Bunzl optimistic to meet expected revenue growth in tough market

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Bunzl plc (LON: BNZL) have said to firms that they have remained optimistic to meet expected revenue growth in a tough market.

Despite the optimism, it seems that shares in Bunzl have remained in red on Tuesday.

Bunzl shares trade at 2,085p (-0.71%). 17/12/19 11:12BST.

Bunzl is one of the biggest British outsourcing companies, having specialist international distribution services all across the world. The firm is a main stay on the FTSE 100.

Bunzl yesterday had seen their shares in green, as the firm seemed to benefit over the Boris Bounce.

Bunzl saw their shares rise the third largest in the FTSE100, just behind Glencore (LON: GLEN) and British American Tobacco (LON: BATS) however all three of these firms saw their shares boosted by over four per cent.

It seems that the election bounce has now ended for Bunzl, as the firm said that it was on track to meet revenue growth figures however weak economic conditions were weighing down on trading.

Bunzl expects revenue for 2019 to rise by 2% with revenue at constant rates rising by 1%. Underlying revenue, London-based Bunzl noted, is set to be flat on 2018.

The firm saw a dip in its underlying revenue back in October, within its third quarter update and the firm alluded to economic conditions being a constraint on trading globally.

Shareholders will remain optimistic however, as the firm did announce the acquisition of Fire Rescue Safety Australia, which distributes specialist fire safety and personal protection equipment.

Chief Executive Frank van Zanten commented: “FRSA has a market-leading position in the provision of emergency response solutions in Australia and further expands and develops the scope of our operations there. We are delighted to welcome their employees to the group.”

“The group’s expectations for the year 2019 remain unchanged with overall trading consistent with the slowing underlying revenue growth indicated in previous announcements this year due to the impact of the continued mixed macroeconomic and market conditions across the countries and sectors in which the Group operates,” said Bunzl.

In the tough operating market, it does seem that Bunzl are doing well and having had a track record of fighting market slumps, shareholders can remain positive for future outlook.

Unilever shares crash following profit warning and Asian slump

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Unilever (LON: ULVR) have seen their shares in red, as it gave shareholders a gloomy outlook for their annual results.

Unilever have seen a turbulent time of trading in 2019. In October, the firm saw its growth slump in both India and China, which alerted shareholders.

Unilever revealed an underlying sales growth of 2.9%, with 1.4% from volume and 1.5% from price. Meanwhile, turnover grew by 5.8% driven by sales growth.

Just a month on, the firm made a new Chairman appointment in Nils Andersen.

Andersen was brought into the firm to tackle the slowdown in Indian and Chinese business, having had experience working with AP Moller Maerskv , Carlsberg A/S and as a non executive director at BP.

Unilever today have seen their shares crash, as the firm reported that underlying sales growth will fall short of guidance due to economic slowdown in South Asia and tough trading conditions in West Africa.

The FTSE 100 listed firm initially had expected underlying sales growth in the lower half of its 3% to 5% multi-year range. However, it now expects underlying sales “slightly below” this guidance.

The main reason that Unilever alluded to this change was the challenges in the quarter in some markets”, including continued trouble in west African markets and a slowdown in south Asia, one of Unilever’s biggest markets.

Chief Executive Alan Jope said: “Due to challenges in certain markets, we expect a slight miss to our full year underlying sales growth delivery.

“Looking ahead to 2020, growth will be second-half weighted. While we expect improvement in H1 2020 versus this quarter, we expect that first half growth will be below 3%. Our full year underlying sales growth is expected to be in the lower half of the multi-year range.

“Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance.”

Shares in Unilever crashed 5.03% to 4,397p on the announcement. 17/12/19 11:03BST.

Lloyds & RBS put under stress after failing Bank of England Test

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Two of Britains biggest banks in Lloyds (LON:LLOY) and Royal Bank of Scotland Group plc (LON:RBS) have seen their shares dip after failing the UK’s most rigorous banking test.

Both the British banks had seen their shares in green since Friday, as the firms continued to ride a wave of optimism following PM Johnsons election win dubbed the ‘Boris Bounce’ by analysts.

However, today the picture is slightly more worrying for both of the British banks.

Both banks passed the Bank of Englands annual assessment in the balance sheet department.

However, plans to double a 100 basis point capital buffer designed to protect lenders in depressed economic conditions could put both bank’s 2020 share buyback plans in jeopardy, analysts said.

“Given we have not seen an acceleration in credit growth, we conclude this is being put in place to be, for lack of a better word, a “Brexit buffer” as the Bank of England has now determined that a 2% buffer is more appropriate in a “standardised risk environment,” Jefferies analyst Joseph Dickerson said.

The increase in the countercyclical buffer is seen likely to lead to a reduction in core tier 1 capital requirements by a similar amount, allowing major British lenders to absorb up to 23 billion pounds of losses in a downturn without restricting lending, as Reuters reported.

But near-term goals to deliver more than a billion pounds of shareholder rewards via a buyback bonanza must now be considered “best case”, according to analysts at KBW.

Lloyd’s have already been put into bad media spotlight earlier this year. The firm faced public scrutiny when they received criticism over the treatment of victims within the HBOS fraud scandal.

Certainly, this will do no favor to either firm especially at a time where the global banking industry and firms such as Lloyds and HSBC (LON: HSBA) have seen their profits take a bruising.

Certainly, being a big player in the banking industry does often lead to a lot of media coverage both good and bad, but not passing the Bank of England stress test may alert both senior management and shareholders.

Shares in Barclays dipped 4.29% to 249p. 17/12/19 10:49BST.

Shares in Lloyds fell further by 5.49% to 63p. 17/12/19 10:50BST.

UK unemployment rate at lowest level since 1975

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New data revealed on Tuesday that unemployment has reached its lowest rate since the three month period to January 1975. The Office for National Statistics said that the unemployment rate has reached a historic low of 3.8%. Meanwhile, the number of people in employment grew by 24,000 to 32.80 million in the three months to October 2019, compared with the previous quarter. Indeed, the employment rate reached a record high of 76.2%, the Office for National Statistics revealed. Over recent months, the growing economic uncertainty has been linked to the UK’s chaotic attempts at departing from the European Union, which has now been postponed yet again until the end of January. Last week’s general election saw the Conservatives win a majority of 80 seats. “The fall in the number of unemployed people was driven by women, whose unemployment reduced by 18,000 to 566,000. On a year-on-year basis, the number of unemployed women reduced by 64,000. The number of unemployed men increased by 4,000 to 715,000 on the quarter but reduced by 29,000 in the year to October,” the Office for National Statistics said in its report. Indeed, the Office for National Statistics said that the three months to October saw the lowest unemployment rate for women, coming in at 3.5%. The unemployment rate among men was largely unchanged at 4%, the Office for National Statistics said. The GBP/USD is below 1.3200 following the release of the mixed UK jobs data. GBPUSD opened around 1.3330/40, but moved quickly below 1.3300, with pain kicking in. It eventually buckled to low as 1.3236 before reverting to 1.3300. Still, selling pressure has remained as focus shifts back to the increasing prospects of a hard or a cliff-edge Brexit to which the odds have gone up considerably after this morning’s headlines,” Stephen Innes, APAC market strategist at AxiTrader, provided an analysis. With the election out of the way, UK politics can turn its attention back to Brexit, and the famous question occurs yet again – deal or no deal?

Fulham Shore shares dip despite stable update

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Fulham Shore PLC (LON: FUL) have seen their shares dip despite giving shareholders a sound update on Monday.

Fulham Shore are a group of distinct growth restaurant businesses operating in the UK, each driven by skilled and incentivised restaurant entrepreneurs. The firm boast names such as Franco Manca Pizza and The Real Greek.

Today, the firm has seen its first half revenues rise due to the launch of new restaurants and rising customer numbers.

For the half-year ended September 29, the restaurant operator posted revenue of £36 million, up 9.3% from £33.3 million in the comparative year ago period.

Pretax profit, however, slumped year-on-year to £743,000 form £1.5 million, mainly due to recognition of interest on lease liabilities under new IFRS16 accounting rules.

First half headline earnings before interest, taxes, depreciation and amortisation increased 68% year-on-year to £8.4 million.

The performance was boosted by the opening of six new six new Franco Manca pizzerias and one new The Real Greek restaurant. The launch of the Franco Manca loyalty scheme and mobile app was credited for the rise in customer numbers as over 55,000 registered users were recorded at last count.

Chair David Page said: “Looking ahead, the board remains confident that Fulham Shore is well positioned for continued growth and a great future. We look forward to continuing this positive momentum in the period ahead.”

Shares of Fulham Shore dipped 5.55% to 10p on Monday afternoon. 16/12/19 15:56BST.

Certainly, Fulham Shore can be pleased with the update that they have given shareholders today, even though share price movements may have not reflected this.

Rival, FTSE250 listed Restaurant Group (LON: RTN) saw their shares crash despite its lead brand Wagamama reporting a strong performance.

Wagamama reported strong second quarter gains, as revenues rose 11% year-on-year to £93.5 million, with like-for-like revenue growth coming in at 6.3%.

Another name in Loungers PLC (LON: LGRS) saw their shares spike just under two weeks ago, as the firm gave a bullish update to the market.

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”.

Shareholders of Fulham Shore should remain confident on the update provided, however, as big guns such as J D Wetherspoon plc (LON: JDW) continue to report strong trading figures, which will make the market more competitive and saturated.

Significant discovery for Touchstone

More good drilling news from Trinidad-focused oil and gas producer Touchstone Exploration Inc (LON: TXP). The results of the Cascadura-1ST1 on the Ortoire exploration block in Trinidad suggest a significant crude oil discovery. The share price has jumped by more than two-fifths to 19.75p. It has more than one year since it was that high.
The announcement is full of technical language. The well indicates 1,037 feet gross of oil pay. In reality, the result was much better than expected and this could be a large discovery. It still needs to be fully tested, though.
The Cascadura-1ST1 well will be...

Nostrum Oil & Gas shares crash following CEO departure

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Nostrum Oil & Gas PLC (LON: NOG) have seen their shares crash on Monday following the immediate resignation of their CEO.

Nostrum Oil & Gas plc is an oil and gas exploration and production company operating in Kazakhstan.

Shares of Nostrum Oil & Gas crashed 8.31% to 15p on the announcement. 16/12/19 15:26BST.

Nostrum have seen a turbulent time of trading across 2019, with shares coming up and down.In July, the firm posted steady results for the first half of 2019 and notified investors of proposed acquisitions of sites in Kazakhstan.

The Company stated that production was in line with expectations and that the first half was financially positive. Despite this, revenues are expected to finish at US $174 million for H1 2019, down from $191 million for H1 2018, which caused shares to dip.

Later in the year, the firm saw their shares crash once again as nine month revenues shrunk, which caught shareholders attention.

Nine month volume sales decreased to 27,515 barrels of oil equivalent per day from 30,523 barrels the year before, showing a significant slow down in production.

Additionally, the firm also faced production cuts in liquid petroleum. In this market gas volumes also dropped a less dramatic 5.4% to 3,680 barrels of oil equivalent per day from 3,891 boepd. While dry gas sales volumes fell 1.1% to 14,255 boepd from 14,415 boepd.

Following the poor performance by the firm, CEO Kai-Uwe Kessel announced his resignation on Monday whilst a strategic review of the company is ongoing.

Independent Non-Executive Director Kaat Van Hecke will takeover as CEO from Monday.

Van Hecke has been a Nostrum board member since the end of 2016. She has been a managing director at (OMV VIE: OMV) and had held executive positions at ExxonMobil Corp (executive positions at ExxonMobil Corp and Royal Dutch Shell PLC.) and Royal Dutch Shell PLC (LON: RDSB).

“On behalf of the board and management of Nostrum, I would like to thank Kai for his contributions over the last 15 years. I am delighted that Kaat, during this period of strategic review, is stepping up to take the executive role at Nostrum,” Chair Atul Gupta said.

The firm began a strategic review of operations which a sale of the firm was questioned, which worried shareholders.

“The first nine months of 2019 have been very challenging. We have seen quicker than expected decline in our core producing reservoirs resulting in a reduction in our sales guidance for 2019 by 1,000 barrels per day,” said Kessel said at the time.

The firm firm reported sales volumes of 27,515 barrels of oil equivalent per day for the quarter, down 9.9% from 30,523 barrels a year before.

The fall in production was due to quicker-than-expected field declines, which led to a reduction in 2019 output guidance from Nostrum at the end of October.

This morning, rival PetroTal Corp (LON: PTAL) saw their shares rally as it boasted a new production record.

Certainly a huge change is needed and the senior board will have to make more changes to turnaround fortunes in a period of tough trading for Nostrum Oil & Gas.

PetroTal shares bounce on new production record

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Shareholders of Petrotal Corp (LON: PTAL) have seen their shares bounce on Monday afternoon, as the firm gave an impressive update to the market.

PetroTal is an oil and gas development and production company. The firm focuses on development of oil assets and oil fields, and has main operations in Canada.

Shares of PetroTal bounced 3.35% to 25p on the announcement. 16/12/19 15:12BST.

In July, the firm provided an update on output and unrest at its Bretaña field in Block 95 in Peru.

BN 95-3D (3D) came online mid June with production at 3,500 bopd, it averaged 2,875 bopd over its first 24 days of production. Full field Bretaña production averaged 3,000 bopd in Q2 and averaged 5,350 bopd since 3D came online.

A few months on, the firm saw their shares rally in November as it gave shareholders an optimistic production guidance.

Based on recent field production experience of production 8,000 barrels of oil per day with a facility having 5,000 bopd nominal capacity, PetroTal expected its central production facilities to be able to handle the order of 15,000 barrels per day, which sent shares soaring over 20%.

Today, the firm said it had completed completed the 5H well, its second horizontal well, at its 100%-owned Bretana oil field in Block 95 in Peru.

he well was completed on time and costs came in 20% under the original budget of $14.5 million, which was a noteworthy accomplishment for shareholders to take.

The initial three-day production rate was 8,250 barrels of oil per day, exceeding management’s expectations. Bretana was able to record production of over 9,000 barrels per day, a record PetroTal said, with only two of the six wells online.

“PetroTal is pleased with the success of the 5H well and proud to play a historical role by drilling Peru’s longest horizontal well to date,” President & Chief Executive Manolo Zuniga said.

He added: “I wish to thank the technical and drilling team for their efforts to ensure safe operations and their dedication directed to the 5H well. The strong well performance emphasises the significant upside of the Bretana oil field and the considerable growth potential the asset possesses. Our interpretation of the reservoir has been confirmed with this well and the increased production will enhance field economics. The ongoing facility enhancements will enable us to effectively manage the increasing oil field production.”

The oil and gas industry has been mixed, and firms have seen their shares volatile amid market turbulence.

Notable updates came from United Oil and Gas who said that they were planning to raise funds to purchase Rockhopper Egypt Ltd from Rockhopper Exploration PLC.

United is a former Tullow Oil team, however FTSE250 listed Tullow saw their shares crash, after the firm saw their chief executive and exploration director quit.

Additionally, Tullow had warned production was likely to be between 89,000 barrels and 93,000 barrels, lower than the 90,000 barrels to 98,000 barrels initially guided, which caused shares to sink in November.

Scotgold Resources update shareholders on operational delays

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Scotgold Resources Limited (LON: SGZ) have given shareholders a cautious update on Monday, following production delay announcements.

The gold mining sector has been busy over the last few weeks as the countdown to Christmas continues, and firm have given mixed updates.

Cora Gold Ltd have seen their shares jump last week as the firm reported progress on its Mali operations.

Cora is currently carrying out a 5,000 metre drilling programme at Sanankoro, looking for new sulphide and deep oxide targets as well as to expanding existing targets.

Eurasia Mining saw their shares rally following progress in their Russian operations. Eurasia reported that it is edging closer to securing the final approval for the Tipil permit, a platinum group metals target located in Russia.

Notably, last week FTSE100 listed Fresnillo saw their shares crash after the firm gave a pessimistic annual production estimate.

Scotgold was founded as an Australian company in 2007 and the Company’s shares were admitted to trading on the AIM market in 2010.

The Company is primarily focused on the development of its high grade Cononish Gold and Silver Project in the Scottish highlands, together with the exploration of highly prospective tenements in the Grampian region of Scotland (the Grampian Gold Project).

Shares of Scotgold currently trade at 66p. 16/12/19 15:01BST.

Today, the firm said that hat development of Cononish Gold and Silver Mine in Scotland’s Grampian Highlands has been extended by 12 weeks and first gold production is now expected in May 2020.

The delay will certainly worry shareholders, as the firm will have to push back its operational and supply time lines as it accounts for these delays.

In August, Scotgold had said that gold production from Cononish project was expected in February 2020, following design delays.

The firm said that it had encountered delays relating to the management of excavated materials necessary to construct process plant building and to establish the site wide drainage required for the establishment of the “dry stack” tailings storage facility.

“The area of these sites is overlain by peat to varying depths, for which the company is utilizing all good practice to manage and preserve this environmentally sensitive material by minimizing storage,” Scotgold said.

The company said it has also identified a “small number of design detail changes which have had a minor impact on the planned schedule”.

“Whilst actions have been taken to minimise schedule impact, it has now become clear that an extension to the schedule will be required,” the company said.

Richard Gray, chief executive officer, said: “We are obviously disappointed that our eagerly awaited first gold production has been delayed, however proper management of our local environment is our first priority and our team has found solutions to the challenges encountered.”

“This has only been possible with the constructive approach taken by our contractors and the regulatory authorities,” Gray said.

Resolute Mining appoint new CFO

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Resolute Mining Limited (ASX: RSG) have seen their shares dip modestly, despite the announcement of a new Chief Financial Officer.

Shares in Resolute Mining dipped 0.87% to AUD1.14. 16/12/19 14:42BST.

Resolute is a gold miner with more than 30 years of experience as an explorer, developer, and operator of gold mines in Australia and Africa which have produced more than 8Moz of gold.

Resolute’s production and cost guidance for the 12 months to 31 December 2019 is 400,000 ounces of gold at an All-In Sustaining Cost of US$1,020 per ounce.

In August, Resolute saw their shares rally after the firm gave shareholders an impressive update.

The Company posted headline-grabbing EBITDA of AUS $78 million, booming 171% on H1 2018 EBITDA of AUS $29 million.

This was led by gold and silver sales revenue of AUS $324 million, spiking 33% from AUS $243 million. Resolute gross profit from operations bounced AUS $30 million on a year-on-year basis, up to AUS $69 million for H1 2019.

Today, the firm said it has ppointed Stuart Gale as chief financial officer with effect from January 20, 2020.

He will be replacing Lee-Anne de Bruin, who will be stepping down after three years in the role since 2017.

Gale will be joining from Australian iron ore company Fortescue Metals Group where he was group manager for Corporate Finance for nine years since 2010.

“Stuart Gale is an experienced CFO who joins Resolute with exceptional experience in successful financial leadership and positive transformation in the mining industry. Stuart has managed teams within one of the world’s leading mining companies and brings proven financial and commercial experience to complement our senior executive team,” said Chief Executive Officer John Welborn.

Shareholders should remain optimistic about the move from Resolute, at a time where gold miners have seen their shares become volatile.

This morning, FTSE250 listed Centamin PLC had started to consider a merger deal with rival Endeavour Mining, after a deal was firmly rejected just under a fortnight ago.

Additionally, fellow Australian gold miner Panther Metals announced that it had secured its first exploration licence in the Northern Territory, Australia.

Its Exploration Licence Application regarded it Marrakai Project, which is located in Pine Creek Orogen. This announcement sent shares in green.