Nissan cut full year forecast causing shares to slide

Ishen Patel
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Nissan cut full year forecast causing shares to slide

Shares of Nissan (TYO: 7201) have slid during Wednesday trading, as the Japanese car giant cut its full year forecast to an 11 year low.

Shares slid 0.5% to JPY711. 13/11/19 14:47BST.

The update provided to Nissan shareholders reported a 70% in quarterly profit and announced the drastic cut in full year forecast.

The global automotive industry has had mixed experiences, where firms such as Renault (EPA: RNO) have cut their annual guidance and Japanese rival Suzuki (TYO: 7269) reported a quarterly slump.

Amid the slowing demand, Peugeot SA (EPA: UG) and Fiat Chrysler Automobiles NV (NYSE: FCAU) have agreed a $50 million tie up deal.

Nissan’s demand was hit by a strong yen and falling sales. Its poor performance highlights stagnation in the progression of the global automotive industry.

Nissan outlined a new executive team appointment, who are set to takeover on December 1st following a string of poor performances.

The scale of the recovery that is needed is evident as Nissan reported their second worst quarter performance in 15 years.

After the appointment of Chairman Ghosn, business has gone both after facing falling profits, uncertainty over management and tensions with shareholders.

Operating profit at Japan’s second-biggest automaker by sales came in at 30 billion yen ($275 million) in July-September compared to 101.2 billion yen a year ago.

“Our sales in China outpaced the market, but sales in other key regions, including the U.S., Europe, and Japan underperformed,” Stephen Ma, a corporate vice president who will become chief financial officer next month, told reporters.

Slow demand for cars in the US and China, has been fueled by the ongoing trade war. Both these countries happen to be the worlds biggest auto markets, which has led to the global slump.

“We are revisiting all our assumptions, and as you can see that is why we revised down our forecast for sales volume for the full year,” Ma said.

Nissan slashed its full-year operating profit forecast by 35% to 150 billion yen, which would be its worst full-year performance in 11 years, which will alert shareholders.

Taylor Wimpey report strong second half demand

Ishen Patel
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Taylor Wimpey report strong second half demand

Taylor Wimpey (LON: TW) have reported strong second half demand for their housebuilding services, despite tough market trading conditions.

Shares of Taylor Wimpey dropped 2.53% despite the update, trading at 165p. 13/11/19 14:33BST.

Britains third largest homebuilder gave shareholders reassurance that they were not going to let Brexit complications and external market issues affect trading.

Taylor Wimpey reported strong second half demands in a market where competitors such as Barratt Developments (LON: BDEV) have seen slow sales in their most recent update.

Additionally, Galliford Try (LON: GFRD) and Bovis Homes (LON: BVS) agreed a merger deal in order to combat the slump in demand and slow trading period.

Taylor Wimpey did warn homebuilders about potential rising costs in 2020, however in the Wednesday statement, the firm speculated that cost inflation may reduce in 2020 instead.

The FTSE100 (INDEXFTSE: UKX) listed home builder, reported a 12.5% rise in its orders, to £2.7 billion as it exploited strong demand coupled with lower interest rates and the governments Help to Buy scheme boosting demand.

“Forward indicators for sales have remained at healthy levels albeit we have seen some increasing customer caution, particularly in the higher-priced markets of London and the South East, as a result of the ongoing political and economic uncertainty,” the company said.

Total order book, excluding joint ventures, stood at 10,433 homes as at November 10 from 9,843 homes a year earlier.

“The key takeaway from Taylor Wimpey’s latest trading update is that the housebuilder says build cost inflation is starting to soften and that this trend will continue in the coming months,” Russ Mould, investment director at AJ Bell, said.

“This is significant as the combination of rising costs and stalling house prices have been putting pressure on the profitability of the wider industry and led the market to question its shaky foundations.

“The disappointment is that these cost pressures are not yet easing rapidly enough for Taylor Wimpey to maintain its previous margin guidance, even if overall guidance is maintained.”

Wizz Air raise their profit and capacity forecast, however shares slide

Ishen Patel
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0
Wizz Air raise their profit and capacity forecast, however shares slide

Wizz Air Holdings PLC (LON: WIZZ) have lifted their profit and capacity forecasts in an update to shareholders on Wednesday, as the budget airline reported increasing demand in first half trading.

Chief Executive Officer József Váradi said the airline was increasing its capacity growth rate to 22%, from 20% promised in July, which was another piece of good news for shareholders.

This comes at a very volatile time in the airline industry, where businesses face stiff competition, regulation and hesitating demand.

The recent demise of Thomas Cook (LON:TCG) a few months back along with big players such as IAG (LON: IAG) and Ryanair (LON: RYA) cutting their medium term profit forecasts has seen skepticism in the market.

In a time like this where competitors have been faltering, the news will please shareholders even more. Varadi said that he remained “bullish” about the London market.

“London is the single biggest travel market in the world, and I don’t think this is going to change any time soon, no matter what happens to the country, what happens throughout Brexit. “We are very keen on positioning ourselves strategically to the London market”, he added.

Wizz, which mainly flies to European destinations, said that net profit for the financial year 2020 would be between €335 million euros to €350 million, prior to this the range was €320 million to €350 million.

Wizz, which competes with Lufthansa’s (ETR: LHA) Eurowings brand at European airports such as Vienna, is performing well considering the industry struggles such as rising fuel costs, weaker demand and Boeing’s (NYSE: BA) 737 delivery delays.

“Despite rapidly rising fuel costs, Brexit uncertainty and chronic overcapacity in the sector, Wizz Air was still able to report record financial results for the first half of the year,” eToro analyst Adam Vettese, said.

Vettese added ““Wizz Air is leaving the rest of its low-cost rivals behind,” he said.

Toshiba report strongest profit figures in two years

Ishen Patel
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Toshiba report strongest profit figures in two years

Toshiba Corp (TYO: 6502) have given shareholders relief in their most recent trading update by producing strong profit figures and pledges to buy subsidiary businesses.

Despite the impressive update, shares of Toshiba slipped 0.26% during Wednesday business to JPY3,770. 13/11/19 13:41BST.

The Japanese tech giant posted its highest quarterly profit in two years, and also explained plans to buy out three listed subsidiaries.

Toshiba have had a tough time in financial 2019, as the firm was hit by accounting scandals and a management crisis.

Toshiba’s energy and infrastructure divisions drove the profit increase, as the company cut costs and reined in low-margin projects.

Ever since Toshiba went bankrupt in its US based nuclear power business, there has been a policy of recovery. This was evident with the sale of its prized memory chip division.

“We’ve changed everything, from marketing, procurement to the ways we take orders and produce products,” Toshiba CEO Nobuaki Kurumatani told Reuters.

Kurumanti alluded to plans in turning the tech conglomerate into a leaner company, adding “We are now compiling detailed strategies to boost the operating profit margin to 6% in three years (from 1% in the last fiscal year),”

Toshiba boasted operating profit figures of 44.23 billion yen for the second quarter ending in September.

This figure was the highest recorded, which was a rise of 6.25 billion yen just one year a go, and was the highest since the same period in 2017.

This figure also beat analyst and market figures of 25.97 billion yen as estimated by Refinitiv.

Toshiba maintained its profit forecast for the year ending March at 140 billion yen, versus 35.4 billion yen a year earlier, in line with the target the company set in its five-year plan.

Additionally, Toshiba have pledged to buy out subsidiaries such as Toshiba Plant Systems & Services (TYO: 1983), marine electrical systems maker Nishishiba Electric (TYO: 6591) and chip-making equipment maker NuFlare Technology (TYO: 6256) to turn them into wholly owned subsidiaries.

The buyouts, which will cost a total of 200 billion yen ($1.83 billion), as shareholders have pushed for action to take control of Toshiba’s portfolio.

Its five-year plan aims for 8-10% operating profit margin for the year ending in March 2024 by focusing on energy, social infrastructure and service businesses.

Unilever announce new Chairman appointment

Ishen Patel
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2
Unilever announce new Chairman appointment

Unilever (LON: ULVR) have announced the appointment of a new Chairman, following an update to shareholders on Wednesday.

Shares of Unilever jumped 0.74% during Wednesday trading, to 4,631p. 13/11/19 13:23BST.

Danish born Nils Andersen will be named Chairman, following his strong business background in consumer goods and logistics.

Unilever, like many global firms have seen a slump in trading and business following tough market conditions and political tensions.Henceforth, the appointment comes at no surprise timing for the consumer goods company, who have seen a tough period of trading in all departments.

Andersen has been a non-executive director on the Unilever board since 2015, and joins a new CFO appointment in Alan Jope, who took the role earlier this year.

Andersen replaces Marjin Dekkers, who is set to stand down after more than three years as Unilever Chariman.

Both Jope and Andersen come into their roles at a time where the FTSE100 listed firm (INDEXFTSE: UKX) have faced a slowdown in Indian and Chinese business, two of the biggest markets.

The Chinese-US trade war and slow domestic demand in both economies have slowed down trading, which Unilever alluded to in their updates for shareholders.

Andersen has experience working with AP Moller Maerskv (OTCMKTS: AMKBY) and Carlsberg A/S (CPH: CARL-B) and has boasted significant achievements at both firms.

Andersen currently is part of Unilever’s audit committee and serves as chairman of Dutch paint company Akzo Nobel NV (AMS: AKZA) and privately held Danish retailer Salling Group A/S. He is also a non-executive director at BP (LON: BP).

It has been a huge honour to serve as chairman of Unilever and I am very proud of the work we continue to do as a truly purpose-driven company,” Dekkers said. “My decision to step down has been a difficult one to make but I look forward to seeing Unilever go from strength to strength under Nils as chairman.” “On behalf of the board, I would like to thank Marijn for his strong leadership and the contribution he has made as chairman,” Andersen said. “I am very proud to have been asked to succeed Marijn and I look forward to working with the board and the Unilever Leadership team to support the company’s continued growth.”

Wetherspoon’s shares spike after positive quarterly update

Ishen Patel
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5
Wetherspoon’s shares spike after positive quarterly update
J D Wetherspoon plc (LON: JDW) have seen their shares spike following a positive quarterly update, coming at a time where competitors have seen slumps across the market. Shares of Wetherspoon spiked 1.85% on Wednesday to 1,553p. 13/11/19 12:57BST. The British pub chain boasted strong sales figures, which increased across the quarter as customers spent more its nearly 900 pubs across Britain and Ireland. The company reported higher demand for coffee, pink gin, real ale and breakfast. Additionally beer sales rose significantly as British consumer trends changed by the quarter. Wetherspoons reiterated their full year performance to be kept in line with annual expectations after a strong financial 2019, with increasing sales and continued political activism headlines from Chairman Tim Martin. In a market where competitors such as Greene King (LON: GNK) and Whitbread (LON: WTB) have been hit headlines of slowing business and takeover bids, Wetherspoons seem to be performing well. Additionally, while Slug and Lettuce owner Stonegate agreed to buy Ei Group (LON: EIG) for £1.27 billion, which may stiffen competition to the Wetherspoon The FTSE250 (INDEXFTSE: MCX) listed firm have been battling increased costs due to a mandatory minimum wage hike, higher property prices and power bills, however these rises were not to affect performance. J D wetherspoon’s like-for-like sales rose 5.3%, which exceeded both market and analyst expectations. “This is a strong start to the year in our view, ahead of our forecast revenue growth of 4.0% for the full year, but we are mindful of the early stage of the year, challenging market backdrop…and potential changes to national living wage,” Investec (LON: INVP) said in a note. Additionally, Chairman Tim Martin gave his opinions on Britains stance with the EU saying, “I strongly believe that the UK economy will be better off on the basis of ‘no-deal’ rather than the deal proposed by the government,” “The trenchant debate surrounding Brexit, thanks to our democratic freedom, has, in my view, exploded myths and increased knowledge on key subjects like trade, tariffs, government and Europe – on a vast scale,” Tim Martin continued. “For example, the pugnacious Jean-Marc Puissesseau, head of Calais ports, has completely undermined the false presumption that the channel ports will seize up post Brexit, without a ‘deal’.”

British Land shares slump after poor interim update

Ishen Patel
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1
British Land shares slump after poor interim update
Shares of British Land Company PLC (LON: BLND) have slumped following an interim trading update which highlighted poor performance and a widened loss. Shares are trading at 550p, after slumping 4.35% on Wednesday. 13/11/19 12:04BST. The British firm alluded to tough trading conditions as a reason for the drop in performance, amid a “challenging” retail environment and an unpredictable UK political backdrop. Competitors have also fallen victim of the recent slump, as Intu (LON: INTU) and Derwent London (LON: DLN) saw their shares crash following income expectations being slashed. The FTSE 100-listed (INDEXFTSE: UKX) property development and investment company saw a pretax loss for the six months to the end of September that widened to £440 million from £42 million a year prior. Additionally, revenue sunk 34% to £328 million from £499 million which alarmed shareholders on Wednesday morning. British Land explained the poor performance by noting the increase in the downward valuation movement on properties of £184 million, and an increase in the capital and other income loss from joint ventures and funds of £128 million. Underlying profit, was £158 million in the first half, falling 9.7% from £175 million reported a year ago, which will cause concern for seniority at British Land. Despite the slump in performance, British Land increased its interim payout by 3.0% to 15.97 pence per share from 15.50p it paid a year before, which may have acted as an attempt to win shareholder optimism. “Looking forward, we expect our markets to remain uneven, but we have kept debt levels low, our balance sheet is strong and flexible and we have a broad spread of expertise across our business,” said Chief Executive Chris Grigg. “We expect retail to remain challenging, so we’ll focus on driving operational performance and maintaining occupancy”. “We see early signs that some liquidity may be returning to parts of the market, and our focus will remain on thoughtfully progressing our strategy to reduce exposure”. Grigg added “In London, we expect the market to remain good, with supply relatively constrained and high quality space, in well-connected, vibrant parts of town continuing to attract demand from a range of businesses. These dynamics are highly supportive of our Campus approach.”

SSE report first half profit, causing shares to jump

Ishen Patel
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SSE report first half profit, causing shares to jump
SSE PLC (LON: SSE) have reported a first half profit, causing shares to jump during Wednesday trading. This comes after a tough period of trading for SSE and a proposed sale involving Ovo. Shares of SSE trade at 1,310p spiking 1.56%. 13/11/19 11:47BST. The Chief Executive of SSE noted that he wanted the next government to address environmental concerns, and to take action on promoting renewable power at the front and centre of their climate change legislation. He said: “The climate emergency needs action now and offshore wind has proven itself to be one of the most cost effective ways this country can decarbonise and get on the road to Net Zero. “Coupled with lifting the moratorium on onshore, the next Government could deliver at least another 10GW of clean, green energy, before the end of its term – enough to power over seven million homes.” The FTSE100 (INDEXFTSE: UKX) listed firm reported that profit rose to £128.9 million from a loss of £284.6 million last year, as SSE experienced a stagnated financial 2018, hence these results will be even sweeter. Earnings per share reached 6.2p, up from -26.4p in 2018, which will certainly please shareholders. However, the British Energy supplier did note a £489.1 million impairment on the sale of its household energy and services business in the UK, which Ovo Energy agreed to buy in September for £500 million. The deal with Ovo is expected to be completed by early 2020, after the CMA triggered an investigation to check regulatory compliance. In the energy industry, many firms have seen stagnating trading figures following tough market conditions. Earlier this year, both Centrica (LON: CNA) and EON (ETR: EOAN) saw their shares crash following slumps in operating profits and poor trading periods. Richard Gillingwater, chair of SSE, said: “SSE is progressing well in the execution of its low–carbon strategy with the sale of SSE Energy Services leading to group more focussed on renewable energy and regulated electricity networks. “Clearly some headwinds remain in the sector with political uncertainty and aspects of UK government policy being subject to judicial process, however, we have strong optionality to create value through the low carbon transition and deliver our dividend commitments.”

Smiths Group shares rally following bullish update

Ishen Patel
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Smiths Group shares rally following bullish update
Smiths Group plc (LON: SMIN) have seen their shares rally following a bullish trading update, published on Wednesday morning. Shares of Smiths Group are trading at 1,674p seeing a 3.46% rise. 13/11/19 11:28BST. Smiths Group said that its annual expectations remain unchanged following a strong trading period leading to double digit revenue growth in the first quarter. In September, shareholders of Smiths Group saw shares rally after a ICU Medical (NASDAQ: ICUI) revived their interest in the British Engineering firm, however this approach was rejected. The FTSE 100 (INDEXFTSE: UKX) listed engineer said revenue for the three months to the end of October was up 11% on an underlying basis, thanks to continued “good” growth in John Crane in both original equipment and aftermarket. Elsewhere, Smiths reported strong growth in its Detection division, helped by contract wins, while the Interconnect unit was hurt by a slowdown in the semiconductor market. The Flex-Tech Division reported organic growth after applications were reported in the aerospace and industrial sector. “For the full year, the group expects year on year growth to be weighted towards the first half and to result in a more even balance in overall performance between the first and second halves of the year,” it said. In an industry which is becoming increasingly competitive, rivals have also made gains. Ultra Electronics (LON: ULE) gave a trading update that was inline with expectations, additionally Boeing (NYSE: BA) experienced a strong trading year with continued demand. For the full year, the London-headquartered company said it expects year-on-year growth to be weighted towards the first half. After a strong trading update from the British engineer, shareholders will be pleased about the performance from the FTSE100 listed engineer. This could be the start of a strong trading year for Smiths Group, and throughout 2019 the firm alluded to technical and operational developments in their products. Shareholders should remain optimistic about future outlook following the reassurance provided in this morning’s update.

Tullow Oil shares crash after production warning

Ishen Patel
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Tullow Oil shares crash after production warning
Shares of Tullow Oil plc (LON: TLW) crashed on Wednesday after the oil and gas firm warned shareholders about their 2019 production figures potentially missing targets following operational problems in Ghana. In February, Tullow hit headlines after they announced that they would shift to an annual profit after a hike in revenues, which continued throughout a turbulent 2019 for the multinational oil and gas exploration firm. The Oil market has been hit by market volatility, and big time names such as Shell (LON: RDSB) and Total SA (LON: TTA) had been hit by low oil prices leading to slumping profits. During 2019, London-based oil producer Tullow sees production averaging 87,000 barrels of oil per day, but 2019 guidance was cut this morning. In July, Tullow had warned production was likely to be between 89,000 barrels and 93,000 barrels, lower than the 90,000 barrels to 98,000 barrels initially guided, which caused shares to crash on Wednesday. The FTSE250 (INDEXFTSE: MCX) listed firm said the lower than forecast production is mainly due to topside issues at the Jubilee field, which has constrained water injection and gas handling, as well as the suspension of a well at the TEN field. “Ghana production has not met our expectations this year, and we are working closely with our Joint Venture Partners to ensure that both fields perform to their potential,” said Chief Executive Paul McDade. McDade added “Tullow expects to deliver robust free cash flow for the full year. This has been supported by our continued disciplined capital investment and underlines our commitment to further reduce our debt and pay returns to shareholders”. In Guyana, Tullow added that they were working with London listed Eco Atlantic, to develop the Orinduik block after two discoveries were made in July. Eco Atlantic and Tullow on Wednesday said initial analysis of samples suggest the two wells contain heavy crude oil with a high sulphur content, which may not be suitable for industrial use. “Recent analysis has shown that at these locations we have encountered heavy oil. We remain confident in the broader light oil potential of the Orinduik and Kanuku blocks located in this prolific oil basin,” said Tullow. Eco Atlantic Chief Operating Officer Colin Kinley added: “Having spent three decades working within the heavy oil industry, we are very encouraged by the initial analysis of these wells and good parameters that define potential pathways to recovery. “The fact the oil is already hot in the reservoir, and mobile, and has high quality porous sand to travel through, helps to eliminate a great part of the conventional heavy oil challenge.” Tullow concluded that Kenyan operations were also making good progress, with a final investment decision to be made in the second half of 2020, which may act as a consolation for shareholders. Shares of Tullow plummeted 22.39% as a result to 159p. 13/11/19 11:19BST.
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