Smurfit Kappa shares rise as eco-trend spreads
Smurfit Kappa Group Plc (LON: SKG) have reported strong yearly growth in a trading update provided on Wednesday.
The Dublin based packaging firm said it delivered a “strong performance” in the year-to-date.
For the nine months, ending on September 30th revenue was up 3% to€ 6.85 billion and earnings before interest, tax, depreciation and amortisation 11% higher at €1.26 billion.
The FTSE100 (INDEXFTSE: UKX) listed firm also reported that Ebitda margin increased 140 basis points to 18.3%.
Key metrics have been at, or ahead of, stated targets, said Smurfit. This performance “continues to demonstrate the strength and resilience of the group’s business model”, the company said.
This comes at a good period for Smurfit Kappa, as they seem to have captured a packaging market which is increasingly moving towards eco-trends.
Competitors such as Mondi Plc (LON: MNDI) and International Paper Co (NYSE: IP) will have to respond quickly in these gains that Smurfit Kappa have made.
“While there have been, and continue to be, obvious macro-economic and political challenges, SKG’s very strong performance against this backdrop shows, once again, the quality of our business and the benefits of our geographic diversity,” said Chief Executive Tony Smurfit.
“Consumers are increasingly demanding sustainable packaging solutions and with our unique applications, knowledge and expertise in paper-based packaging we are ideally positioned to take advantage of this mega trend,” he noted.
The change to sustainable packaging will set an example to all firms in the industry, as the rise of eco products continues to be a priority on firms’ agendas.
Notably, American operations also grew approximately 2% with continued EBITDA and EBITDA margin improvement year-on-year.
Steve Miley, a senior market analyst at www.asktraders.com, said: “What’s not to like? Key metrics for Smurfit Kappa were in line with or ahead of stated targets. Whilst the firm isn’t immune to macroeconomic headwinds, the paper packaging firm is finding itself in a increasingly advantageous position.
David O’Brien, equity analyst at Goodbody commented: “Smurfit Kappa reports solid results in Q3 against a backdrop of industry headwinds and well documented macro-economic and political challenges which are impacting other industry players more sharply.
O’Brien concluded “The factors driving Smurfit Kappa’s positive performance are twofold: its integrated business model and continuous drive to innovate set it apart from its peer group. The business is a leader in innovation which enables it to harness key trends including the rise of e-commerce and increasing consumer demand for sustainable packaging solutions. Corrugated demand appears to have picked up in October with the UK noting an up-tick.”
Currently, shares of Smurfit Kappa Group Plc are trading at 2,558p per share. 30/10/19 11:25BST.
Standard Chartered make third quarter gains
Standard Chartered PLC (LON: STAN) have reported strong pre-tax profit gains in their third quarter trading update.
In the trading update released on Wednesday morning, pre-tax profit for the three months that ended in September grew 16%.
However, there was warning about growing headwinds including falling global growth rate and tough market conditions following Brexit complications.
Pre-tax profit came at $1.24 billion compared to $1.07 billion reported last year.
Net profit for the quarter was $772 million, increasing 3% from the $752 million Standard Chartered reported a year ago.
This is a positive note from Standard Chartered, after it was noted that rival HSBC (LON: HSBA) reported third-quarter pre-tax profits fell 18% from a year ago, despite strength in its Asian operations.
HSBC on Monday said it no longer expects to reach its return target of more than 11% in 2020 due to testing market conditions.
Additionally, rivals such as Lloyds Banking Group PLC (LON: LLOY) and Deutsche Bank (ETR: DBK) have experienced slow business performance in the last six months.
Standard Chartered earlier this year announced plans to increase returns and dividends over the next three years by cutting $700 million in cost and targeting income growth between 5% to 7%.
Group CEO Bill Winters said: “Our strategy of the last few years has progressively created a stronger and more resilient business as evidenced by a 16% increase in underlying profits in the third quarter. The continuing execution of that strategy remains our priority, enabling us to face the more challenging external environment confidently.”
Standard Chartered are a globally operating bank, having operations in Asia, Africa, and the Middle East whilst its headquarters are situated in London.
The bank also added that operations in North America and China brought in $1.58 billion, a 2% increase on-year, whilst income grew in Hong Kong, Korea and China.
Notably, Standard Chartered said its corporate and institutional banking operating income grew 13% to $1.87 billion, retail banking was up 4% from a year ago to $1.32 billion. Private banking income increased by 14%.
For its outlook, the bank said it continues “to focus on executing our strategy with the objective of delivering a 10% return on tangible equity by 2021” but flagged “growing headwinds” such as geopolitical tensions and expectations of “declining near-term global growth and interest rates.”
Currently, shares of Standard Chartered are trading at 713p per share, rising 2.71%. 30/10/19 11:09BST.
Third Quarter updates shows progress for Computacenter
Computacenter plc (LON: CCC) have released their third quarter trading statement, which shows revenue and profits ‘well ahead’ of 2018 figures.
The strategy included the drive to digitalise helps to offset “challenging” economic conditions.
Computacenter are one of many FTSE250 (INDEXFTSE: MCX) listed firms who have alluded to tough market conditions being a disruption to revenues.
Well publicised challenging economic conditions are affecting some of our customers however, to-date, this has been more than compensated by the drive to digitalise across the entire marketplace,” it said.
Other firms of note who have issued statements on slowing business revnues include De La Rue (LON: DLAR) and Dunelm (LON: DNLM) as their share price crashed earlier this month.
In the update for the three months ending in September, he company said trading across the group has been “good”.
As outlined, the 2018 figures and expectations have been smashed. As a result Computacenter’s outlook remains in line with its existing expectations, which were upgraded back in July.
“While the fourth quarter is always the most critical to the year’s performance, the board’s confidence with its current expectations continues to strengthen as we progress through the year.”
Additionally, the group saw ‘pleasing’ revenue growth over the comparative quarter within technology sourcing in the UK.
In Germany and Europe, it continued to perform strongly throughout the quarter, with shortfalls from its international sector customers significantly exceeded by increases from the public sector, it said.
In other global operations, the US the company “saw a strong return to both revenue and profitability growth”.
Following the challenging first-half comparison, the group has, as expected, comfortably beaten its prior year third quarter comparative with the positive momentum seen in the first six months of the year continuing throughout the quarter,” the company said.
Shares of Computacenter are trading at 1329p per share, seeing a 5.45% rise during Wednesday trading. 30/10/19 10:50BST.
ConvaTec report solid Third Quarter results
ConvaTec Group PLC (LON: CTEC) have reported solid results and growth reports in their third quarter trading statement released on Wednesday morning.
The achievements and targets were met and stay consistent with management expectations, allowing them to keep their 2019 guidance unchanged.
Following this update, UBS have reinstated ConvaTec’s rating to neutral whilst other firms such have Credit Suisse have informed investors about the trading update.
After a difficult few months of trading, it seems that the wounded reputation of ConvaTec is on the mend.
The medical products and technology firm reported that in the three months ending September 30, total revenue was $462.9 million, 2.4% higher than the $452.2 million reported a year before.
The company reported that the improvement was driven by 4.6% growth in organic revenue.
The growth consolidates ConvaTec’s status in the against other medical supplier firms such as RA Pharmaceuticals (NASDAQ: RARX) and UBS (EBR: UCB) who are set to complete a merger in early 2020.
Group performance was boosted by growth in all of the company’s units – Advanced Wound Care, Ostomy Care, Continence & Critical Care, and Infusion Devices.
“A number of markets in EMEA and Latin America performed well, while we continued to focus on leveraging our specialised and expanded salesforce in the US. There were some distributor inventory movements in the current and prior year which provided a tailwind in the quarter, which we anticipate will partly reverse in the fourth quarter,” ConvaTec explained.
The FTSE250 (INDEXFTSE: MCX) listed medical firm is currently undergoing structural transformation. The first half costs of these changes are estimated to cost $14 million with an anticipated full-year spend of $40 million.
In the nine month period, revenue was $1.35 billion, showing drop of 1.6% – blamed on foreign exchange movements – but growth of 1.5% on an organic basis, CovaTec said.
“The Transformation Initiative remains on track as we continue to implement the improvement projects and we will provide an update on progress with the 2019 results,” the company added
“I am pleased we have reported a solid performance in the third quarter, but this is a small step on the significant journey ahead of us as we focus on pivoting to sustainable and profitable growth. As an organisation we need to get closer to patients, to strengthen our innovation pipeline and to drive a relentless focus on execution excellence,” said Chief Executive Karim Bitar.
In 2018, ConvaTec reported pretax profit of $201.2 million on revenue of $1.83 billion.
Currently, shares of ConvaTec are trading at 198.5p per share, climbing 8.44%. 30/10/19 10:34BST.
De La Rue issues profit warning causing shares to sink
De La Rue plc (LON: DLAR) have issued a warning to shareholders about its profit levels in a press statement released this morning.
Following the announcement, the share price of De La Rue has crashed significantly as the former UK passport printer speculates about tough Brexit market conditions.
Today the company issued a statement saying the following “De La Rue expects H1 2019/20 adjusted operating profits for the half year ended 28th September 2019 to be low-to-mid single digit millions. Full year 2019/20 adjusted operating profit will be significantly lower than market expectations”
This was also added “Management, led by the new CEO, is conducting a detailed review of the business and will update the market further when it reports its H1 2019/20 results on 26 November 2019.”
Additionally, De La Rue has specialized in printing bank notes giving it national recognition.
De La Rue are not the only firm that have speculated about tough market conditions, and will look to recover in the same fashion as the London Stock Exchange (LON : LSE) in its third quarter.
The banknote printer had already warned in May that operating profit for the 2020 financial year would be “somewhat lower” than 2019.
The firm also revealed a 78% sink in profits, before tax to £25.5m in its full-year results in May, down from £113.6m a year earlier.
Following this collapse, the sudden resignation of Chief Executive Martin Sutherland allowed Vacher to take the reigns earlier this month.
Additionally, problems were added when the Serious Fraud Office opened an investigation into the company over summer to probe suspected corruption in South Sudan.
De La Rue have experienced a tough 2019, after losing a British Passport Contract to French rival which lowered revenues.
AJ Bell investment director Russ Mould warned that De La Rue has failed “a major test” for its shareholders.
As a banknote printer in a world going cashless, “if it didn’t exist as a business today, would you really set it up?” he asked.
This poses a lot of questions for shareholders of De La Rue, as British firms such as Dunelm (LON: DNLM) and MoneySupermarket (LON: MONY) continue to be hit by ongoing Brexit complications.
Currently. shares of De La Rue are trading at 149.8p per share, falling 19.89% this morning. 30/10/19 10:13BST.
Pound positive despite likelihood of general election, FTSE slides on BP update
It was a somewhat flat day for British performance indices. That isn’t to say that nothing happened, rather that performance indicators failed to deliver any kind of groundbreaking revelations one way or the other.
BP posted a dismal set of results for the last quarter, which saw the day’s trading get off to a lulling start. This was followed by news that Labour had agreed to a general election on the condition of a No-Deal Brexit being ruled out. After three years of little compromise on either side, it was refreshing to see Labour implementing a measure that it should also apply to Brexit negotiations – namely, being more forthcoming with their support for a deal, on a conditional basis.
Speaking on the Pound and other market indices leading up to the final bell, Spreadex Financial Analyst Connor Campbell stated,
As Britain takes another step towards a general election, the pound held its nerve – the FTSE, on the other hand, had a far rougher Tuesday.”
“Perhaps sensing the inevitable – Boris Johnson, alongside the Lib Dems and SNP, were looking to push the country to the polls regardless of what Corbyn and co. felt – Labour dropped their opposition to a general election, stating their ‘condition of taking no deal off the table has now been met’. A December vote, then, is now basically on, though the exact date of the ballot is still up in the air.”
“Hoping that an election will create some Christmas clarity – however misguided that belief might be – the pound just about swung positive after the news. It didn’t move much, mind, rising 0.1% against the dollar and euro alike.”
“With sterling in the green, a good chunk of its banking and housing stocks in the red, and BP down more than 4% after a terrible set of Q3 results, the FTSE dropped 0.6%. That took the UK index back under 7300, and made it easily the day’s worst performer.”
“In contrast the DAX and CAC fell 0.2% and 0.1% respectively, while the Dow Jones climbed past 27100 despite Alphabet sliding 2% following last night’s third quarter earnings update.”
Elsewhere in political and macro economic news, there have been updates from; new Brexit deal agreed, UK economy looks likely to avoid recession, Hong Kong protester shooting and China’s strategy, the Supreme Court rules against Boris, the collapse of Thomas Cook (LON: TCP), the bid for the London Stock Exchange (LON: LSE), Lloyds Banking Group PLC (LON: LLOY), Barclays (LON: BARC) and Deutsche Bank (ETR: DBK).Fitbit shares move upward by 31% amid offer from Alphabet
Fitbit (NYSE: FIT) shares moves upward by 31% following an offer from Alphabet to takeover the company.
Fitness Trackers
Fitness trackers have become popular in the last five years. There is an increasing demand for fitness trackers as more and more people wish to track their physical health. Fitbit is the primary producer of fitness trackers in the world. Fitbit fitness trackers detect the owner’s daily steps to calculate distance travelled per day. Furthermore, Fitbit fitness trackers measure physical health by monitoring heart rate as well as sleep duration. Fitbit fitness trackers are particularly appealing to customers who wish to lose weight as these fitness trackers monitor calories burnt per day.The Market for Fitness Trackers
The market for fitness trackers and smartwatches has been growing in the past five years. Created through a corporate restructuring of Google, Alphabet is interested in widening its reach in the technology industry by investing in fitness trackers.Alphabet
Alphabet (NASDAQ: GOOGL) hopes to increase its presence in the market for fitness trackers and smartwatches. Consequently, Alphabet approached Fitbit to discuss the possibility of a takeover. Following the offer from Alphabet to takeover Fitbit, Fitbit shares immediately surged by 31%. According to SkyNews, Fitbit gained approximately £264m following Alphabet’s offer. As a result, Fitbit’s value went up to £1.13 bn on Monday. Neither Alphabet nor Fitbit announced the price Alphabet offered to takeover FitBit. Nevertheless, even the existence of an offer from Alphabet proved sufficient to increase the market value of Fitbit. Alphabet released its third quarter results on the same day it made an offer to takeover Fitbit. The reports indicated a 2% fall in Alphabet’s shares.Growth Potential
The decision to make an offer to takeover Fitbit indicates Alphabet’s trust in the growth potential of Fitbit. The market for fitness trackers gets more and more competitive as cheap substitutes to Fitbit products become available. Rivals from China challenge Fitbit through selling more affordable fitness trackers. Two of Fitbit’s greatest rivals are Huawei (SHE: 002502) and Xiaomi (HKG: 1810). Considering the increasing demand in fitness trackers and smartwatches, more companies are likely to invest in the sector.John Laing builds on portfolio with new stakes in infrastructure
Responsible infrastructure investor and partner John Laing Group PLC (LON: JLG) today issued two positive updates on new stakes it has acquired in two infrastructure projects.
The first announcement detailed the Company’s acquisition of a 30% interest in the Ruta del Cacao road project in Colombia, for aconsideration of £62 million. The second announcement told investors that it had secured a 35% stake in the Hurontario Light Rail Transit PPP project in Canada, for an interest of £13 million.
In its statement, the Company said that it, “is pleased to announce that further to its announcement on 20 August 2019 regarding the agreed acquisition of 30% of the Ruta del Cacao road project in Colombia, all relevant approvals have now been obtained and the acquisition completed on 28 October 2019 for a total consideration of £62 million.”
Speaking on the second announcement, John Laing added, “Hurontario LRT consists of an 18km line connecting municipalities in the Greater Toronto and Hamilton Area and will improve connectivity within and between the two districts. The project builds on John Laing’s successful history of investment and delivery of complex rail schemes, including the Denver Eagle commuter rail in USA and Sydney Light Rail in Australia.”
The Group concluded by saying that its total investment commitments to-date totalled £157 million.The Company’s share price stands at 365.00p per share 29/10/19 15:59 GMT. Analysts from Peel Hunt reiterated their ‘Buy’ stance on John Laing Group stock, the Group’s p/e ratio stands at 5.78 and their dividend yield is 1.48%.
Elsewhere in infrastructure, there have been updates from; Scottish government policy, JLEN (LON: JLEN), Active Energy Group PLC (LON: AEG), Velocys PLC (LON: VLS), AFC Energy plc (LON: AFC), SIMEC Atlantis Energy (LON: SAE), Aquila European Renewables Income Fund (LON: AERI) and PowerHouse Energy Group (LON: PHE).Koovs seems to be in fashion as sales double despite uncertainty
Western fashion experts for online Indian consumers Koovs plc (LON: KOOVS) boasted impressive fundamentals during the second quarter, despite the ongoing uncertainty surrounding Future Lifestyle Fashions Limited’s investment into the company.
The Group’s headline figure was its 100% year-on-year gross order value growth, from £2.5 million to £5.0 million.
This was bolstered by additional progress in its trading margin, which increased from 7% to 12% on-year, a 69% spike in website traffic which was up to 27.3 million visits, and conversion rates rising from 1.1% to 1.3%.
The Company said that the latest round of results represents the third consecutive quarter of growth in its core performance metrics, and indicates the strength of Koovs’ underlying business model.
FLFL subscription and near-term strategy
The Company’s statement read, “As announced on 21 October 2019, Koovs was informed by Future Lifestyle Fashions Limited (“FLFL”) that the Reserve Bank of India (the “RBI”) now requires FLFL to reapply for approval prior to completing its outstanding £6.5 million investment into Koovs. FLFL has confirmed to the Company that it is in the process of reapplying for this approval and has confirmed its commitment to honour its investment into Koovs, whether through the existing mechanism (through the issue of compulsory convertible preference shares) or, to the extent available, an alternative route should the approval not be forthcoming.”“The Company is working with FLFL to secure the committed investment, alongside considering other fundraising options available to the Company, in the event the RBI approval process is not completed within the coming weeks.”
“The Board has also determined to implement certain cash conservation measures, primarily in relation to reducing stock purchases and marketing spend, with the intention of ensuring there is the maximum time available for the various options available to the Company to be considered.”
Investor notes
Despite the positive sales figures, the FLFL uncertainty weighed on the Company’s progress during trading today. The Group’s share price dipped 3.04% or 0.092p to 2.93p per share 29/10/19 15:43 GMT. Neither a p/e ratio nor a dividend yield are available for Koovs stock, the Company’s market cap is £11.25 million. Elsewhere in fashion, there have been updates from; Superdry (LON: SDRY) N Brown Group plc (LON: BWNG), Boohoo Group PLC (LON: BOO), Burberry Group plc (LON: BRBY), H&M (STO: HM-B) and Sports Direct International Plc (LON: SPD).Apple announces the release of noise-cancelling AirPods Pro
Apple (NASDAQ: AAPL) is due to release the AirPods Pro on Wednesday.