General Election chatter make Sterling nervous, European indices continue free-fall

Jamie Gordon
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General Election chatter make Sterling nervous, European indices continue free-fall
Following the rousing baritone notes of MP Geoffrey Cox, the Pound Sterling halted its post-Supreme Court verdict rally, with the Conservatives making an increasingly concerted effort to pressure the Labour Party into agreeing to a general election. After the release of his phone call transcript, Donald Trump’s infamous tangerine smirk could hardly be contained as the thus far fruitless impeachment campaign saw the DOW Jones climb during Wednesday trading. Aside from these modest rises and falls, the Eurozone can only pray the CAC and DAX have got parachutes to hand. Speaking on market movements through the day, Spreadex Financial Analyst Connor Campbell stated,

“The markets’ stress headache only intensified as Wednesday went on – all bar the Dow Jones, which managed a remarkably chilled out open.”

“As investors process the recently released transcript of the call between Donald Trump and Ukrainian President Volodymyr Zelensky, attempting to ascertain the implications regarding yesterday’s impeachment announcement, the Dow pushed 0.3% higher. That lifted the US index back towards 26900, a level it tumbled under on Tuesday.”

“In stark contrast, the DAX and CAC were in a terrible mood, plunging 1% and 1.2% respectively, as it all got a bit much. The German index is now below 12200 for the first time in over a fortnight, with its French cousin struggling to hold onto 5550.”

“The FTSE avoided the same kind of losses thanks to the UK’s own political mess. Falling 0.3%, the index was rescued by the comparatively greater suffering of sterling, which dropped 1.1% against the dollar and 0.5% against the euro.”

“Whatever pleasure the currency took in the Supreme Court deciding Boris Johnson’s prorogation of Parliament was unlawful has been replaced with concern over what happens next, especially since there is increased talks of the government trying to force the country towards a general election. And with a busy Commons schedule this afternoon, the drama likely isn’t over for the pound just yet.”

Elsewhere in political and macro economic news, there have been updates from; the Supreme Court’s ruling, the collapse of Thomas Cook (LON: TCP), ECB stimulus, the bid for the London Stock Exchange (LON: LSE), Lloyds Banking Group PLC (LON: LLOY), Jo Johnson quitting, Hilary Benn’s Brexit delay bill, Barclays (LON: BARC) and Deutsche Bank (ETR: DBK).

Chariot Oil and Gas shares dip despite losses narrowing

Jamie Gordon
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2
Chariot Oil and Gas shares dip despite losses narrowing
Oil and gas exploration and development company Chariot Oil and Gas Limited (LON: CHAR) saw its losses narrow due to a decline in its share based payments as it continued the developments of its ventures. The Company booked a loss from operations of £1.898 million, contracting from £2.028 million. This was led by a fall in share based payments from US $507,000 to $355,000 year-on-year during the first half. Additionally, Chariot Oil and Gas admin expenses stood at $1.5 million and their unaudited cash balance at 30 Junes stood at $12.1 million. Operationally, the Group said it secured the Lixus Offshore Licence, which offers a near-term opportunity for cashflow generation. Going forwards, the Company will hope to secure partners for the appraisal and development of the Anchois gas field.

Chariot Oil and Gas comments

Larry Bottomley, CEO, stated,

“Using the information acquired from the 2018 drilling campaigns we have not only been able to de-risk and refine our giant prospect portfolio, but also identified and acquired a low risk appraisal asset with the capacity to generate significant cash flow for the Company.”

“Chariot’s risk portfolio is now balanced by a commercially attractive production opportunity, capable of sustaining the high impact exploration programmes of our giant potential prospects within the wider portfolio. Our cash position substantially exceeds our commitments and, with the significant interest received in our data rooms, we are confident about our ability to achieve on our near-term goals in Morocco. At the same time, we remain vigilant to further new venture opportunities that can further de-risk the portfolio whilst also looking to secure additional partners to deliver wells in a fast follower position on our Namibian and Brazilian assets.”

Investor notes

Following the update, the Company’s shares have dipped 11.17% or 0.40p, to 3.22p per share 25/09/19 15:36 BST. Peel Hunt analysts reiterated their ‘Add’ stance, while finnCap analysts reiterated their ‘Corporate’ stance on Chariot Oil and Gas stock. Neither a p/e ratio nor a dividend yield are available for the Group, their market cap is £11.83 million. Elsewhere in oil and gas news, there have been updates from; Union Jack Oil PLC (LON: UJO), Prospex Oil and Gas PLC (LON: PXOG), IGAS Energy PLC (LON: IGAS), Trinity Exploration & Production PLC (LON: TRIN), Baron Oil PLC (LON: BOIL), Cabot Energy PLC (LON: CAB) and Reabold Resources PLC (LON: RBD).

AEG acquires North Carolina project and losses narrow on lower finance costs

Jamie Gordon
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AEG acquires North Carolina project and losses narrow on lower finance costs
Biomass-focused development and sale company Active Energy Group PLC (LON: AEG) books significant operational and financial progress during the first half of 2019. Despite the progress, the Company still posted a loss from continuing operations of US 1.833 million, down from $2.268 million, and an operating loss of $1.543 million, narrowing from $1.683 million year-on-year during the first half. This progress was led by the Group’s finance costs being cut almost in half, and H1 revenues jumping from nothing, to $99,830, on-year. AEG made good progress but spent the first half of 2019 focusing on the acquisition of its Lumberton commercial hub in North Carolina, which will aid in the development of its forest-to-energy supply chain. Further, the Group sent samples of its CoalSwitch fuel alternative and biomass black pellets to prospective US and EU clients – in forestry, renewable and agricultural sectors – for a testing programme.

AEG comments

Chief Executive Michael Rowan, said, “We have acquired the Lumberton site and have a defined plan for the commercialisation of CoalSwitch contemporaneously with additional products. Our ambition remains for [AEG] to become a profitable producer of second-generation biomass fuels, focusing on the pellet market. Our production designs are modular, and we are designing efficient operations that are scalable to increase manufacturing volumes to potential market demands. With first production imminent,the company is looking forward to the future with increasing confidence.”

Investor notes

The Company’s share price dropped 20.37% or 0.11p to 0.43p per share 25/09/19 12:32 BST. The Group’s p/e ratio and dividend yield are unavailable, their market cap is £5.47 million. There have been recent renewable energy updates from; Velocys PLC (LON: VLS), AFC Energy plc (LON: AFC), John Laing Environmental Assets Group Ltd PLC (LON: JLEN), SIMEC Atlantis Energy (LON: SAE), Aquila European Renewables Income Fund (LON: AERI), PowerHouse Energy Group (LON: PHE) and SIMEC Atlantis Energy (LON: SAE).

Properties in England see strongest rental growth, Ideal Flatmate

Dina Caruso
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Properties in England see strongest rental growth, Ideal Flatmate
Properties in England have experienced the strongest rental growth in the past five years, new data revealed on Wednesday. The latest research by Ideal Flatmate has examined where in the UK has experienced the largest raise in rental growth over the course of the past five years. The data shows that properties in England have seen the strongest rental growth, up by 15.6%, in the past five years. Scotland follows at 14.7% with Northern Ireland third at 11.5%. As for the most tenant-friendly country in the UK in terms of rental growth, Wales saw an increase of just 3.11% over the past five years. In terms of regions, Ideal Flatmate said that the East of England has been the worst region for proportional rental growth with a 22.1% increase. This is followed by the East Midlands at 14.94%. York has seen the largest increase, rising 38.1% across the five year period from £749 per month to £1,034. Manchester follows with a 37.8% rise and Ipswich closely comes in behind it. “While initial rental affordability may be based on the cost of renting in a given area, many renters are aware of this cost and make a choice to live there,” Co-founder of Ideal Flatmate, Tom Gatzen, said in a statement. “However, the real squeeze in rental affordability is the continued increase in rents in many parts of the UK on an annual basis. While an increase of £250 over five years might not sound significant, for those renting in York and already struggling with the cost, it’s enough to price them out of the sector altogether,” Ideal Flatmate’s Co-founder continued. “Over the last five years, the growing preference for people to share the burden and live with others rather than go it alone has been driven out of necessity rather than choice, but at least, we have better platforms, technology, and transparency to accommodate this growing trend now.” Elsewhere in UK property, new data revealed the market’s seasonal trends.

Universe Group makes progress and acquires Celtech during first half

Jamie Gordon
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Universe Group makes progress and acquires Celtech during first half
Developer of IT-based point-of-sale and payment services Universe Group plc (LON: UNG) saw impressive fundamentals during the first half of 2019. The Company’s revenues grew 7.3% to £9.92 million year-on-year for H1. This led hikes in adjusted EBITDA from £0.98 million to £1.39 million, and a jump in operating profit, from £0.17 million to £0.28 million. The only regression was in its net cash flow from operations, which contracted from £1.98 million to £1.70 million. Its progress was reflected in its EPS, which rose from 0.06p to 0.07p on-year. Universe Group added that it acquired cloud-based technology provider Celtech for an interest of £4.96 million. This was funded through cash resources and a £5.00 million new banking facility from HSBC,

Universe Group comments

Andrew Blazye, Non-Executive Chairman, stated,

“We are encouraged to see that revenues across the Group’s activities for the first half show both organic and acquisition driven growth on the same period last year. We have secured further important contracts with two existing major clients and we are pleased with the progress made in integrating Celtech into the wider Group. We are already starting to benefit from the acquisition synergies.”

“Our payment and loyalty operations continue to perform well and we are positioning the newly acquired ab-initio platform at the forefront of our expanded RMS offering. We continue to be cash generative under-pinned by material recurring revenues.”

“We are, as previously stated, also a second half weighted business, dependent on a small number of high value projects. However, we are confident that, with the investments we have made into the business, we are well positioned for growth in 2019 and beyond.”

Investor notes

After dipping, the Company recovered to a rally of 1.33% or 0.065p to 4.94p 25/09/19 13:24 BST. Analysts from finnCap reiterated their ‘Corporate’ stance on Universe Group stock. The Group’s p/e ratio is 13.94, no dividend yield is available. Elsewhere in the tech sector, there were updates from; Microsaic Systems PLC (LON: MSYS), Petards Group plc (LON: PEG), SCISYS Group PLC (LON: SSY), Pebble Beach Systems Group PLC(LON: PEB), ULS Technology PLC (LON: ULS), Midwich Group PLC (LON: MIDW) and ProPhotonix Ltd (LON: PPIX).

Shaftesbury books ‘robust’ leasing activity and acquisitions

Jamie Gordon
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3
Shaftesbury books ‘robust’ leasing activity and acquisitions
British real estate investment trust Shaftesbury plc (LON: SHB) posted consistent full-year progress across its performance fundamentals. The Company told shareholders on Wednesday that its food and drink and retail occupiers reported good footfall and sales growth. Regarding its leasing performance, the Group booked ‘robust’ leasing activity alongside ‘good demand’ for its regular space

It went on to say that on its new operations and acquisitions; that work had commenced after planning consent was secured on its 72 Broadwick Street scheme, it opened the Seven Dials Market at its Thomas Neal’s Warehouse and completed £34.9 million of acquisitions since 1 April 2019.

Shaftesbury comments

Brian Bickell, Chief Executive, stated,

“Our exceptional 15.2 acre portfolio, located in some of the busiest parts of the West End, continues to perform well. The small to medium-sized space we mostly provide, combined with our modest rental levels, are a considerable advantage in the current market, attracting good levels of interest. Our long-established tenant selection strategy has ensured that we have been largely unaffected by high-profile retail and restaurant failures and restructurings.”

“We continue to convert our portfolio’s reversionary potential into contracted income, whilst delivering further long-term growth in rental values. During the period since 1 April 2019, leasing activity has been robust, rents continue to be achieved at or above ERV and lease incentive levels have remained stable. Vacancy remains low and consistent with our long-term average; much of our available space is under offer.”

“Despite the uncertain political and macroeconomic backdrop, London’s global city status continues to draw businesses and visitors from across the World, reinforcing the West End’s long-term appeal and prospects.“

Investor notes

The Company’s shares dipped 0.79% or 7.00p to 875.00p per share 25/09/19 13:20 BST. Analysts from Peel Hunt reiterated their ‘Hold’ stance on Shaftesbury stock. The Group’s p/e ratio is 51.58, their dividend yield is 1.92%. Elsewhere in property development and estate agency news, there have been updates from; Rightmove Plc (LON: RMV), Berkeley Group Holdings Ltd (LON: BKG), Redrow plc (LON: RDW), U+I Group PLC (LON: UAI), Hunters Property PLC (LON: HUNT), GCP Student Living plc (LON: DIGS) and Barratt Development Plc (LON: BDEV).

Suppliers “still too slow” at helping vulnerable customers, Ofgem

Dina Caruso
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Suppliers “still too slow” at helping vulnerable customers, Ofgem
Energy companies are “still too slow” when it comes to helping customers who are struggling with debt, a report revealed on Wednesday. Ofgem’s report shows that though vulnerable customers get more help, energy suppliers are still not doing enough to help manage debt levels. Ofgem said that the number of disconnections for debt fell to a record low last year – 6 disconnections occurred for electricity and none for gas. Meanwhile, over 850,000 and 650,000 free services were provided to vulnerable electricity and gas customers respectively in 2018 by suppliers. Ofgem said that these customers received additional support to help manage their energy. Moreover, the amount of prepayment meters installed by suppliers by force to collect debt dropped by 15% in 2018 – driven by Ofgem’s rules to cut down on this. Ofgem added however that it is concerned about the high number of meters installed by force on behalf of First Utility (Shell Energy) and Utility Warehouse last year. “Energy is an essential service, and suppliers must take particular care with those customers who are less able to manage and pay for their energy,” Mary Starks, Executive Director for Consumers and Markets at Ofgem, commented in the report. “We are pleased that suppliers are making such good progress on getting extra help to vulnerable customers that need it, for example by making their bills easier to access or read,” Mary Starks continued. “However, some suppliers are simply not keeping up with the rising numbers of customers who owe them money. It’s imperative that suppliers move quickly and efficiently to help struggling customers manage paying back their debts, or risk pushing them further into hardship.” Shares in Centrica plc (LON:CNA) were down 1.02% as of 12:02 BST Wednesday, shares in Electricite de France SA (EPA:EDF) were down 6.70% as of 12:49 CEST, SSE plc (LON:SSE) shares were also down, trading at -0.2% as of 12:04 BST, and E.ON SE (ETR:EOAN) shares were trading at -1.39% as of 12:50 CEST.

Markets flustered by US impeachment inquiry and UK Supreme Court ruling

Jamie Gordon
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0
Markets flustered by US impeachment inquiry and UK Supreme Court ruling
The difficult start to the weak was continued, especially in already-fragile Eurozone indices, by Tuesday’s political turmoil. The well-documented and precedent-setting rejection on the UK Parliament shutdown began the furore, but not to be outdone, the US followed later in the day with its long-awaited impeachment inquiry. Markets will no doubt suffer more before they improve, and we will wait and see how many of Donald Trump’s and Paul Manafort’s Ukrainian black-ops are uncovered before the impeachment inquiry expires. Talking on the market opening, Spreadex Financial Analyst Connor Campbell stated, “There’s just a bit TOO much going on at the moments for the markets, leading to another tricky start for all involved.” “It appeared on Tuesday that the UK and US were engaged in a bizarre game of one-upmanship, battling over which nation’s political mess is the biggest. First you had the Supreme Court ruling that Boris Johnson’s prorogation of Parliament was unlawful, bringing to an end – for now, at least – its suspension. Then, that evening, Nancy Pelosi announced a long-awaited, and much sought after, impeachment inquiry into Donald Trump, the tipping point being the ongoing Ukraine scandal.” “And for investors who like their politics safe and stable, not perpetually on fire, that’s a problem. Overnight the Dow Jones fell to a fresh 2-week low of 26850, setting the tone for Wednesday’s European open.” “The DAX, already having a rough week thanks to Monday’s manufacturing PMI migraine, lost another 0.6%, sending it under 12250 for the first time since September 10th. The CAC, meanwhile, was down 0.8% and back below 5580.” “Interestingly there was rare agreement between the FTSE and pound after the bell. The UK index dropped half a percent, like it’s US and Eurozone peers striking a 2-week low in the process. This despite sterling giving up yesterday’s post-Supreme Court ruling pop; cable slipped 0.4%, while against the euro the pound dipped 0.2%.” “Needless to say, the resumption of Parliament in the UK, and the next steps in the impeachment furore in the US, are going to be closely watched by nervous investors.” Elsewhere in markets and macro economic news, there have been updates from; the Supreme Court’s ruling, the collapse of Thomas Cook (LON: TCP), ECB stimulus, the bid for the London Stock Exchange (LON: LSE), Lloyds Banking Group PLC (LON: LLOY), Jo Johnson quitting, Hilary Benn’s Brexit delay bill, Barclays (LON: BARC) and Deutsche Bank (ETR: DBK).  

Sainsbury’s: improved sales momentum, opens and closes stores

Dina Caruso
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4
Sainsbury’s: improved sales momentum, opens and closes stores
Sainsbury’s (LON:SBRY) said in a second quarter trading statement on Wednesday that it has experienced an improved sales momentum across all business areas. The company also announced that it will be closing many stores and opening new ones. Shares in the supermarket chain were up during trading on Wednesday. Sainsbury’s said that second quarter total retail sales were up 0.1%, excluding fuel, and like-for-like sales were down 0.2%, excluding fuel. Meanwhile grocery sales increased by 0.6%, general merchandise sales declined by 2% and clothing sales rose by 3.3%. The supermarket chain added that it will be opening 10 new supermarket stores whilst closing up to 15. Sainsbury’s also said that 70 Argos stores will be closed and 80 Argos stores will be opened in Sainsbury’s supermarkets. Moreover it will close 40 convenience stores and open 110 new ones. Sainsbury’s expects the closures to deliver a profit benefit of £20 million each year. “Sales momentum was stronger in all areas and we further improved our performance relative to our competitors, particularly in Grocery,” Mike Coupe, Chief Executive Officer, commented in a company statement. “We have focused on reducing prices on every day food and grocery products and expanding our range of value brands, which have been very popular with customers,” the Chief Executive Officer continued. “At the same time, we are investing significantly in our supermarkets, driving consistent improvements to service and availability.” “Argos continued to grow market share in key categories, but sales were impacted by reduced promotional activity and the timing of new product releases in gaming and toys. Clothing sales were boosted by clearance activity and strong online growth and Tu continued to grow market share.” Additionally, Sainsbury’s said that though retail markets remain highly competitive and the consumer outlook remains uncertain, it is on track to deliver full year underlying profit before tax in line with expectations. Shares in J Sainsbury plc (LON:SBRY) were trading at +2.21% as of 11:13 BST Wednesday.

Boohoo profits soar

Dina Caruso
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4
Boohoo profits soar
Boohoo group plc (LON:BOO) posted a leap in profit before tax on Wednesday in its half year results. Shares in the UK-based online fashion retailer were up during trading on Wednesday. Boohoo, which was founded in Manchester in 2006, said that profit before tax for the six months ended 31 August grew 83% to £45.2 million. Meanwhile revenue rose 43% to £564.9 million. The company also owns the brands PrettyLittleThing and Nasty Gal. The online fashion retailer said that it is increasing its market share through “highly effective marketing strategies”. Indeed, the company uses a range of high profile celebrity campaigns, influencer associations and digital and traditional marketing initiatives. Love Island contestant Maura Higgins joined the list of celebrities recently as she signed for boohoo.com as a UK brand ambassador. “It has been a fantastic first half of the year for the group,” John Lyttle, CEO, commented in a company statement. “We have delivered significant market share gains across all of our key markets, and for the first time in our history, revenue has exceeded £1 billion in the last 12 months,” the CEO continued. “We have delivered strong growth and operating leverage in our more established brands and will continue to invest in both our more established and newly-acquired brands. We enter the second half of the year well-placed and confident that our platform, which combines the latest fashion, great prices and excellent customer service, all underpinned by a well-invested infrastructure, will deliver further market share gains.” Boohoo confirmed that it continues to maintain a “highly positive outlook” for the online fashion sector globally. As for the UK high street, many retailers have suffered lately amid a gloomy trading environment. Earlier this year, Boohoo also posted a rise in group revenue for the three months to the end of May. The company is aimed at 16-30 year olds and offers low-cost clothing, shoes and accessories. Shares in Boohoo Group plc (LON:BOO) were trading at +0.45% as of 10:22 BST Wednesday.
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