Britvic shares climb despite annual profit plunge

Ishen Patel
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Britvic shares climb despite annual profit plunge

Britvic Plc (LON: BVIC) have seen their shares climb despite a 25% plunge in annual profit, as the firm alluded to a write down of French assets.

Britvic Plc is a British drinks manufacturer having a portfolio of brands including Robinsons, Tango, J2O, drench, MiWadi, Ballygowan, Teisseire, Fruité, Maguary and DaFruta. I

In addition, in Great Britain and Ireland, the company produces and sells a number of PepsiCo’s famous soft drinks brands, including Pepsi, 7UP, SoBe and Mountain Dew, under exclusive agreements with PepsiCo (NASDAQ: PEP).

Shares of Britvic climbed 0.81% to 993p. 27/11/19 11:10BST.

Profit before tax sank 24.3 per cent to £110.3 million for the year to the end of September after Britvic struggled with a new law in France and wrote down £31.2 million in local assets.

Additionally, revenue climbed 2.8% year on year to £1.55 billion, and the firm also cut net debt by £9.4 million to £575.5 million.

The FTSE250 (INDEXFTSE: MCX) listed firm saw their basic earnings per share sink too 30.6p.

Britvic blamed its profit slump on “a challenging year” in France following the introduction of a law designed to force companies to improve suppliers’ pay.

This in turn has caused prices to increase for Britvic, which contributed to falling sales.

The firm also wrote down £31.2 million in value for three juice manufacturing plants as it looks to sell these to rival Refresco.

Chief Executive Simon Litherland said “I am pleased to report that Britvic has once again delivered a strong performance, with good momentum in our key brands and categories. In 2019 we have increased revenue, adjusted margin and earnings before interest and taxes, as well as significantly improving free cashflow generation”.

“Our commercial execution, innovation agenda and revenue management continue to deliver results. Our transformational business capability programme is now complete – and importantly forms a key part of our broader commitment to building a more flexible and sustainable business model going forward”.

“Building on this strong platform, I am confident that Britvic is well placed to capitalise on the future growth opportunities in the years ahead. While we anticipate conditions to remain challenging, we fully expect that we will make further progress in 2020”.

Chris Daly, chief executive of the Chartered Institute of Marketing, credited the firm’s refreshed marketing strategy for Robinsons with pushing UK revenue higher.

“The FTSE 250 company has a refreshed strategy focusing on key categories for growth including the launch of new products in the adult soft drink market,” he added, citing a marketing push for Pepsi Max.

“Although Coca-Cola (LON: CCH) has long been synonymous with the festive period, retailers may yet be persuaded to give Britvic’s cola brand a larger share of shelf space.”

HSBC private banking sees double digit asset and revenue growth

Ishen Patel
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HSBC private banking sees double digit asset and revenue growth

The private banking division of HSBC (LON: HSBA) have given shareholders a positive update, as the firm saw double digit asset and revenue growth spawned from strong Asian business.

Shares of HSBC are trading at 587p (+0.81%). 27/11/19 10:50BST.

The firm said that they are aggressively pursuing double digit growth in client assets and revenues, following a surge in Asian wealth, according to Reuters.

Antonio Simoes, the divisions chief executive said that the bank aims to increase its presence in the Asian markets, with an emphasis on China.

“The strategy to achieve double-digit asset and revenue growth is working,” said Simoes, who assumed his role in January. “And as part of that, Asia is by far the region that is growing the most.”

The global banking sector has appeared to be in decline, as both HSBC and Lloyd’s (LON: LLOY) saw declines in their third quarter profits.

Additionally, Deutsche Bank (ETR: DBK) have also fallen victim to tough trading conditions, and reported a third quarter loss.

The FTSE100 (INDEXFTSE: UKX) listed global bank however does seem to have made a recovery in its private banking division which will appease shareholders.

In Asia, there has been higher economic growth, rising wages and a thriving business enterprise mindset which has allowed HSBC to grow, following both operational and structural changes in their global strategy.

Assets managed by HSBC’s private banking unit rose 9.4% in the first nine months of 2019 to $338 billion (£263 billion), while revenue rose 4.6% versus the same period a year earlier to $1.4 billion. The unit is the smallest contributor to group revenue at 3%.

Asia accounts for 42% of HSBC’s total private banking assets, making it the single largest market and accounts for the biggest share of the banks overall revenue.

Despite political tensions and ongoing feud in Hong Kong, HSBC have said that they will not let this battle of political and geographical sovereignty affect business.

“Our third-quarter results showed very resilient performance for Hong Kong against the backdrop of what’s happening,” he said. “From a private banking perspective, we continue to have targets for Hong Kong that are very ambitious.”

HSBC’s private banking growth plans come as interim CEO Noel Quinn reviews the lender’s worldwide businesses as part of an audition for the full-time role under Chairman Mark Tucker.

“Going forward, we want to be bigger in onshore China and we are looking at how to do that as regulations change,” Simoes said.

“If you take a 10-year view, we will need to be bigger in onshore China.”

AFI Development residential sales affected by ‘challenging’ market

Jamie Gordon
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AFI Development residential sales affected by ‘challenging’ market
Russia-focused real estate development company AFI Development (LON: AFRB) posted underwhelming results for the first nine months of the year, in what it described as ‘challenging market conditions’. The Company were able to report some areas of progress. For instance, they celebrated year-on-year revenue growth for the nine month period, from $207.1 million to $254.4 million, alongside a narrowing of total expenses from $137.2 million, to $119.1 million. However, this progress was somewhat jolted by the ‘volatile’ Russian economy, and in turn, the Company saw total profit for the period narrow from $96.6 million to $77.1 million on-year for the same period. Concurrently, basic and diluted EPS fell from 9.21 to 7.34 cents. Elsewhere in the property sector; Schroder Real Estate Investment Trust (LON: SREI) adjusted its strategy, Land Securities Group plc (LON: LAND) posted underwhelming financial results, Shaftesbury plc (LON: SHB) booked robust leasing activity and Berkeley Group Holdings Ltd (LON: BKG) restated its confidence in the South-East market.

AFI Development comments

Eli Avrahampour, Chairman, offered the following response to the Company’s update,

“I report that, despite a slowdown in residential sales in the third quarter, we delivered another solid set of results for the first nine months of 2019.”

“The positive momentum in our revenues and gross profit is largely attributable to the recognition of residential pre-sales and the stable performance of the yielding portfolio.”

“Looking ahead, the pace of sales across our residential portfolio remains subject to volatile market conditions with continuing uncertainty around the outlook for the Russian economy and, in turn, its real estate sector.”

Investor notes

The Company’s shares dipped 0.68% or 0.002 USD to 0.29 USD per share 26/11/19 16:30 GMT. AFI Development’s p/e ratio is 0.10 and their dividend yield is currently unavailable. The Group’s market cap stands at $308.02 million.

Schroder REIT adjusts strategy in challenging market

Jamie Gordon
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2
Schroder REIT adjusts strategy in challenging market
Schroder Real Estate Investment Trust (LON: SREI) announced on Tuesday that they had been disposing their lower yield assets during the six months to September 30th 2019, against a backdrop of decreased NAV returns and a ‘challenging market’. The Group began the update by telling shareholders that they had disposed of £45 million worth of assets during and post period end. Thsi reflected a a 15% net premium to the valuation at the start of the period, which takes total disposals since January 1st to £95 million. The Company then spoke on refinancing, which capitalised on, “low long-term interest rates reducing the cost of the long term debt from 4.4% to 2.5% and extending the term from 8.5 years to an average 16.5 years”. This interest saving of £2.5 million per annum has been paid to shareholders in the form of a 19% dividend rise beginning from the 1st of October 2019. Despite this positive start, the Company ran us through its somewhat deflated fundamentals. NAV of £354.3 million or 68.3 pps represented a decrease of 0.6% during the six month period, while NAV returns of 0.5% was a notable contraction from 3.0% for the same period a year earlier. However, Schroder REIT was happy to report progress in its portfolio. It stated that 96% of its portfolio is now located in ‘Winning Cities’ and during the period, it completed 26 new lettings, rent reviews and renewals for an additional £1.1 million of rent above the previous level. Elsewhere in the property sector; Land Securities Group plc (LON: LAND) posted underwhelming financial results, Shaftesbury plc (LON: SHB) booked robust leasing activity, Berkeley Group Holdings Ltd (LON: BKG) restated its confidence in the South-East market and Redrow plc (LON: RDW) posted strong results and completions.

Schroder REIT comments

Speaking on the update, Lorraine Baldry, Chairman of the Board, said, “This has been another busy period for the Company with a focus on activity that has improved shareholder total returns and strengthened the balance sheet. This should support future returns during a period of greater market uncertainty. Whilst the disposals of lower yielding assets will result in a temporary decline in net income prior to reinvestment, the Board is comfortable with this approach as the Company has approximately £90 million of funding to take advantage of more attractively priced investment opportunities supporting the delivery of a fully covered, sustainable and growing dividend policy.” Duncan Owen, Global Head of Schroder Real Estate, added, “The activity during the interim period leaves the Company in a strong position with a low borrowing ratio and operational flexibility. There is additional investment capacity of approximately £90 million ahead of an expected market correction. Selectively deploying this capital over the course of 2020 into Winning Cities at higher yields should mean the Company is well placed to deliver continued, sustainable growth in net income.”

Investor notes

Following the update, the Company’s shares rallied 1.31% or 0.70p to 54.10p per share 26/11/19 15:45 GMT. The Group’s p/e ratio is 17.23, their dividend yield stands at 4.71%.

IMImobile rallies on 27% earnings hike

Jamie Gordon
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IMImobile rallies on 27% earnings hike
Cloud communications software and solutions provider IMImobile PLC (LON: IMO) reported strong financial results for the six months ended September 30th, alongside a period of client wins and acquisitions. The Company began by stating that its performance was in line with the Board’s expectations, with revenue jumping 24% to £83.0 million. This sales progress led a 27% surge in adjusted EBITDA to £9.8 million and adjusted profit after tax rising 12% to £5.2 million. The only downside to today’s fundamentals was the Group’s net debt, which narrowed from £7.5 million to £21.8 million between the first and second halves of the financial year.

Operationally, during the period, IMImobile announced the acquisition of 3Cinteractive Corp, new contract wins across all regions and new launches, “utilising new richer messaging channels, Apple Business Chat, RCS and WhatsApp Business”.

The Company’s shareholders fared similarly well, with adjusted diluted EPS up 5% year-on-year for the same period, to 6.9p. Other positive financial results announced on Tuesday came from; IG Design Group PLC (LON: IGR) celebrating a profit bounce, CRH PLC (LON: CRH) posted a strong third quarter and Pets at Home (LON:PETS) celebrated a productive first half.

IMImobile comments

Jay Patel, Chief Executive Officer, stated,

“89% of companies are now competing primarily on the basis of customer experience, meaning demand for customer communication software has never been greater. Our enterprise-grade offering, and comprehensive set of applications addresses the needs of the largest complex global organisations. With the introduction of new, richer communication channels, we are excited about the possibilities for dramatically improving customer experience.”

“We have made strong organic progress throughout the first half of the year and expect the positive momentum to continue through to the year end and beyond. The acquisition of 3Cinteractive provides a solid foundation in the US and we are very confident of success in this market. The outlook for the year is positive and we are trading in line with Board expectations.”

Investor notes

The Company’s shares rallied 5.59% or 17.00p to 321.00p per share 26/11/19 15:15 GMT. The Group’s p/e ratio is 18.20, their dividend yield is unavailable, and their market cap is £238.50 million.

SkinBioTherapeutics shares fall following widened loss reports

Ishen Patel
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1
SkinBioTherapeutics shares fall following widened loss reports

SkinBioTherapeutics PLC (LON: SBTX) have seen their shares fall on Tuesday afternoon after the firm reported a widening on their annual loss.

SkinBioTherapeutics are a life science company focused on skin health.

The SkinBioTherapeutics’ platform applies research discoveries made on the activities of lysates derived from probiotic bacteria when applied to skin. The Company has shown that the SkinBiotix® platform can improve the barrier effect of skin models, improve repair and reduce bacterial load.

Shares fell 3.87% following the announcement and trade at 16p. 26/11/19 15:02BST.

The firm said it will now focus on five channels for development, encompassing both existing and new technology.

The widened loss for financial 2019 was caused by increased research and development spending, but the firm have reassured shareholders that there will be long term benefits.

The firm focused on skin health said it will develop its core technology SkinBiotix, which has secured an extended agreement with Croda International PLC (LON: CRDA) for use in cosmetic applications.

Other technologies in focus include AxisBiotix, MediBiotix, CleanBiotix and PharmaBiotix.

For the annual financial year ending June 30, the firm made a pretax loss of £1.4 billion widened from the £941,451 figure a year ago.

Additionally, no revenue was generated in either financial period, which may concern shareholders.

Research and development expenditure increased from £416,000 to £708,000 omprising development work with the University of Manchester, ongoing manufacture, scale-up and formulation work as well as the costs for the cosmetic human study.

However, this does show that SkinBioTherapeutics are keen to get the best quality product out and be a market leader.

Stuart Ashman, chief executive of SkinBioTherapeutics, said: “This has been an exciting year for the company.”

“The beginning of the year was about proving the sound scientific foundation of our SkinBiotix technology and the positive effects of it on the barrier function of the skin. The successful results drove commercialisation discussions forward which resulted in our recent agreement with the world leader in skincare actives for the cosmetic industry, Croda International PLC. We will continue to seek further commercial opportunities and build the development pipeline with new programmes in eczema and psoriasis during 2020,” Ashman added.

The pharmaceuticals industry has seen a mixed set of results by firm across financial 2019.

Market leaders such as Pfizer (NYSE: PFE) and GSK (LON: GSK) have reported bullish interim updates, which gives them further foot holding the global pharmaceuticals market.

Additionally, Roche (SWX: ROG) announced the acquisition of US drugmaker Promedior last week.

IG Design Group celebrates 21% profit bounce

Jamie Gordon
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1
IG Design Group celebrates 21% profit bounce
Manufacturer of celebrations, gifting and stationary products IG Design Group PLC (LON: IGR) posted significant progress in its fundamentals between the first and second halves of the financial year. The Group’s revenue bounced 21% between the first and second half, up to £248.4 million. This led the Company’s adjusted operating profit to increase likewise by 21% to £23.6 million. Similarly, they narrowed their net debt from £100.0 billion to £86.2 million between the two halves, which allowed their average leverage to fall to 1.0 times, from 1.3 times for the 12 months to 30 September 2018. IG Design shareholders also fared well, with their adjusted fully diluted EPS up 2% to 20.1p, and their interim dividend surging 20% to 3.0p. Other positive updates on Tuesday came from Rockfire Resources PLC (LON: ROCK) reporting new gold discoveries, CRH PLC (LON: CRH) posted a strong third quarter and Pets at Home (LON:PETS) celebrated a productive first half.

IG Design comments

Paul Fineman, Group CEO, said,

“Our strong start to the year highlights the strength and agility of our business. Our initiatives and investments are bearing fruit and will drive further growth into the future.”

“Our long-established relationships with many of the world’s leading and ‘winning’ retailers provides a strong foundation for us to meet ambitious growth targets, both organically and through an active pipeline of acquisition opportunities, whilst maintaining prudent average leverage.”

“We remain focused on driving growth, maintaining our financial strength and continuing to deliver in line with expectations, whilst ensuring we continue to make the most of our many exciting future prospects.”

Investor notes

The Company’s shares dipped 1.23% or 8.00p to 640.00p per share 26/11/19 14:34 GMT. Analysts from Berenberg reiterated their ‘Buy’ stance on IG Design Group stock. Their p/e ratio is 40.50, their dividend yield stands at 1.33%.

Bank of England fine Citigroup for providing inaccurate data

Ishen Patel
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0
Bank of England fine Citigroup for providing inaccurate data

The Bank of England have fined Citigroup (NYSE: C) after the US bank failed to provide accurate regulatory returns for the groups British operations between 2014 and 2018.

Shares of Citigroup currently trade at $75 (-0.75%). 26/11/19 14:45BST.

The global banking scene appears to be in decline as firms struggle to stimulate business in a cut throat market.

Established names such as Lloyd’s (LON: LLOY) and HSBC (LON: HSBA) have seen their third quarter profits decline in tough trading conditions.

Additionally, overseas banks including Deutsche Bank (ETR: DBK) appear to be in crisis following a third quarter loss report

Imposing its biggest fine to date, the Prudential Regulation Authority (PRA), the BoE’s banking supervisory arm, said Citigroup’s UK framework for reporting data to regulators was not designed, implemented or operating effectively, according to Reuters.

The Bank of England ensured that it was mandatory for banks to report a broad range of data so regulators can check that they are not taking too much risk or holding small amounts of capital as insurance against market shocks.

“While Citi remained in surplus to its liquidity and capital requirements at all times, the failings persisted over a significant length of time and were serious and widespread in nature,” the BoE said.

“Citi failed to deliver accurate returns and failed to meet the standards of governance and oversight of regulatory reporting which we expect of a systematically important bank,” BoE Deputy Governor and PRA Chief Executive Sam Woods said.

Some of the regulatory returns were unreliable and did not provide the PRA with an accurate picture of the bank’s capital or liquidity position, it added.

Citigroup were quick to defend their actions saying that they have dealt with regulatory issues in the past, and will look to settle the matter at the earliest chance.

“Citi places a high priority on meeting its regulatory reporting requirements, and has devoted significant resources to UK financial reporting before, during and after the period to which the PRA’s notice relates,” the bank said in a statement.

“Citi co-operated fully with the PRA throughout the process, and in 2019 a leading independent accountancy and audit firm confirmed that Citi had remediated the material issues identified.”

The PRA said the fine would have been $62.7 million had Citi not agreed to resolve the matter early.

Australian Bank Westpac (ASX: WBC) have also hit news headlines after their CEO was forced to step down following a money laundering scandal.

Global Petroleum shares spike following success in Namibian operations

Ishen Patel
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1
Global Petroleum shares spike following success in Namibian operations

Global Petroleum Limited (LON: GBP) have seen their shares spike on Tuesday afternoon after the firm said operations in Namibia looked promising and praised the PEL0094 licence.

Global Petroleum Limited is an oil and gas, upstream exploration company presently focused on Africa and the Mediterranean. The Company’s principal assets are two exploration blocks located offshore Namibia.

Shares in Global Petroleum spiked 33.79% to 1.94p. 26/11/19 14:29BST.

The firm unveiled a best estimate resource at the licence of 964 million barrels, which sparked shareholder optimism.

Within that, the Albian carbonate reservoir at Welwitschia Deep is estimated at 772 million barrels with a probability of success of 15%.

“Our technical work to date on PEL0094 confirms the acreage is highly prospective. We are delighted our review of the data so far has confirmed the high level of prospectivity of PEL0094 generally, and of the Welwitschia Deep prospect in particular, which contains unrisked best estimate prospective resources of nearly 800 million barrels,” said Chief Executive Peter Hill.

“Specifically, our work suggests the Welwitschia-1A well, drilled in 2014 by previous licensees, was abandoned before reaching the underlying Welwitschia Deep prospect. Moreover, the 2014 well was drilled to the west of the newly identified Marula lead, located in the Upper Cretaceous which was the primary target of Welwitschia-1A.”

“These factors, together with the scale of the prospective resource numbers which we have released today, demonstrate that both Welwitschia Deep and Marula are very attractive targets,” added Hill.

Whilst Global Petroleum have seen major success today the energy and petroleum market has seen updates.

Nostrum Oil and Gas (LON: NOG) and Chariot Oil & Gas (LON: CHAR) have seen their shares dip following modest updates.

Additionally, Shell (LON: RDSA) and Total SA (LON: TTA) have seen their shares dip amid volatile oil prices and trading slumps.

Certainly, shareholders of Global Petroleum will be pleased with the update and this has been reflected in this mornings stock price increase Shareholders will have to wait to see whether Global Petroleum can exploit further discoveries to give themselves a strong foothold in the market amid tough trading conditions and stiff competition.

i3 Energy shares plummet following Liberator Field drilling issues

Ishen Patel
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1
i3 Energy shares plummet following Liberator Field drilling issues

Shares of i3 Energy PLC (LON: I3E) have plummeted on Tuesday after the firm updated shareholders about drilling issues at its Liberator well.

i3 Energy isn an independent oil and gas company with assets and operations in the United Kingdom. i3 Energy’s core asset is the Liberator oil field discovered by well 13/23d-8 located in License P.1987, Block 13/23d in which it has a 100% operated interest.

Shares of i3 plummeted 25.2% on Tuesday afternoon to 19p. 26/11/19 14:13BST.

Only a few weeks back, i3 saw their shares rally after the firm made a new discovery at its Serenity oilfield in the UK central North Sea.

However, this pattern was short lived as shares plummeted today following the cautious update. The firm said that the oil water contact at its Liberator well currently being drilled was “lower than anticipated”.

The Liberator well 13/23c-11, in the company’s 100%-owned Liberator field in the North Sea, was drilled to 220 feet, as planned.

“Initial evaluation of the measurement while drilling logs indicate that, at this location, about 20 feet of the Captain sand with oil indications has been found above the expected oil water contact of 5,270 ft total vertical depth subsea,” the company said.

Chief Executive Majid Shafiq said: “We are pleased to have encountered a thick Captain sand at this location including oil indications in the upper captain sand above the oil water contact. Initial interpretation is that the sand thickness above the oil water contact is lower than anticipated. Definitive results will be determined and the market updated in due course.”

“Initial interpretation is that the sand thickness above the OWC is lower than anticipated. Definitive results will be determined and the market updated in due course,” he added.

Wireline logging will now be carried out as per the planned data evaluation programme, i3 added.

In the oil and gas industry, competitors such as Nostrum Oil and Gas (LON: NOG) and Chariot Oil & Gas (LON: CHAR) have seen their shares dip following modest updates.

Additionally, big titan Shell (LON: RDSA) have reported lower profits in their third quarter following volatile oil prices and tough market conditions.

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