations and selling space will be reduced in a further store in Germany. Trading at our first store in eastern Europe, in Ljubljana, Slovenia has exceeded expectations. As previously announced, we will enter the Polish market with a new store in Warsaw in spring 2020, followed by a store in Prague, Czech Republic. We have now also signed leases for a further store in Poland, in Poznan, and for our first store in Slovakia, in Bratislava which will take Primark to its fifteenth country.” AB Foods concluded “Sales growth in Twinings was driven in particular by herbal teas in the UK and the US, although Ovaltine sales were held back by a slow start in Thailand. Margin benefited from the tea supply chain efficiencies delivered last year. At Allied Bakeries, the operating loss was reduced with progress from cost reductions more than offsetting the loss of contribution from lower sales.”

Confidence pays off

The firm saw its shares jump in December, as they gave confident expectations to shareholders. The firm updated shareholders by saying that the company will benefit “materially” from the increase in sugar prices and further cost reduction in its current financial year. Speaking at the company’s annual general meeting, Chair Michael McLintok said the company expects another year of strong profit and margin growth in grocery, with Twinings Ovaltine drink in particular benefiting from a more efficient tea supply chain. McLintock said fast fashion retailer Primark has a strong pipeline of new sites, with margin to be reduced by “only a small” amount year-on-year, hurt by a weaker pound for purchases being largely offset by lower costs in both the cost of goods and overheads. “Our businesses have completed all practical preparations for Brexit and contingency plans are in place should our businesses experience some disruption at the time of exit,” McLintock said. Shares in AB Foods trade at 2,625p (+2.74%). 16/1/20 10:37BST.

Trans-Siberian Gold discover Vein 25 near Asacha gold mine

Ishen Patel
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0
Trans-Siberian Gold discover Vein 25 near Asacha gold mine

Trans-Siberian Gold (LON: TSG) have given the market another update regarding their Asacha Gold Mine operations.

TSG is focused on low cost, high grade mining operations and stable gold production from its 100% owned Asacha Gold Mine in Far East Russia.

The Company also holds the licence for the development and exploration of the Rodnikova deposit, one of the largest gold fields in South Kamchatka.

The firm said that its newly discovered zone, Vein 25 North is located 400 meters within the east zone of the Asacha mine.

Notably, Trans Siberian said that this new vein has delivered encouraging results.

The company said high-grade gold intersections were obtained in a more or less complex structural environment, with initial drilling results of 133 grams per tonne of gold and 57 grams per tonne of silver at over four meters.

The firm told shareholders that it will continue drilling over the next few months as it plans for a second drill to be mobilized adding to the site.

In addition to the north extension of Vein 25, five other target areas will be drill tested during the year.

To achieve this, the firm said that its board has approved a 2019/20 drilling program totaling 25,000 meters with the potential for further expansion.

Alexander Dorogov, CEO of Trans-Siberian Gold commented:

“We are very pleased with the strong operational performance delivered in 2019 and are accelerating our investment in the exploration and development of the Asacha Gold Mine. The recently conducted drilling programme has yielded some exciting, high grade mineralisation results at Vein 25; this is an important development target for the extension of resource mineralisation. We have an ambitious exploration programme planned in 2020 and with drilling continuing we look forward to updating the market on our progress.”

Trans-Siberian bounce back

Last week, the firm gave shareholders a disappointing update. The firm saw their shares fall when it said that analysis showed the resource at the Asacha gold mine had been overestimated.

The total measured, indicated, and inferred mineral resource for the Kamchatka-located mine has fallen to 313,000 ounces of gold and 675,000 ounces of silver as at the start of December 2019.

The estimate before the results were published was 553,000 ounces of gold and 1.3 million ounces of silver which showed a 43% and 93% drop respectively.

As Trans-Siberian Gold reported in September and October, preliminary internal estimates of Asacha “indicated the existing in-situ resource may have been overestimated”.

The Group will be conducting both underground and surface drilling campaigns during 2020.

A total of approximately 22,000m of surface drilling will target the lateral extents of the Main zone and QV25. A further 2,000m of underground drilling will be conducted on the Main zone at depth.

The update today shows the resilient nature of Trans Siberian to bounce back from last weeks update, and shareholders will hope that the Russian miner can strike gold across 2020.

“The resource will be supplemented by additional ounces targeted in an accelerated exploration programme as well as existing stockpiles. A new drilling campaign of approximately 8,000 metres around Vein 25 in the East zone is already underway. We are confident we have the time, capital and skills to upgrade the mineral resource at Asacha. Formal guidance for 2020 will follow shortly, but at this stage we anticipate annual gold production to be in line with recent years.”

Shares in Trans-Siberian Gold trade at 59p (+0.85%). 15/1/20 15:40BST.

Ten Entertainment see higher sales and growth across financial year

Ishen Patel
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0
Ten Entertainment see higher sales and growth across financial year

Ten Entertainment Group PLC (LON: TEG) have seen their shares in green on Wednesday afternoon.

Shares in Ten Entertainment trade at 317p (+2.26%). 15/1/20 14:45BST.

The firm updated the market by saying that total and like for like sales were higher in its recently ended financial year.

Ten also praised the benefit of its technology re-engineering program which has caused results to climb.

Ten Entertainment reported total sales of £84.1 million in its financial year, which ended on December 29.

Notably, this figure showed a 10% increase over the previous financial year’s sales figure of £76.4 million.

Additionally, like for like sales growth was 8% which has been steady across the last few years of trading for the firm.

According to Ten Entertainment, 70% of its estate now benefits from cost efficiencies obtained through its Pins & Strings program, which reduces maintenance costs.

The firm also noted that across the year, four or more of its sites were refurbished including a “prime location” which “has received additional investment as a concept site format to trial new entertainment experiences”.

Ten expressed plans to open an inaugural new build site within the first six months of 2020, and this will strengthen its pipeline.

Its financial 2019 adjusted earnings before interest, tax, depreciation, and amortisation is expected to align with market expectations.

Duncan Garrood, Chief Executive Officer, commented:

“Ten Entertainment has had another strong year, delivering profitable sales growth. Our ever-evolving offer, providing family entertainment underpinned by tenpin bowling, is thoroughly enjoyed by increasing numbers of customers.

“We continue to innovate, increase our footprint and improve the quality of our offering which positions us well for future growth.”

TEG expects to announce its full-year results on 25th March 2020.

Ten make progress from July

In July, the firm announced sales growth and site acquisitions during the first half, and partially attributed its positive figures to digital marketing success.

The Group saw sales and like-for-like sales growth of 9.6% and 7.4% respectively, during the first half. The Company said growth in LFL sales remained stable and it owed the recent improvement to the extended period of hot weather conditions during May and June 2019.

It added that it had expanded its estate with acquisitions of sites in Southport in Q1 and Falkirk in Q2.

Both sites are existing bowling facilities, which will now undergo ‘Tenpinisation’ before contributing to profits in 2020. Ten Entertainment sites now number at 45.

Hollywood Bowl – rivals in the market

A competitor in the industry, Hollywood Bowl (LON:BOWL) have seen a successful time of trading in similar fashion to Ten. In December, the firm reported profit growth as its shares rallied.

Hollywood Bowl said that, for the year ended 30 September, profit before tax grew by 15.3% to £27.6 million, compared to the £23.9 million figure recorded the year prior.

Meanwhile, total revenues grew by 7.8% to £129.9 million, up from last year’s £120.5 million.

Hollywood Bowl added that it has six further bowling centres in the development pipeline from 2021-2023.

The company said that food and drink revenue was up 6.3% on the year before, amounting to £35 million. It said that more customers chose to spend as a result of the launch of its new menu and its enhanced bar and diner experience.

“I am delighted to report another year of strong profitable and cash generative growth, demonstrating the consistent delivery of our proven, customer-led strategy,” Stephen Burns, Chief Executive of Hollywood Bowl, commented in a statement.

The update from Ten is impressive, but shareholders still have to remember that in Hollywood Bowl a big competitor looms. At a time where British businesses are struggling, shareholders should be content.

Ten Entertainment will hope that they can build on the impressive financial year and continue to report growth and profit for shareholders.

Vistry set to report record profit levels despite Brexit gloom

Ishen Patel
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1
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.

Vistry give shareholders confidence

Greg Fitzgerald, Chief Executive commented: “The Group has made further operational progress over the past 12 months and for 2019 expects to deliver another year of record profit. Building high quality new homes for our customers has been, and remains our priority, and I am confident we will finish the year as an HBF 5-star housebuilder. “We completed the transformational acquisition of the Linden Homes and the renamed Vistry Partnerships at the start of this year; integration is well under way and we are fully focused on delivering the clear and significant benefits from this exciting combination as quickly as possible.”

Vistry Outlook

The company said “We are delighted to have completed the transformational acquisition of the Linden Homes and Vistry Partnerships businesses at the start of the year. Our focus is on successfully integrating these businesses and delivering the clear and significant benefits from the combination as quickly as possible.” “Whilst it is early in the year to comment on 2020 trading, we have a strong forward sales position and trading to date has been very positive, with consumer confidence returning and industry fundamentals remaining strong. We are excited about the prospects for the enlarged business and expect to report much progress in the year ahead.”

Galliford Try and Vistry Deal

Vistry at the start of November, agreed a substantial home building deal with Galliford Try in a for Bovis to takeover the two Galliford housebuilding business units. The deal was announced on November 7 and was valued at £1.14 Billion, which sends out a huge statement of intent for competitors. The agreement comes after Galliford rejected a £1.05 billion bid from rival Bovis for its Linden Homes and Partnerships & Regeneration businesses back in May. In September the two confirmed they had resumed talks. Bovis was to issue shares worth £675 million and pay £300 million in cash, combined with £100 million of Galliford debt. The two firms announced that the terms from the September agreement were unchanged, and will see will see Bovis issue 63.8 million new shares to Galliford, valued at £675 million, pay £300 million in cash, and take over Galliford’s £100 million debt. Bovis also added that they will carry out a “bonus issue” of 5.7 million shares to existing shareholders

Rivals in the market

This morning, rival Persimmon (LON:PSN) told shareholders that it expects a decline in full year revenue, however profit will meet expectations. 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. 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. Shareholders of Vistry will remain optimistic, however there is no denying that the shroud of Brexit is still overhauling the British Property market. Shares in Vistry trade at 1,326p (-1.19%). 15/1/20 14:35BST.

BlackRock to focus on ESG and climate change in 2020

Ishen Patel
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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.
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