Deutsche Bank shares dip on modest predictions

Ishen Patel
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Deutsche Bank shares dip on modest predictions

Deutsche Bank AG (ETR: DBK) have seen their shares dip on Tuesday morning, after the firm gave investors a modest presentation update.

Deutsche Bank has been in recent crisis, and has experienced a turbulent 2019 where shareholders have been kept on the edge of their seats.

The bank in July had flagged a loss this year and announced restructuring plans worth $7.4 billion including the elimination of 18,000 jobs.

At the end of October, the firm reported a third quarter loss which sent shares in free fall.

The third quarter results followed a poor trading update in the second quarter which puts heavy scrutiny on the bank’s operations and management.

The quarterly loss follows one of €3.15 billion in the second quarter and contrasts with a €229 million net profit a year earlier.

Today, the firm pared back its revenue growth target, which sent shares in red.

The firm blamed rock bottom interest rates for bruising business in a modest update to shareholders and investors.

The German bank said it expected revenue at its core banking business to grow by just 1% in the run up to 2022, half the growth level estimated in July. It put emphasis instead on efforts to cut billions of euros in costs.

Chief Executive Christian Sewing pointed to “significant progress” in recent months in turning around the bank in the presentation ahead of an investor day. But the bank highlighted the impact of low interest rates in the euro zone on its business.

The firm also added that low rates would hurt its retail bank as well as corporate banking in the medium term, but remained hopefully in its investment banking division.

The bank said it had taken steps to cope with low rates, including lending more and “selectively” passing on to customers the costs it faces for keeping cash at the central bank.

The update that Deutsche Bank have provided, reiterate the state of the European banking industry.

Just one week ago, Moody’s lowered the UK banking sector’s outlook from stable to negative.

Alongside Deutsche Bank, many other firms in the industry have experienced business slumps.

At the end of October, Lloyds Banking Group PLC (LON: LLOY) saw their shares crash following a poor quarterly update. The firm saw a 97% fall in pre-tax profit for the third quarter from last year.

Additionally, FTSE100 listed HSBC (LON: HSBA) are another household name who have experienced the slump, and have announced changes to their structural organization as well as a strategy to lower costs leading to job cuts.

Shareholders of Deutsche Bank will remain cautious as it seems that the German firm is fighting an increasingly tough battle, however if a concerned effort is made to cut costs and stimulate business then shareholders can hold onto something.

Shares of Deutsche Bank trade at €6, dipping 1.06%. 10/12/19 11:30BST.

No festive sparkle for UK supermarket sales

Dina Caruso
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No festive sparkle for UK supermarket sales
Supermarket sales growth slowed over the past 12 weeks, new data by Kantar revealed on Tuesday. Indeed, year-on-year supermarket sales grew by merely 0.5% as political uncertainty surrounding the upcoming general election weighed on shoppers, Kantar said. Indeed, with Brexit delayed yet again, parties now campaign to win votes ahead of Thursday’s general election. Kantar added that shoppers seem to be delaying their preparations for Christmas following a dull Black Friday shopping period and wet autumn. The data shows that shoppers have made on average one less visit to the shops over the quarter compared to the same period a year prior. “We’re yet to see consumers ramp up their spending in the run up to Christmas and, as anticipated, Black Friday only brought a limited boost for the grocers,” Kantar said in its report. “The number of people claiming to take advantage of Black Friday this year fell to 53% from 57% in 2018, with signs of ‘promotion fatigue’ among consumers, an increased scepticism regarding the value of the deals on offer, and some retailers pulling back from the day all together.” Kantar’s data revealed that Christmas puddings and seasonal biscuit sales were down 16% and 12% over the past four weeks, compared to the same period the year prior. Tesco (LON:TSCO) performed best out of the larger supermarkets over the period. It recently began to offer a subscription customer loyalty scheme, though Kantar said that it is too soon to determine whether Clubcard Plus has had an impact, and sales dropped by 0.8%. Meanwhile, sales at Sainsbury’s (LON:SBRY) declined by 1.1%, at Asda (NYSE:WMT) by 1.9% and at Morrisons (LON:MRW) by 2.9%.

Santander cut senior pension perks

Ishen Patel
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0
Santander cut senior pension perks

Santander (LON: BNC) have joined the long list of financial firms who have slashed the pension perks of their senior management teams.

Shares of Santander currently trade at 298p (-1.88%). 10/10/19 11:14BST.

The firm announced that UK Chief Executive Nathan Bostock will have his pension allowance cut from next year.

The bank has told shareholders that it will look at investor concerns to rein in senior management perks.

Bostock’s pension allowance, valued at £558k will be reduced from 35% of his base pay to 22% and to 9% in 2021.

This will equate to a cut of more than £400k across two years, following activism from shareholders to make these cuts.

He received a total pay package worth £6.4 million in 2018, including a final £1.8 million payment for share awards he gave up when he left Royal Bank of Scotland.

The move to cut pensions comes at a good time for Santander shareholders, and the firm has seen a positive few weeks of trading. At the start of November, Santander announced that they had invested into Ebury, which sent shares up.

Ebury is a trade and foreign exchange facilitator for small and medium-sized companies and have boasted impressive figures in their recent trading years.

Santander join rivals such as Standard Chartered who announced that they will cut the pension allowance for their Chief Financial Officer and Chief Executive Officer will be cut following discussions with shareholders.

Winters’s pension allowance will be reduced by 50% to £237,000 from £474,000, while Chief Halford’s pension allowance will also be cut by 50% to £147,000 from £294,000.

Barclays made a similar announcement saying that they will make similar strategic changes, in an update published at the end of November.

Finally, Lloyds Banking Group joined the movement when the global bank announced that they cut the pension allowance paid to Chief Executive Antonio Horta-Osorio, by £228,000.

Horta-Osorio, the longest-serving of Britain’s top banking bosses, pocketed a contribution of around 419,000 pounds this year, equating to 33% of his £1.27 million base salary.

Computacenter shares spike on confident expectations

Ishen Patel
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1
Computacenter shares spike on confident expectations

Shares of Computacenter plc (LON: CCC) have seen their shares spike on Tuesday morning, after the firm said it would exceed market expectations.

Computacenter plc is a European company that provides computer services to public- and private-sector customers. It is a UK company based in Hatfield, Hertfordshire.

Shares of Computacentre spiked 5.54% to 1,618p. 10/12/19 10:58BST.

At the end of October, the FTSE250 listed firm saw progress in their third quarter, which led to the firm keeping maintaining their expectations.

Today, shareholders received a positive update saying that the firm expects its figures to exceed both analyst and market expectations.

Profitability and earnings per share are on track to beat full year expectations, the IT supplier said, which spiked shares.

“The strong 2019 performance is coming from Computacenter’s established businesses and, in the second half of the year, from the acquired business in the US which is now performing in line with our expectations following a difficult start to the year,” the board said.

The firm said that it has not suffered a blow from existing difficult contracts, that bruised performance in the second half of 2018.

“The group has not seen a repeat of the negative impact that occurred in the second half of 2018 due to contract provisions and these existing difficult contracts continue to perform in line with, or slightly ahead of, our expectations,” said Computacenter.

In fact, they “continue to perform in line with, or slightly ahead of our expectations”, the company said.

“Computacenter’s board acknowledge, as is the case every year, that there is still a significant amount to do in December, which is always our busiest month of the year,” it added.

“However, visibility on this critical month’s outturn is starting to improve.”

The firm is set to update its full year results on the 23rd January, and following the positivity today big results are expected to be announced.

In the IT and software industry, there have been updates. Global name Avast (LON:AVST) saw their shares in green as the firm reported strong sales despite workplace and business divisions.

The cyber security firm said revenue rose 9% year on year for the quarter ending in September. Revenues were totaled at £170 million.

Additionally, London listed Redcentric have seen their shares jump at the end of November, as the firm reported that it had swung to an interim profit, which led to the doubling of its interim dividend.

Certainly, shareholders of Computacenter will be eagerly expecting the results which will be published in January, the fact that the firm has now reinstated its confidence to beat expectations will spark investor appetite as reflected in this morning’s share price movement.

Rolls Royce shares dip on shareholder departure

Ishen Patel
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2
Rolls Royce shares dip on shareholder departure

Rolls-Royce Holding PLC (LON: RR) have seen their shares dip on Tuesday, as the firm told the market that the executive of their largest shareholder had departed.

Shares in Rolls Royce dipped 3.14% to 702p. 10/12/19 10:47BST.

The firm said that announced that an executive from its largest shareholder, activist investor Value Act Capital, has resigned from from the engineer’s board.

Bradley Singer, stepped down this morning. He is chief operating officer of Value Act.

When Singer joined the board, chairman Ian Davis said he would stay on as long as Value Act remained a significant shareholder.

Singer said: “Since I joined the board nearly four years ago, Rolls-Royce has undertaken many significant initiatives and faced challenges head-on.”

Value Act own a 10% stake in Rolls Royce who are a FTSE100 listed firm.

Rolls Royce will have to make a concerned effort to ensure that their share price does not end up in free fall.

The global automotive market has seen slumps over the last few months, which has been caused by Brexit complications and other external market shocks.

Competitors in the industry have been quick to make moves, and Rolls Royce have certainly been put under pressure with recent news.

Rivals such as Honeywell (NYSE:HON) have seen their shares in red back in October, as the firm fell short of estimates by analysts in its latest update, as a result cutting their annual targets.

Certainly shareholders of Rolls Royce will not be best impressed following the sudden departure this morning.

However, the firm has shown a resilient nature in the past to be able to fight slumps and competition to operate in the engine, which may leave shareholders optimistic.

Strong demand has come from firms such as Boeing which may mean that shareholders of Rolls Royce see long term benefits.

Ted Baker issues profit warning, bosses quit

Dina Caruso
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Ted Baker issues profit warning, bosses quit
Shares in Ted Baker (LON:TED) plunged on Tuesday after the luxury clothing brand issued a profit warning. Shares in the clothing retailer dropped by almost 13% during Tuesday morning trading. Ted Baker said in a trading update that it now expects profit before tax to amount to a minimum of £5 million, possibly reaching £10 million depending on trading over the festive period. The luxury clothing brand said that the past year has been “the most challenging in our history”. Ted Baker added that trading over November and Black Friday was below expectations, with lower than anticipated margins and sell through. “An anticipation that difficult trading conditions will continue, and therefore it is appropriate to take a more cautious outlook for the remainder of the financial year, which includes the key trading months of December 2019 and January 2020,” the company said in a statement. In addition to the profit warning, the company announced that its bosses have stepped down. Lindsay Page has resigned as Chief Executive Officer, and the search for a replacement will begin in January 2020. Additionally, David Bernstein also stepped down as Executive Chairman of the company. “I would like to thank everyone at Ted Baker whom I have had the pleasure of working with since 1997. In particular, I am grateful for the team’s support over the last 12 months,” Lindsay Page said. “I would also like to take this opportunity to thank Ray Kelvin for the opportunity he gave me 22 years ago to join this fantastic brand and help to achieve his vision of creating a truly international business. I am very proud of everything the team at Ted Baker has achieved together,” Lindsay Page continued. Ted Baker is not the only business to feel the bite of the gloomy trading conditions to hit the UK retail sector. Mothercare (LON:MTC) also made headlines on Tuesday, posting a deeper loss in its half year results. Ted Baker warned investors earlier in October of its difficulties as it posted a pre-tax loss, battling against “unprecedented” trading conditions. Shares in Ted Baker plc (LON:TED) were down on Tuesday, trading at -14.86% as of 10:38 GMT.

Ashtead shares in red despite reported profit growth

Ishen Patel
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2
Ashtead shares in red despite reported profit growth

Shareholders of Ashtead Group plc (LON: AHT) have seen their shares drop on Monday morning despite a relatively positive update.

Ashtead Group plc is a British industrial equipment rental company formerly based in Leatherhead, Surrey, but which has since moved to new offices in the City of London.

Shares of Ashtead dropped 7.1% to 2,198p. 10/12/19 10:25BST.

Ashtead experienced a similar dip in their profits in September, when the firm saw their shares dip despite a relatively stable performance.

In September, the FTSE100 listed firm saw revenue bounced 17% on a year-on-year basis fro the first half, to £1.27 billion, led by a 16% jump in rental revenue.

This led a growth of 14% to an EBITDA of £626.6 million, and an on-year rise of 11% in operating profit, up to £358.3 million.

In this morning’s update, the firm posted a rise in interim profit as strong US and Canadian growth pushed revenue higher despite a weaker UK performance.

For the six months ended October 31, the equipment rental firm posted a £660.2 million pretax profit, 8.2% higher than its £610.0 million profit the year before.

This improvement came from rental revenue, which was up 18% to £2.45 billion from £2.07 billion, lifting group revenue 19% to £2.68 billion from £2.25 billion.

According to Ashtead, its half-year revenue performance reflects “strong growth in the US and Canadian markets”. However, investment in its Canadian business and “weakness in the UK” meant a more modest performance in terms of profit.

Chief Executive Brendan Horgan said: “Our North American end markets remain strong and we continue to execute well on our strategy of organic growth supplemented by targeted bolt-on acquisitions. In contrast, the UK market remains challenging and we are therefore refocusing A-Plant on leveraging its platform to deliver long-term sustainable results while generating strong cash flow.”

Shareholders should have been appeased, as Ashtead increased its interim dividend by 10% to 7.15p per share from 6.5p per share the year prior.

Horgan said: “Our business continues to perform well in supportive North American end markets, while we have taken decisive strategic action to refocus our UK business in the challenging market conditions. Thus, except for the UK and a currency headwind, we expect results to be in line with our expectations and the board continues to look to the medium term with confidence.”

Competitors have seen their shares just as volatile, in a market which has been hit by Brexit slumps.

At the end of November, CRH saw their shares rally as the firm gave shareholders a bullish third quarter update.

The firm reported reported a 9% rise in third quarter profit on a like-for-like basis, and also alluded to sustained demand and pricing which it expects to continue in 2020.

Home building firms, such as Berkeley who Ashtead may supply to have also experienced fluctuations.

On Friday, Berkeley reported that pre tax profit fell 31% to 276.7 million pounds ($355.01 million) for the six months ended Oct. 31.

Additionally, Gleeson saw their shares in red despite a confident outlook to shareholders, which further adds to the inconsistent nature of the home building market.

Certainly, shareholders should remain optimistic about the update from Ashtead. As the Election creeps up on voters, it seems that firms can then make a concrete recovery plan to battle business slumps once more clarity is given.

Mothercare posts deeper loss

Dina Caruso
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Mothercare posts deeper loss
Mothercare (LON:MTC) posted a wider loss on Tuesday in its half year results. Shares in the childcare retailer were up during Tuesday morning trading. Mothercare said that, for the 28 week period to 12 October, group loss before tax amounted to £21.2 million, deeper than the £18.5 million loss posted the year prior. Meanwhile, worldwide sales declined by 8.4%, amounting to £452.3 million. Additionally, net debt rose to £24.5 million, up 14.4% on the same period a year prior. Earlier in November, the childcare retailer announced that Mothercare UK had entered administration. Total UK sales declined 19.2% over the period, Mothercare said in its results. It’s UK business is not alone in feeling the bite of the tough trading conditions to hit the UK high street. Indeed, Mothercare UK joins Thomas Cook (LON:TCG) in another British business to collapse this year. “It was simply not financially viable to maintain the UK store estate and supporting infrastructure any longer without putting the whole Mothercare Group at risk,” Mark Newton-Jones, CEO of Mothercare, commented on the results. “Whilst this was a very difficult decision and one we didn’t take lightly, it completes the transformation of our group into a capital light, cash generative and profitable business and, importantly, protects all of the pensioners of the Group,” the CEO continued. “We are confident in the future of the Mothercare brand. We believe that, without the financial and management burden of running a UK retail operation, we can singularly focus Mothercare on its global international franchise. This opportunity for this business is best demonstrated by the fact that there are 130 million babies born every year across the world, compared to 700,000 in the UK‎, and the Group will now look to drive value for shareholders by harnessing that potential.” Shares in Mothercare plc (LON:MTC) were up on Tuesday, trading at +0.39% as of 09:14 GMT.

Phoenix Global Resources shares rally on positive update

Ishen Patel
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0
Phoenix Global Resources shares rally on positive update

Phoenix Global Resources PLC (LON: PGR) have seen their shares rally on Monday morning after the firm gave shareholders a positive update.

Phoenix Global Resources plc is an upstream oil and gas company offering its investors an opportunity to invest directly into Argentina’s Vaca Muerta shale formation and other unconventional resources.

Shares in Phoenix rallied 11.04% to 19p on the announcement. 9/12/19 15:20BST.

The firm said that production was increased in the third quarter of 2019, but a fall in oil prices caused revenues to decline.

Big name rivals such as FTSE100 listed Shell and SABIC reported a quarterly slump in profits due to volatile oil prices.

For the three months ended September 30, Argentina-focused oil & gas firm Phoenix Global posted total production of 10,830 barrels of oil equivalent per day, up 13% from 9,621 barrels in the second quarter.

However, a 14% decline in average realised prices to $38.9 per barrel of oil equivalent from $45.1 caused revenue to drop 6.6% to $34.1 million from $36.5 million.

At the start of November, Phoenix completed the sale of its non core partner operated conventional Santa Cruz Sur assets.

Chief Operating Officer Javier Vallesi said: “Testing continues at Mata Mora, the results of which will be used to help define the future drilling and the overall development plan for the block. At Puesto Rojas, the vertical Agrio unconventional wells were drilled and completed under budget and are now on flowback. Consistent with our operational objectives, we continue to build our organisational and execution capability as we begin the appraisal and development of our unconventional concessions”.

“The sale of our Santa Cruz assets in November further focuses our resources on the company’s significant unconventional acreage consistent with our stated objective to become a leading, Argentina-focused, unconventional development and production company,” Vallesi added.

The update comes at a good time for shareholders of Phoenix Global Resources, and amid a time of volatile oil prices hit by external markets shocks, shareholders should remain optimistic for the firm. It may be the case that once the global economy has stabilized over the next few months, that shareholders will see the full potential of Phoenix Global Resources.

United Oil and Gas raise funds to purchase Rockhopper Egypt

Ishen Patel
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3
United Oil and Gas raise funds to purchase Rockhopper Egypt

United Oil and Gas (LON: UOG) have updated the market on Monday, saying that they were raising funds to purchase Rockhopper Egypt Ltd from Rockhopper Exploration PLC (LON: RKH).

United Oil & Gas (UOG) is an independent oil & gas start-up established in 2015.

United is a former Tullow Oil team, with a strategy to acquire assets where the management team’s experience can drive near-term activity to unlock previously untapped value.

This morning, FTSE250 listed Tullow saw their shares crash, after the firm saw their chief executive and exploration director quit.

Additionally, 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 sink in November.

United Oil and GAs said it had conditionally raised $6.3 million to part fund their purchase.

Rockhopper Egypt holds a 22% non-operated interest in the Abu Sennan concession, which will deliver around 1,100 barrels of oil equivalent per day net low-cost production once complete. The concession is currently producing.

United Oil and Gas has undertaken a conditional equity offer, raising $6.3 million gross through the issue of 159.0 million new shares at 3 pence per share.

Additionally, 150.6 million were conditionally places by brokers Optiva Securities and Cenkos Securities PLC.

The remaining 8.4 million were subscribed for by existing shareholders and two directors.

The funding package includes prepayment financing off up to $8 million from BP Group PLC with which United Oil & Gas has entered an off take agreement for United’s future production.

United have also pledged to issue 114.5 million new shares worth $4.5 million to Rockhopper, these shares will represent 18.5% of United Oil & Gas’s enlarged share capital.

A general meeting will be held n December 23 to obtain approval for the deal from United oil & Gas shareholders.

Brian Larkin, chief executive at United Oil & Gas, said: “The Rockhopper Egypt acquisition is a transformational development step for our company. Upon completion of this deal, United will have material production which will generate significant cash flow for reinvestment into the business.”

He added: “We also gain exposure to an exciting fully funded development programme in Egypt which includes four wells in 2020. Along with activity across our wider portfolio, including the potential for future production from Italy and moving our Jamaican asset forward, we expect 2020 will not be short of significant news flow across our asset base. We are now on track to transform United into a highly cash generative and asset backed business, and I would like to thank shareholders for their support so far, especially with reaching this important milestone in United’s journey.”

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