Angling Direct accquires Eric’s Angling Centre
Angling Direct Plc (LON: ANG) gained a boost during afternoon trading on Wednesday. This followed news that Angling Direct had bought Eric’s Angling Centre in a cash deal.
The deal was valued at £1.1 million as Angling Direct stampede their influence in the British Angling market.
Eric’s reported revenues of £5.2 million in 2018 and looks like a sound investment for Angling Direct.
After this purchase Angling Direct will own 31 stores in England, having stated that by the end of the financial year the target was 34 and this looks set to be achieved.
The fishing superstore have announced plans to rebrand and renovate many stores including the Farlows Lakes Store, whilst merging two stores in Leeds.
With these aims, there is a hope to accelerate the stores progress by consolidating the local retail selection.
Angling Direct’s Chief Executive Darren Bailly said “Erics is a premium business and that the company looks forward to welcoming its thousands of regular customers. Our strategy is to consolidate this highly fragmented market, delivering economies of scale and broadening our access to new customers through an increased retail footprint.”
Bailly also added “I also welcome the staff to the group. With their knowledge and experience, they are a valuable addition to Angling Direct and we will support them fully through the integration.”
Following the news of the acquisition, the share price of Angling Direct rose 2.52% higher, trading at 61p per share.
Eric’s angling own two stores in strong angling communities, and Angling Direct saw this opportunity to expand market dominance.
Steve Blow of Eric’s Angling commented on the move “It gives me great comfort to hand over the business, which I have assisted in building over the last 30 years, to Angling Direct”
Blow concluded “Whilst continuing to provide industry-leading products and excellent, reliable service, I believe Angling Direct will further enhance our customers’ retail experience. It has everything an angler could ask for, be it online or in-store.”
After operating for over thirty years, Eric’s saw this as potential to join forces with an angling superstore to widen customer base.
In wider retail news, updates have been provided on Laura Ashley Holding Plc (LON: ALY), Dunelm Group Plc (LON: DNLM), Amazon.com Inc (NASDAQ: AMZN) and Huawei (SHE: 002502).
NAO: risks to the UK border out of government’s control
The risks to the UK border in the event of a no deal Brexit is now, to a certain extent, out of the government’s control, a report on the nation’s preparedness for Brexit found on Wednesday.
The National Audit Office said that, though government departments have done a significant amount to prepare, the largest risks to the smooth operation of the border prevail and “resolving them is now, to some extent, out of government’s control”.
As the nation approaches the Halloween Brexit deadline at the end of the month, uncertainty over the future of the UK remains.
The National Audit Office said that the exact fate of the border in the event of a no deal departure from the European Union is not certain. However, the disruption of goods crossing the border and queues for businesses and the public are expected to occur.
“Preparing the UK border for EU exit with or without a deal is extremely complex and has required a huge amount of work from many government departments, agencies and third parties such as traders,” Gareth Davies, head of the National Audit Office, said in a statement.
“Despite their efforts, significant risks remain which may have consequences for the public and businesses,” Gareth Davies continued.
“Government will face new challenges in monitoring and responding to any disruption that may ensue following a no deal exit, and will need to replace temporary measures with sustainable long-term solutions to ensure the border is fit for purpose.”
On Wednesday the GBP/USD rose to a five-month high amid hope for a Brexit deal. The GBP/USD was trading above 1.28, which is the highest since May.
Signify agrees to buy US based Cooper Lighting Solutions
Signify NV, (AMS: LIGHT) have agreed to buy Cooper Lighting Solutions solutions from Eaton Corp (NYSE: ETN) for $1.4 billion in cash.
The acquisition is the largest by Signify, the former Phillips lighting before they companies parted ways.
This forms part of an intention to strengthen its market position in North America.
Signify said the deal would add to earnings per share, and lead to cost savings of $60 million annually within three years.
The deal is expected to be completed in the first quarter of 2020, subject to regulation and approvals.
Cooper reported sales of $1.7 billion in 2018 and earnings before tax, interest and depreciation of $187 million.
Signify have also stated the intention to keep dividends consistent, and shareholders will only see a rise after the acquisition.
The main focus will be to reduce the debt of the combined company, as one of the short term goals was identified.
However, two major benefits have bene identified by Signify. The first said that Cooper will boost its revenues from 42% to 53% of total sales.
The firm also concluded that the takeover will deliver $60 million, in savings for the first three years of the deal. Those savings derive from cost synergies in materials, supply chain and sourcing optimization.
Eric Rondolat, CEO of Signifiy said “Today’s announcement confirms the strategic importance of the North American market for Signify. This acquisition will substantially strengthen our position in this attractive market”
Rondolat added “We look forward to welcoming the team from Cooper Lighting. They have built a highperformance company based on professionalism, truly innovative offers and a long and strong relationship with their customers. We share a genuine passion and single focus for Lighting and a successful track record in innovation. We will join forces to further develop connected lighting and provide our customers with the highest level of service while optimizing operational efficiencies.”
As a result, Signify have seen a 2.38% rise in their share price, trading at €24.47 per share, whilst Eaton Corporation Plc saw a smaller increase of 0.11% trading at $82.27 per share 16/11/19 15:11 BST.
In the technology sector there have been updates to Facebook Inc (NASDAQ: FB), Castleton Technology Plc (LON: CTP) and Huawei (SHE: 002502).
Huawei sales increase 27% after strong Q3
Huawei Technology (SHE: 002502) produced a fine third quarter, seeing sales increase by 27% after smart phone sales surged.
The strong sales were driven by a surge in shipments from China launched before the blacklisting by the US, following the trade war.
Huawei is the world’s biggest producer of telecom equipment, and the second largest manufacturer of mobile phones.
Following the tensions of the US China trade war, President Trump banned all US involvement with Huawei disrupting the supply of production parts.
The recent release of the ‘Mate 30’ lacks access to a licensed version of Google’s (NASDAQ: GOOGL) Android operating system.
In a report released on Wednesday, the tech titan announced revenue figures of 610.8 billion yuan. This was a 24.4% increase across the first three quarters of 2019.
Revenue in the third quarter, which ended in September totaled 165.29 billion yuan according to Reuters calculations based on statements from Huawei.
Nicole Peng, Vice President from consultancy Canalys said “Huawei’s overseas shipments bounced back quickly in the third quarter although they are yet to return to pre-US ban levels. The Q3 result is truly impressive given the tremendous pressure the company is facing. But it is worth noting that strong shipments were driven by devices launched pre-US ban, and the long-term outlook is still dim.”
Huawei boasted their strong shipping figures of 185 million smartphones this year, according to analytics this shows a 29% rise in Q3 shipments.
According to these statistics, the legislation imposed by Trump has failed to stop Huawei revenue growth.
A company stated gave the following insight “”Huawei has maintained its focus on ICT (information and communications technology) infrastructure and smart devices, and continued to boost the efficiency and quality of its operations. This contributed to increased operational and organizational stability and solidified the company’s performance in the first three quarters of 2019.”
In addition, US firms such as Intel Corp (NASDAQ: INTC) and Micron Technologies Inc (NASDAQ: MU) found alternate paths to supply parts to Huawei.
Huawei have managed to be successful amidst US pressure, growth does look to be sustainable as tensions between China and US ease.
If a trade deal can be struck up, then Huawei will find it a lot easier to sell more smartphones on a larger scale and can expect higher gross revenues.
In the technology sector, there have been updates to Facebook Inc (NASDAQ: FB), Blue Star Capital Plc (LON: BLU) and Castleton Technology Plc (LON: CTP)
Alexion set to buy Achillion Pharmaceuticals
US based Alexion Pharmaceuticals (NASDAQ: ALXN) are set to buy Achillion (NASDAQ: ACHN) in a reported $930 million deal.
This will stampede Alexion’s dominance in the pharmaceuticals market for treating rare blood disorders.
Alexion has offered $6.30 per Achillion share, and including extra contingencies rise up to $8.30 per share.
Alexion faced a tough financial year in 2018, where several members of senior management resigned and a scandal involving sales practice of its top drug Soliris.
Soliris, Alexion’s flagship product is used to treat genetic disorders brought in in $3.56 billion revenue in sales last year, accounting for 86% total revenue.
Following the success of Soliris, Alexion have increase their medical portfolio by winning US approval for its successor Ultomiris.
Ludwig Hantson, Chief Executive Officer of Alexion commented “Alexion has demonstrated the transformative impact that inhibiting C5 can have on multiple rare and devastating diseases. However, we believe this is just the beginning of what’s possible with complement inhibition”
Hantson also added “Targeting a different part of the complement system – the alternative pathway – by inhibiting Factor D production addresses uncontrolled complement activation further upstream in the complement cascade, and importantly, leaves the rest of the complement system intact, which is critical in maintaining the body’s ability to fight infection. We believe this approach has the opportunity to help patients with diseases not currently addressed through C5 inhibition. We look forward to applying our nearly three decades of complement and development expertise to unlock the potential of oral Factor D inhibitors and bring these benefits to patients.”
As a result, shares of Achillion Pharmaceuticals rocketed during premarket Wednesday trading by 82%.
Today, Achillion has traded at $3.65 whilst Alexion saw a 3.42% increase trading at $104.81 16/10/19 13:40BST.
Despite a strong financial performance last year, shares of Alexion are low due to concerns about similar versions of Soliris being produced by competitors.
Joe Truit, President and Chief Executive Officer at Achillion said “We have established great momentum – discovering and advancing several small molecules into clinical development that have the potential to treat immune-related diseases associated with the alternative pathway of the complement system. Alexion is an established leader in developing medicines for complement-mediated diseases, and we look forward to working together to accelerate our objective of bringing novel therapies to patients as quickly as possible and ensuring that the broad promise of this approach is fully realized. We thank our employees, investigators and partners for their incredible work and commitment”
The immediate plan by Alexion to buy Achillion Pharmaceuticals will benefit shareholders of Achillion.
As shares are being offered at $6.30, this has the potential to rise very quickly if goals and objectives are met.
This will also add to the portfolio of Alexion and increase market dominance in treating rare blood disorders.
In the health sector, there have been updates to RA Pharmaceuticals Inc (NASDAQ: RARX), TekCapital (LON: TEK) and Yourgene Health Plc (LON:YGEN).
Barratt Developments show slow sales in update
Barratt Developments (LON: BDEV) reported lower sales and a fall in the value of homes sold in their trading update.
The midlands based home developers struggled to achieve medium-long term as forward sales were down in value.
With this change, Barratt Developments have swung in delivering low cost homes to recover ground lost.
Shares in Barratt Developments fell by 1.76% trading at 671p 16/11/19 12:26 BST.
David Thomas Chief Executive commented “We have started our new financial year well, with a good sales rate and a healthy forward order book. As the only major housebuilder to be awarded a 5 Star rating for customer satisfaction for ten years in a row, we continue to lead the industry in quality and customer service.”
Thomas added “Whilst there is economic and political uncertainty, we continue to be disciplined and have a strong balance sheet and cash position which we believe provide us with the resilience and flexibility to react to potential changes in the operating environment in FY20 and beyond. We maintain our focus on the delivery of operational improvements across our business, and our commitment to deliver the highest quality homes across the country.”
Once again, the property market has been hit by shocks amidst tensions with Brexit negotiations, and future speculation is hard to comment on.
UK House Price Growth has been leveling out for months as buyers worry about longer term shocks following Britain’s position with Brexit.
Efforts have been made by Barratt Developments to reduce costs, including changes of design of the houses they build, reduction of roof pitch and height houses along with reduced exposure to London.
Russ Mould, investment director at AJ Bell (LON: AJB) said “Barratt is still talking about achieving ‘margin improvements’, crucially without compromising quality – or in other words without building lower calibre houses
“Either Barratt has found an approach that has eluded its rivals or it seems likely shareholders will face disappointment at some stage” Mould concluded.
Barratt have said they expect the volume of house sales to grow toward the end of the of their medium-long term target range of 3-5% annually.
Total sales rose to 12,963 units from 12,903 earlier this year.
However, this was offset by a fall in the value of these homes by 2.4% to £3.07 billion.
Interest rates are still low by historical standards, giving an opportunity for new homeowners to pounce on this opportunity.
However, the low interest rates can only promote demand if the supply of housing were to increase in the UK, where evidently there is a massive shortage.
Despite political tensions, Barratt seem focused achieving their medium-long term goals, by riding out this slip due to Brexit.
In other current affairs, there have been updates. These include, London Stock Exchange (LON:LSE), Fuel Prices, Amazon (NASDAQ: AMZN), the collapse of Thomas Cook (LON: TCP) and Facebook (NASDAQ: FB)
Tekcapital shares climb as Salarius succeeds
Intellectual property investor Tekcapital (LON: TEK) have expanded their portfolio company Salarius Ltd (NASDAQ: SLRX) has secured a new customer for patented MicroSalt, causing stock prices to soar.
Shares in Tekcapital rose during Wednesday trading by 10.66% at 6.53p per share.
Tekcapital owns 97.5% of the share capital of Salarius ltd. In Salarius portfolio update, consumers were given an insight into Microsalt stating “Salarius, is the developer and manufacturer of a proprietary low sodium salt called MicroSalt. Salarius is passionate about improving lives with healthier food and is taking the lead in the industry by providing the best low-sodium salt solution, based on the mechanical transformation of the salt particle itself”
A major selling point was the amount of reduced sodium, amidst a shift in importance to health guidelines. “The technology produces salt crystals that are approximately one hundred times smaller than typical table salt, delivering a powerful saltiness as the micro-grains dissolve in the mouth, with approximately 50% less sodium consumption”
Salarius have worked an agreement with a diversified snack manufacturer to include Microsalt in the production of company snacks. However, no financial terms of the contract have been published.
Tekcapital’s executive DR Chairman Clifford Gross added “We are glad to see Salarius’ continued market traction as it expands its customer base and believe that MicroSalt has the potential to empower consumers worldwide to enjoy full-flavour snacks with reduced sodium,”
Salarius Chief Executive Victor Manzanilla said “The snack food market is highly competitive, with snack food manufacturers competing for shelf space with competitor brands at small, mid-size and large leading retailers. One way these snack food manufacturers are differentiating themselves in such a crowded market is by having a heathier alternative version of their most popular brands, and they are learning they can do this with MicroSalt without sacrificing the taste of their products.”
The patented Microsalt has been a product development funded by Tekcapital, and the success has paid off after landing this huge contract.
Tekcaptial have seemed to tap into an exciting market with the development of Microsalt.
The low sodium ingredients market is estimated to reach $1.76 billion by the end of 2025, with a compound annual growth rate of 11.7%.
Additionally, the global savory snacks market is continually evolving. As it is a considered a highly competitive market, the expected growth will peak $108 billion by 2021.
Victor Hugo Manzanilla, CEO of Salarius said: “We are very excited with this new customer collaboration. The snack food market is highly competitive, with snack food manufacturers competing for shelf space with competitor brands at small, mid-size and large leading retailers. One way these snack food manufacturers are differentiating themselves in such a crowded market is by having a heathier alternative version of their most popular brands, and they are learning they can do this with MicroSalt® without sacrificing the taste of their products.
Many companies are making the shift to healthy alternatives to differentiate themselves from market competition.
By using Microsalt, firms are given the flexibility of creating the same snacks with less sodium content, without giving up quality and taste.
In the health sector, there have been updates on Ra Pharmaceuticals Inc (NASDAQ: RARX), OptiBiotix Health Plc (LON: OPTI) and Yourgene Health Plc (LON:YGEN)
Augean’s shares soar after strong profit figures
Augean Plc (LON: AUG) have beaten market expectations for profits for the second time this year, causing their stock price to soar.
The firm specializes in waste and resource management, with an emphasis on the hazardous waste sector, the oil/gas industry and the nuclear sector operating all across the UK.
The company also published details about a subsidiary company “Our subsidiary company Augean North Sea Services (ANSS) specialises in the development of innovative solutions to manage all waste streams derived from North Sea exploration, production and decommissioning activities”
The group provides strong commercial and compliance led solutions. Additionally in the company bio, “The Group provides a wide range of services through its treatment, transfer, industrial services, landfill disposal, recovery and recycling capability”
Augean have said that 2019 statistics will show a 20% rise in landfill volumes across all waste sectors, with landfill prices also increasing by 20%.
The company benefitted particularly from increased profits on radioactive waste operations, along with strong figures in waste treatment and North Sea businesses.
Augean saw an adjusted pretax profit of £16.5 million, and that 2019 annual profits were set to exceed expectations at the start of the year.
Jim Meredith, Executive Chairman said “The Group has delivered strong results in all areas of the business with cash generation especially pleasing. We remain confident in the Group’s prospects for a full year result and anticipate results ahead of market expectations”
In 2018, pretax profit amounted to £10.6 million, following adjustment this rose 69% from 2017 totaling £11.4 million.
Earlier in the year, Augean faced a battle with tax authorities after facing a £4.6 million tax bill from HMRC.
In Augen’s six month interim publication, they stated “Based on the legal and other advice received by the Group over several years, Augean is confident that the Group has met its obligations in respect of landfill tax, consistent with the law and official guidance at the time. Accordingly, it has appealed both the Augean South and Augean North assessments and the tax tribunal is expected in 2020. HMRC has agreed to the deferment of the payment of total tax assessed against the relevant group entities until the outcome of the tax tribunal has concluded. HMRC is considering whether penalties may be appropriate and there may be other final assessments for other time periods for both Augean North and Augean South”
Shares rose by 16.27% to 137.20p per share, which reflects a strong trading period.
Both shareholders and senior authority will be pleased after massively exceeding the markets expectations.
In the mining and energy sector there have been updates to Serabi Gold (LON: SRB), Kavango Resources PLC (LON: KAV), Glencore PLC (LON: GLEN) and Resolute Mining Limited (LON: RSG).
CMA set to discuss Amazon Deliveroo Merger
The CMA (Competition and Markets Authority) have begun enquiries into the proposed merger of Amazon (NASDAQ: AMZN) and Deliveroo.
The UK based competition regulator stated that investigations have been opened in the acquisition, amidst worries that this merger would stifle competition.
In May, Amazon claimed its interest in Deliveroo with a $575 million investment at a Deliveroo fundraiser into parent company Roofoods Ltd. This was a strange move following the closure of Amazons’ food chain, Amazon Restaurants last year.
Deliveroo also faced donations from T Rowe Price (NASDAQ: TROW), Fidelity (NYSE: FIS) and Greenoaks Capital.
The news comes following speculation that the investment by Amazon was a foundation to launch a merger campaign.
Analysts have questioned whether this move was driven by the employment nature of Deliveroo drivers.
As Deliveroo drivers are effectively self-employed, this would allow the ability to deliver Amazon parcels along with food deliveries.
Amazon said in a statement ““We believe this minority investment will enable Deliveroo to expand its services, benefiting consumers through increased choice and creating new jobs as more restaurants gain access to the service.”
In June, the CMA released a statement which barred any approaches to integrate the two firms.
The CMA also added it had ““reasonable grounds for suspecting” Amazon and Deliveroo had “ceased to be distinct”, or that “arrangements are in progress or in contemplation”
Nicole Kar, head of law firm Linklaters’ commented “This type of deal is right in the CMA’s area of interest at the moment — large tech incumbents like Amazon investing in smaller rivals, so-called “killer acquisitions. Please use the sharing tools found via the share button at the top or side of articles”
Kar also noted, “The key questions for the CMA are first whether the investment Amazon has made give it rights to determine Deliveroo’s strategy and investment and/or insights into what innovation and expansion it is working on. This [Amazon] deal plays right into the sweet spot for the CMA at the moment. Anything connected to what Amazon, Facebook and Google do at the moment is really high on the agenda,””
The June statement stops Amazon and Deliveroo operating as a ‘merged entity’ as well as stopping the transfer of key staff or commercially sensitive information, pending this formal investigation.
This is the latest plan of action in the retail market following its decision to stop the proposed £7.3 billion merger of J Sainsbury (LON: SBRY) and Asda in February 2019.
The CMA commented “This is consistent with a more activist and interventionist role taken by the CMA since the new chairman and chief executive took hold,” said Mr Black, adding that the approach had been “most dramatically revealed in the evisceration of the Asda Sainsbury’s deal and the clinical destruction of their attempt to merge”.
The CMA has placed a deadline of 11th December for this investigation to conclude.
To note, shares in Amazon have increased 1.78%, trading at $1,767.38.
In retail news, there have been changes to the stock prices of Laura Ashley (LON: ALY), Dunelm (LON: DNLM) and N Brown (LON: BWNG).
Firms struggle to meet PPI handling times
News emerged on Wednesday that firms are struggling to meet their normal PPI complaint handling times as a result of a significant spike in complaints during the month of the final deadline.
The Financial Conduct Authority said that though firms have measures in place to handle the PPI complaints, several have informed the regulator that some complaints may not receive a final response until summer 2020.
The deadline for customers to claim mis-sold PPI was 29 August.
The Financial Conduct Authority had launched a nationwide communications campaign to raise awareness of the approaching mis-sold PPI complaints deadline.
At the start of September, Lloyds Banking Group (LON:LLOY) said it would dedicate an additional £1.8 billion in order to settle any claims of mis-sold PPI.
Meanwhile, the Royal Bank of Scotland warned at the start of September that it expects a hit of up to £900 million after a rise in PPI claims.
“We are challenging firms to deal with these complaints as quickly as is reasonable, given the very large volumes. It will take time for some consumers to receive their response but it is important to us that these complaints are handled fairly and accurately,” the Financial Conduct Authority said in a statement.
“If following your complaint, you are entitled to compensation, you will receive interest on the amount you are due (typically 8%), which will include the length of time it took to respond, so you won’t lose out financially from any delay,” the Financial Conduct Authority added.
Shares in Lloyds Banking Group plc (LON:LLOY) were trading at +0.074% as of 11:04 BST Wednesday.
Shares in the Royal Bank of Scotland Group plc (LON:RBS) were trading at +0.84% as of 11:06 BST Wednesday.