JPD Capital launches medicinal cannabis investment vehicle
JPD Capital has launched a cannabis focused fund to harness the growth of the global medicinal cannabis market.
The fund has said they will invest in companies anywhere in the ‘seed-to-sale’ supply chain, from cultivators all the way through to CBD brands.
JPD Capital is domiciled Guernsey with operations based in London.
The cannabis investment vehicle has a minimum investment of £25,000 and is restricted to sophisticated, high net worth and professional investors.
Jon-Paul Doran, founder of JPD Capital, said: “I am delighted to be launching our medicinal cannabis fund in the UK. The success of our pharmaceutical arm Eco Equity over the past 18 months shows there is appetite for investment in the industry.
“The cannabis market is the fastest-growing market of 2019, proving its unstoppable growth and obvious attraction for investors.”
Look to iShares JP Morgan Emerging Markets Bond ETF for exposure to Ukraine’s growing economy
Most of Western Europe is struggling with economic stagnation induced by a contracting manufacturing sector.
By looking further east to the Ukraine you will find a economy not so heavily reliant of capital intensive manufacturing but one being propelled forward by talent in the technology sector.
Ukraine’s economy grew at 4.1% year-on-year to the third quarter 2019 while its unemployment rate dropped to 7.3%, a five year low.
The entrepreneurial spirit pushing the economy was evident from meetings we had at Web Summit with a number of entrepreneurs and organisations promoting the nation’s tech sector.
We met with representatives of Unit City, a tech village based in Kiev that provides training to young developers and encourages them to remain in Ukraine, as opposed to join tech giants in Silicon Valley.
As well of providing facilities for developers, Unit City is home of over 100+ Ukrainian start ups and is representative of the innovation and technology sector helping economic growth in Ukraine.
It is not just private enterprise promoting the technology sector, in late 2019 the Ukrainian Prime Minister launched the IT Creative Fund to help train aspiring IT students.
With this emphasis on education, and to keep home grown talent at home, Ukraine is setting themselves up for significant economic expansion.
iShares JP Morgan Emerging Markets Bond ETF
To gain diversified exposure to growth in Ukraine we look to iShares JP Morgan Emerging Markets Bond ETF. This is a very unexciting method of taking exposure in Ukraine but the equity markets are not yet developed enough for fund managers to include in a meaningful manner with most Eastern Europe mandated funds dominated by Russian equities. For example, the equity focussed iShares MSCI Eastern Europe doesn’t have any direct holdings in Ukraine. Given the sparse inclusion in funds, one also look to companies expanding operation into Ukraine such as Mondelez.Tritax Big Box REIT build from August update as portfolio continues to expand
Tritax Big Box REIT PLC (LON:BBOX) have told the market that they expect strong trading across 2020, which has seen them build on an impressive update in August.
Tritax Big Box said that it expects a year of growth, as the value of its warehouse portfolio rose in 2019 due to growth in the market for large logistics assets.
Colin Godfrey, CEO, Fund Management, said:
“The market for very large Big Box logistics assets continues to display strong fundamentals for 2020 and the longer term. Structural tailwinds are supportive as occupiers upscale the size of their logistics assets1 to further increase efficiency, reduce costs and rationalise their supply chains, in the face of the rapid transition to omni-channel purchasing by consumers.
This year, we see the potential for further sectoral yield compression after a largely static 2019, which was impacted by the uncertainty of Brexit and the general election. Investment volumes have the potential to increase, driven by activity from overseas investors and institutions continuing to re-weight their portfolios. The all-property yield gap versus 10-year Gilts is wide at nearly 400bps.”
The real estate investment firm said that its portfolio was valued at £3.94 billion up till December 31, which saw a notable rise from the 2018 figure of £3.42 billion.
Six months into 2019, in June the portfolio value stood at £3.85 million, and on a like for like basis the firm saw a 1.8% lift in value across 2019.
Tritax Big Box added that it is targeting an aggregate dividend of 6.7 pence for 2019, which shareholders will be pleased about as this sees progress across the year.
For the first nine months of 2019, the firm paid out a total of 5.025p and on a sweeter note for shareholders Tritax Big Box said it intends to pursue its progressive dividend policy across 2020.
Tritax said it has £1.7 billion of committed debt financing in place, of which £1.2 billion was drawn as at the end of December, adding that 87% of its committed debt is financed on an unsecured basis.
Godfrey concluded by saying:
“Occupier take-up looks promising for 2020 with over 10 million sq ft of lettings reported to be under offer and carried over from 2019. Speculative supply has slightly decreased from 2018, but importantly reduced by c.50% for buildings over 500,000 sq ft, where demand continues to outstrip supply. Attractive levels of rental growth are therefore expected to continue, which when combined with 53% of our contracted rental income receiving fixed or minimum increases will support the Group’s progressive dividend policy.
Following the acquisition of db symmetry (since rebranded Tritax Symmetry), Development Assets represent c.11% of our GAV and we now control one of the UK’s largest logistics landbanks, providing the opportunity for internal growth at attractive yields. In 2020, our primary focus will be on delivering value to our shareholders through our in-house pre-let developments which we expect to fund primarily by recycling capital from the sale of specific Investment Assets, and disposal plans for the current year are already underway. We continue to identify opportunities to add further value through acquiring new Investment Assets and forward funded developments.”
Tritax Big Box build from August
In August the Company told investors that operating profit before changes in fair value had extended 5.7% on a year-on-year basis, to £60.7 million for H1 2019. Its portfolio value also grew 12.6% in an on-year comparison, up to £3.85 billion, with rent roll also rising 3.5% to £166.8 million. Notably, the company declaring a dividend for the period of 3.425p per share, up 2.2% on-year. Similarly, adjusted EPS lifted modestly, up 0.9% to 3.41p a share. Tritax Big Box total return for the six month period was down by 4.68 points to 0.42%, and EPRA net asset value per share dipped 1.8% to 150.08p. “The long-term fundamentals of our market are positive. The sector continues to benefit from the structural change in shopping habits, as consumers switch from the high street to buying online, creating ongoing demand for logistics space to fulfil these orders.” Shares in Tritax Big Box REIT trade at 139p (-0.29%). 3/2/20 12:02BST.Imperial Brands appoint current Inchcape Chief Executive
Imperial Brands (LON:IMB) have said that they have appointed a new Chief Executive on Monday morning.
Shares in Imperial Brands trade at 1,950p (-0.010%). 3/2/20 11:37BST.
The tobacco company said that car dealer Inchcape PLC’s current Chief Executive Stefan Bomhard will join in a future date.
Notably, the firm said that Aliso Cooper who is their Chief Executive has stepped down with immediate effect now that an adequate replacement was appointed.
Thérèse Esperdy, Chair of the Board said:
“After a thorough search process, which attracted strong, high calibre interest, the Board is delighted to appoint Stefan as Chief Executive of Imperial Brands. Stefan has significant experience across multiple consumer sectors and within large multinational organisations, particularly in brand building and consumer-led sales and marketing. He has demonstrated strong strategic and operational leadership and has developed a track record of delivering successful transformational change during his tenure at Inchcape. Stefan takes on the Chief Executive role at a significant point in Imperial’s development and the Board is confident that his experience and expertise will drive the business forward. Stefan’s initial priorities will be to strengthen performance and enhance shareholder value.”
Stefan said: “I’m delighted to be joining Imperial as the next Chief Executive. I believe the business has a great future and I’m looking forward to working with the Group’s employees to maximise the opportunities that lie ahead and build a stronger, more sustainable business.”
Period of change for Imperial?
In November, Imperial updated shareholders by saying that the yearly trading figures were poor as sales of Next Generation products slumped, leading to the appointment of a new chair. For its year ended September 30, the tobacco company’s pretax profit dropped 7.1% to £1.69 billion from £1.82 billion, which concerned senior stakeholders. The profit decline was worsened by a rise in distribution, advertising & selling costs to £2.3 billion from £2.0 billion and an increase in administrative & other expenses to £1.75 billion from £1.60 billion. This lead to a slump in operating profit by 8.3% to £2.2 billion from £2.4 billion. In this update, it was announced that Cooper would be stepping down and today it seems a replacement has been found for Imperial. Bomhard will take up the role at an interesting time for Imperial, where the firm seems to be going through a period of operational and structural change. The new appointment will certainly be presented with a different challenge to his previous, and shareholders will be keen to see what direction the firm goes in.Ryanair boast strong festive trading as budget airline swings to a profit
Ryanair Holdings plc (LON:RYA) have reported strong festive trading on Monday morning, as shares have sustained in green.
Across its third quarter, which included the festive period the budget airline reported a profit which teased shareholder’s excitement.
Notably, Ryanair saw a loss last year and the update today certainly shows progress in what seems to be a volatile airline industry.
In the three month period to December 31 – the airline firm recorded operating profit of €91.3 million, compared to a loss of €68.0 million for the same period a year before.
Additionally, the firm saw traffic rise 6% giving a total of 36 million customers.
Notably, total operating revenue in the third quarter was up 21% year on year to €1.91 billion from €1.58 billion. Traffic rose 6.2% to 35.9 million, while revenue per passenger grew 13%. Additionally, the budget airline saw its load factor increase by 1% from 95% to 96%.
Looking at total operating expenses, Ryanair noted that these increased by 9.7% to €1.81 billion from €1.65 billion.
Ryanair said “Our fuel bill rose 14% (+€83m) to €0.7bn due to higher prices and 6% traffic growth. Ex-fuel unit costs rose by 1% due to higher staff (increased pilot pay, higher crew ratios as pilot resignations have slowed to almost zero) and maintenance costs (older aircraft longer in the fleet due to the Boeing MAX delivery delays), offset by falling EU261 costs due to improved punctuality.”
Adding “Our fuel is 90% hedged for FY20 at $71bbl and 90% of our FY21 fuel is now hedged at $61bbl, delivering over €100m fuel savings into FY21. We continue to negotiate attractive growth deals as airports compete to win Ryanair’s very limited traffic growth.”
Looking forward, the firm remained confident despite operational and productional delays from Boeing (NYSE:BA).
Ryanair said that the first deliver of new MAX aircrafts will not arrive till September or October 2020, however these have been dubbed as “game changer” aircraft giving 4% more seats with 16% less fuel burn.
Speaking on Boeing delivery timeframes, the budget airline said “Due to these delivery delays, we won’t see any of these cost savings until late FY21. As a direct result of these delivery delays, we plan to extend our 200m p.a. passenger target by at least one or two years to FY25 or FY26.”
Guiding forward, the firm remained confident about their ability to deliver results in a tough market saying:
“As announced on 10 Jan., Ryanair’s FY20 PAT guidance has risen to a range of €0.95 billion to €1.05 billion thanks to stronger Christmas and New Year travel bookings, at better than expected fares. Q4 forward bookings are 1% ahead of this time last year at slightly better than expected average fares and we now expect full year traffic to grow by 8% to 154 million guests. Ancillary revenues continue to grow, but at a slower rate having annualised the cabin bag changes in Nov.
This will support full-year revenue per guest growth of between +3% to +4%. The full year fuel bill will rise by €440 million and ex-fuel unit costs will increase by approx. 2%. On the basis of current trading, Ryanair expects to finish close to the mid-point of the new PAT guidance range. This guidance is heavily dependent on close-in Q4 fares and the absence of any security events.”
November passenger figures
Ryanair saw their passenger numbers climb across November, which was one of many reasons why the firm swung to a profit in the four month period.
November traffic rose by 4.0% year-on-year to 10.5 million from 10.1 million and in Lauda, by 67% to 500,000 from 300,000 last year.
Notably, this came after a cut in production and profit estimates and a series of slow updates where the airline industry had been hit by external shocks.
Boeing delays weigh on Ryanair
In December, Ryanair announced that they had intentions to close two more bases following a shortage of Boeing 737 MAX aircrafts being delivered.
Ryanair said it now expects to receive just 10 MAX aircraft rather than 20 as previously predicted.
The Irish budget airline said that as a result of the aircraft delivery delays, it has cut its traffic growth forecast for the year to March 31, 2021, by 0.6% to 156 million passengers from 157 million.
Receiving just half the 737 MAX aircraft means Ryanair will also close two more bases in summer 2020, in Nuremberg, Germany, and Stockholm Skavsta, located roughly 100 kilometres from the Swedish capital.
Certainly, the production delays are not just weighing up on Ryanair but many competitors as well.
Despite these delays, it seems that Ryanair have managed to pull a rabbit out of the hat, and have given shareholders a very impressive update on Monday.
Shares in Ryanair trade at €15 (+4.51%). 3/2/20 11:06BST.
Coronavirus spreads, as UK Government pledges £20 million to CEPI
The coronavirus, those dreaded words that have been the subject of not just British headlines, but global headlines is spreading and at a rate that many did not once anticipate.
The virus has been vastly expanding and spreading throughout the world, and reports had surfaced suggesting that UK was now in the light of exposure to the deadly virus.
Today, the UK Government has donated £20 million towards a vaccine to help fight the disease, in an attempt to speed up the process for which a vaccine can be produced.
As the death tolls rise, as the numbers of affected individuals climb global governments have now seen an urgent need to address the pressing issue, how can this deadly virus be fought?
The death toll as reported this morning had reached 361 in China, and total cases of affected persons had surged to 17,000.
But yet, it seems that the containment procedure is not being handled and global governments are now cooperating to address what the media are calling ‘a global coronavirus disaster’.
11 British people who had been in Wuhan are now being placed in quarantine for a two week period, to prevent any chance of the deadly disease spreading further in the UK.
Reports have surfaced already suggesting that the coronavirus had been sighted in York, and as a result over 240 calls to a dedicated coronavirus helpline in York had been reported.
The £20 million which has been pledged by the British Government will go to CEPI – the Coalition for Epidemic Preparedness Innovations – a global body aiming to fast-track a vaccine within six to eight months according to the BBC.
CEPI chief executive Dr Richard Hatchett said such a tight timescale was “unprecedented”.
“This is an extremely ambitious timeline – indeed, it would be unprecedented in the field of vaccine development,” Dr Hatchett said.
“It is important to remember that even if we are successful – and there can be no guarantee – there will be further challenges to navigate before we can make vaccines more broadly available.”
The coronavirus has been declared as a global health emergency by the World Health Organization, and the cases of diagnosis are growing by the day.
Certainly, the coronavirus outbreak seems more potent than was once thought and global governments will have to cooperate to end the epidemic which has proved fatal.
Future shares rally over 6% as annual results set to beat expectations
Future plc (LON:FUTR) have seen their shares rally over 7% on Monday morning following confident expectations.
Shares in Future trade at 1,362p (+6.41%). 3/2/20 11:07BST.The British media firm said that it expects its annual results to be ahead of market expectations, despite both political and economic uncertainties affecting many British businesses.
The magazine and media brand said that it had carried strong trading momentum across the four month period, which ended on January 31st.
Following the strong trading form, Future said that they can expect financial year results to be “materially ahead of current market expectations”.
Interestingly, the firm saw audience members across its media division rise which caused the surge in strong organic revenue.
Future also saw higher conversion off margin revenue in eCommerce and digital display advertising.
For its financial year ended September 30, 2019 the company posted pretax profit of £12.7 million on revenue of £221.5 million.
Future commented: “The Group has continued to see strong momentum in the year to date; in particular, we have continued to grow the audience numbers within the Media division. This underpins strong organic revenue growth, which together with improved conversion of higher margin revenues, in both eCommerce and digital display advertising is benefitting the Group’s trading results. In addition, our cash position remains ahead of the Board’s expectations, also reflecting the strong cash conversion of our Media revenue streams.”
Interestingly, where other British firms have seen slumps in their trading Future have made ground. Shareholders will be particularly impressed with the confident, resilient nature of the firm as reflected in today’s update. The political and economic turbulence is something which has affected all British business, but whilst there still could be periods of slow trading across 2020 some reassurance has been provided by the government. On Friday, it was made official that UK negotiations with the EU had been formally completed and the process of withdrawal would be commencing. However, this is just a formality and investors remain cautious as Brexit “finally happens”.Shaftesbury reports high footfall and stable demand during festive period
REIT, Shaftesbury plc (LON:SHB), the company with a 15.2 acre portfolio in London’s West End, reported stable demand and high footfall during the three months covering the 2019-2020 festive period.
The company said it achieved £8.0 million of leasing transactions at or above September 2019 ERVs during the three months to 31 December 2019. It added that EPRA vacancy had narrowed from 3.7% to 3.6% between September and December, of which 1.3% was under offer.
It continued, saying that 211,000 squ foot of its property was under refurbishing and repurposing, which represented 10.3% of its portfolio. It concluded its summary, saying that half of the commercial space in its 72 Broadwick Street scheme had been pre-let, with ‘encouraging interest’ in the remaining space.
Shaftesbury comments
Brian Bickell, Chief Executive, commented:
“Traditionally, the period leading up to and throughout Christmas and New Year has always seen the highest footfall and busiest trading, and this year has been no exception. Early data indicates that generally our occupiers, particularly F&B businesses, have seen turnover growth over the period, in contrast to reports of static or declining revenue and footfall nationally.”
“There are early signs of increasing activity in institutional property investment markets, although, in our locations, private owners remain reluctant to sell assets which, in common with our portfolio, offer both security and potential for income and value growth.”
“Our proven strategy and impossible-to-replicate portfolio continue to give us confidence in the long-term prospects for the business.“
Investor notes
The company’s shares rallied modestly by 0.78% or 7.00p, to 907.00p per share 31/01/20 14:47 GMT. Peel Hunt analysts reiterated their ‘Hold’ stance on Shaftesbury stock. The group’s p/e ratio stands at 50.56, their dividend yield 1.95%.Sylvania Platinum shares dip 7% as it faces operational challenges
Platinum mining company Sylvania Platinum (LON:SLP) posted record half-year production, but a slow-down in output lead to a somewhat subdued set of second quarter results.
Sylvania Dump Operations production was down from 20,797, to 19,206 4E PGM between the first and second quarters; which brought the half-year to a record total of 40,003 ounces.
The group also posted net revenue narrowing from $31.2 million to $27.9 million, though its cash balance widened from $26.6 million to $33.8 million between the two quarters.
The reduced performance in the second quarter was caused by operational and market hindrances. These included; power interruptions causing downtime in operations, water management continuing to be a focus at some operations and a depressed chrome market putting pressure on chrome miners.
Sylanvania Platinum comments
Speaking on the results, company CEO, Terry McConnachie, said:“The Group, through the continued diligence of our management and operations teams, has once again produced a strong result in spite of challenges relating to water and power which are both outside of our control. Despite downtime and consequential chokes to the processing plants, our teams were able to explore and implement mitigatory measures and produce a solid 19,206 4E PGM ounces for the quarter. Historically, the second quarter is known to present challenges in terms of a dip in production due to the host mines’ shutdown over the festive period, however, due to careful planning and controls, the SDO were able to perform very well.”
“The recent communication of potential retrenchments at some of our host mines has necessitated that we review our feed strategy in terms of alternative feed sources to compensate for the potential loss of any current arisings or RoM material to our plants. We have been in similar situations before and I believe that through committed engagement with our host mines, and based on flexibility between current arisings and dump material on our operations, we will be able to manage the potential change in ratio of feed sources effectively to minimise or prevent the potential impact of the host mines downsizing.”
“The Group has reported a cash balance of $33.8 million, following the $2.9 million dividend payout in November 2019, which was aided by an increase in the PGM basket price. The Group continues to maintain a good cash holding which will enable the funding of any further capital expenditure. The performance in the first half of the year has established a robust production base to build on and sets us on track to deliver on our targets in 2020.”
Investor notes
Following the update, the company’s shares dipped 7.39% or 3.22p to 40.28p per share 31/01/20 14:25 GMT. Liberum reiterated their ‘Buy’ stance on Sylvania Platinum stock; the group’s p/e ratio is 8.94, their dividend yield is modest at 1.93%.Do Unilever shares present better value than this consumer peer?
Unilever (LON:ULVR) recently reported fourth quarter and 2019 full year results that were met with positivity from the market who initially sent shares higher.
The key positive takeaways were a 2.9% increase in underlying sales and a 2% increase in turnover.
Margins also improved with operating margin increasing 50bps to 19.1%.
Alongside the full year results, Unilever announced intentions to explore the sale of brands such as P&G Tips and other brands they felt no longer offered any contribution to their efforts to create a more sustainable and streamlined business.
“Despite growth being slow they have beat the market expectation and announced a review of the overall tea business. With performance lagging over the last 12 months the numbers are hardly dazzling but will give shareholders some comfort as the business looks to be turning a corner,” said John Woolfitt, Director of Trading at Atlantic Capital Markets.