GSK shares receive boost on US drug applicaton

Ishen Patel
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6
GSK shares receive boost on US drug applicaton

GlaxoSmithKline plc (LON: GSK) have seen their shares modestly boosted on Thursday afternoon following an announcement by the firm on a drug application in the United States.

GlaxoSmithKline have seen a relatively positive 2019 with the firm giving shareholders good updates across the year.

In July, the firm announced that it would be appointing HBSC’s Jonathan Symonds as the Non-Executive Chairman of the Board.

Shareholders were optimistic about the update, as Symonds had prior experience working in the pharmaceuticals industry working with firms such as AstraZeneca (LON: AZN) – who notably updated the market this morning about the approval of a Chinese marketing campaign.

Additionally, at the end of October the FTSE100 listed firm then gave shareholders an impressive update which saw a lift in their annual profit forecasts as the firm impressively told shareholders that turnover rose 11% to £9.39 billion in the three months ended Sept. 30 from a year earlier.

Today, the firm said that ViiV Healthcare has completed submission of a new drug application to the US Food & Drug Administration, seeking approval of fostemsavir.

ViiV Healthcare is majority owned by GSK, with rival firms Pfizer Inc (NYSE: PFE) and Shionogi Ltd (TYO: 4507) as a minority shareholders.

Fostemsavir is an investigational attachment inhibitor for the treatment of HIV-1 infection, which is being developed for use in combination with other antiretroviral agents in heavily treatment-experienced adults.

“Fostemsavir may provide an important treatment option for the group of people living with HIV who, for a variety of reasons, are not able to suppress their virus with other medicines and could be left with few or no treatments available to them,” said ViiV Healthcare Chief Executive Deborah Waterhouse.

She added: “In keeping with our mission of leaving no person with HIV behind, we have overcome many barriers to bring this important new medicine to people living with HIV, including investing in what is a very complex manufacturing process.”

Clipper books strong six months following European growth

Jamie Gordon
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0
Clipper books strong six months following European growth
Logistics and e-fulfilment services provider Clipper Logistics PLC (LON: CLG) posted good financial progress during the six month period ended 31 October 2019. The Group’s revenue rose 11.7% year-on-year to £254.6 million. This led a 13.5% jump in reported EBIT, up to £12.1 million, alongside a 9.5% growth in profit before tax, to £10.1 million. During the six month period, the Company also reported a “Significant European growth trajectory”, with 111.6% revenue growth in Poland and 33.4% growth in Germany. It also announced new automation programmes with Superdry (LON: SDRY), alongside new operations with Hope & Ivy, Simba Sleep, SLG, Amara, Shop Direct and a new operation providing services to the M&S (LON: MKS) National Distribution Centres. The Company’s shareholders saw similar progress, with its EPS up 8.3% to 7.8p, while its interim dividend jumped 9.4% to 3.5p per share. Elsewhere, other positive financial updates came from AJ Bell PLC (LON: AJB) and Albion Enterprise VCT PLC (LON: AAEV).

Clipper Logistics comments

Responding to the update, Steve Parkin, Executive Chairman, stated,

“The Group continues to see impressive revenue and EBIT performance in the first six months of the year, largely driven by the particularly strong growth in e-fulfilment and returns management and an improving contribution from our Clicklink Joint Venture.”

“A number of new operations have commenced in the period with major customers including Hope & Ivy, Simba Sleep, SLG, Shop Direct and M&S. Our business continues to perform well in Europe, with revenue growth in Poland of 111.6% and Germany of 33.4%. This is supported by a solid new business pipeline in the UK where we continue to offer value-add e-commerce and logistics services, including automation programmes, as we trial robotic technologies with a number of customers.”

“As retailers increasingly collaborate to minimise their route-to-market costs, Clipper, given its presence and infrastructure in retail logistics, is ideally placed to facilitate consolidation on behalf of retailers.”

“Trading has continued to be positive post-period end, with the key Black Friday trading weekend seeing record daily volumes in certain sites, and we expect full year earnings to be broadly in line with the board’s expectations. Notwithstanding the difficulties facing the UK high street and the uncertainties of the UK political environment in the current year, Clipper remains positive about the longer-term outlook and believe the Group is well positioned to achieve further growth in both the UK and internationally.”

Investor notes

The Company’s shares dipped 1.17% or 3.50p, to 296.50p per share 05/12/19 12:02 GMT. Analysts from Berenberg reiterated their ‘Buy’ stance on Clipper stock. The Group’s p/e ratio is 22.73, their dividend yield is 3.27%.

Victrex shares dip on disappointing update

Ishen Patel
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1
Victrex shares dip on disappointing update

Shareholders of Victrex plc (LON: VCT) have seen a dip in their shares on Thursday afternoon, after a modest update was provided.

Victrex plc is a British-based supplier of high performance polymer solutions. The company’s headquarters and manufacturing facilities are based in the UK with technical and customer support facilities in multiple markets, serving more than 40 countries

Shares of Victrex PLC saw a 0.77% dip on the announcement, and trade at 2,324p. 5/12/19 13:07BST.

Victrex reported that it saw a sharp drop in revenue and profit following weak sales performance.

As a result, the FTSE250 listed firm cut its dividend, which will come as alarming news to shareholders.

In the twelve months to September 30, Victrex recorded pretax profit of £104.7 million, down 18% on the £127.5 million reported the year before. Additonally, Revenue fell 9.8% year on year to £294.0 million from £326.0 million.

The company lowered its total dividend per year to 59.56 pence, down 58% on the 142.24p distributed the year before.

“Our full year performance was in line with expectations, with good growth in Aerospace, Energy and Medical being offset by a deterioration during the second half in Automotive, Electronics and Value Added Resellers, although these end markets are gradually stabilising,” said Chief Executive Jakob Sigurdsson.

Victrex saw a 15% drop in group sales to 3,751 tonnes from 4,407 tonnes the year before.

The company explained: “This reflects the cyclicality in Automotive and the associated impact on our Value Added Resellers segment, together with some de-stocking, with supply chain inventories running very low.”

The company also noted the “weaker” Electronics market, with both the semiconductor and smartphone markets down.

Victrex said a further headwind was the “tough” year on year comparative in its Consumer Electronics business, where it signed a large contract in the prior year. Excluding that contract, total group sales are down 12%.

Sigurdsson continued: “Pleasingly, we saw further progress in our new product pipeline and mega-programmes. We secured our first commercial order for Aerospace composite parts, we signed a new long-term development alliance with Airbus to support larger Primary and Secondary structures, and we saw strong growth in our next generation PEEK-OPTIMA HA Enhanced product for the Spine market. In PEEK Gears, our value proposition is strong and we have multiple development programmes underway, as well as gears on the road.”

Victrex said it remains “cautious” in its near term outlook.

“Looking forward, Automotive and Electronics are showing signs of stability, although we will retain some caution on these markets at this early stage, with an initial assumption that current trends will continue through the first half year,” Sigurdsson said.

He added: “Our cost-effective de-bottlenecking project is underway, enabling Victrex to gain significant incremental capacity in support of our medium-term growth programmes, although an extended shutdown will mean some under recovered overheads. On a full year basis, currency offers a modest tailwind although this will be offset to a large degree by some limited incremental operating investment, cost inflation and our employee bonus scheme. Overall, we remain focused on making year-on-year progress and our Polymer & Parts strategy keeps us well placed to deliver our medium to long term growth opportunities.”

The results from Victrex come as no surprise when we look at one of the main markets that Victrex supply to. If we look at a couple cases, the results start to become familiar.

Nissan (TYO: 7201) saw their shares slide on November 13, as the firm cut its full year forecast. Nissan alluded to slumping demand and tough market conditions as a hamper to business.

Additionally, Renault saw its shares in red after the firm cut its 2019 guidance as a result of “less favourable” economic environment, Renault joined rivals such as Suzuki who saw their sales crash following a global slump and poor performance.

Considering the nature of the updates in the automotive industry, the results will have come as no surprise to Victrex.

Once market trading eases up following Brexit clarifications and the resolving of the US China trade war, shareholders may see shares in green. However, this will be a waiting game and patience will be needed for shareholders to allow Victrex to recover.

South African Airways receive lifeline after being on the edge of collapse

Ishen Patel
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0
South African Airways receive lifeline after being on the edge of collapse

South African Airways have received an injection of cash, in order to help fight its survival prospects in a tough airline industry.

South African Airways is the state owned flag carrier of South Africa. The firm is eadquartered in Airways Park at Tambo International Airport.

This morning, the firm said that it was to enter a business process rescue operation with a £212 million lifeline from government and banks.

State-owned SAA, which has not made a profit since 2011 and has depended on government bailouts to stay solvent, said it would try to operate a new provisional flight schedule.

The airline industry has been savagely competitive and many firms have seen struggles in a tough period of trading.

The first demise came earlier this year, from British based Thomas Cook (LON:TCG) who collapsed following a combination of slowing business and poor administration.

Last week, it was reported that Fastjet (LON: FJET) were fighting to stay afloat in the market amid slumps in revenues, which led to a consideration of selling its Zimbabwe business.

It seems that South African Airways have joined the slump, and government officials will be worried about the performance of the business.

SAA said the process sought to provide the best prospects for “selected activities within the group to continue operating successfully”.

Last month, the firm was hut by an employee strike that forced it to cancel hundreds of flights which made matters worse for the South African flag carrier.

On Wednesday, a deputy minister, who declined to be identified due to the sensitivity of the matter, told Reuters he had received an official letter saying President Cyril Ramaphosa had called for a change of approach on SAA and that the airline would enter “voluntary business rescue”.

Pravin Gordhan, minister of public enterprises, said in a statement on Thursday that business rescue was the best way to restructure SAA into a stronger entity. He said the plan was still to attract an equity partner.

Existing lenders would provide 2 billion rand of lands guaranteed by the government, which gives some backing in the event of a future collapse.

Government would provide 2 billion rand in a “fiscally neutral manner”, Gordhan said.

Hans Klopper of BDO Business Restructuring said the rescue process for SAA could be fraught with difficulty and that it could take months if not years to find a solution to the airline’s problems.A relatively small amount of SAA’s assets could be recoverable. The rescue process could further dent confidence in the airline, he said.

“If there aren’t willing patrons prepared to book flights then the bottom falls out of the whole business,” Klopper said.

“With SAA there is a structure of devastation, but you may have somebody who comes in and offers, say, 1 cent on the rand. Because some creditors could get zero if there is a liquidation.”

There have been firms however, who have made gains in the apparently slumping airline industry.

Both Ryanair (LON: RYA) and FTSE100 listed Wizz Air (LON: WIZZ) both saw their November passenger numbers rise, after both firms gave modest expectations in prior updates.

It seems that there is a monumental turnaround process that needs to be made for South African Airways, and the injection may give an opportunity to kickstart operations however the market will remain cautious.

AJ Bell dips despite posting a strong full-year

Jamie Gordon
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3
AJ Bell dips despite posting a strong full-year
Online investment platform provider AJ Bell PLC (LON: AJB) saw its share price dip on Thursday, despite posting impressive results for the year ended 30 September 2019. The Company’s profit before tax jumped 33% year-on-year to £37.7 million. This was led by a revenue bounce of 17%, up to £104.9 million, alongside a 17% rise in retail customers, to 232,066. AJ Bell continued listing its successes, telling readers that its AUA rose 13% to £52.3 billion, while its balance sheet performed a £12.1 billion hike to £86.1 billion, and its customer retention rate increased by 0.3% to 95.4%. It finished its summary by telling its shareholders that its total dividend for the year surged 31% to 4.83p per share, and that during the period, the Group had launched its Corporate Social Responsibility initiative, to help “provide the opportunity for charitable causes to share in the future success of AJ Bell”. Elsewhere in asset and investment management news, Monks Investment Trust PLC (LON: MNKS) underperformed, Investec plc (LON: INVP) sells its asset management division, Personal Assets Trust PLC (LON: PNL) provides a cautious update and JLEN (LON: JLEN) introduces itself to the UK Investor Magazine.

AJ Bell comments

CEO of the Company, Andy Bell, added the following insights to the update:

“These results are a strong endorsement of the business model and growth strategy that we outlined in the run up to our IPO a year ago. Our focus on the needs of our customers and helping them to invest has enabled us to continue to add new customers to the platform and retain existing ones. This has resulted in assets under administration increasing to £52.3 billion and helped us to deliver another strong financial performance with revenue up 17% and profit before tax up 33%. Our balance sheet remains strong and the Board has proposed a final dividend of 3.33p which takes the total ordinary dividend for the year to 4.83p, an increase of 31%.”

“The structural growth drivers for investment platforms in the UK remain strong and if we continue to meet the needs of customers we are well placed to benefit from these over the coming years.”

“Alongside these results, we are announcing an innovative CSR initiative which will see charitable causes share in our success if we exceed our ambitious growth plans, subject to shareholder approval. A new share option plan will result in charitable causes benefiting from circa £10 million if we increase our earnings per share by at least 100% over three years and by at least 150% over five years, subject to certain other conditions. The share options will be granted in favour of the AJ Bell Trust, a charity that predominantly supports disadvantaged young people in the UK and our customers and staff will get the chance to nominate which underlying causes should benefit. This means that the alignment of interests between our community, our customers, our staff and our shareholders is further strengthened.”

Investor notes

Despite the positive update, the Company’s shares are down 4.68% or 19.09p, to 388.91p per share 05/12/19 12:42 GMT. Analysts from Liberum reiterated their ‘Sell’ stance on AJ Bell stock. The Group’s market cap is £1.59 billion, their dividend yield stands at 0.39%.

Grainger announce Welsh acquisition

Ishen Patel
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0
Grainger announce Welsh acquisition

Grainger PLC (LON: GRI) have seen their shares boosted after the firm announced a new acquisition in an update to shareholders.

Grainger is a British based residential property business, and have been trading since 1912. They have headquarters based in Newcastle upon Tyne, United Kingdom.

Grainger have seen a relatively positive period of trading across the last few months.

At the end of November, the firm saw its shares surge following a strong update. The FTSE250 said for the financial year to September 30, its net rental income grew 45% to £63.5 million from £43.8 million in 2018.

At a time where the UK housing market is apparently slumping, Grainger have appeared to defy the odds.

Grainger, in similar fashion to home building firms such as Taylor Wimpey and Homeserve have alluded to the tough UK market conditions and Brexit complications as a stagnation to business.

It seems that Grainger have once again pulled it out of the bag, and shareholders will be pleased with the update.

Today, Grainger alluded to the new acquisition of a capital quarter in Cardiff Wales for a reported £57 million.

The terms agreed include a forward funding and the acquisition of a 307 home project in the capital of Wales.

Grainger alluded to the growing nature of the Welsh property market due to its strong economic prospects and growth potential.

The home is currently being developed by IM Properties, with Winvic Construction Ltd acting as contractor.

The residential property provider said, apart from private rental homes, the scheme will deliver a range of amenities for residents, including a rooftop lounge and terrace.

Grainger said it expects this investment to generate a gross yield on cost approaching 7% once stabilised, with completion anticipated in mid-2022.

“We are pleased today to announce this £57 million investment to deliver 307 new, high quality, purpose built rental homes in Cardiff, supporting growth in the region, building on our existing portfolio in the South West and leveraging our operational platform,” said Chief Executive Helen Gordon.

Shares of Grainger currently trade at 280p (+0.73%). 5/12/19 12:43BST.

AstraZeneca shares dip despite Chinese marketing approval

Ishen Patel
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4
AstraZeneca shares dip despite Chinese marketing approval

AstraZeneca plc (LON: AZN) have positively updated shareholders on their Chinese operations, however shares have remained in red.

“AstraZeneca is a global pharmaceutical company with a major UK presence. Our purpose is to push the boundaries of science to deliver life-changing medicines. The best way we can help patients is to be science-led and share this passion with the scientific, healthcare and business communities of the UK.”

Shares of AstraZeneca modestly dipped 0.027% on Thursday afternoon, and trade at 7,313p. 5/12/19 12:17BST.

AstraZeneca have had a stellar 2019, as the firm firstly reported a 12% rise in first half year sales back in July, which saw shares in green.

First-half product sales rose 12% to $11,183 million, which saw shares spike by over 6% on the back of new medication sales.

In November, the firm once again hit the bullseye. The FTSE100 listed firm won the approval for Roxadustat in China, and also won access to the Japanese market for the treatment of dialysis patients with anaemia from chronic kidney disease.

Additionally, shareholders got further excitement when the firm mentioned a a collaboration deal with US based FibroGen (NASDAQ: FGEN) for Roxadustat, saying that “pooled efficacy analyses from Phase III programme showed that roxadustat did not increase the risk of cardiovascular events”.

Today, shareholders have got the icing on the cake for 2019, as the firm confirmed with Merck & Co (NYSE: MRK) that it had received marketing authorization from China’s National Medical Products Administration for their Lynparza drug.

The approval in China is based off the successful results from the III SOLO-1 trial, which showed that Lynparza significantly reduced the risk of disease progression or death by 70% in women with BRCA-mutated advanced ovarian cancer following response to platinum-based chemotherapy.

The company said Lynparza, which is being jointly developed and commercialised by AstraZeneca and Merck, is currently approved in 65 countries, including the EU, US and Japan. China has the highest prevalence of ovarian cancer globally, with more than 52,000 new cases diagnosed in 2018, the company noted.

Roy Baynes, senior vice president and head of Global Clinical Development, chief medical officer, MSD Research Laboratories, said: “Today’s approval of Lynparza reinforces the importance of patients knowing their BRCA mutation status at diagnosis.

“We are proud to provide a new option for the treatment of this devastating disease in China, and we will continue to collaborate with the Chinese government and healthcare organizations to provide Lynparza to patients who need it as quickly as possible.

In November, AstraZeneca said it would create a new global research & development centre and an artificial intelligence innovation centre, both in Shanghai, and a “first-of-its-kind” healthcare industrial fund with China International Capital Corp Ltd (HKG: 3908).

Albion Enterprise VCT shares stumble despite strong half update

Ishen Patel
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0
Albion Enterprise VCT shares stumble despite strong half update

Albion Enterprise VCT PLC (LON: AAEV) have seen their shares stumble despite posting an impressive figures in their half update.

Albion Enterprise VCT PLC is a Venture Capital Trust and the investment objective of the Company is to provide investors with a regular and predictable source of income, combined with the prospect of longer term capital growth.

Shares of Albion Enterprise VCT dipped 0.88% to 112p. 5/12/19 11:59BST.

The investment company reported NAV per share as at September 30 of 119.42 pence, up from 112.12p a year prior and 117.76p as at March 31.

The growth was helped by uplifts in value of Oviva AG and Koru Kids, the company noted. Shareholders will be pleased however, as the firm maintained its interim payout of 3p per share.

During the period, the company’s unrealised and realised gains was £3.9 million, it said, while £2.7 million was invested in new and existing companies.

“Significant” follow on investments included £606,000 in Proveca, for the reformulation of paediatric medicines, and £221,000 in Koru Kids, which provides an online marketplace connecting parents and nannies.

“We as a board see the portfolio as being well balanced across a variety of growth sectors,” said Chair Maxwell Packe.

“There is a strong pipeline of investments, as well as a number of existing businesses having the potential to continue to deliver positive returns,” added Packe.

Many VCT’s have updated the market, and firms have not been performing as well as Albion Enterprise.

Seneca Global Income & Growth Trust PLC have given shareholders a modest update, alluded to the tough political and economic conditions combined with the “volatility of underlying financial markets”.

Additionally, FTSE250 listed Monks Investment Trust (LON: MNKS) gave shareholders an update, which entailed a similar story to the one outlined by Seneca. Monk’s revealed they had underperformed in the market, however did allude to tough market conditions coupled with political and economic uncertainty.

The uncertain nature of Brexit negotiations has weighed upon the finance and investment scene, as Moody’s lowered the banking outlook from stable to negative on Tuesday, so shareholders should remain optimistic from the update given by Albion.

IG shares dip on bruised interim update

Ishen Patel
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0
IG shares dip on bruised interim update

IG Group Holdings plc (LON: IGG) have seen their shares dip on Thursday morning after the firm reported modest interim revenues.

IG Group is a UK-based company providing trading in financial derivatives such as contracts for difference and financial spread betting and, as of 2014, stockbroking to retail traders. While the majority of the company’s activities are based in the UK, the company has expanded internationally.

Shares of IG Group dipped 4.03% to 661p. 5/12/19 11:45BST.

The FTSE250 listed firm said it expects net trading revenue in the six months to November 30 to total around £250 million compared to the £251 million estimate it made a year ago.

The company noted that it has continued to build the size and quality of the active client base in its core markets, which is the key driver of revenue growth in the medium-term.

IG Group said revenue in its core markets in the first half is expected to be around £210 million, 6% lower than in the same period of the year before, which was reflected in the stock price movement this morning.

The company have seen a drop in client numbers over the past year, as regulators have lobbied to get tighter rules on trading products such as contracts for differences.

In 2018, the European regulator placed restrictions on marketing, distribution or sale of CFDs to retail clients, in order to protect investors from losing more money than they put in, restrict the use of leverage and incentives, and ensure that risk warnings are provided.

IG is set to report its half year results on January 21 next year.

Competitor Numis Securities saw their shares in green, despite the firm reporting a 61% plunge in pretax from to £12.4 million from £31.6 million the year before.

IG have previously alluded to Brexit complications as a obstacle to successful trading and followed the same lines as rival AJ Bell who said earlier in the year that negative market movements and political uncertainties led to a disappointing quarterly update.

The reflection on the overall banking and finance sector was not pleasing, and shareholders will be worried. The speculation from Moody’s Moody’s saw the lowering of the UK banking sector outlook from stable to negative.

M&G suspend dealings in direct property fund leading to shares dipping

Ishen Patel
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0
M&G suspend dealings in direct property fund leading to shares dipping

M&G PLC (LON: MNG) have suspended dealings in their direct property fund, which has seen their shares in red.

M&G plc is a savings and investment company with a long-term outlook, bringing the M&G Investments business together under one roof with the UK and European parts of Prudential (LON: PRU).

Shares of M&G trade at 218p, dipping 3.02% on Thursday morning. 5/12/19 11:28BST.

The firm has more than £2.5 billion in assets under management. However, the suspension made was to stem the tide of investor redemptions.

Investors will not be able to buy or sell units in the M&G Property Portfolio fund.

M&G alluded to political and economic uncertainties hindering business, and this has made operating very tough.

The FTSE100 listed company said “unusually high and sustained outflows” have forced the temporary suspension of the funds, blaming Brexit uncertainty and the UK retail sector’s woes for making it difficult to sell commercial property. The fund invests in 90 commercial properties across the UK including retail parks and offices.

“The suspension will allow the fund managers time to raise cash levels to pay redemptions, whilst ensuring that asset sales are achieved at market prices and investors in the Fund are safeguarded,” M&G said.

Cash levels in the M&G Property find are the one of the lowest in the sector, at a rate just above 10% – which will worry shareholders.

Jonathan Miller, head of fund research at Morningstar says: “While bricks and mortar property acts as a portfolio diversifier that also provides an income, we’ve continually flagged there’s a mismatch between its illiquid structure and a daily dealing fund.

“There hasn’t been enough of a buffer here, nor the ability to swiftly sell assets to meet redemptions. Even though M&G is waiving part of the management fee during the suspension period, we can’t be far away from the regulator stepping in regarding issues in this space.”

M&G will waive 30% of its annual charge while the fund is suspended to reflect the fact that investors will not be able to access their money. The suspension will be monitored daily and reviewed every 28 days. M&G said the fund will re-open “as soon as liquidity levels have been sufficiently rebuilt”.

Adrian Lowcock, head of personal investing at Willis Owen says the fee waiver is an appropriate gesture but adds: “Of course this will, once again, raise the question of whether illiquid assets should be held in an open-ended structure. The open-ended structure simply does not work if the investors in it do not share the same long-term perspective. This should serve as a reminder to investors to only consider open-ended property funds if they are unlikely to need access to their money quickly.”

Yesterday, a notable update from Monks Investment Trust saw a huge underperformance reported to shareholders, the firm alluded in similar fashion to M&G about tough market conditions and Brexit complications. Certainly, it seems that the whole of the UK finance and business is suffering however shareholders of M&G will be concerned about the gloomy updated leading to shares dipping.
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