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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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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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.

CVS Group shares spike on back of strong update

Ishen Patel
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CVS Group shares spike on back of strong update

CVS Group Plc (LON: CVSG) have seen their shares spike on Thursday afternoon after they gave shareholders a positive update.

CVS Group is the largest integrated veterinary services provider in the UK encompassing four main business areas; our veterinary practices, diagnostic laboratories, pet crematoria and e-commerce division.

Shares of CVS Group spiked 9.1% on Thursday to 1,127p. 28/11/19 14:03BST.

The board announced that trading performance in the first fourth months of financial 2020 was ahead of management expectations.

The board added that amid tough trading conditions the firm continued a trend of positive trading momentum.

In the four months leading up to October 31, the firms total sales grew by 17% and like for like sales increased by 8% from the same period one year ago.

The results will thoroughly please shareholders, as 2019 has been a year of turbulence for CVS.

At the start of 2019, the firm saw its stocks in red after the firm issued a profit warning to shareholders. However it seems that strong recovery has been made across the year.

“The board is pleased to announce that the improved trading performance delivered in the second half of the financial year to 30 June 2019 and the encouraging start to the first two months of the new financial year, as announced at the time of our preliminary results on 27 September 2019, has continued in September and October 2019,” Chair Richard Connell said in his annual general meeting statement.

The Core Practices division saw a notable rise in sales by 7.4% which drove the strong trading results published.

“These LFL growth rates primarily reflect a continued focus on high quality clinical work, including increased volume and value of referrals within the group, in addition to a price increase in our Healthy Pet Club preventative medicine scheme in February 2019 and a modest price increase applied to veterinary fees in our UK small animal business on 1 July 2019,” Connell said.

CVS said its gross margins, employment costs and vet vacancy rates have all continued at a similar level to those reported at the time of financial 2019 results in September.

“The directors recognise that the comparatives become more challenging in the second half of the current financial year, given the improved second half performance seen in the previous financial year. Nevertheless, the board is naturally pleased with the core Practices division like-for-like sales performance in the financial year to date and with the trading performance of the group being slightly ahead of management’s expectations for the first four months.” Connell added.

The industry seems to be recovering from a slump, with FTSE250 (INDEXFTSE: MCX) listed retailer Pets at Home (LON: PETS) saw their shares rise after reports of a strong half period of trading. Additionally, rival Premier Veterinary Group Plc (LON:PVG) announced a new Chief Financial Officer in a structural reshuffle.

T Clarke builds on earlier success as trading continues ‘strongly’

Jamie Gordon
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T Clarke builds on earlier success as trading continues ‘strongly’
Construction engineering company T Clarke PLC (LON: CTO) announced that their trading during the second half of the financial year had continued with the same strong momentum as the first. Ending the first half with a 25% year-on-year increase in underlying operating profit, the Company said they expected to report an underlying operating profit before interest and taxation of approximately £10 million, following a second half where the Company had continued trading ‘strongly’. This would reflect a jump from FY18, where the Company finished at £8.8 million, and would be in line with the Company’s strategy to achieve their ‘key financial target’ of an underlying profit margin of 3%.
Concurrently, the Board expects results for the full year ended 31 December to be in-line with market expectations.

The Company added that its order book stands at £361 million, and they have already secured £232 million of revenue for 2020.

The Company went on to finish its statement,

“In addition, our teams across the UK are actively negotiating a number of major schemes which provide further visibility for both 2020 and 2021.”

“Our long-standing, high quality reputation and the strength of the relationships with our blue-chip clients is a key asset for TClarke. Furthermore, our strong balance sheet continues to be a significant differentiator and enables us to win and deliver projects of a scale which positions us well for further growth. We continue to adhere to a strict bidding policy supporting our sustainable operating margin at 3% going forward.”

“Looking ahead, we approach the new financial year in a strong position, both operationally and financially which gives the Board confidence for the Group’s prospects for 2020 and beyond.”

Elsewhere in property and construction; AFI Development (LON: AFRB) posted underwhelming results, Schroder Real Estate Investment Trust (LON: SREI) adjusted its strategy, Land Securities Group plc (LON: LAND) disappointed and Shaftesbury plc (LON: SHB) booked robust leasing activity Following the update, T Clarke shares rallied 2.30% or 2.61p to 116.11p per share 28/11/19 13:26 GMT. Their p/e ratio stands at 7.38, their dividend yield is 3.42%.

Oracle Power shares rally on UAE Sheikh investment

Ishen Patel
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Oracle Power shares rally on UAE Sheikh investment

Oracle Power PLC (LON: ORCP) have seen their shares rally after the firm confirmed overseas investment from a UAE Sheikh.

Oracle Power is an AIM listed coal developer. The Company’s primary interest is the Thar Coalfield Block VI area located in the Sindh Province of South East Pakistan, a 1.4bn tonnes resource with a 529Mt JORC mineral resource and 113Mt JORC proven reserves within Phase 1 of the mining area of its mining lease.

Shares of Oracle Power have rallied 74.47% to 0.41p. 28/11/19 13:44BST.

In the industry, competitors such as AFC Energy (LON: AFC) and i3 Energy (LON: I3E) have seen their shares crash in the last week.

Additionally, Cairn Energy (LON: CNE) and (LON: XPP) saw their shares drop after modest respective trading updates.

Oracle confirmed that said the private office of Sheikh Ahmed Bin Dalmook Al Maktoum has agreed to invest £500,000 in a £700,000 placing priced at 0.25 pence per share.

The placing was arranged by Brandon Hill Capital Ltd. If shareholder approval is granted, the private office will hold 200 million shares in the lignite mineral resource and mine mouth power plant developer. It will also be issued with 300.0 million warrants exercisable at the same 0.25p price for a two year period.

Once both placing stage are complete, the private office will hold an approximately 11.5% stake in Oracle Power’s share capital.

Oracle Power has raised the other £200,000 of tis £700,000 placing from other investors, including a £40,000 subscription by Chief Executive Naheed Memon and £10,000 subscription by Chair Mark Steed.

Memon said: “We are honoured and delighted to welcome His Highness Sheikh Ahmed Bin Dalmook Al Maktoum as a shareholder in Oracle. His extensive network and global relationships are expected to help the company as it seeks to unlock the inherent value of Block VI and its sizeable coal resources.

“As stated previously, Oracle is engaged in ongoing discussions with other state-owned enterprises in both Pakistan and China which have expressed a willingness to provide financial and technical support in the event Block VI was included in a coal gasification to fertiliser initiative, which has now been acknowledged by both governments. Following today’s announcement, the company will now seek to advance these discussions towards a positive conclusion.

“We believe this is a truly exciting time for the company and I look forward to updating the market on subsequent developments.”

Barclays joins competitors in cutting senior executive pensions

Ishen Patel
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0
Barclays joins competitors in cutting senior executive pensions

Barclays PLC (LON: BARC) have announced on Thursday that they will join other competitors in cutting the pensions of personnel in senior executive positions.

This morning, Barclays announced that they had sold a division of Barclays Wealth to Rathbone Brothers (LON: RAT) for an undisclosed fee.

Shares of Barclays currently trade at 174p (-0.1%). 28/11/19 13:37BST.

Barclays announced that they will cut the £396,000 pension that it pays to Chief Executive Jes Staley by around 50%.

The moves cues after rivals have also pledged to tame executive pensions perks following activism by investors.

The British bank is consulting shareholders on the proposal following an overhaul and restructure strategy, and will be voted at the banks’s annual meeting next year.

Competitors such as HSBC (LON: HSBA) and Royal Bank of Scotland (LON: RBS) have told shareholders that they will set pension contributions paid to CEO’s at 10% of base salary, which will match other workers in the firm.

“It’s a start but these cuts do not really go far enough. There’s no real reason why CEO pension payments shouldn’t be completely in line with other staff,” Peter Parry, policy director at investor group ShareSoc told Reuters.

“There is always a worry that when companies rein in pay in one area, they compensate for it in another area. The sad thing is that executive pay is now out of control,” he said.

Additionally, Standard Chartered (LON: STAN) reported that they will cut the pension’s for their CFO and CEO at the start of the month, despite the strong leadership of Winters and Halford producing strong third quarter results.

Finally, Lloyds Banking Group (LON: LLOY) 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.

The move from the global banks to make this change reflects shareholder sentiment that CEO’s are taking too much control of the institutions.

The move will certainly please shareholders and other workers at these global banks, and should allow a more consistent pension plan across all workers.

Faron Pharmaceuticals shares soar following US regulatory approval

Ishen Patel
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1
Faron Pharmaceuticals shares soar following US regulatory approval

Faron Pharmaceuticals Oy (LON: FARN) have seen their shares soar after the firm won US regulatory approval for a cancer medication as it updated shareholders on Thursday afternoon.

Faron Pharmaceuticals is clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs.

“Research and development to find treatments for severe diseases with serious unmet medical needs is what we do. I am proud and excited to be among this group of people working hard, facing challenges and understanding the humane purpose of science. ” Dr Markku Jalkanen, CEO

Shares of Faron soared 36.21% after the announcement to 224p. 28/11/19 12:47BST.

The firm said that US regulators had approved its Clevegen cancer treatments, as an investigational new drug which sent shares soaring.

Additionally, the firm reported that the drug was given clearance to allow the expansion of a clinical trial into the US, which sparked shareholder enthusiasm.

The US Food & Drug Administration approved the IND application for Clevegen, an immunotherapy targeting tumour associated with macrophages in some metastatic or inoperable solid tumours.

“We are very pleased to receive this IND approval from the FDA, marking another milestone in the development of Clevegen,” Chief Executive Officer Markku Jalkanen said.

“This approval will allow us to expand Matins into the US using the same protocol both in Europe and in the US, accelerating our understanding of this novel precision medicine in cancer patients who are refractory to all other treatment options and streamlining the regulatory processes,”

Jalkanen added. “With the US IND now approved, in due course, we plan to file applications for Breakthrough status in the US and Prime status in Europe, further facilitating regulatory interactions during the development of Clevegen.”

Market leaders such as Pfizer (NYSE: PFE) and GSK (LON: GSK) have reported bullish interim updates, which gives them further foot holding the global pharmaceuticals market.

Noteworthy updates also come from ImmuPharma (LON: IMM) and Beximco (LON: BXP) who both reported progress in their trading reports.

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