Dashing through the snow… as Christmas breaks the bank
A study has found that 43% of British shoppers expect to spend more than their monthly pay cheque over the festive season.
Indeed, 68% of British people said that they intend to use credit cards to fund the additional cost of Christmas, a survey of 1,000 adults in the UK conducted by Creditfix.co.uk found.
An additional 24% said that they have more than one credit card to cover Christmas costs.
According to the survey, 62% of Brits said that the biggest cost over the festive period comes from purchasing gifts for loved ones.
Last month, we took a look at the adverts released by retailers this Christmas to encourage shopping over the festive season.
John Lewis & Partners, together with Waitrose & Partners, released their Christmas advert featuring the character #ExcitableEdgar.
Additionally, Marks & Spencer (LON:MKS), Sainsbury’s (LON:SBRY), Tesco (LON:TSCO) and McDonald’s (NYSE:MCD) also released adverts to encourage consumers to get into the festive spirit.
Meanwhile, respondents also said that hosting Christmas dinner, attending social events such as Christmas markets and buying decorations also break the bank.
The survey found that 16% are still paying off debt from last year’s Christmas period.
“It is difficult to anticipate the true cost of Christmas, especially when we all want to treat our loved ones to something special. This is even more the case considering the cost of gifts and festive experiences, such as Christmas markets, which seem to get more expensive every year,” Taylor Flynn, head of marketing at Creditfix, commented on the data.
“There are resources available to Brits that can help with budgeting over the festive season and handling credit card bills in the new year, easing financial strain. So, Brits can spend less time worrying about money and more time enjoying the holidays,” Taylor Flynn continued.
Ted Baker shares crash following balance sheet errors
Shareholders of Ted Baker plc (LON: TED) have seen their shares crash following announcements of a £25 million balance sheet error.
Ted Baker plc is a British luxury clothing retail company, and is a stable name on the British high street.
Shares in Ted Baker crashed 9.12% to 361p after the announcement. 2/12/19 11:18BST.
In the retail and clothing sector, rivals such as Superdry and Sosandar have seen their shares slip in similar fashion following modest updates.The firm warned investors that it will take a £25 million hate, after it overstated the value of inventory on its balance sheet.
The retailer has appointed Freshfields Druckhaus Deringer to investigate the issue and told shareholders that it estimates an impact on the value of the stock of between £20 million and £25 million.
The interim period has not been pleasant for Ted Baker, as the firm reported a half year loss at the start of October.
The Magic Circle law firm will appoint independent accountants to undertake a “comprehensive review” of the issue, Ted Baker said.
“Ted Baker is committed to ensuring the independent review is completed in an efficient and transparent manner and will update the market as appropriate,” Ted Baker said in a statement.
“Whilst the review is ongoing, the company will not comment further.”
Liberum called the discovery “less than ideal”.
“In our view, it is indicative to some degree of the very early stage work that the new and highly regarded CFO, Rachel Osborne, is undertaking,” the broker said.
“The board believes that any adjustment to inventory value will have no impact on the year-end cash balance and will relate to prior years. We keep our recommendation under review as there are further moving parts that may need consideration, which naturally lead to some additional questions.”
This issue will not come at a pleasant time for newly appointed Rachel Osnorne, who was appointed finance head just a few weeks back.
The issue was mentioned in Ted Baker’s last annual report from information provided by auditors KPMG.
AJ Bell’s investment director Russ Mould said it appeared that “Ted Baker has found another banana to slip up on”.
“Discovering that the value of inventory on its balance sheet has been overstated is a huge blunder on its behalf,” he said.
“It suggests that the business hasn’t got a grip on its numbers which is a bit worrying considering that new chief executive Lindsay Page used to be the finance director.
“Appointing a law firm and the intention to bring in independent accountants will raise questions about whether more serious problems are bubbling under the surface at the business.”
The company is due to publish its latest trading next week.
Fresnillo shares dip following modest 2019 production estimates
Fresnillo Plc (LON: FRES) have seen their shares dip, after the firm gave shareholders a disappointing update on Monday morning.
Fresnillo plc is a Mexican-based precious metals mining company incorporated in the United Kingdom and headquartered in Mexico City. It is the world’s largest producer of silver from ore and Mexico’s second-largest gold miner.
Shares of Fresnillo dipped 3.43% after the modest announcement, and trade at 557p. 2/12/19 11:04BST.
Fresnillo, have seen a trading slump over the last few weeks and shares have been volatile. At the end of October, the firm reported low output at the end of its third quarter, which saw shares in red.
Today, the FTSE100 listed miner announced expectations that its 2019 production guidance would be at the lower end of their target.
Fresnillo follow a string of firms in the industry who have seen their guidances cut, and noteworthy names such as Hochschild Mining and Antofagasta recently slashed their expectations.
Additionally, the firm said that its objectives going forward were to focus on stabilizing production, improving operational performance and delivery projects on time.
Ahead of its capital markets day in London on Monday, Fresnillo set its 2019 production guidance at the bottom of its previously guidance range.
The miner said it expects to produce 885,000 ounces of gold and 55 million ounces of silver. In October, Fresnillo had guided for 880,000 ounces to 910,000 ounces of gold for 2019, and for between 55 million ounces and 58 million ounces of silver. However, it had said at the time that it expected 2019 production to be towards the lower end of each range.
The firm alluded to the planned Noche Buena mine closure and lower production from the Herradura site, which led to 2019 capital expenditure forecasts of around $585 million.
“Our priorities for 2020 are to stabilise production, and to unlock the full potential of our current mines and projects. We will focus on operational improvement and efficiency, while de-risking and advancing our development pipeline, most notably the new Juanicipio mine,” said Chief Executive Octavio Alvidrez.
“We are confident that with the proactive measures put in place at our mines, together with our consistent, focused strategy, we will deliver on these priorities and that we will continue to create sustained value for stakeholders in the long-term, balancing growth with returns and maintaining a solid financial position,” Alvidrez added.
For 2020, gold production is predicted at 785,000 ounces and silver at 66 million ounces. Gold output is estimated at 665,00 ounces and silver at 71 million ounces for 2022.
The estimates for future is based upon current geological models and anticipated production improvements, Fresnillo said.
Whilst, Fresnillo have seen a slump in the market gold mining competitor Serabi Gold have seen their shares climb as they gave shareholders an impressive update.
Ocado shares sink after a positive week
Ocado Group PLC (LON: OCDO) have seen their shares sink on Monday morning, after the firm announced a bond issue following a week of positive news.
Ocado had seen its shares in green over the last few days, as the firm had reported that it was set to open a robotic warehouse in Bristol.
Additionally, the firm saw its share spike further following an announcement that the firm had struck a deal with Aeon to implement its robotic warehouse.
However, shareholders have seen their shares sink as the firm announced its plans to fund these projects.
The FTSE 100 listed firm announced announced a £500m bond issue as it seeks cash to fund tech arm Ocado Solutions’ commitments.
The company added that the guaranteed senior unsecured convertible bonds, which are due in 2025 re expected to carry a coupon of between 0.75 per cent and 1.25 per cent a year.
Ocado uses robot technology in its customer fulfilment centres (CFCs) to automate many processes.
It said it would supply Aeon with CFCs and end-to-end software applications to serve millions of customers across Japan.
The full terms of the deal with Aeon have not be disclosed as of yet, but it seems that Ocado have had to find a way to raise funds for these projects.
The offering comes after Ocado had been in the news having agreed deals with rivals such as US firm Kroger and high street retailer Marks and Spencer.
On Ocado Retail, the group also announced that it expected revenue growth of 10-11 per cent, with growth in orders including those for Ocado Zoom slightly higher than retail revenue growth.
Ocado have not been hit by the apparent slump that competitors such as Marks and Spencer and Sainsbury have been hit by, however after a positive week for the online grocery retailer this will leave a sour taste.
Shares of Ocado sunk 7.4% on Monday morning, trading at 1,228p. 2/12/19 10:53BST.
The challenges faced by SMEs
Four in ten SME owners believe that they are currently going through the most unstable period they’ve ever experienced as a business owner.
The findings were revealed in a study of 500 business owners, commissioned by Xero, as part of a report which explores the future of small businesses.
According to the report, 54% of owners believe that the biggest threat to small businesses is receiving payments late.
Tax rates came next, and the prevailing uncertainty surrounding Brexit came third.
The nation was supposed to depart from the European Union at the end of October, but it was granted yet another extension to its departure deadline.
Uncertainty prevails among the UK’s political climate as parties prepare for a general election later on this month.
The report found that other challenges include the cost of staff recruitment, maintaining or increasing levels of productivity and cyber attacks.
“The ways small businesses work now are dramatically different from the 1980s when the first personal computers arrived,” Gary Turner, MD and co-founder of Xero, said.
“But business needs to adapt to greater changes coming their way,” Gary Turner continued.
“New technologies will hasten a far greater consciousness towards the biggest killer of small businesses.”
“Cash flow problems will decline as instant payment technologies take root as a cultural norm.”
Gerd Leonard, business futurist and contributor to the report, added: “Humanity will change more in the next 20 years than in the previous 300.”
“We will see the biggest technological transformation in human history – impacting where, how and why we work,” Gerd Leonard said.
“Automation is reducing the need for humans to undertake routine tasks and the world of work is heading towards a dramatic reset.”
“Everything we assume about work, jobs, training and education is being challenged by exponential scientific and technological progress.”
“Whether you’re a small business owner, an accountant, bookkeeper or advisor, these emerging trends will affect you very soon.”
Botswana Diamonds and Vast Resources agree deal for Zimbabwe operations
Botswana Diamonds PLC (LON: BOD) and Vast Resources PLC (LON: VAST) have announced a deal to replace the Heritage concession agreement between the two firms.
Botswana Diamonds PLC is a diamond exploration and project development company that holds exploration licenses in Botswana and South Africa.
Vast Resources is focussed on the rapid transformation from exploration company to mining company and delivering multiple revenue streams.
This will be driven by the advancement of its two primary value drivers, the Baita Plai Polymetallic Mine in Romania, and the Chiadzwa Community Concession in Zimbabwe, into near term production.
As a result of the announcement, both firms saw their shares in red.Shares of Botswana Diamonds fell 1.7% to trade at 0.81p, whilst Vast Resources slipped 3.52% to 0.32p. 29/11/19 13:43BST.
In October 2018, Botswana Diamonds concluded an agreement with Vast to develop Vast’s Heritage concessions in Zimbabwe’s Marange diamond fields. At that time, it was decided that a separate agreement would be reached covering joint development of diamond properties outside the Marange fields.
After this, Vast entered a joint venture with Chiadzwa Mineral Resources Private Ltd which covered the Chiadzwa Community diamond concession, also located in the Marange fields.
A new company, Katanga Mining Private Ltd (TSE: KAT), was created in order to operate the Chiadzwa joint venture. Katanga is intended to conclude a joint venture agreement with Zimbabwe Consolidated Diamond Co for the exploration and mining of the Chiadzwa concession and the marketing of diamonds from the operation.
The new agreement outlines the formation of a new company which holds the interest of Vast Resources,the Chiadzwa Community joint venture and Katanga.
Additionally, the agreement expresses the intent to issue new shares representing 2.5% of the newly formed company to Botswana Diamonds once the detailed agreement between Katanga and Zimbabwe Consolidated Diamond Co becomes effective.
Botswana Diamonds Chair John Teeling said: “Zimbabwe is opening up to investment. The country is rich in resources and has significant diamond potential. Vast Resources is at an advanced stage in finalising an agreement with the Central Authorities on a package of ground in the Chiadzwa / Marange area. This is a revised package from that on which Botswana Diamonds and Vast Resources had previously agreed to cooperate. In the light of this development, our previous agreement with Vast has been revised on new terms acceptable to the board.
“We look forward to the diamond agreement being concluded and to work starting on what is highly prospective ground. Botswana Diamonds is also studying additional opportunities in Zimbabwe.”
In the mineral and mining sector, there have been updates as firms have been busy. Antofagasta (LON: ANTO) and Hochschild Mining (LON: HOC) have seen their shares in red after their respective announcements.
Firms in the industry such as Thor Mining (LON: THR) Amur Minerals (LON: AMC) who made share placing announcements a fortnight ago, in order to raise funds for new discovery operations.
Bahamas Petroleum shares jump following confident expectations
Bahamas Petroleum Company PLC (LON: BPC) have seen their shares jump on Friday after the firm said it was on track for 2020.
The Bahamas Petroleum Company was formed to invest in an offshore oil exploration programme in licence areas covering approximately 16,000 sq km (4 million acres) in the territorial waters and maritime Exclusive Economic Zone (EEZ) of The Bahamas.
The Group holds 100% interests through wholly owned subsidiaries in five Exploration Licenses granted by the Government of the Commonwealth of The Bahamas, and has applications for an additional 5 licenses.
Shares of Bahamas Petroleum jumped 0.63% to 2p. 29/11/19 13:25BST.
In the industry, Global Petroleum (LON: GBP) have seen their shares spike this week following success in their Namibian operations.
Nostrum Oil and Gas (LON: NOG) and Chariot Oil & Gas (LON: CHAR) have seen their shares dip following modest updates.
Earlier this year, Bahamas Petroleum saw its shares rally following an announcement detailing a licence extension.
The mutual fund will exclusively hold Bahamas Petroleum shares and is intended “to provide Bahamians with an opportunity to invest in the company’s nationally significant project”. Leno Corporate Services Ltd has been chosen to act as adviser for the mutual fund’s creation.
“Details of the proposed mutual fund, including the terms, how investors’ interests in [Bahamas Petroleum] would be reflected, eligibility for, anticipated timeframe and manner of subscription, will be confirmed in the coming weeks,” the company said.
In addition, the firm has made progress in its environment authorization in the Bahamas, which will please shareholders.
Chief Executive Simon Potter said: “The timely receipt of requisite approvals from the government means we have been able to commence a critical piece of preparatory work ahead of drilling activities: the collection of a comprehensive range of samples necessary to demonstrate the current ambient conditions at the proposed drill site. This will allow a direct assessment of any potential impact from our planned activities, noting that those activities by their very nature will be for a short, temporary duration, close to the international maritime border with Cuba, in a location which is an active marine thoroughfare serving both the existing petroleum facilities in the Bahamas as well as the entire region. We remain on track to see drilling commence on schedule.”
HSBC and Santander issue customer refunds following regulatory breaches
Both Santander (LON: BNC) and HSBC (LON: HSBA) have been ordered to issue refunds to customers after the global banks broke watchdog orders.
Shares of Santander trade at 304p (-0.066%), whilst HSBC shares are trading at 578p. (-0.33%) 29/11/19 13:10BST.
Both banks have experienced different trading periods over the last few months.
HSBC fell victim to the global banking decline in a similar fashion to Lloyds (LON: LLOY) where both firms experienced a decline in third quarter profits.
Santander however, have seen shares rise after the firm invested into trade and foreign exchange facility Ebury.
Britain’s competition watchdog said that the firms had broke a legal order that ensures customers receive text alerts before banks before banks charge them for going into an unarranged overdraft.
HSBC was found to have broken a part of the Competition and Market Authority’s (CMA) Retail Banking Market Investigation Order twice and is refunding 8 million pounds to 115,000 customers, the CMA said on Friday.
Santander broke the order six times and has agreed to issue a refund, but has yet to confirm the number of customers affected and how much it will refund, the watchdog added.
The CMA told the market that the breaches first occurred in February 2018, and the refunds paid by the banks will cover all fees incurred by customers.
The watchdog said it was also directing HSBC and Santander to do an independent check of their compliance with the legal order between February 2018 and December 2019, to send the text alerts on time.
The order came into full force in 2018m after the CMA identified a number of problems in personal current accounts and small- and medium-sized enterprise banking markets.
Both these banks will be put into the bad media spotlight following the investigation, and certainly the firms will have to recover in order to ensure that the media puts them back in favorable light. Notably, the CEO of Westpac Banking Corp in Australia (ASX: WBC) was forced to resign following a scandal allegation involving money laundering.Countrywide announce sale of Lamber Smith Hampton Business
In an announcement made on Friday, Countrywide PLC (LON: CWD) have said they will sell their Lambert Smith Hampton Business.
Countrywide is headquartered in Chelmsford, Essex. It operates over 850 estate agents and letting offices across the country.
It is the United Kingdom’s largest property group, including residential property surveying, a collaboration of estate agents, and corporate services
The firm made the announcement, and the deal is expected to be valued at £38 million in cash.
Shares of Countrywide rallied on the announcement by 15.88% and now trade at 5p. 29/11/19 12:52BST.
Countrywide have had a turbulent 2019, as the firm reported a widened loss in March which caused their shares to crash.
However, shareholders seem optimistic on the deal announced on Friday, as shares moved into green.
The UK estate agent also announced a share consolidation on the basis of 1 new share for every 50 existing shares. The reduction in the number of overall issued shares is expected to improve market liquidity by reducing the volatility and spread.
Countrywide will sell Lambert Smith Hampton to John Bengt Moeller, who is chair of Great Global Holdings Ltd, a holding company for several UK and international companies.
Both the sale and share consolidation will be discussed at the upcoming annual general meeting. The verdict is expected to be announced before the year ends.
“The sale of the Lambert Smith Hampton commercial business strengthens the group. Once completed, we believe that the group will be in a more advantageous position in our core residential market. The group remains on course to deliver a full year result in line with the board’s expectations,” said Executive Chair Peter Long.
The sale itself is expected to improve Countrywide’s capital structure, and proceeds from the sale will allow the group to materially reduce its net debt.
In the real estate and property industry, competitors such as Sirius Real Estate (LON: SRE) have seen their shares rise following increased dividend payouts.
Additionally, the property market has been busy as REIT Real Estate Investors plc (LON: RLE) announced it had changed its variable interest rate facility.
Finally, GCP Student Living (LON: DIGS) and Rightmove (LON: RMV) have given updates as the UK property market has been hit by external shocks.