Schroder REIT adjusts strategy in challenging market
Schroder Real Estate Investment Trust (LON: SREI) announced on Tuesday that they had been disposing their lower yield assets during the six months to September 30th 2019, against a backdrop of decreased NAV returns and a ‘challenging market’.
The Group began the update by telling shareholders that they had disposed of £45 million worth of assets during and post period end. Thsi reflected a a 15% net premium to the valuation at the start of the period, which takes total disposals since January 1st to £95 million.
The Company then spoke on refinancing, which capitalised on, “low long-term interest rates reducing the cost of the long term debt from 4.4% to 2.5% and extending the term from 8.5 years to an average 16.5 years”. This interest saving of £2.5 million per annum has been paid to shareholders in the form of a 19% dividend rise beginning from the 1st of October 2019.
Despite this positive start, the Company ran us through its somewhat deflated fundamentals. NAV of £354.3 million or 68.3 pps represented a decrease of 0.6% during the six month period, while NAV returns of 0.5% was a notable contraction from 3.0% for the same period a year earlier.
However, Schroder REIT was happy to report progress in its portfolio. It stated that 96% of its portfolio is now located in ‘Winning Cities’ and during the period, it completed 26 new lettings, rent reviews and renewals for an additional £1.1 million of rent above the previous level.
Elsewhere in the property sector; Land Securities Group plc (LON: LAND) posted underwhelming financial results, Shaftesbury plc (LON: SHB) booked robust leasing activity, Berkeley Group Holdings Ltd (LON: BKG) restated its confidence in the South-East market and Redrow plc (LON: RDW) posted strong results and completions.
IMImobile rallies on 27% earnings hike
Cloud communications software and solutions provider IMImobile PLC (LON: IMO) reported strong financial results for the six months ended September 30th, alongside a period of client wins and acquisitions.
The Company began by stating that its performance was in line with the Board’s expectations, with revenue jumping 24% to £83.0 million.
This sales progress led a 27% surge in adjusted EBITDA to £9.8 million and adjusted profit after tax rising 12% to £5.2 million. The only downside to today’s fundamentals was the Group’s net debt, which narrowed from £7.5 million to £21.8 million between the first and second halves of the financial year.
Operationally, during the period, IMImobile announced the acquisition of 3Cinteractive Corp, new contract wins across all regions and new launches, “utilising new richer messaging channels, Apple Business Chat, RCS and WhatsApp Business”.
The Company’s shareholders fared similarly well, with adjusted diluted EPS up 5% year-on-year for the same period, to 6.9p. Other positive financial results announced on Tuesday came from; IG Design Group PLC (LON: IGR) celebrating a profit bounce, CRH PLC (LON: CRH) posted a strong third quarter and Pets at Home (LON:PETS) celebrated a productive first half.IMImobile comments
Jay Patel, Chief Executive Officer, stated,
“89% of companies are now competing primarily on the basis of customer experience, meaning demand for customer communication software has never been greater. Our enterprise-grade offering, and comprehensive set of applications addresses the needs of the largest complex global organisations. With the introduction of new, richer communication channels, we are excited about the possibilities for dramatically improving customer experience.”
“We have made strong organic progress throughout the first half of the year and expect the positive momentum to continue through to the year end and beyond. The acquisition of 3Cinteractive provides a solid foundation in the US and we are very confident of success in this market. The outlook for the year is positive and we are trading in line with Board expectations.”
Investor notes
The Company’s shares rallied 5.59% or 17.00p to 321.00p per share 26/11/19 15:15 GMT. The Group’s p/e ratio is 18.20, their dividend yield is unavailable, and their market cap is £238.50 million.SkinBioTherapeutics shares fall following widened loss reports
SkinBioTherapeutics PLC (LON: SBTX) have seen their shares fall on Tuesday afternoon after the firm reported a widening on their annual loss.
SkinBioTherapeutics are a life science company focused on skin health.
The SkinBioTherapeutics’ platform applies research discoveries made on the activities of lysates derived from probiotic bacteria when applied to skin. The Company has shown that the SkinBiotix® platform can improve the barrier effect of skin models, improve repair and reduce bacterial load.
Shares fell 3.87% following the announcement and trade at 16p. 26/11/19 15:02BST.
The firm said it will now focus on five channels for development, encompassing both existing and new technology.
The widened loss for financial 2019 was caused by increased research and development spending, but the firm have reassured shareholders that there will be long term benefits.
The firm focused on skin health said it will develop its core technology SkinBiotix, which has secured an extended agreement with Croda International PLC (LON: CRDA) for use in cosmetic applications.
Other technologies in focus include AxisBiotix, MediBiotix, CleanBiotix and PharmaBiotix.
For the annual financial year ending June 30, the firm made a pretax loss of £1.4 billion widened from the £941,451 figure a year ago.
Additionally, no revenue was generated in either financial period, which may concern shareholders.
Research and development expenditure increased from £416,000 to £708,000 omprising development work with the University of Manchester, ongoing manufacture, scale-up and formulation work as well as the costs for the cosmetic human study.
However, this does show that SkinBioTherapeutics are keen to get the best quality product out and be a market leader.
Stuart Ashman, chief executive of SkinBioTherapeutics, said: “This has been an exciting year for the company.”
“The beginning of the year was about proving the sound scientific foundation of our SkinBiotix technology and the positive effects of it on the barrier function of the skin. The successful results drove commercialisation discussions forward which resulted in our recent agreement with the world leader in skincare actives for the cosmetic industry, Croda International PLC. We will continue to seek further commercial opportunities and build the development pipeline with new programmes in eczema and psoriasis during 2020,” Ashman added.
The pharmaceuticals industry has seen a mixed set of results by firm across financial 2019.
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.
Additionally, Roche (SWX: ROG) announced the acquisition of US drugmaker Promedior last week.
IG Design Group celebrates 21% profit bounce
Manufacturer of celebrations, gifting and stationary products IG Design Group PLC (LON: IGR) posted significant progress in its fundamentals between the first and second halves of the financial year.
The Group’s revenue bounced 21% between the first and second half, up to £248.4 million. This led the Company’s adjusted operating profit to increase likewise by 21% to £23.6 million. Similarly, they narrowed their net debt from £100.0 billion to £86.2 million between the two halves, which allowed their average leverage to fall to 1.0 times, from 1.3 times for the 12 months to 30 September 2018.
IG Design shareholders also fared well, with their adjusted fully diluted EPS up 2% to 20.1p, and their interim dividend surging 20% to 3.0p.
Other positive updates on Tuesday came from Rockfire Resources PLC (LON: ROCK) reporting new gold discoveries, CRH PLC (LON: CRH) posted a strong third quarter and Pets at Home (LON:PETS) celebrated a productive first half.
IG Design comments
Paul Fineman, Group CEO, said,
“Our strong start to the year highlights the strength and agility of our business. Our initiatives and investments are bearing fruit and will drive further growth into the future.”
“Our long-established relationships with many of the world’s leading and ‘winning’ retailers provides a strong foundation for us to meet ambitious growth targets, both organically and through an active pipeline of acquisition opportunities, whilst maintaining prudent average leverage.”
“We remain focused on driving growth, maintaining our financial strength and continuing to deliver in line with expectations, whilst ensuring we continue to make the most of our many exciting future prospects.”
Investor notes
The Company’s shares dipped 1.23% or 8.00p to 640.00p per share 26/11/19 14:34 GMT. Analysts from Berenberg reiterated their ‘Buy’ stance on IG Design Group stock. Their p/e ratio is 40.50, their dividend yield stands at 1.33%.Bank of England fine Citigroup for providing inaccurate data
The Bank of England have fined Citigroup (NYSE: C) after the US bank failed to provide accurate regulatory returns for the groups British operations between 2014 and 2018.
Shares of Citigroup currently trade at $75 (-0.75%). 26/11/19 14:45BST.
The global banking scene appears to be in decline as firms struggle to stimulate business in a cut throat market.
Established names such as Lloyd’s (LON: LLOY) and HSBC (LON: HSBA) have seen their third quarter profits decline in tough trading conditions.
Additionally, overseas banks including Deutsche Bank (ETR: DBK) appear to be in crisis following a third quarter loss report
Imposing its biggest fine to date, the Prudential Regulation Authority (PRA), the BoE’s banking supervisory arm, said Citigroup’s UK framework for reporting data to regulators was not designed, implemented or operating effectively, according to Reuters.
The Bank of England ensured that it was mandatory for banks to report a broad range of data so regulators can check that they are not taking too much risk or holding small amounts of capital as insurance against market shocks.
“While Citi remained in surplus to its liquidity and capital requirements at all times, the failings persisted over a significant length of time and were serious and widespread in nature,” the BoE said.
“Citi failed to deliver accurate returns and failed to meet the standards of governance and oversight of regulatory reporting which we expect of a systematically important bank,” BoE Deputy Governor and PRA Chief Executive Sam Woods said.
Some of the regulatory returns were unreliable and did not provide the PRA with an accurate picture of the bank’s capital or liquidity position, it added.
Citigroup were quick to defend their actions saying that they have dealt with regulatory issues in the past, and will look to settle the matter at the earliest chance.
“Citi places a high priority on meeting its regulatory reporting requirements, and has devoted significant resources to UK financial reporting before, during and after the period to which the PRA’s notice relates,” the bank said in a statement.
“Citi co-operated fully with the PRA throughout the process, and in 2019 a leading independent accountancy and audit firm confirmed that Citi had remediated the material issues identified.”
The PRA said the fine would have been $62.7 million had Citi not agreed to resolve the matter early.
Australian Bank Westpac (ASX: WBC) have also hit news headlines after their CEO was forced to step down following a money laundering scandal.
Global Petroleum shares spike following success in Namibian operations
Global Petroleum Limited (LON: GBP) have seen their shares spike on Tuesday afternoon after the firm said operations in Namibia looked promising and praised the PEL0094 licence.
Global Petroleum Limited is an oil and gas, upstream exploration company presently focused on Africa and the Mediterranean. The Company’s principal assets are two exploration blocks located offshore Namibia.
Shares in Global Petroleum spiked 33.79% to 1.94p. 26/11/19 14:29BST.
The firm unveiled a best estimate resource at the licence of 964 million barrels, which sparked shareholder optimism.
Within that, the Albian carbonate reservoir at Welwitschia Deep is estimated at 772 million barrels with a probability of success of 15%.
“Our technical work to date on PEL0094 confirms the acreage is highly prospective. We are delighted our review of the data so far has confirmed the high level of prospectivity of PEL0094 generally, and of the Welwitschia Deep prospect in particular, which contains unrisked best estimate prospective resources of nearly 800 million barrels,” said Chief Executive Peter Hill.
“Specifically, our work suggests the Welwitschia-1A well, drilled in 2014 by previous licensees, was abandoned before reaching the underlying Welwitschia Deep prospect. Moreover, the 2014 well was drilled to the west of the newly identified Marula lead, located in the Upper Cretaceous which was the primary target of Welwitschia-1A.”
“These factors, together with the scale of the prospective resource numbers which we have released today, demonstrate that both Welwitschia Deep and Marula are very attractive targets,” added Hill.
Whilst Global Petroleum have seen major success today the energy and petroleum market has seen updates.
Nostrum Oil and Gas (LON: NOG) and Chariot Oil & Gas (LON: CHAR) have seen their shares dip following modest updates.
Additionally, Shell (LON: RDSA) and Total SA (LON: TTA) have seen their shares dip amid volatile oil prices and trading slumps.
Certainly, shareholders of Global Petroleum will be pleased with the update and this has been reflected in this mornings stock price increase Shareholders will have to wait to see whether Global Petroleum can exploit further discoveries to give themselves a strong foothold in the market amid tough trading conditions and stiff competition.i3 Energy shares plummet following Liberator Field drilling issues
Shares of i3 Energy PLC (LON: I3E) have plummeted on Tuesday after the firm updated shareholders about drilling issues at its Liberator well.
i3 Energy isn an independent oil and gas company with assets and operations in the United Kingdom. i3 Energy’s core asset is the Liberator oil field discovered by well 13/23d-8 located in License P.1987, Block 13/23d in which it has a 100% operated interest.
Shares of i3 plummeted 25.2% on Tuesday afternoon to 19p. 26/11/19 14:13BST.
Only a few weeks back, i3 saw their shares rally after the firm made a new discovery at its Serenity oilfield in the UK central North Sea.
However, this pattern was short lived as shares plummeted today following the cautious update. The firm said that the oil water contact at its Liberator well currently being drilled was “lower than anticipated”.
The Liberator well 13/23c-11, in the company’s 100%-owned Liberator field in the North Sea, was drilled to 220 feet, as planned.
“Initial evaluation of the measurement while drilling logs indicate that, at this location, about 20 feet of the Captain sand with oil indications has been found above the expected oil water contact of 5,270 ft total vertical depth subsea,” the company said.
Chief Executive Majid Shafiq said: “We are pleased to have encountered a thick Captain sand at this location including oil indications in the upper captain sand above the oil water contact. Initial interpretation is that the sand thickness above the oil water contact is lower than anticipated. Definitive results will be determined and the market updated in due course.”
“Initial interpretation is that the sand thickness above the OWC is lower than anticipated. Definitive results will be determined and the market updated in due course,” he added.
Wireline logging will now be carried out as per the planned data evaluation programme, i3 added.
In the oil and gas industry, competitors such as Nostrum Oil and Gas (LON: NOG) and Chariot Oil & Gas (LON: CHAR) have seen their shares dip following modest updates.
Additionally, big titan Shell (LON: RDSA) have reported lower profits in their third quarter following volatile oil prices and tough market conditions.
Rockfire Resources shares soar following new gold discovery
Rockfire Resources PLC (LON: ROCK) have seen their shares soar on Tuesday after the firm reported consistent gold assays from an operation in Australia.
Rockfire Resources is an Australian focused gold and copper exploration company with mineral assets in Queensland. Rockfire has three medium-grade, near-surface gold prospects, positioned amongst multi-million ounce gold deposits.
Shares in Rockfire soared 113.86% to 0.89p. 26/11/19 13:54BST.
As Rockfire have seen huge success, in the mining sector there have been mixed updates as shares continue to be volatile.
Established names such as Hochschild Mining (LON: HOC) and MC Mining (JSE: MCZ) have seen their shares crash since Friday after they cut their annual profit expectations.
Additonally, competitors such as Serabi Gold (LON:SRB) and Kavango Resources (LON: KAV) have seen their shares rally following impressive updates.
The firm updated shareholders that it had returned broad consistent gold assays from a geophysical target on its Plateau gold project.
Of particular note was gold mineralisation occurring almost continuously throughout a 215 metre deep hole, including 177 metres at 0.5 grams per tonne gold.
Rockfire believes that this hole has intersected the upper levels of a large mineralised system.
“Hole BPL025 was designed to drill down a sub-vertical pipe structure into the centre of a geophysical chargeable anomaly,” David Price, chief executive of Rockfire in a statement.
“This is the first indication that Plateau has grade continuity extending at depth and supports our belief that this deposit is much larger than previously demonstrated. With consistent gold, silver and zinc being encountered close to surface, we always believed that a large mineralised system was somewhere deeper down. This hole has demonstrated that mineralisation can be followed over long intervals,” he added.
This is an impressive update from Rockfire, and shareholders seem to be hungry for more as reflected by the monumental rise in share price across Tuesday trading.
It is important to remember that Rockfire is a relatively young company, however regardless of the size of the company this is still an impressive find.
Shareholders will be thoroughly impressed with the update, and if Rockfire can tap into these resources then shareholders will be excited to see dividends and further growth of the firm.
Westpac Banking CEO quits over money laundering scandal
The CEO of Australia’s Westpac Banking Corp (ASX: WBC) has quit on Tuesday after reports suggested he was involved in a money laundering scandal involving child exploitation.
The news comes just one day after he told staff that this was “not a major issue” and that he intended to stay on in his position at the Australian bank.
Shares in Westpac currently trade at AUD24, seeing a 1.72% jump on Tuesday. 26/11/19 13:35BST.
Where Westpac have been hit with legal implications, the global banking sector is still being haunted by cut throat market conditions.
Established names such as Lloyd’s (LON: LLOY) and HSBC (LON: HSBA) have seen their third quarter profits decline in tough trading conditions.
Additionally, overseas banks including Deutsche Bank (ETR: DBK) appear to be in crisis following a third quarter loss report.
Brian Hartzer announced his departure from the 2nd December, and added to the list of Australian banks who have lost their top executives in the past 18 months.
Regulator AUSTRAC last week launched legal action accusing Westpac of enabling 23 million payments in breach of anti-money laundering laws, including the facilitation of offshore payments relating to child exploitation
Chairman Linday Maxsted had said at the weekend that change in senior leader would be destabilizing for the bank.
However, this tone changed on Tuesday when Maxsted announced both Hartzer’s exit and that his own retirement in the first half of next year. He had said in September he had no intention to retire.
“We sought feedback from all our stakeholders … it became clear that board and management changes were in the best interest of the bank,” Maxsted said in a statement.
Maxsted added in a media call that his successor would run a global search for a new CEO and Chief Financial Officer Peter King would take over in the interim. King said he would stay “as long as the board needs me”.
Hartzer had told senior staff in a meeting on Monday that the crisis was “not an Enron or Lehman Brothers”, according to The Australian newspaper, referring to the two famous corporate collapses.
Larger rival Commonwealth Bank of Australia (ASX: CBA) had also been subject of investigation by regulator AUSTRAC, which resulted in a $700 million penalty and the early retirement of its CEO.
This scandal will put bad media spotlight onto Westpac, and certainly consumers and shareholders will take a while to get over this injustice.
The hottest artists to invest in right now
Sponsored by Red Eight
Investors are always looking for the next big thing, but predicting trends in a field as nuanced as the art world is no easy feat. Here’s our insider’s guide to three artists who are about to make it big on the art scene. Now’s the time to invest in their work before the rest of the art world catches up.
RETNA
Born Marquis Lewis in Los Angeles in 1979, the acclaimed street artist RETNA is best known for his striking typography and intricate letterwork which is rich in hidden meaning and symbolism. The artist chose his unusual moniker from the lyrics of a Wu Tang song which was particularly important to him when he was young and became interested in street art after spotting grafitti along the highway.
RETNA’s work includes large-scale murals and sculptures as well as smaller, more gallery-friendly pieces featuring his charismatic geometric script which is aesthetically reminiscent of Egyptian hieroglyphs and Native American symbology. His text is not written in an identifiable language, since RETNA explains that “I want my text to feel universal. I want people from different cultures to all find some similarity in it—whether they can read it or not.”
RETNA’s work has been snapped up by the likes of Usher, Swizz Beatz, and expert curators and collectors like Jeffrey Deitch, and his pieces have consistently over-performed at auction. Examples include his “Soldiers is Another Frame of Mind” (2013) which sold for $36,400 against the high estimate of $22,800, while at the annual Clara Lionel Foundation Diamond Ball in September 2017 Dave Chapelle made a successful $180,000 bid on a RETNA painting.
RICHARD HAMBLETON
Nicknamed the “Godfather of street art”, Richard Hambleton was born in Vancouver in 1952 and is best known for his sinister shadowman silhouettes daubed on buildings in New York. Hambleton studied at the Vancouver School of Art and began his striking “Image Mass Murder” series in 1976, taking influence from the chalk outlines drawn by the police at murder scenes.
In 1979 Hambleton permanently settled in New York and began to work in his studio rather than directly on the streets. During the 1980s art boom he enjoyed significant success and was considered part of the influential group which also included Keith Haring and Jean-Michel Basquiat.
Today Hambleton’s works grace top galleries and museums across the world including the Brooklyn Museum, the Andy Warhol Museum in Pittsburgh, and The Museum of Modern Art in New York. Although until now Hambleton has lagged behind contemporaries like Basquiat, his work is now receiving the recognition it deserves. The recent sale of “Opening” (1983) which beat its €7,000 low estimate by over 20 times at Blindarte in Milan, with a closing price of €150,000.
This is not an isolated event; over the past couple of years the value of his work has shot up from a couple of thousand dollars to 6 figures. The current record price for a Hambleton work is for “As the world burns” which sold at Artcurial in 2018 for $553,332. The future looks very bright indeed for those who own or are able to obtain Hambleton pieces before prices climb even higher.
MARK SLOPER
Mark Sloper is the genius behind Illuminati Neon which draws on the artist’s punk roots as a friend of the Sex Pistols and producer of the recent Sky TV documentary, Punk 67. Sloper went to art college in Sheffield before falling in love with punk. In the Illuminati Neon studio in Shepherds Bush each piece is bespoke and hand-blown, featuring witty punk messages which bring a touch of irony or humour to the image.
Illuminati Neon is rapidly developing a dedicated following on the international art circuit, and in September Mark Sloper’s work featured in the world’s best emerging artists exhibition at the prestigious Saatchi Gallery in London. For the moment Illuminati Neon’s pieces remain extremely affordable, making this artist exceptionally attractive to art investors looking for the next big thing.