Amerisur agreed takeover deal with GeoPark

Ishen Patel
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Amerisur agreed takeover deal with GeoPark

Amerisur Resources PLC (LON: AMER) have agreed a takeover deal with Latin America based GeoPark Ltd (NYSE: GPRK).

The deal reached shareholders after an update was provided on Friday, and is valued at £242 million.The deal worked out at 19.21p per share, which shows an appreciation from current market value.

Shares of Amerisur trade at 18.86p climbing 4.78% across Friday trading. 15/11/19 12:16BST.

Amerisur Chief Executive John Wardle said: “The transaction presents a significant opportunity for our stakeholders in Colombia and, given GeoPark’s existing presence, will ensure the continuity of our partnerships in country. The strategic portfolio of assets is an excellent fit for GeoPark, which, as a leading independent Latin American E&P, is well positioned to maximise the potential.”

The takeover was confirmed after a strategic review, inclusive of a formal sales process was announced back in July.

The oil exploration industry has been volatile, and firms have experienced mixed results.

Big names such as Shell (LON: RDSB) saw their profits sink amid periods of low oil prices, whist Total SA (LON: TTA) reported that profits fell 15% in their third quarter update.

Amerisur Chair Giles Clarke said: “The cash offer from GeoPark Colombia of 19.21p per share represents a premium of almost 60% to Amerisur’s share price prior to the formal sale process and is an attractive proposition for Amerisur and its shareholders, particularly when compared to recent public markets acquisitions in the sector.

“The market for Amerisur has been fully tested and the board is unanimously recommending this condition light offer to shareholders.”

GeoPark has received irrevocable undertakings to vote in favour of the offer in respect of 289 million Amerisur shares, representing around 24% of the existing share capital of Amerisur.

Geopark chief executive James Park said: “A consistent pillar of GeoPark’s long term value proposition has been and will continue to be inorganic growth, including M&A and block acquisitions. “Amerisur’s asset base in Putumayo will provide GeoPark with access to an underexplored high potential basin, as part of our larger Marañon-Oriente-Putumayo strategy in the region and with an operating export pipeline. “Additionally, with the incorporation of the CPO-5 block, operated by our strategic partner ONGC, and adjacent to our prized Llanos 34 block and nearby recently awarded exploratory blocks, GeoPark would now have a contiguous land position of more than one million gross acres in one of the most productive areas of the Llanos basin in Colombia, containing multiple development and exploratory opportunities.”

Carpetright formalize takeover deal with Meditor

Ishen Patel
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0
Carpetright formalize takeover deal with Meditor

Carpetright plc (LON: CPR) have agreed a takeover deal with Meditor, who are their largest shareholder.

The bid value was reported to be around £15.2 million and was significantly less than what shareholders valued the UK textiles firm at.

Carpetright saw their shares collapse a fortnight ago, and reports suggested that seniority were pondering the potential of a takeover deal.

Shares in Carpetright rallied 14.96% after the Friday announcement to 4.8p. 15/11/19 12:02BST.

The pair were in talks last month as Carpetright sought ways to raise £80 milion to pay off £56 million in debts and give it enough cash to grow the business.

Carpetright chairman Bob Ivell said: “We believe the MHL offer is in the best interests of all stakeholders.

“While we have made significant progress with our recovery plan for the Carpetright group, our ability to invest in the future of the business has been constrained against the backdrop of limiting banking covenants and a very challenging consumer market.

“With a recapitalised business and the backing of a committed new owner with the resources to invest in Carpetright for the long term, we will be able to complete our recovery in the private arena and emerge as a stronger business.”

Investment manager and poker player Talal Shakerchi, who owns Meditor, added: “With Meditor’s support and financial backing and without the constraints of a public market listing, Carpetright will be well positioned to compete more effectively.

“This will facilitate substantially increased investment in Carpetright’s committed employees and its store estate as well as driving new initiatives and improvements. I am excited about the long term prospects and opportunities for the Carpetright business.”

Many firms have struggled to stay afloat in testing waters on the British high street.

In a tough business environment, the struggles of Marks and Spencer (LON: MKS) and Sainsbury’s (LON: SBRY) have been reported, and the takeover bid for Carpetright will give relief to shareholders that the company did not descend into administration similarly to Mothercare (LON: MTC).

TalkTalk swing to an interim profit

Ishen Patel
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0
TalkTalk swing to an interim profit

TalkTalk Telecom Group PLC (LON: TALK) have announced that they had swung to an interim profit following an announcement on Friday morning.

TalkTalk seemed optimistic about the published results and maintained their guidance for financial 2019.

Despite the positive results, shares of TalkTalk dipped 3.6% to 105p. 15/11/19 11:47BST.

In a time where the telecoms industry is volatile and surprising, rivals have had mixed experiences.

Vodafone (LON: VOD) have reported a second half loss in their most recent update which has seen their shares crash in a similar manner to Deutsche Telekom (ETR: DTE) who cut their dividends earlier this week.

Additionally, BT (LON: BT.A) hit Friday headlines as Labour vowed to nationalize the firm as one of their election policies.

In the six months to September 30, revenue fell 3.6% to £792 million from £822 million last year, whilst a pretax profit of £1 million was reported from a £4 million loss last year.

Headline earnings before interest, taxation, depreciation and amortisation climbed 39% to £140 million from £115 million.

TalkTalk said: “Headline Ebitda outlook for the year remains unchanged, with increased Fibre penetration and headquarter move efficiencies driving a materially lower cost base.”

TalkTalk moved its headquarters to Salford, Greater Manchester, from London, a moved which delivered £7 million in first half cost savings.

Looking to the second period, the FTSE 250 (INDEXFTSE: MCX) firm expects a further £10 million in savings.

Chief Executive Tristia Harrison said: “We’re pleased that our clear strategy to accelerate customer growth in Fibre broadband while also reducing costs has led to a significant increase in profitability in the first half.

“We now have over two million customers taking a Fibre product, adding nearly 300,000 customers in the half.”

TalkTalk also reported that they were close to formalizing a deal to sell its Fibrenation sister company to Cityfibre. Shareholders should remain optimistic about TalkTalk, considering the tough market conditions and the similar experiences of rivals. In the longer term, there is an expectation that TalkTalk can produce positive results once economic and political uncertainties are removed.

Vodafone see Indian slowdown, but shareholders should remain optimistic

Ishen Patel
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Vodafone see Indian slowdown, but shareholders should remain optimistic

Vodafone (LON:VOD) have reported a slowdown in their Indian business, as the technological giant reported a loss to shareholders following a disastrous trading period.

Earlier this week, Vodafone reported a half year loss which causes their shares to sink and the news from overseas operations in India will only add salt to the wound.

Shares in Vodafone sunk 1.92% after the poor trading update to 156p. 15/11/19 11:29BST.

India has been one of Vodafone’s booming markets in recent times, with more than a billion mobile subscribers but across financial 2019 business has slumped.

It was reported that the prices of telephone calls fell in India, but the data prices continued to remain high which would have added to Vodafone’s losses.

The stiff competition of firms such as Reliance Jio (NSE: RCOM) and Tata Communications (NSE: TATACOMM) have slashed data costs leading to India boasting the cheapest mobile data in the world.

Overseas competitors such as Deutsche Telekom (ETR: DTE) have experienced a crisis as well as they slashed their dividend, whilst BT (LON: BT.A) hit UK headlines after Labour pledged to nationalize the firm on Friday morning.

Earlier this week, Vodafone’s CEO Nick Read warned that the company’s India operation could be in doubt unless the government stopped hitting operators with higher taxes and charges.

“Financially there’s been a heavy burden through unsupportive regulation, excessive taxes and, on top of that, we got the negative Supreme Court decision,” he was reported as saying on Tuesday.

There have been reports that the substantial loss could result in the exiting of Vodafone from the Indian market, which could cost India more than Vodafone. Amidst the crisis, Vodafone have also threatened to quit operations and business in India after reports that they were unwilling to pay the heavy tax demands. The results come at a tough period of trading for Vodafone, however it seems that there is a reluctance for the telecom giant to exit the Indian market. However, if tax disputes and revenues are not stimulated then shareholders may be concerned about future updates and share prices.

BT share price falls following Labour announcement

Ishen Patel
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4
BT share price falls following Labour announcement

BT shares (LON: BT.A) have fallen after Labour made a pledge to nationalize the firm and offer free broadband for all in an attempt to win voters ahead of the general election.

Shares of the telecoms giant fell 2.64% after the abrupt announcement to 190p. 15/11/19 10:58BST.

Labour have promised to provide free fibre broadband by 2030 for homes and businesses, providing it wins the December election.

The party pledged that it would nationalize BT to deliver the policy and introduce a tax on rivals such as Vodafone (LON: VOD) and Virgin Media.

Shadow chancellor John McDonnell told the BBC the “visionary” £20 billion plan would “ensure that broadband reaches the whole of the country”.

Prime Minister Boris Johnson said it was “a crackpot scheme”.

PM Johsnon added that would cost the taxpayer “many tens of billions” and that the Conservatives would deliver “gigabit broadband for all”.

And the Lib Dems called it “another unaffordable item on the wish list”.

Virgin have responded with the following statement, “Virgin Media has the fastest scaled network in the UK and has pledged to bring next-generation Gigabit broadband to half of the UK, by the end of 2021. As this commitment shows, private investment is essential to delivering improved broadband infrastructure”.

“With billions of pounds worth of private money invested in the UK, Virgin Media continues to expand its network, providing competition and choice to consumers”.

“Government policy has a role to play and can help to accelerate broadband deployment in a way that minimises the level of public subsidy needed and provides the UK and consumers with incredible connectivity within a competitive market”.

BT Chief Executive Philip Jansen told the BBC that Labour had under-estimated the price of its pledge.However, Jansen was keen to remain impartial and said he would be content to work with any governing party to help build a digital Britain.

Jansen concluded that it would not be ‘easy’ to implement the Labour policy, and changes would have to be enforced concerning shareholders, BT pensioners and employees.

This comes as a response to PM Johnson’s recent pledge to spend £5 billion to bring full fibre broadband to every British household by 2025.

But Mr McDonnell said the Conservatives’ funding plan for improving broadband was “nowhere near enough” and would leave the UK falling further behind other countries who already have fibre more widely available.

The plan includes nationalising parts of BT – namely its digital network arm Openreach – to create a UK-wide network owned by the government.

“We’re putting the money in and therefore we should own the benefit as well,” said the shadow chancellor.

Earlier this year, Ofcom reported that only 7% of UK households have access to full fibre broadband, which both parties have pledged to improve.

However, this is a real shot in the dark from the struggling Labour party. The pledge to nationalize BT would cost the taxpayers million, could further worsen the budget deficit and maybe worse off all completely misguide voters come December 12th.

The policy comes at a time where there does not seem to be any prospect of Labour winning the magical 326 seats in Westminster, and policies like this may not benefit Labour’s cause.

Labour have only given voters a brief explanation of how this policy would be implemented, but further details would be required to understand the size and magnitude of this legislation.

However, Labour did add that they would tax UK tech firms on a percentage system on global profits and UK sales, which could raise up to £6 billion. Once again, this does seem far fetched in a market where technological developments are chaining by the day.

But Conservative Culture Secretary Nicky Morgan said: “Jeremy Corbyn’s fantasy plan to effectively nationalise broadband would cost hardworking taxpayers tens of billions.

“Corbyn is clearly so desperate to distract from his party’s divisions on Brexit and immigration that he will promise anything, regardless of the cost to taxpayers and whether it can actually be delivered. What reckless idea will be next?”

Industry experts have had their say on the unrealistic nature of Labour policy,

Julian David, chief executive of TechUK, which represents many UK tech firms, said: “These proposals would be a disaster for the telecoms sector and the customers that it serves.

“Renationalisation would immediately halt the investment being driven not just by BT but the growing number of new and innovative companies that compete with BT.”

The shift in shares is not as significant as analysts may have expected, showing a skepticism from traders about the chances of Corbyn winning the majority in the December election. “The loses in BT have been limited due to the market perception that Corbyn hasn’t got a chance of becoming Prime Minister,” said John Truong, Equity Trader at Frederick & Oliver. He also highlighted the negative impact on shares in sectors earmarked for possible nationalisation such as the Utilities sector.

Rio Tinto shares spike after financial pledge to ERA

Ishen Patel
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3
Rio Tinto shares spike after financial pledge to ERA

Rio Tinto plc (LON: RIO) have seen their shares spike on Friday morning after the firm pledged to raise funds to clean up a uranium mine.

Shares of the London listed miner spiked 1.38% to 4,148p on Friday. 15/11/19 10:42BST.

The mining sector has become increasingly competitive, with firms such as Serabi Gold (LON: SRB) reporting strong third quarter figures. Additionally, Hochschild Mining (LON: HOC) have remained confident in future outlook after a mixed trading update.

Rio Tinto said they will take part and underwrite a fundraise by invest Energy Resources of Australia (ASX: ERA).ERA are looking to clean up and close the Ranger uranium project in the Northern Territory of Australia.

Rio own a 68% stake in ERA and will look to assist them in the clean up and eventual closure of the Ranger operation.

ERA has been looking to raise AUD476 million, or $323.4 million, to go towards the plan, but the firm has been unable to secure third-party underwriting support, so Rio Tinto will step in to “ensure ERA has the funds it needs”.

Bold Baatar, Rio Tinto’s head of Energy & Minerals, said: “We take mine closure very seriously and ensuring ERA is able to fund the closure and rehabilitation of the Ranger project area, through participating in this entitlement offer, is a priority.

“We have committed to supporting this offer with the objective of ensuring ERA is in a position to rehabilitate Ranger to a standard that will establish an environment similar to the adjacent Kakadu national park.”

ERA are set to end the Ranger project by January 2021, and clean up the side within five years of this date.

FTSE100 (INDEXFTSE: UKX) listed Rio Tinto have pledged to subscribe to $221 million rights of ERA and will fully underwrite $326 million of equity fundraising if no other party does.

“We have committed to supporting this offer with the objective of ensuring ERA is in a position to rehabilitate Ranger to a standard that will establish an environment similar to the adjacent Kakadu National Park,” said Bold Baatar, Rio Tinto’s group executive for energy & minerals.

Enteq Upstream dips despite 143% earnings hike

Jamie Gordon
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0
Enteq Upstream dips despite 143% earnings hike
Oil and gas producer Enteq Upstream plc (LON: NTQ) saw its shares dip despite posting progress in its half-year financials. The Company saw its revenues jump 58% year-on-year to $6.5 million for the half year ended 30 September 2019, which led a 143% surge in its EBITDA, up to $1.5 million. However, Enteq also noted that losses per share remained flat at 0.4 cents, while post tax losses widened by $100,000 to $400,000, while its cash balance dropped by more than a million dollars to $10.7 million. Operationally, the company added that its technology partnerships were ‘creating pull through’ for Enteq Upstream sales, and that during the period they secured an exclusive agreement with Shell for innovative Directional Drilling technology. Elsewhere in oil, Premier Oil PLC (LON: PMO) offered a positive forecast, while Tullow Oil plc (LON: TLW) issued a less promising outlook. Royal Dutch Shell plc (NYSE: RDS.A) and Nostrum Oil and Gas PLC (LON: NOG) both posted disappointing financial results.

Enteq Upstream comments

Martin Perry, CEO, responded to the update,

“Enteq has delivered progressive growth, both in revenue and adjusted EBITDA, for the third successive first half reporting period, with a particularly strong performance from international sales. Investment continues to be made into both new technology and strategic opportunities with the recent exclusive technology agreement with Shell significantly broadening the potential for Enteq.”

“Despite a recent drop in the number of active rigs drilling in North America, Enteq is optimistic for growth as new technology and markets are introduced. The board is confident in meeting its full year expectations.”

Investor notes

Following the update, the Company’s shares dipped 7.89% or 2.40p to 28.00p per share 14/11/19 13:01 GMT. Neither a dividend yield nor a p/e ratio are available, their market cap is £19.32 million.

Tesla decides against opening a European plant in the United Kingdom due to Brexit uncertainty

Dilara Kucuk
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1
Tesla decides against opening a European plant in the United Kingdom due to Brexit uncertainty
Elon Musk announced that Tesla (NASDAQ: TSLA) considered launching its first large European plant in the United Kingdom. However, Tesla decided against picking the United Kingdom as the location due to uncertainty created by Brexit.

Brexit Uncertainty

Elon Musk said that picking the United Kingdom as the location for Tesla’s European plant would be a mistake. According to Mr. Musk, it would be way too risky in a period of high economic and regulatory uncertainty in the United Kingdom.

Finalist : Germany

After considering multiple locations, Tesla decided to open its European plant in Germany. The new plant which will host a factory as well as a design centre will open up near Berlin. The new Tesla plant will create thousands of jobs in Germany. It will mainly focus on producing batteries and cars. Tesla has a huge growth potential due to increasing consumer demand for electric cars. The new European plant is likely to draw investment from multiple sectors due to its growth potential. The plant would have benefited the United Kingdom economy to a large extent if Tesla decided to open it in the United Kingdom.

Risk

Brexit uncertainty caused hesitation among many manufacturers. Earlier this year, Nissan (TYO: 7201) raised concerns that its European business model would become unsustainable in the case of a no deal-Brexit. Furthermore, other companies such as Sony (TYO: 6758), Ford (NYSE: F) and Barclays (LON: BARC) moved significant portions of their capital to other European capitals due to Brexit uncertainty. No-deal Brexit implies that companies in the United Kingdom might face tariffs when trading with European countries. In the case that the United Kingdom passes a Brexit agreement, it is still unclear what such an agreement would imply in terms of trade deals. The uncertainty created by Brexit makes other European countries more preferable for manufacturing giants such as Tesla. Brexit uncertainty holds back the flow of investment from European Union countries to the United Kingdom.

German Economy

Recent research on Germany’s economic growth showed that Germany is facing an economic slowdown. Tesla’s decision to open a large plant in Berlin is likely to boost Germany’s economy, and contribute to preventing economic stagnation in the region. Elon Musk stated that selecting Germany as the location for Tesla’s European plant was a strategic decision to benefit from Germany’s strong engineering industry.

Tracsis acquisitions lead full-year revenue surge

Jamie Gordon
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0
Tracsis acquisitions lead full-year revenue surge
Tracsis PLC (LON: TRCS), a provider of software, hardware and services for the rail, traffic data and wider transport industries, today posted an uplifting set of full-year performance fundamentals, on the back of a series of recent acquisitions. The headline figure was a 24% year-on-year jump in revenues, up to £49.2 million. This led hikes in the Company’s EBITDA and operating profit, which were up 12% and 13% to £10.5 million and £6.7 million respectively. Tracsis shareholders saw similar progress, with the Company’s full-year dividend rising 13% to 1.8p per share, and their fully diluted EPS increasing 8% to 27.42p. This came on the back of the acquisition of Compass Informatics, Cash and Traffic Management Limited and Bellvedi Limited, during the period. All of which served to enhance Tracsis’s “overall product and service offering”.

Operationally, the Company also told investors that it had secured a Five-year Framework Agreement with a ‘major Train Owning Group’, they had seen continued good performance across its software offerings, strong trading in its rail infrastructure businesses, and finally, that Chris Barnes had succeeded John McArthur as Group CEO.

Elsewhere in software, Wirecard AG (ETR:WDI) announced a new partnership, while AdEPT Technology Group PLC (LON: ADT), Intelligent Ultrasound Group PLC (LON: MED) and dotDigital Group plc (LON: DOTD) all reported strong sales.

Tracsis comments

Speaking on Thursday’s results, Chris Barnes, Chief Executive Officer, stated,

“In my first report as the new CEO, I am delighted to present these results which show good growth for the Tracsis Group compared to the previous year. The results reflect the impact of the acquisitions that we have completed in the period along with strong organic growth, something which is a key focus as we look to increase collaboration and expand our product offerings across the Group. The acquisitions we have completed in the year will have a full impact in the next year, and combined with the strong pipeline of organic sales opportunities provide a good platform for future growth of the business in the years to come. I have inherited a great business, with a wide range of compelling product and service offerings, a great team of colleagues, an excellent blue-chip client base, and I am excited about the prospects for the Group.“

Investor notes

The Company’s shares have rallied following today’s update, up 3.05% or 18.45p to 623.45p per share 14/11/19 15:17 GMT. The Group’s p/e ratio is 22.97, their dividend yield stands at 0.13% and their market cap is £179.24 million.  

Disney’s shares rise by 3.5% amid the launch of new streaming service Disney+

Dilara Kucuk
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3
Disney’s shares rise by 3.5% amid the launch of new streaming service Disney+
After a period of trial, Disney (NYSE: DIS) launched its long-expected streaming service Disney + on Tuesday. As a result of the launch, Disney’s shares experienced a rise by 3.5%.

Disney +

Disney + overwhelmingly fulfilled Disney’s expectations by attracting more than 10 million subscribers on its first day of launch. As a result of this success, Disney’s shares increased by 3.5% as a result of overwhelming consumer demand for the new streaming service. Disney tested its new streaming service in the Netherlands before officially launching the service on Tuesday. Currently, Disney + is available in the United States, Canada and the Netherlands. Furthermore, Disney + will become available in the United Kingdom and Ireland next March.

Content

Disney + offers original content as well as a comprehensive library of Disney, Pixar, Marvel and National Geographic movies. Furthermore, The first 30 seasons of The Simpsons is available on Disney +. Moreover, Disney + hopes to receive subscribers’ attention by streaming the first live-action Star Wars series “The Mandalorian”. Offering movies and TV shows that already have a huge audience makes Disney+ a competitive streaming service. Disney aims to compete with other streaming services such as Netflix (NASDAQ: NFLX) and Amazon (NASDAQ: AMZN). Consequently, Disney + has a large growth potential due to its already growing consumer demand. Disney + is available on the internet, iOS, Android, Roku, smart Tvs and game consoles. Disney is also looking into making the service available on Apple (NASDAQ: AAPL) products. New Marvel movies will be streamed exclusively on Disney+.

Investment

Disney expects to spend at least $1 billion on producing original content on Disney +. Furthermore, Disney+ aims to increase its investment in producing original content to $2.5 billion by 2024. All movies and shows on Disney + will be family friendly. Although Disney acquired Deadpool, it will not be streaming the movie on Disney +. While Disney will focus on developing Disney+, it will also continue producing movies for theatre release.

Cost

As of now, Disney + costs $7 a month or $70 a year. Additionally, Disney expects to have at least 90 million subscribers by 2024. Financial analysts predicted that it would take at least one year for Disney+ to have 10 million subscribers. Disney+ achieved this growth in one day. Increasing consumer demand for Disney+ reflects Disney’s growth potential in the future.
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