BNP Paribas announce plans for Swiss job cuts

Ishen Patel
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BNP Paribas announce plans for Swiss job cuts

BNP Paribas (EPA: BNP) have announced today that they are considering cutting 250 jobs in their Switzerland operations.

Shares of BNP Paribas currently trade at EUR51 (+0.29%). 29/11/19 11:59BST.

France’s biggest bank said that there were “major challenges” in the Swiss financial environment as it seeks to cut costs globally.

The bank alluded to plans to start an employee consolation period, which will commence on January 14.

This scheme will allow the bank to consider measures that could reduce the number of job costs which may occur across financial 2020 and 2021.

“BNP Paribas in Switzerland, like other banks, currently finds itself facing major challenges: negative rates, a contraction in margins and a speeding-up of technology investments, all against the backdrop of a contrasted global growth environment within Europe,” it said.

“The plan is part of a wider transformation currently under way at Group level and would allow BNP Paribas (Suisse) SA to increase its efficiency, in particular by better leveraging the synergies provided through the Group,” it added.

Earlier this year, the bank cut its profitability target for 2020 and announced cuts in corporate and investment banking amid tough market conditions.

The reductions will affect both front and back office work, it said.

BNP Paribas have followed in similar steps as many multinational firms who have actively looked to cut jobs in a cut throat market to reduce operating costs.

In the finance and insurance industry, HSBC (LON: HSBA) and Aviva (LON: AV) both announced job cuts this year, with HSBC cutting jobs in UAE first.

Additionally, other household names including Tata Steel (NSE: TATASTEEL) and Audi AG (ETR: NSU) have set that they will axe the size of their respective workforces.

Certainly, the job cuts allude to a bigger issue in the state of the global banking and finance industry. The gloomy picture seems to have spread also to the UK manufacturing industry, certainly with the cloudy Brexit negotiations, ongoing feud between China and the US combined with the turmoil in Hong Kong, the position of the global economy has never looked so uncertain.

Real Good Food shares jump after interim loss narrows

Ishen Patel
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Real Good Food shares jump after interim loss narrows

Real Good Food PLC (LON: RGD) have seen their shares jump on Friday morning after the firm narrowed its interim loss.

Real Good Food is a business which delivers cakes, bakery goods and cake decorations.

Shares in the firm jumped 4.15% to 6p on Friday following the positive announcement. 29/11/19 11:43BST.

The firm has seen a period of strong trading, however this may not be enough to suffice stakeholders in an increasingly competitive industry.

Competitors such as Finsbury Foods (LON: FIF) and Coca Cola (LON: CCH) have seen their sales increase in their most recent update.

Additionally, big time rival Greggs (LON: GRG) and Cake Box (LON: CBOX) reported strong trading figures a week ago, which causes shares to rally.

A “stellar” performance from its Food Ingredients division and further cost savings more than offset a more difficult trading period for the Cake Decoration unit in the first half of financial 2020.

The Liverpool based business said that current trading remained in line with management expectations for financial 2020 in both divisions.

For six months to September 30, Real Good Food recorded a pretax loss of £2.5 million, sharply narrowed from a £9.1 million loss a year ago.

Revenue rose 7% year on year to £32.4 million, as a result of strong performance in the food ingredients division.

First half underlying adjusted earnings before interest, taxes, depreciation and amortisation rose to £2.8 million from £929,000 as a result of revenue growth and cost savings.

Mike Holt, non-executive chair, said: “The group has made significant progress over the past six months, especially within Food Ingredients where capacity has doubled and is almost fully utilised with strong order intake and commitments from both new and existing customers. Whilst Cake Decoration has had a difficult period, its new chief executive has launched a major improvement programme focussed on developing strategic partnerships with customers and distributors and driving fundamental operational improvements, the benefits of which are beginning to come through.”

“The group now has two core businesses with clear growth strategies, and the leadership and resources to deliver upon them. With a lower cost base in place and the group’s improving performance increasingly evident, the board is confident of delivering further progress in the second half and beyond,” Holt added.

Investec announce sale of asset management division

Ishen Patel
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Investec announce sale of asset management division

Investec plc (LON: INVP) have announced that they will sell 10% of their asset manager division to be renamed Ninety One, in March.

Shares of Investec dipped 1.21% after the announcement and trade at 442p. 29/11/19 11:24BST.

The plan comes as the financial services group announced plans to restructure the business and the division will be spun off as a demerger in March 2020.

In an update published on Friday, Investec said it plans to sell about 10% of Ninety One, which will be split between London and Johannesburg under a dual-listing.

The demerger, which requires shareholder approval, is expected to take place on March 13, it said.

Joint Chief Executive Fani Titi declined to say how much Investec hoped to raise from the share sale but said the move was aimed mainly at delivering long-term value and was in the interests of shareholders and clients.

“Shareholders will benefit from direct ownership of two attractive, independent businesses with management teams focused on long-term growth and value creation,” he said.

Titi added that the simplification of the group would allow better focus and increased accountability.

Investec said at the time that there were “limited synergies” between the asset management business and its specialist banking and wealth & investment divisions.

“We continue to make good progress with respect to the proposed demerger and listing of Ninety One. We remain excited about the benefits of this transaction and are determined to drive simplification across the group, focusing on enhancing the long-term prospects of Ninety One and Investec Bank and Wealth for the benefit of all our stakeholders,” said joint chief executives Fani Titi and Hendrik du Toit.

In addition, the company said 20% of both Ninety One PLC and Ninety One Ltd will be held by Forty Two Point Two, the investment vehicle of management and directors of Ninety One.

Investec said that it plans to use the funds gained from the sale to strengthen the overall capital position of Investec Bank and Wealth, in order to support its growth plans.

In a time where competitors have struggled, the news should not worry shareholders as much as expected.

Both HSBC (LON: HSBA) and Lloyds (LON: LLOY) saw declines in their third quarter profits.

However, noteworthy performance came from Standard Chartered (LON: STAN) and Bank of Ireland (LON: BIRG) who gave shareholders impressive updates.

Ocado shares spike as deal is struck with Aeon

Ishen Patel
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Ocado shares spike as deal is struck with Aeon

Shares of Ocado Group PLC (LON: OCDO) have spiked following reports that the supermarket firm had struck a robotic warehouse deal with Japanese firm Aeon.

Yesterday, shareholders got the news that Ocado had plans to open a new robotic warehouse in Bristol and the firm has seen its shares further rise following the agreement with the Japanese Grocer.

Shares of Ocado spiked 12.41% to 1,357p. 29/11/19 11:11BST.

Ocado uses robot technology in its customer fulfilment centres (CFCs) to automate many processes.

The agreement outlines the development of a national fulfillment network to serve the whole of the Japanese market, which kept shareholders optimistic.

With this in place the firm expects sales capacity of around ¥600bn (£4.24bn) by 2030, growing to approximately ¥1tn by 2035.

Aeon chief executive Motoya Okada said: “We see Ocado as a state-of-the-art, exciting and transformative partner aligned with our strategy of accelerating Aeon’s digital shift to serve Japan’s consumers.”

Following the cutthroat nature of the supermarket industry, where competitors such as Marks and Spencer (LON: MKS) and Sainbury’s (LON: SBRY) have seen their profits slump this will come as good reading for Ocado shareholders.

Ocado said it expected an additional £25m of operating costs in fiscal year 2020 to implement the service.

Chief market analyst for Markets.com Neil Wilson said: “This is a big deal – Aeon is in the top 10 global retailers bracket and is among Asia’s largest retailers. This deal gives access to one of the world’s largest markets and with probably the best brand Ocado could have picked for entry into the Japanese market.

“Aeon’s footprint is especially large as it has a presence across multiple retail channels, from groceries and convenience to general merchandise. Another smart move by Steiner and co.”

Chief Executive Officer Tim Steiner said: “This partnership marks a major milestone for the food retail landscape in Japan, and I am excited that Ocado will play a key role in bringing ever greater levels of convenience and choice to Aeon’s customers.”

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown (LON: HL), said: “No one should be popping champagne just yet though. This is an exciting announcement, but the proof will be in the pudding. With a sales-based valuation more than double its long-term average, and no real profits expected any time soon, Ocado will have to wait for years to see if the current partnerships pay off. “The warehouse fire earlier this year mean operational performance is still under the microscope. But if Ocado can keep its house in order this time, it may catch the eye of further partners, and that’s where future fortunes lie.” “This just goes further in cementing Ocado’s place as a technology service provider after its previous deals in the US and Europe,” added Jasper Lawler, head of research at London Capital Group. “This is the UK firm’s biggest foray into Asia and we’d expect the continent to be a big target for future growth. He added that the dramatic rise is not just about Japan – but proof that Ocado’s business model of providing technology to retailers is working. “It is about the multiple investors are willing to pay for a high growth tech firm over a retailer,” Lawler said. “The more tech deals Ocado can ink, the higher we would expect its P/E ratio to go.”

Trump’s Hong Kong HRD Act sours the Thanksgiving Pie

Jamie Gordon
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Trump’s Hong Kong HRD Act sours the Thanksgiving Pie
As markets closed their final productive day of the week – before an inevitably lethargic post Thanksgiving Friday – Donald Trump chose his moment to sour the mood. Following this morning’s announcement that the president had signed the Hong Kong Human Rights and Democracy Act, China has vowed to retaliate. Without shaking indices to their core, the typically light-hearted Chinese response certainly saw market sentiments turn frigid for the duration of Thursday trading. Speaking on market movements, or lack thereof, Spreadex Financial Analyst Connor Campbell treated us to his regular candour,

“With the US off stuffing themselves senseless, Thursday was hardly the most inspiring session of trading.”

“Donald Trump’s signing of the Hong Kong Human Rights and Democracy Act , or more accurately China’s reaction to that bill, gently weighed on investors, without fully sparking a new wave of trade deal pessimism.”

“That’s perhaps because the superpowers, but especially the US, have been keen to stress that an agreement is ‘very close’/in its ‘final throes’/is only ‘millimeters away’. Of course, the Hong Kong is could be a major obstacle. But for now investors are behaving cautiously.”

“The DAX was the worst performer, and even than that only saw it down 0.3%. The CAC kept above 5900 following a 0.1% fall, while the FTSE reduced its initial losses to lose just a handful of points, returning it above 7400.”

“After surging overnight on the back of the YouGov MRP poll putting the Tories at a 68-seat majority, the pound cooled on Thursday. Nevertheless its 0.1% dip against dollar and euro alike didn’t do too much damage to a currency banking on a significant Conservative win on December 12.”

Outside of the Hong Kong issue, other major developments on Thanksgiving Thursday came from; lacklustre UK car production figures, Barclays PLC (LON: BARC) cuts its Executives’ pensions and Virgin Money UK PLC (LON: VMUK) scraps its dividend.

Motorpoint to open new site as profits slow down

Jamie Gordon
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Motorpoint to open new site as profits slow down
The UK’s largest independent vehicle retailer Motorpoint Group PLC (LON: MOTR) posted what it described as a ‘resilient’ set of second half results, alongside a series of operational updates. While the Company boasted revenue growth of 1.0% to £533.9 million and cash flow from operations conversion rose 233% during the second half, their other fundamentals were decidedly more bleak. Its profit before tax dropped by 18.3% during the second half, to £9.4 million, and its EBITDA fell 12.4% to £13.4 million. Further, its operating expenses spiked on a non-recurring basis by £1.7 million. The situation was equally mixed for Motorpoint Group shareholders, with interim dividend declared up 4.0%, while basic EPS dropped 14.0% to 8.0p.

Operationally, the situation was more uplifting. The Company said its senior team as bolstered by the appointment of a Chief Operating Officer and Chief Technology Officer, and added that it was on track to open its new site in Swansea during Q4 2020.

Other deflated updates in the motor industry have included; lacklustre UK car production results, Honda Motor Co Ltd (NYSE: HMC) cut its sales forecast, Suzuki Motor Corp (TYO: 7269) warn of a quarterly slump and Pendragon (LON:PDG) revenues were down.

Motorpoint comments

“Against a challenging environment, the Group has delivered a resilient trading performance, underpinned by revenue growth and robust cash generation. Group profit was impacted by increased overheads, which were approximately £2m higher than the comparable period last year. Half of this increase will be non-recurring following process changes implemented in the period.”

“The first half of the year has seen significant growth in our market share despite ongoing market disruption, with the political situation leading to another period of lacklustre consumer confidence. Specifically, within the used car market, the early summer months was also a period of unusually high pressure on margins.”

“We have seen significant success in improving our processes around the preparation of our vehicles, including through the recruitment of a new COO and the opening of our dedicated 10-acre Preparation Facility in Peterborough. This has already driven down our stock days further, releasing working capital back into cashflow. Our investment in our proprietary IT systems also continued with the recent appointment of a CTO to drive further progress.”

“Opening plans for our next site, in Swansea, are well progressed and we anticipate launching this new 5-acre site in our financial Q4. We are in advanced discussions on several further sites and expect to be able to provide an update in the coming months.”

“Current trading is consistent with achieving management’s full year expectations, albeit with a greater weighting towards H2, however potential outcomes from the Government’s Brexit negotiations could influence our future performance in unpredictable ways.

“We believe our unrivalled choice of nearly new vehicles and ongoing dedication to Choice, Value and Service positions us strongly to take advantage of any market disruption, as has been evidenced in the period by our growing market share.”

Investor notes

Following the update, the Company’s shares rallied 1.68% or 4.30p to 260.30p per share 28/11/19 11:09 GMT. Motorpoint currently has a p/e ratio of 13.69 and a dividend yield of 2.91%.

Phoenix Group shares gain boost after exceeding cash generation target

Ishen Patel
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0
Phoenix Group shares gain boost after exceeding cash generation target

Phoenix Group Holdings (LON: PHNX) have seen their shares boosted after the firm gave shareholders a positive update

The FTSE100 (INDEXFTSE: UKX) listed firm announced that it exceeded its cash generation target on business growth.

The Phoenix Group is one of the largest providers of insurance services. It is also the largest specialist consolidator of heritage life assurance funds in Europe.

Their main focus has traditionally been on closed life fund consolidation where we specialize in the acquisition and management of closed life insurance and pension funds.

Shares of Phoenix Group were boosted 1.94% to trade at 747p. 28/11/19 15:17BST.

Earlier this month, Phoenix announced the appointment of a new Chief Executive in the form of Andy Briggs who was former boss at Aviva (LON: AV).

Big players in the industry such as Lloyd’s (LON: LLOY) have seen their profits sink in the most recent quarter, and other names such as AIG (NYSE: AIG) have struggled to gain ground after testing trading conditions, and hence Phoenix have made efforts to change fortunes.

Phoenix said it has generated £707 million of cash in 2019, exceeding the upper end of its £600 million to £700 million target. In 2018, cash generation amounted to £664 million.

It also continued to meet, or exceed, customer service metrics, it said, and remains on track to deliver the £1.2 billion total synergy target for its Standard Life Assurance purchase.

Phoenix acquired the Standard Life Assurance Unit from wealth manager Standard Life Aberdeen PLC (LON: SLA) in 2018 for £1.97 billion.

Following this deal, this allowed Phoenix to become one of Europe’s largest consolidators of heritage funds following gate deal and consolidated a strategic partnership with Standard Life Aberdeen.

“This trading update further reinforces Phoenix’s conviction in its business model and its capacity to generate cash, deliver resilience and exploit multiple avenues of growth to deliver long-term sustainable cash generation, not just today but in the years ahead,” said Chief Executive Clive Bannister in his Capital Markets Day statement.

Transport for London strips Uber off its operating license

Dilara Kucuk
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Transport for London strips Uber off its operating license
Earlier this week,Transport for London announced its decision to strip Uber (NYSE: UBER) off its operating licence over various breaches of passenger safety regulations. Transport for London said that Uber is too risky to use due to constant security failures that put passengers in potentially dangerous situations.

Security Concerns

Transport for London found that Uber’s systems enabled unauthorized drivers to use their photos in authorized driver accounts. Furthermore, this security breach allowed unauthorised drivers to pick up customers. Transport for London said that the system allowed unauthorized drivers to pretend to be authorized Uber drivers in more than 14,000 trips. Uber customers get inside a stranger’s car believing the driver to be their Uber driver. Due to security failures in Uber’s systems, an unauthorised driver can pretend that they are your authorized Uber driver. Moreover, Uber’s system allows suspended or fired drivers to create a new Uber account to continue carrying passengers. Suspended or dismissed Uber drivers can continue carrying passengers simply by creating a new account. Transport for London said Uber is not fit for London as its security system is easily manipulated. Transport for London will scrutinise Uber throughout the appeal process. Failures in Uber’s system raises serious safety concerns as it allows passengers to get into cars with drivers who are unlicensed, uninsured or suspended. Transport for London stated that it cannot be certain that similar issues will not arise again if Uber continues to operate in London.

History

Transport for London has a controversial history with Uber. In 2017, Transport for London suspended Uber’s operating license amid safety concerns. Uber successfully appealed against the decision of Transport for London. As a result, Uber received a 15-month operating license. Later on, Uber secured a 2-month extension to its operating license which ended this month. Meanwhile, Uber continues its legal battle against giving its drivers minimum wage and paid-holidays. Transport for London raised concerns that Uber denies its workers basic employment protections.

Competition

There are currently more than 45,000 authorised Uber drivers and 3.5 million Uber riders in London. Alternative transportation systems have been increasingly popular in London in the past five years. Ride apps such as Bolt (CNSX: BOLT) and Kapten launched deals to compete with Uber. Furthermore, alternative transportation such as bikes and electric scooters create additional transportation options for Londoners. Santander offers a bike hire system while Lime (STO: LIME) allows users to hire electric scooters using an app.

OPG Power shares soar after interim profit rises

Ishen Patel
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0
OPG Power shares soar after interim profit rises

OPG Power Ventures Plc (LON: OPG) have seen their shares soar on Thursday afternoon after the firm reported interim profit gains.

OPG operates and develops power generation assets in India and currently has 414 MW in operation principally under the group captive model and 62MW of Solar assets.

Shares of OPG Power soared 20.63% to 19p. 28/11/19 14:50BST.

OPG proposed an interim dividend on Thursday after profit and revenue rose from a year ago after the firm tightened focus on its profitable assets.

For the six months ended September, pretax profit widened 28% to £9.7 million from £7.6 million the year prior. This was after revenue rose 0.6% to £78.4 million from £77.9 million the year before.

OPG proposed a 0.6 pence per share interim dividend. The firm did not pay a dividend the year prior.

“Two years ago the board adopted a strategy to focus on our profitable, long-life assets in Chennai and to deleverage in order to deliver growth in shareholders’ equity by the transfer of value from debtholders to investors,” Chair Arvind Gupta said. “This process continued successfully during the first half of this financial year.”

“By maintaining our sector leading operational performance, we intend to sustain the rate of term debt repayment with the objective that in 2023 we will be debt free,” Gupta added. “As interest costs decline in line with borrowings we will generate increasing levels of free cash flow which, in due course, will increase shareholder value substantially.”

The energy and power sector has been busy across the last few days of trading and updates are provided. Oracle Power (LON: ORCP) have seen their shares rise as they received overseas investment, Active Energy (LON: AEG) have seen progress in their Canadian operations. Additionally, Union Jack Oil (LON: UJO) have seen their shares crash following a share placing announcement whilst competitor Egdon Resources (LON: EDR) saw their shares boosted following two renewed gas licenses.

Paypoint shares jump despite modest update

Ishen Patel
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0
Paypoint shares jump despite modest update

Paypoint plc (LON: PAY) have seen their shares jump on Thursday afternoon after the firm reported a mixed update to shareholders.

PayPoint plc is a British business offering a system for paying bills in United Kingdom, Ireland and Romania.

Shares of Paypoint jumped 3.36% to 1,016p. 28/11/19 14:28BST.

The firm reported that it saw a drop in interim profit, similar to other players in the finance industry such as Non Standard Finance (LON: NSF) and Lloyds (LON: LLOY).

However, shareholders leapt onto the fact that the firm saw its underlying revenue rise on the increased rate of installations on its upgraded payment system.

In the six months to September 30, the retail, mobile and online payment service saw pretax profit slip 5.1% to £24.0 million from £25.3 million the year before.

Profit was hurt by renegotiations of the commercial terms of its agreement with parcel delivery firm Yodel.

As a result of those same negotiations, costs were up 9.9% to £33.2 million from £30.2 million.

Revenue fell 2.3% from £106.1 million to £103.7 million, and net revenue which excludes the commission the company pays to retailers and the cost of mobile top-ups, increased 3.1% to £57.3 million from £55.6 million.

At the end of the period, PayPoint had a terminal in 28,366 UK sites, down slightly from March 31. The roll out of its upgraded platform PayPoint One “continued at pace”, the company said, which increased 17% to 15,088 over the six month period.

The company announced expectations to remove all of its legacy terminals by the end of 2020.

PayPoint One average weekly service fee per site rose 3.3% to £15.50 from £15.00, with total service fee revenue from the new terminals up 32% to £6.3 million.

Executive Chair Nick Wiles said: “I’m pleased with the progress PayPoint has made over the past six months as continued execution against our stated strategic priorities has seen the business deliver net revenue growth and underlying profit before tax growth.

“Whilst the financial performance of the business will be influenced by parcel volumes and continued resilience in UK bill payments over the second half, the progress of the business during the first half, reported today, underpins the board’s confidence that as PayPoint’s growth drivers continue to develop, there will be progression in profit before exceptional items and tax for the full financial year,” Wiles added.

Paypoint concluded by declaring an ordinary dividend of 23.6p with an additionally dividend of 18.4p, giving a total dividend of 42p which sees a 51% climb from a year ago.

In the industry, competitors such as Wirecard AG (ETR:WDI) and Yeepay announced a merger deal a fortnight ago.
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