GlaxoSmithKline round off excellent 2019 with bullish fourth quarter update
GlaxoSmithKline (LON:GSK) have seen their profits rise across 2019 as the pharmaceutical titan updated the market on its 2019 and fourth quarter operations.
Glaxo alluded to the improvements particularly in its vaccines and consumer health segments, and also the benefits exploited from its mutual venture with Pfizer (NYSE:PFE).
The pharmaceutical giant said that it had reported a £6.22 billion pretax profit across 2019, which sees a 30% surge from the 2018 figure of £4.8 billion. The rise in profit was one of headline statistics from today’s update.
Revenue was £33.75 billion, rising 9.5% from £30.82 billion in 2018 . This higher year-on year improvement was driven by strong performance in the vaccines market , where revenue rose 22% to £7.16 billion from £5.89 billion, following the success of its Shingrix shingles vaccine.
Consumer Healthcare revenue also rose 17% from £7.66 billion to £9 billion, which was driven by a strong partnership with Pfizer.
The joint venture agreement between the two firms seem to have benefitted both parties, as Pfizer reported in November that they had smashed both analyst and market expectations.
In this agreement, Pfizer hold a 32% equity whilst GlaxoSmithKline hold the rest. Within three years, the firm expressed their intentions to demerger and create a new listing on the London Stock Exchange.
The FTSE 100 listed firm declared a final dividend of 23 pence for the fourth quarter, which takes total dividend to 80p which was consistent from the 2018 figure.
Looking forward, GlaxoSmithKline expressed their strategy to keep dividends flat at 80 pence across 2020.
The firm said ” We set out below earnings guidance for 2020. This reflects our expectations for growth in key new products, and the start of a two-year period in which we will continue to increase investment in these products and in our R&D pipeline, alongside implementation of our new programme which will prepare the Group for separation.”
In 2019, the firm saw its adjusted earnings per share totalled 123.9p, rising 3.8% from 119.4p in 2018, a 1% rise at constant currency. Adjusted figures exclude intangible amortisation, intangible impairment, major restructuring, and other costs.
Emma Walmsley, Chief Executive Officer, GSK said:
“GSK delivered a good performance in 2019 with growth in sales and earnings, together with strong cash generation. We also made excellent progress in all three of our long-term priorities: Innovation, Performance and Trust, strengthening our pipeline, improving operational execution and reshaping the company.
“In 2020, our first priority remains Innovation, to progress our pipeline and support new product launches. Recent data readouts underpin our decision to further increase investment in R&D and these new products. At the same time, we are again focused on operational execution, including delivering a successful integration in Consumer Healthcare, and we are also preparing for the future, starting a new two-year programme to get GSK ready for separation.
“All of this aims to support future growth, deliver significant value creation, and set up two new leading companies in biopharma and consumer healthcare, each with the opportunity to improve the health of hundreds of millions of people.”
Lookers set to meet expectations despite “challenging” financial 2019
Lookers PLC (LON:LOOK) have told the market that they expect their profit results to meet company expectations.
Shares in Lookers trade at 56p (+3.53%). 5/2/20 13:02BST.
The firm alluded to a challenging trading environment in the fourth quarter of 2019, however it seems that the firm has managed to overcome these to deliver strong results.
For the three months to the end of December, Lookers said like-for-like sales of new vehicles declined by 6.6%, compared to a 3.2% fall in the third quarter, due to a contracting UK new car market, and a reduction in lower margin fleet volume.
Like for like sales increased by 3.8%, which saw growth compared to the 2.6% figure reported in the third quarter.
Lookers also alluded to a forecast predicting a further decline in the UK new car market in 2020, and Lookers joined a number of firms who have cited political tensions as a dampener on business.
Mark Raban, Chief Executive Officer said:
“2019 was a challenging year for Lookers. The declining new car market, political and economic uncertainty and increased operating costs were all factors in the Group’s decline in profitability. Over recent weeks the Board has instigated a number of clear and decisive actions to stabilise and improve operational and financial performance.
The Board remains confident about the long-term prospects for the Group, benefitting from excellent OEM relationships, strategic trading locations and a strong freehold property portfolio.”
The UK car market is still trying to bounce back from external shocks which have affected consumer confidence and have caused lower output from automobile manufacturers.
Lookers also announced a change in their senior management board this morning. Chief Financial Officer Mark Raban will become chief executive officer with immediate effect, alongside the promotion of Franchise Director Cameron Wade to be chief operating officer.
Raban and Wade will be replacing former CEO Andy Bruce and COO Nigel McMinn, both of whom stepped down in November after Lookers saw a tough few months of trading, which led to the issuance of a profit warning.
Griffin Mining suspend Chinese operations following coronavirus warning
Griffin Mining Ltd (LON:GFM) have suspended their operations in China following fears that the coronavirus could disrupt operations and supply chains.
Griffin said that work at its Caijiaying mine has been held following an announcement from the Chinese Government telling businesses to suspend “non-essential business”.
The mine, which provides gold, zinc, silver and lead has been stopped temporarily following the turn of the Chinese new year.
The firm said:
“Further to the announcement made by Griffin Mining Limited on 29th January 2020 concerning operations at the Caijiaying Mine, Chinese Government decrees have now restricted all non-essential businesses activities until 9th February 2020 as efforts are made to contain the Coronavirus outbreak in China.
As advised in the previous announcement, pursuant to past normal operational practices, mining operations were suspended at the Caijiaying Mine during the lunar Chinese New Year festivities with effect from 22nd January 2020, whilst milling operations continued until the 30th January 2020.
Underground workings at Caijiaying are being maintained on a care and maintenance basis with essential services, including pumping and ventilation, ongoing. As planned, the opportunity has been taken to undertake maintenance work at the mill, which has now been completed and the mill placed in care and maintenance. Whilst all essential and senior Chinese staff remain at Caijiaying, all non-essential local staff have been sent home and placed on standby with the expectation of operations recommencing on 9th February 2020 as mandated by the Chinese authorities.”
There have been thousands of people now affected by the coronavirus, and it was reported that the virus had spread into Hong Kong.
Yesterday, Hong Kong reported that they had seen their first death following a diagnosis of coronavirus, and certainly this is not an issue that global governments will want to stretch out.
Beside the fact that the coronavirus has become a global health disaster, the global economy is now suffering major setbacks over the potency of the lethal disease.
Not just for the sake of Griffin, but for the global economy and the health of the world population, the coronavirus will have to be addressed before lives are lost and global trading stumbles.
Shares in Griffin Mining trade at 63p (-2.69%). 5/2/20 12:43BST.Oil prices spike as hopes of a coronavirus fix reach global news
Oil prices have remained volatile across the last few months, as both political and economic factors have been influencing oil indices. Prices have spiked this morning following hopes of a coronavirus cure which has left the globe in a state of shock.
On Wednesday, Oil prices jumped over 3% as news broke through on a potential short term solution for the ongoing coronavirus crisis, which is continuing to take its toll on Chinese business.
The coronavirus has had disastrous effects not just for Chinese businesses and stocks but also massive health implications, as fears surge following the vast spread and potency of the lethal illness.
Both Brent Crude and US West Texas Intermediate jumped more than 3% on Wednesday morning, as investors remained optimistic from the medical breakthrough’s that had been reported to battle the coronavirus.
The price of Brent Crude currently is $55.25, and has seen day lows of $54.05 and highs of $55.85.
Looking at West Texas Intermediate, the current price is $50.71 which has seen a jump of 2.55%. Once again, West Texas Intermediate has been up and down today seeing highs of $51.19 and lows of $49.47.
A Chinese newspaper, which covers news from the City of Wuhan told global media outlets that a team of researchers had concluded that that drugs Abidol and Darunavir can inhibit the virus in vitro cell experiments.
Yesterday, the World Health organization said that this would be a real window of opportunity for the global community to come together and fight, and that measures will be made to tackle the ongoing crisis.
Global media has criticized both the Chinese Government and the Chinese Health departments for not handling the initial outbreak of coronavirus with adequate response, and yesterday it was reported that almost 4,000 new cases were confirmed in China.
Certainly the price of Oil does remain up and down over the renewed hope that there will be a short term fix to the coronavirus, however it will take much more than a short term fix to stop the outbreak and ensure safety of the global population.
PrettyLittleThing “overly sexualised” ad banned
A Youtube advert for PrettyLittleThing (LON:BOO) was banned on Wednesday as a result of its “overly sexualised” nature.
PrettyLittleThing is owned by Boohoo Group alongside boohoo, boohooMAN, Nasty Gal, MissPap, Karen Millen and Coast.
The brands have signed several Love Island stars recently to boost sales and drive social media activity.
However, the Advertising Standards Authority said on Wednesday that the advert for PrettyLittleThing “must not appear again” because it is likely to cause “serious offence”.
The Youtube advert, seen in October of last year, opened with a woman wearing black vinyl, high waisted chaps-style knickers and a cut-out orange bra, dragging a neon bar and looking over her shoulder.
The advert continued to illustrate women posing seductively in various lingerie style clothing.
PrettyLittleThing’s advert received a complaint questioning whether it was offensive and irresponsible because it objectified and sexualised women.
The Advertising Standards Authority banned the advert, and told the online fashion brand “not to use advertising that was likely to cause serious offence by objectifying women”.
“We considered that the cumulative effect of the scenes meant that overall, the products had been presented in an overly-sexualised way that invited viewers to view the women as sexual objects,” the Advertising Standards Authority said.
“We therefore concluded that the ad was likely to cause serious offence and was irresponsible.”
Boohoo recently posted an impressive set of results in January, and it raised its annual guidance following strong revenue growth.
Shares in Boohoo Group plc (LON:BOO) were up on Wednesday, trading at +1.31% as of 11:52 GMT.
Grainger see private rental sector growth as share rise over 2%
Grainger PLC (LON:GRI) have made progress in their financial year, as the firm alluded to growth in rental business.
Grainger praised the strong performance of its private rented sector portfolio, at a time where the property market has been hit by external shocks and political complications.
In the four month period, which ended on January 31 Grainger said that overall like-for-like rental growth was 3.5%, with a 3.0% rise on a like-for-like basis on the residential landlord’s PRS homes.
The property investment firm said that its private rental sector had continued to perform well, with occupancy at 97.5% and a strong sales performance in the period, with pricing 0.8% ahead of valuations.
Grainger’s PRS development pipeline as at January 31 stands at 24 schemes, representing 9,104 homes and around £2.00 billion in investment, an impressive stat for shareholders to note within today’s update.
From the total portfolio, £845 million is related to internal company investment, £600 million from a joint venture deal with Transport for London and £570 million from opportunities in the planning and legal stages.
Grainger looked forward to their business potential in 2020, and updated shareholders on four new schemes planned for 2020.
The firm said “We have made good progress on our schemes in the planning process, including Exchange Square in Birmingham (375 PRS homes, c.£77m), and the redevelopment of one of our regulated tenancy assets in Waterloo, London, where we secured planning consent to increase the site from 69 homes to 215 PRS homes.”
Grainger senior management have continued to praise the growth and development of their PRS portfolio.
Helen Gordon, Chief Executive, said:
“I am pleased to report a period of continued momentum in our PRS growth strategy, as the UK’s leading provider of private rental homes. We have made good progress on a number of schemes in our pipeline, including those in the planning process and new acquisitions. Lettings on our recently launched schemes are progressing well and ahead of underwriting, a testament to the quality of the design of our buildings and customer service offering. We are seeing a growing customer demand for our rental homes across the portfolio with 97.5% occupancy and 3.5% like-for-like rental growth. Supporting our new build investment, sales from our regulated tenancy portfolio are transacting well, reflecting positive market sentiment.
“Since our last financial year end, we have secured two further schemes in line with our targeted investment strategy: Capital Quarter (307 PRS homes) in Cardiff for c.£57m, and our third scheme in Canning Town (132 PRS homes) for c.£55.5m. In addition, we have received planning consent for the redevelopment of one of our regulated tenancy assets in Waterloo, London.
“Investment in our CONNECT technology led platform, which provides a leading differentiated experience for our customers and enhances our operational capability, is delivering early results on our new schemes, with wider roll out of the platform anticipated later this year.
Grainger remained confident for their business in 2020, and shareholders will take much hope and optimism for the firm to bring consistency across 2020.
“The outlook for Grainger in 2020 is positive. Grainger is in a strong position to benefit from the market opportunities following the clear result of the General Election which is already driving improved housing market sentiment. The business is ready and equipped to deliver on our PRS growth strategy, which in turn will deliver attractive, sustainable returns to shareholders and, importantly, enable us to provide great homes and great service to our growing customer base.”
Grainger break political constraints
In November, the firm updated the market saying that it had seen income rental growth across its financial year. 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. The strategic focus on the UK private rented sector continues to deliver real growth in the business, underpinned by strong demand for rental homes across the country. Profit before tax rose 30% to £131.3 million from £100.7 million, the company said. As a result, the company proposed a final dividend of 3.46p per share, which showed a 9% rise from 2018. Total dividend for the year was 5.19p, which again saw a climb from 4.75p in 2018.Welsh acquisitions
Following on from the impressive update in November, Grainger announced that they had made two new acquisitions as part of their strategy to grow and expand. 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 stabilized, with completion anticipated in mid-2022. Grainger have managed to overcome numerous hurdles in the last year, and the property market has been hit by Brexit complications. Shareholders will pleased from today’s update, and certainly this shows the hungry nature of the firm to grow in a property market that still seems to be recovering from external shocks. Shares in Grainger trade at 305p (+2.62%). 5/2/20 12:01BST.Redrow book stable half year, as Brexit takes it toll on British homebuilders
Redrow PLC (LON:RDW) have noted a slump in performance in the first half of its financial year but has remained confident for future expectations amid wider macroeconomic and political complications.
“Redrow has once again delivered a robust operational and financial set of results for the first-half of the financial year and traded strongly despite an uncertain political and economic background.
The results are consistent with our expectations highlighted in September, that returns will be considerably more weighted than usual to the second-half due to constrained outlet growth last year and the timing of apartment block completions.”
The FTSE 250 lister alluded to political tensions as a constraint on strong performance, something which has been felt by many British businesses.
It is indeed the case that we have formally left the EU, as the vote to leave passed on Friday 31st January, however this is just the paperwork.
Analysts and market traders have speculated over the volatility that may be experienced over the next 12 months, as Brexit negotiations and a withdrawal deal is set to unfold as PM Johnson’s takes his terms to Brussels.
Looking at the figures for Redrow however, the house builder reported revenue of £870 million for the six months to the end of 2019, which saw a 10% slump compared to £970 million a year ago, which lowered pretax profit by 15% to £157 million from £185 million.
Redrow said revenue was hurt by legal completions reducing from 2,970 to 2,554. Private completions were down by 99 and social completions were 317 lower, showing the external shocks that the firm faced over the last few months of trading.
The firm noted that average selling price remained consistent being £387,000 versus £391,000 a year ago.
The company said it achieved a record number of private reservations in the six months to the end of December with the value of reservations up 18% at £936 million year-on-year.
Despite the slight slow down in performance, Redrow decided to increase their interim dividend by 5% to 10.5 pence compared to 10 pence earlier in the year.
John Tutte, Executive Chairman of Redrow, said
“Redrow has once again delivered a robust operational and financial first-half performance consistent with our expectation that revenue will be considerably more weighted than usual to the second half.
The Group delivered a record value of first half reservations at £936m (2019: £795m), a pre-tax profit of £157m (2019: £185m) and ended the period with net cash of £14m (2019: £101m). Given our confidence in the full year performance we have declared an interim dividend of 10.5p, up 5% on the previous year.
The market in the first five weeks of the second half has been resilient with the value of reservations up 15% at £180m (2019: £156m).
Current market conditions, combined with our very strong order book give me confidence this will be yet another year of progress for Redrow and our expectations for the full year remain unchanged.”
Redrow slow down from September
In September, the firm booked a strong set of figures for the full-year, with growth across profit indices and operational progress. The Company posted revenue growth of 13% on a year-on-year comparison for the full year ended 30 June 2019, up to £2.1 billion. This pushed operating profit up 8% on-year and profit before tax up 7%, to £411 million and £406 million respectively. The Group’s headline fundamental though, was its 13% on-year growth in legal completions, up to 6,443. The Group added that it had added 7,379 plots to their current land holdings, and delivered 1,712 affordable homes, up 55%. Redrow are not the only homebuilder that have struggled amid Brexit complications. As negotiations unfold and more clarity is given, there could be renewed optimism not just for names in the building industry but the wider British business sector as well. Shares in Redrow trade at 825p (+0.36%). 5/2/20 11:48BST.Donald Trump delivers his State of the Union speech
President Donald Trump has once again hit headlines on Wednesday following his State of the Union Address last night, as he hailed the “great American comeback” in his speech to Congress.
American Politics has always been known for its partisan, policy driven nature however Trump highlighted the divisions in both the House and Senate which has hindered the passing and aggregation of legislation in American Politics across his tenure.
The main case for Trump’s address last night was to fuel support for his 2020 Election Campaign, as both the primaries and caucuses fill voter enthusiasm as candidates look to rally support across all states in America.
The President delivered his speech in the House of Representatives on Tuesday, ironically in the same place where the initial stages of his impeachment took place.
The impeachment procedure is still gaining traction, and certainly there is a long way to go before Trump becomes the third US President to be impeached in office, however Trump seems more concerned about his new election campaign.
Trump did not mention his impeachment once in his delivery last night, but rather took the opportunity to address members from the Republican and Democrat party to try and convince party members that another four years of Trump would be beneficial.
Tensions got so heightened that even at one point Nancy Pelosi ripped up a copy of his speech behind him, making her opinions of Trump publicly aware for spectators to see.
Republican lawmakers chanted “four more years” as Mr Trump prepared to speak, urging him on for November’s White House election.
In the speech which lasted almost one hour and twenty minutes, the President mentioned the theory of “American Change” and how things had changed since his inauguration in 2017.
The president told his audience: “In just three short years, we have shattered the mentality of American decline and we have rejected the downsizing of America’s destiny.
“We are moving forward at a pace that was unimaginable just a short time ago, and we are never going back!”
Certainly, bookmakers are not underestimating the ability of Trump to win the 2020 election, and if elected then American Politics can expect another four years of tweets, antics and partisan driven policies.
The fun of American Politics continues, and will captivate the globe. Certainly Donald Trump has done nothing shy of that since he announced his intentions to run for the Presidency a few years back.
Domino’s boast fourth quarter growth in UK and Ireland
Domino’s Pizza Group PLC (LON:DOM) have seen fourth quarter revenue growth in their most recent trading update published today.
Domino’s, known for their mouth watering pizzas, range of sides and the notorious “two for Tuesday” deals have seen a mixed period of trading, however the update today will please shareholders.
The firm reported fourth quarter revenue growth, which was driven by better performance in the UK and Irish market.
Domino’s also noted that there are procedures that are currently taking place which involve the disposal of their international operations, which was the subject of headlines a few months back.
The firm said: “In October, we announced that Domino’s Pizza Group would be exiting our directly operated international markets, with the intention of finding more suitable owners for these businesses, ensuring the Domino’s brand remains and thrives in these countries. Since this announcement, the Board’s focus and priority has been on Norway, given the significant operating losses in this market. Once we have agreed a transaction for Norway, we will focus on progressing transactions for our businesses in Sweden, Switzerland and Iceland. We are focused on securing the best possible terms for shareholders and are working closely with Domino’s Pizza Inc throughout. We will update the market in due course.”
In the 13 weeks to December 29, group sales were 3.7% higher year-on-year at £352.0 million from £339.6 million, one impressive statistic to take from today’s update.
On an organic metric, at constant currency and excluding acquisitions and disposals, sales climbed 4.1% from the year prior.
In the UK and Ireland, sales jumped 4.4% from £312.9 million to £326.7 million, on organic measures this also showed a 4.5% rise.
Like-for-like sales in the UK alone were 3.9% higher during the quarter, though in Ireland, they were down 1.0%.
Internationally, Domino’s have struggled and business has slumped. Once again this sentiment was reflected in the figures from today’s update.
Looking at international business, sales were down 4.9% to £25.3 million from £26.6 million. Domino’s said its disposal program is “progressing” and added that it is focusing on offloading its Norway operations.
David Wild, Chief Executive Officer, said:
“I am pleased with the performance of our core UK and Ireland markets, with system sales up 4.4% and UK like-for-likes up 3.9%, against a strong comparative and a competitive backdrop. This performance was driven by the power of our brand, our strong digital capabilities and the operational expertise of our franchisee partners.
“At the end of the period we announced the tragic passing of our CFO, David Bauernfeind. David will be deeply missed by all who knew him and worked with him. He leaves behind a high-quality finance team who have shown remarkable resilience and dedication over the past month, and we are well advanced in the search for an interim CFO.
“We look forward to announcing our preliminary results next month and updating the market on strategic progress made over the last few months.”
Domino’s Chair departs
Domino’s told the market in December that chair Stephen Hemsley would step down, and the firm is set to look for a replacement. The FTSE250 listed firm said that Senior Independent Director Ian Bull will become interim chair while the search continues. Domino’s commented: “The search for a new chairman is progressing, and will be followed by the appointment of a new CEO. Further announcements will be made in due course.” The exiting from European markets may mean that Domino’s can centralize their UK and Irish business, a sector which has been blooming over the last quarter. In the long term this could prove beneficial is results continue to be strong. Shares in Dominos trade at 313p (+5.55%). 5/2/20 11:12BST.Babcock CEO announces departure after 4 year stint
Babcock International Group PLC (LON:BAB) have told shareholders about a couple of changes to their senior board on Wednesday.
The firm said that Chief Executive Officer Archie Bethel will be stepping down from his role, and will depart when a suitable replacement is found.
Bethel has held his role for four years, and has been with Babcock for 16 years since his initial appointment since 2004.
Ruth Cairnie, Chair, said: “On behalf of the Board, I want to thank Archie for his service to Babcock, during which time he was instrumental in growing Babcock from a small cap to a leading defence business. Archie has been a proven and respected leader, whose knowledge and understanding of the sector is second to none.”
Archie Bethel, Group Chief Executive, said: “Having served at Babcock for 16 years, I feel that this is the right time to retire. In the meantime, I am focused on positioning the Company for further success in the future. It has been an honour and privilege to serve at Babcock and I am proud of what the Company has achieved.”
Babcock also announced that it would be appointing United Utilities Group PLC’s Chief Financial Officer Russ Houlden as non-executive director with effect on April 1.
Houlden has held his role at United Utilities for ten years since 2010, and has also held senior roles on the reporting committee of the 100 Group.
“Russ has been an integral part of the work we have done in recent years to transform the organisation, helping us to deliver best ever levels of customer service, a more resilient network and real gains in operational performance and efficiency. Alongside this, Russ has helped secure a robust and sustainable financial profile for the company, including securing a fully funded pension scheme on a self-sufficiency basis,” said United Utilities Chief Executive Steve Mogford.