Atlantic Capital Markets remain positive on Smurfit Kappa following a strong 2019 and dividend increase
Dow Jones misses chance to hit all-time high after wow Wednesday
“Poised for a fresh record peak in the pre-market, the Dow Jones bottled it after the open, investors getting cold feet once the bell rang on Wall Street.”
“Instead of celebrating news that China will halve tariffs on 1717 US goods as a Valentine’s Day treat, the Dow loitered unchanged just under 29300.”
“To be fair to the index, it had a spectacular session on Wednesday, rising close to 500 points. And it is now 1000 points above its end of January lows. So it has perhaps earned a break.”
“The Dow’s level-headedness failed to impact the Eurozone indices. The CAC re-crossed 6000 as it expanded its gains to 0.7%, while the DAX spent the day nearing a fresh all-time high of its own, adding 0.6% to sit a smidge above 13550.”
“The FTSE was somewhere between Dow and DAX, rising just 0.2% as it stuck its nose above 7500. It arguably would have been a bit livelier if Brent Crude’s 1.1% decline hadn’t sent BP and Shell down 1.6% and 0.7% respectively. This as the black stuff waits for OPEC+ to declare their plan to tackle a coronavirus-informed drop in demand.”
“That its gains weren’t more robust was a surprise considering sterling continued yesterday’s losses, falling 0.3% against the dollar to hit a 6-week low of $1.295. It was in marginally better health against the euro, a 0.2% loss leaving much of Tuesday’s rebound intact. It’s going to be a tricky few months for the currency, as the UK and EU start to feel each other out regarding the future of their trade relationship.”
Nationwide told to refund £900,000 in unstated overdraft charges
CMA response
Adam Land, senior director of remedies, business and financial analysis at the CMA, said: “Banks and building societies that fail to send customers text alerts saying they will be charged if they enter an unarranged overdraft are breaking the rules. The fact that Nationwide is a repeat offender makes it even more serious. “Following our action, it will now repay all affected customers, and quickly.”“This issue will not occur again”The CMA saidt Nationwide has appointed an independent auditor to review its processes.
Nationwide comments
Sara Bennison, chief marketing officer at Nationwide, said: “The CMA Directions, issued to Nationwide in August 2019, required the Society to complete an independent review of its processes in relation to text alerts. While all members received their texts on each and every occasion, this review identified that alerts sent to members who were in Collections did not explicitly state that they would be charged an unarranged overdraft fee. “While these members haven’t been overcharged, we appreciate these texts are designed to help people avoid unarranged overdraft charges, so we apologise that on this occasion we didn’t meet the high standards we set ourselves. We are contacting impacted members and will be automatically refunding the charges back into their account. “From 11 November 2019, the Society removed unarranged overdraft charges, so this issue will not occur again in the future.”Investor notes
The Company’s share price stands at 164.00p per share.Compass shares jump 2% following steady start to financial year
“Following approval from the EU Competition Commission, we completed the acquisition of Fazer Food Services on 31 January 2020 for an initial cash consideration of approximately €420 million.
We also continued to make progress with the disposal programme and have recently sold 50% of our Japanese Highways business for a consideration of £55 million, with agreement to sell the remainder over the next three years. We expect to make further progress with disposals throughout the year.
We have had an encouraging start to the year and our outlook for 2020 remains unchanged with organic growth around the mid-point of our 4-6% guidance range whilst maintaining our strong margin(2). In the longer-term, we remain excited about the significant structural growth opportunities globally, and the potential for further revenue and profit growth combined with further returns to shareholders.”.November blues for Compass
Compass gave shareholders a pessimistic update in November which led to shares crashing. Compass reported a 5.7% increase in full year underlying revenues reaching £25.2 billion for the year ending 30 September. Operating profit rose 4.7% to £1.9 billion. Operating margin was 7.4% while free cash flow grew 9.3% to £1.25 billion. Group chief executive Dominic Blakemore said that despite the good performance, Compass was “not immune to the macro environment”. The update today from Compass will give shareholders some encouragement following a mixed few months for the firm. Shares in Compass trade at 1,958p (+2.70%). 6/2/20 16:39BST.Diploma introduces its new CFO
Gibbes is a chartered accountant having qualified with Deloitte LLP before going on to become Director in Audit and Assurance. Since, she has held senior finance roles at Management Consulting Group (LON:MMC), Domino’s Pizza (NYSE:DPZ) and Intu Properties (LON:INTU).
Diploma comments
Company Chief Executive Johnny Thomson, stated:“I am delighted to welcome Barbara to Diploma. She has a wealth of experience and a strong track record in fast paced, decentralised, service-orientated environments. She has strategic vision, strong commercial acumen and a track record of execution. I have no doubt that Barbara is an excellent fit for Diploma, and I am really excited about working with her to deliver our strategic objectives and the next phase of growth.”
Barbara Gibbes added:
“I am looking forward to joining Diploma. The business has an excellent track record of value-added customer service and strong returns, and I look forward to working with Johnny and the management team to further develop and realise the Group’s potential.”
Investor notes
Diploma shares were up 0.71% or 14.00p to 1,984.00p per share 06/02/20 15:10 GMT. Peel Hunt analysts reiterated their ‘Hold’ stance on the company’s stock. The Group’s p/e ratio is 30.64, their dividend yield stands at 1.46%.Filtronic shares dip 13% as it swings to loss in the second half
The headline figure, though, was that the company swung from a £0.4 million operating profit during the first half, to a £0.5 million operating loss during the second half. Further, its net debt widened from £2.5 million to £3.6 million.
In brighter news, the company noted impressive operational developments:· “Successfully disposed of the Telecoms Antenna Operation for an initial consideration of $5.5m potentially increasing with a profit share in excess of mutually agreed gross profit targets.
· Strong demand from our lead OEM customer for Orpheus product and initial demand for our next-generation Morpheus, both being deployed in 5G X-Haul applications.
· Good progress made to onshore production of public safety products to the USA with production expected to commence in Q1 calendar year 2020.
· Expansion programme implemented at Sedgefield to increase manufacturing capacity and production volumes of X-Haul and defence transceiver products. Machinery now embedded and optimised to improve operational efficiency.
· New design contract wins for High-Altitude Pseudo-Satellite (HAPS) mmWave “X-Haul” applications and other 5G mmWave equipment markets.”
Filtronic comments
Speaking on the update, Chairman Reg Gott, said:
“The sale of the FTAO business enables us to implement an effective operating structure across a more efficient footprint and provides us with a stronger balance sheet to further develop and grow the business. The Board is committed to revenue growth initiatives and intends to strengthen the sales and marketing organisation and extend engineering capacity across a range of disciplines during the course of this calendar year.”
“The recent design wins to develop X-Haul derivatives to major players in the High-Altitude Pseudo-Satellite and 5G mmWave equipment markets were key milestones on our strategic roadmap. However, this NRE funded development work will run through the next 16 months meaning revenue will largely not be recognised until FY2021, slightly limiting our progress in H2 profit development. These new contracts enable us to further extend our engineering capability, know-how and highlight our ability to develop a competitive position across a wider market”.
Investor notes
Following the update, the company’s shares dipped 13.21% or 1.47p, to 9.66p per share 06/02/20 14:10 GMT. Analysts from finnCap reiterated their ‘Corporate’ rating of Filtronic stock. The company’s market cap is £21.25 million.On the Beach Group set to capture Thomas Cook market share
“As outlined in the Group’s Preliminary Results on 27 November 2019, there exists an unprecedented opportunity to take market share in the beach travel market following the failure of Thomas Cook Group (“TCG”). On the Beach has responded to this opportunity, more than doubling offline marketing spend to drive awareness of the On the Beach brand. Management expects that a proportion of this investment will payback in the second half of the financial year. Alongside this exceptional marketing spend, the Group has also focused on price competitiveness to continue to drive long term market share gains.” the company’s statement read.
On the Beach continued, stating that the failure of Thomas Cook has led to an overall reduction in capacity and as a result, a ‘significant’ year-on-year seat price increase. The situation has been exacerbated by issues with the Boeing 737 Max and in turn, seat prices aren’t expected to normalise within the current financial year. The Group said its action to secure market share was helping to drive strong sales growth for summer 2020. Its international sites continued to deliver efficient performance and the Group’s Board is continuing to evaluate opportunities to enter new markets.On the Beach Group comments
Simon Cooper, Chief Executive of the company, commented:
“The actions we have taken in the first four months of the new financial year have accelerated our market share gain and mean we are well prepared to take advantage of capacity returning into the market. Our incremental investment into offline marketing activity is helping to drive significant growth in awareness of the brand nationally and we are delighted with the performance of the Classic Package brand in its first year post launch. We look forward to providing a more detailed update on progress at the Group’s Interim Results.”
Investor notes
Following the update, the company’s shares rallied 4.64% or 18.80p to 423.80p per share 06/02/20 13:57 GMT. Peel Hunt analysts reiterated their ‘Buy’ stance on On the Beach Group stock. The Group’s p/e ratio is 18.93, their dividend yield is 0.78%.SDCL Energy Efficiency Income Trust acquires 50% of recycled energy project
“The 298MW portfolio consists of five operating projects which generate low-cost, efficient energy, comprising three recycled energy projects, one natural gas combined heat and power project and a 50% interest in an industrial process efficiency project.” The company’s statement said.
The group said it would finance the acquisition through cash reserves. It added that its existing project debt finance facilities remained in place post-acquisition.
SDCL Energy Efficiency Income Trust comments
Jonathan Maxwell, CEO and Founder of Sustainable Development Capital LLP, said:
“We are delighted to have completed this acquisition. This opportunity involves a proven operational portfolio of industrial energy efficiency projects with strong environmental benefits.
This investment further diversifies SEEIT’s portfolio, in terms of geography, technology, counterparty and application. We are confident that this acquisition will make a significant contribution to SEEIT’s total returns.”
Investor notes
Following the announcement, the SDCL Energy Efficiency Income Trust shares rallied modestly by 0.91% or 1.00p, to 111.00p per share 05/02/20 16:45 GMT. The company has a target dividend per share of 5.00p, with this set to increase to 5.50p for the year ended March 31 2021. Its estimated NAV is 99p.FTSE and Sterling quashed by proposed MiFID II concession removal from London
“Despite the World Health Organisation downplaying reports of a coronavirus treatment coming out of Chinese media, investors couldn’t resist the temptation to keep the market rebound going.”
“While the NASDAQ hit a fresh all-time high, the Dow Jones added 260 points, crossing 29000 for the first time in a week and a half. Echoing those gains, the DAX rose 1.3%, with the CAC nearing 6000 as it reclaimed another 0.9%.”
“Interestingly the FTSE couldn’t keep up the pace with its Eurozone and US peers, instead rising just 0.6%. What made the UK index’s performance especially curious was that the pound was down 0.4% against the dollar and 0.1% against the euro.”
“Sterling reversed its post-service PMI gains following reports that the EU could amend its Mifid II financial regulations to remove the concessions originally granted to the UK when the rules were first put into place. That would, presumably, be in order to combat the fact the continent’s biggest financial market – London – now sits outside the European Union.”
“It also didn’t help the FTSE that Imperial Brands (LON:IMB) was down close to 8%, after issuing a profit warning related to the crackdown on vaping.”
