Wizz Air raise their profit and capacity forecast, however shares slide

Ishen Patel
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Wizz Air raise their profit and capacity forecast, however shares slide

Wizz Air Holdings PLC (LON: WIZZ) have lifted their profit and capacity forecasts in an update to shareholders on Wednesday, as the budget airline reported increasing demand in first half trading.

Chief Executive Officer József Váradi said the airline was increasing its capacity growth rate to 22%, from 20% promised in July, which was another piece of good news for shareholders.

This comes at a very volatile time in the airline industry, where businesses face stiff competition, regulation and hesitating demand.

The recent demise of Thomas Cook (LON:TCG) a few months back along with big players such as IAG (LON: IAG) and Ryanair (LON: RYA) cutting their medium term profit forecasts has seen skepticism in the market.

In a time like this where competitors have been faltering, the news will please shareholders even more. Varadi said that he remained “bullish” about the London market.

“London is the single biggest travel market in the world, and I don’t think this is going to change any time soon, no matter what happens to the country, what happens throughout Brexit. “We are very keen on positioning ourselves strategically to the London market”, he added.

Wizz, which mainly flies to European destinations, said that net profit for the financial year 2020 would be between €335 million euros to €350 million, prior to this the range was €320 million to €350 million.

Wizz, which competes with Lufthansa’s (ETR: LHA) Eurowings brand at European airports such as Vienna, is performing well considering the industry struggles such as rising fuel costs, weaker demand and Boeing’s (NYSE: BA) 737 delivery delays.

“Despite rapidly rising fuel costs, Brexit uncertainty and chronic overcapacity in the sector, Wizz Air was still able to report record financial results for the first half of the year,” eToro analyst Adam Vettese, said.

Vettese added ““Wizz Air is leaving the rest of its low-cost rivals behind,” he said.

Toshiba report strongest profit figures in two years

Ishen Patel
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Toshiba report strongest profit figures in two years

Toshiba Corp (TYO: 6502) have given shareholders relief in their most recent trading update by producing strong profit figures and pledges to buy subsidiary businesses.

Despite the impressive update, shares of Toshiba slipped 0.26% during Wednesday business to JPY3,770. 13/11/19 13:41BST.

The Japanese tech giant posted its highest quarterly profit in two years, and also explained plans to buy out three listed subsidiaries.

Toshiba have had a tough time in financial 2019, as the firm was hit by accounting scandals and a management crisis.

Toshiba’s energy and infrastructure divisions drove the profit increase, as the company cut costs and reined in low-margin projects.

Ever since Toshiba went bankrupt in its US based nuclear power business, there has been a policy of recovery. This was evident with the sale of its prized memory chip division.

“We’ve changed everything, from marketing, procurement to the ways we take orders and produce products,” Toshiba CEO Nobuaki Kurumatani told Reuters.

Kurumanti alluded to plans in turning the tech conglomerate into a leaner company, adding “We are now compiling detailed strategies to boost the operating profit margin to 6% in three years (from 1% in the last fiscal year),”

Toshiba boasted operating profit figures of 44.23 billion yen for the second quarter ending in September.

This figure was the highest recorded, which was a rise of 6.25 billion yen just one year a go, and was the highest since the same period in 2017.

This figure also beat analyst and market figures of 25.97 billion yen as estimated by Refinitiv.

Toshiba maintained its profit forecast for the year ending March at 140 billion yen, versus 35.4 billion yen a year earlier, in line with the target the company set in its five-year plan.

Additionally, Toshiba have pledged to buy out subsidiaries such as Toshiba Plant Systems & Services (TYO: 1983), marine electrical systems maker Nishishiba Electric (TYO: 6591) and chip-making equipment maker NuFlare Technology (TYO: 6256) to turn them into wholly owned subsidiaries.

The buyouts, which will cost a total of 200 billion yen ($1.83 billion), as shareholders have pushed for action to take control of Toshiba’s portfolio.

Its five-year plan aims for 8-10% operating profit margin for the year ending in March 2024 by focusing on energy, social infrastructure and service businesses.

Unilever announce new Chairman appointment

Ishen Patel
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Unilever announce new Chairman appointment

Unilever (LON: ULVR) have announced the appointment of a new Chairman, following an update to shareholders on Wednesday.

Shares of Unilever jumped 0.74% during Wednesday trading, to 4,631p. 13/11/19 13:23BST.

Danish born Nils Andersen will be named Chairman, following his strong business background in consumer goods and logistics.

Unilever, like many global firms have seen a slump in trading and business following tough market conditions and political tensions.Henceforth, the appointment comes at no surprise timing for the consumer goods company, who have seen a tough period of trading in all departments.

Andersen has been a non-executive director on the Unilever board since 2015, and joins a new CFO appointment in Alan Jope, who took the role earlier this year.

Andersen replaces Marjin Dekkers, who is set to stand down after more than three years as Unilever Chariman.

Both Jope and Andersen come into their roles at a time where the FTSE100 listed firm (INDEXFTSE: UKX) have faced a slowdown in Indian and Chinese business, two of the biggest markets.

The Chinese-US trade war and slow domestic demand in both economies have slowed down trading, which Unilever alluded to in their updates for shareholders.

Andersen has experience working with AP Moller Maerskv (OTCMKTS: AMKBY) and Carlsberg A/S (CPH: CARL-B) and has boasted significant achievements at both firms.

Andersen currently is part of Unilever’s audit committee and serves as chairman of Dutch paint company Akzo Nobel NV (AMS: AKZA) and privately held Danish retailer Salling Group A/S. He is also a non-executive director at BP (LON: BP).

It has been a huge honour to serve as chairman of Unilever and I am very proud of the work we continue to do as a truly purpose-driven company,” Dekkers said. “My decision to step down has been a difficult one to make but I look forward to seeing Unilever go from strength to strength under Nils as chairman.” “On behalf of the board, I would like to thank Marijn for his strong leadership and the contribution he has made as chairman,” Andersen said. “I am very proud to have been asked to succeed Marijn and I look forward to working with the board and the Unilever Leadership team to support the company’s continued growth.”

Wetherspoon’s shares spike after positive quarterly update

Ishen Patel
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Wetherspoon’s shares spike after positive quarterly update
J D Wetherspoon plc (LON: JDW) have seen their shares spike following a positive quarterly update, coming at a time where competitors have seen slumps across the market. Shares of Wetherspoon spiked 1.85% on Wednesday to 1,553p. 13/11/19 12:57BST. The British pub chain boasted strong sales figures, which increased across the quarter as customers spent more its nearly 900 pubs across Britain and Ireland. The company reported higher demand for coffee, pink gin, real ale and breakfast. Additionally beer sales rose significantly as British consumer trends changed by the quarter. Wetherspoons reiterated their full year performance to be kept in line with annual expectations after a strong financial 2019, with increasing sales and continued political activism headlines from Chairman Tim Martin. In a market where competitors such as Greene King (LON: GNK) and Whitbread (LON: WTB) have been hit headlines of slowing business and takeover bids, Wetherspoons seem to be performing well. Additionally, while Slug and Lettuce owner Stonegate agreed to buy Ei Group (LON: EIG) for £1.27 billion, which may stiffen competition to the Wetherspoon The FTSE250 (INDEXFTSE: MCX) listed firm have been battling increased costs due to a mandatory minimum wage hike, higher property prices and power bills, however these rises were not to affect performance. J D wetherspoon’s like-for-like sales rose 5.3%, which exceeded both market and analyst expectations. “This is a strong start to the year in our view, ahead of our forecast revenue growth of 4.0% for the full year, but we are mindful of the early stage of the year, challenging market backdrop…and potential changes to national living wage,” Investec (LON: INVP) said in a note. Additionally, Chairman Tim Martin gave his opinions on Britains stance with the EU saying, “I strongly believe that the UK economy will be better off on the basis of ‘no-deal’ rather than the deal proposed by the government,” “The trenchant debate surrounding Brexit, thanks to our democratic freedom, has, in my view, exploded myths and increased knowledge on key subjects like trade, tariffs, government and Europe – on a vast scale,” Tim Martin continued. “For example, the pugnacious Jean-Marc Puissesseau, head of Calais ports, has completely undermined the false presumption that the channel ports will seize up post Brexit, without a ‘deal’.”

British Land shares slump after poor interim update

Ishen Patel
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British Land shares slump after poor interim update
Shares of British Land Company PLC (LON: BLND) have slumped following an interim trading update which highlighted poor performance and a widened loss. Shares are trading at 550p, after slumping 4.35% on Wednesday. 13/11/19 12:04BST. The British firm alluded to tough trading conditions as a reason for the drop in performance, amid a “challenging” retail environment and an unpredictable UK political backdrop. Competitors have also fallen victim of the recent slump, as Intu (LON: INTU) and Derwent London (LON: DLN) saw their shares crash following income expectations being slashed. The FTSE 100-listed (INDEXFTSE: UKX) property development and investment company saw a pretax loss for the six months to the end of September that widened to £440 million from £42 million a year prior. Additionally, revenue sunk 34% to £328 million from £499 million which alarmed shareholders on Wednesday morning. British Land explained the poor performance by noting the increase in the downward valuation movement on properties of £184 million, and an increase in the capital and other income loss from joint ventures and funds of £128 million. Underlying profit, was £158 million in the first half, falling 9.7% from £175 million reported a year ago, which will cause concern for seniority at British Land. Despite the slump in performance, British Land increased its interim payout by 3.0% to 15.97 pence per share from 15.50p it paid a year before, which may have acted as an attempt to win shareholder optimism. “Looking forward, we expect our markets to remain uneven, but we have kept debt levels low, our balance sheet is strong and flexible and we have a broad spread of expertise across our business,” said Chief Executive Chris Grigg. “We expect retail to remain challenging, so we’ll focus on driving operational performance and maintaining occupancy”. “We see early signs that some liquidity may be returning to parts of the market, and our focus will remain on thoughtfully progressing our strategy to reduce exposure”. Grigg added “In London, we expect the market to remain good, with supply relatively constrained and high quality space, in well-connected, vibrant parts of town continuing to attract demand from a range of businesses. These dynamics are highly supportive of our Campus approach.”

SSE report first half profit, causing shares to jump

Ishen Patel
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0
SSE report first half profit, causing shares to jump
SSE PLC (LON: SSE) have reported a first half profit, causing shares to jump during Wednesday trading. This comes after a tough period of trading for SSE and a proposed sale involving Ovo. Shares of SSE trade at 1,310p spiking 1.56%. 13/11/19 11:47BST. The Chief Executive of SSE noted that he wanted the next government to address environmental concerns, and to take action on promoting renewable power at the front and centre of their climate change legislation. He said: “The climate emergency needs action now and offshore wind has proven itself to be one of the most cost effective ways this country can decarbonise and get on the road to Net Zero. “Coupled with lifting the moratorium on onshore, the next Government could deliver at least another 10GW of clean, green energy, before the end of its term – enough to power over seven million homes.” The FTSE100 (INDEXFTSE: UKX) listed firm reported that profit rose to £128.9 million from a loss of £284.6 million last year, as SSE experienced a stagnated financial 2018, hence these results will be even sweeter. Earnings per share reached 6.2p, up from -26.4p in 2018, which will certainly please shareholders. However, the British Energy supplier did note a £489.1 million impairment on the sale of its household energy and services business in the UK, which Ovo Energy agreed to buy in September for £500 million. The deal with Ovo is expected to be completed by early 2020, after the CMA triggered an investigation to check regulatory compliance. In the energy industry, many firms have seen stagnating trading figures following tough market conditions. Earlier this year, both Centrica (LON: CNA) and EON (ETR: EOAN) saw their shares crash following slumps in operating profits and poor trading periods. Richard Gillingwater, chair of SSE, said: “SSE is progressing well in the execution of its low–carbon strategy with the sale of SSE Energy Services leading to group more focussed on renewable energy and regulated electricity networks. “Clearly some headwinds remain in the sector with political uncertainty and aspects of UK government policy being subject to judicial process, however, we have strong optionality to create value through the low carbon transition and deliver our dividend commitments.”

Smiths Group shares rally following bullish update

Ishen Patel
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Smiths Group shares rally following bullish update
Smiths Group plc (LON: SMIN) have seen their shares rally following a bullish trading update, published on Wednesday morning. Shares of Smiths Group are trading at 1,674p seeing a 3.46% rise. 13/11/19 11:28BST. Smiths Group said that its annual expectations remain unchanged following a strong trading period leading to double digit revenue growth in the first quarter. In September, shareholders of Smiths Group saw shares rally after a ICU Medical (NASDAQ: ICUI) revived their interest in the British Engineering firm, however this approach was rejected. The FTSE 100 (INDEXFTSE: UKX) listed engineer said revenue for the three months to the end of October was up 11% on an underlying basis, thanks to continued “good” growth in John Crane in both original equipment and aftermarket. Elsewhere, Smiths reported strong growth in its Detection division, helped by contract wins, while the Interconnect unit was hurt by a slowdown in the semiconductor market. The Flex-Tech Division reported organic growth after applications were reported in the aerospace and industrial sector. “For the full year, the group expects year on year growth to be weighted towards the first half and to result in a more even balance in overall performance between the first and second halves of the year,” it said. In an industry which is becoming increasingly competitive, rivals have also made gains. Ultra Electronics (LON: ULE) gave a trading update that was inline with expectations, additionally Boeing (NYSE: BA) experienced a strong trading year with continued demand. For the full year, the London-headquartered company said it expects year-on-year growth to be weighted towards the first half. After a strong trading update from the British engineer, shareholders will be pleased about the performance from the FTSE100 listed engineer. This could be the start of a strong trading year for Smiths Group, and throughout 2019 the firm alluded to technical and operational developments in their products. Shareholders should remain optimistic about future outlook following the reassurance provided in this morning’s update.

Tullow Oil shares crash after production warning

Ishen Patel
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Tullow Oil shares crash after production warning
Shares of Tullow Oil plc (LON: TLW) crashed on Wednesday after the oil and gas firm warned shareholders about their 2019 production figures potentially missing targets following operational problems in Ghana. In February, Tullow hit headlines after they announced that they would shift to an annual profit after a hike in revenues, which continued throughout a turbulent 2019 for the multinational oil and gas exploration firm. The Oil market has been hit by market volatility, and big time names such as Shell (LON: RDSB) and Total SA (LON: TTA) had been hit by low oil prices leading to slumping profits. During 2019, London-based oil producer Tullow sees production averaging 87,000 barrels of oil per day, but 2019 guidance was cut this morning. In July, Tullow had warned production was likely to be between 89,000 barrels and 93,000 barrels, lower than the 90,000 barrels to 98,000 barrels initially guided, which caused shares to crash on Wednesday. The FTSE250 (INDEXFTSE: MCX) listed firm said the lower than forecast production is mainly due to topside issues at the Jubilee field, which has constrained water injection and gas handling, as well as the suspension of a well at the TEN field. “Ghana production has not met our expectations this year, and we are working closely with our Joint Venture Partners to ensure that both fields perform to their potential,” said Chief Executive Paul McDade. McDade added “Tullow expects to deliver robust free cash flow for the full year. This has been supported by our continued disciplined capital investment and underlines our commitment to further reduce our debt and pay returns to shareholders”. In Guyana, Tullow added that they were working with London listed Eco Atlantic, to develop the Orinduik block after two discoveries were made in July. Eco Atlantic and Tullow on Wednesday said initial analysis of samples suggest the two wells contain heavy crude oil with a high sulphur content, which may not be suitable for industrial use. “Recent analysis has shown that at these locations we have encountered heavy oil. We remain confident in the broader light oil potential of the Orinduik and Kanuku blocks located in this prolific oil basin,” said Tullow. Eco Atlantic Chief Operating Officer Colin Kinley added: “Having spent three decades working within the heavy oil industry, we are very encouraged by the initial analysis of these wells and good parameters that define potential pathways to recovery. “The fact the oil is already hot in the reservoir, and mobile, and has high quality porous sand to travel through, helps to eliminate a great part of the conventional heavy oil challenge.” Tullow concluded that Kenyan operations were also making good progress, with a final investment decision to be made in the second half of 2020, which may act as a consolation for shareholders. Shares of Tullow plummeted 22.39% as a result to 159p. 13/11/19 11:19BST.

Italy Challenges Bordeaux On The Fine Wine Investment Scene

UK Investor Magazine
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Italy Challenges Bordeaux On The Fine Wine Investment Scene
Sponsored by OenoFuture Despite being the home of Sassicaia, Tignanello and a host of sensational Barolo producers, Italy has long been in France’s shadow when it comes to fine wine investment. Yet as the traditional collector’s favourite Bordeaux continues to lose market share, Italy has been a key beneficiary. The latest figures from Liv-Ex show Bordeaux’s share of the fine wine market hitting an all-time low of 49.5% in October 2019, while in the same month Italian fine wines claimed a 11.4% market share by value. Taking a longer term view, the figures are even more compelling; according to Liv-Ex since 2015 Italian fine wines on the secondary market have risen in value from £2 million to £5m with volumes rising by 1500% over the past decade. “No one has a crystal ball”, comments Daniele Napoletano, Head of Italian Investment at the London-based fine wine investment company OenoFuture. “We live in times when a single tweet by Donald Trump can wipe billions off the markets and we’re currently in the longest stock market rally since the Great Depression. The beauty of the wine market is that the price movements are much more straightforward. Fine wine is produced in tiny quantities yet demand is growing across the world, especially from emerging economies.
firenze 07.10.09: bibi graetz, produttore di vino
foto matteo baldini/guido mannucci
I always recommend that my clients also diversify their wine investment portfolio by looking beyond Bordeaux and the traditional investment regions. The remarkable growth shown by Italy over the past couple of years proves that these wines have a very exciting future ahead of them. At OenoFuture we are privileged to have an incredibly knowledgeable team including Italian wine expert Daniel Carnio and Master of Wine Justin Knock. They have exhaustively tasted the world’s great wines and are equipped find upcoming superstars like Bibi Graetz in Tuscany before they reach blue chip prices. This kind of insider knowledge allows us to achieve exceptional results for our investment clients.” As well as these high potential emerging producers, investors should take inspiration from the remarkable track record of wines like Sassicaia. First released in 1968, this stunning Super Tuscan has gone from strength to strength in recent years, with the 2016 vintage awarded 100 points by Monica Larner from Robert Parker’s Wine Advocate. From a release price of £1,270 per case of 12 this magnificent wine is now trading at around £2,200. With results like these, it’s easy to see why Italy is fast-becoming the darling of the fine wine market in the face of Bordeaux’s continued decline. For the moment, the market is largely dominated by Super Tuscans from producers which are able to generate volumes comparable to Bordeaux’s top estates. Piedmont, on the other hand, is more comparable to Burgundy with a plethora of smaller producers, making it more the preserve of connoisseurs and those with access to fine wine investment advisors. For Daniel Carnio, co-founder of OenoFuture, Barolo is particularly exciting for those looking to take a longer term view; “the development of the Barolo cru system with 181 ‘crus’ or growths has been a real game-changer. Moving forward I expect to see increasing interest in Barolo across the world, and especially in markets like China where Italian wine is almost not present. Typically for emerging markets French fine wines are the first to enter, followed by Spanish, Italian, and wines from the rest of the world. For the savvy investor wanting to be ahead of the game, now is the moment to invest in Italian fine wine.”

Coca Cola announce solid third quarter update

Ishen Patel
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Coca Cola announce solid third quarter update
Coca-Cola HBC AG (LON: CCH) have given shareholders a solid third quarter update, highlighted in a trading statement released on Wednesday morning. Additionally, Coca Cola have announced that the Christmas truck will return for the ninth consecutive year. Kris Robbens, marketing director at Coca-Cola Great Britain and Ireland, said: “Whilst Christmas is a moment of celebration, it’s also incredibly important to remember those that need support throughout the season. So we’re really pleased to partner with Crisis and whilst guests at the tour enjoy a refreshing Coca-Cola zero sugar, when they recycle their can they’ll be helping to support an amazing charity.” After the announcement was made, shares of Coca Cola rallied 5.93% to 2,499p 13/11/19 10:36BST. The soft drinks giant, who have established themselves as a FTSE100 (INDEXFTSE: UKX) made a bold move when they purchased Costa Coffee from Whitbread (LON: WTB) in a reported £3.9 billion deal in 2018. The company reported “a solid performance in a quarter where poor weather impacted industry volumes in our geographies”, which led to shares rising during Wednesday trading Coca Cola reported that FX-neutral revenue growth of 3.4%, or 2.3% excluding the impact of the Bambi acquisition. Additionally, volumes increased by 1.1% in the quarter, -0.1% excluding Bambi whilst established markets volumes increased by 1.2%, an acceleration on the first half and prior-year period. Emerging markets volumes increased by 3.0%, or by 0.8% excluding Bambi, whilst ongoing volume growth in Romania, Ukraine and Nigeria was reported. Group net sales revenue grew 5% from 2018 to €1,961.4 million, and bullish performance in emerging markets led to net sales climbing 9.8% to €869.4 million. Additionally, developing markets volumes declined by 4.0%, with very strong volume growth of 11.3% in the prior-year period, which may act as compensation for stagnating growth in some EMEA Markets. In EMEA markets, there was solid performance however trading did stagnate in Greece and Switzerland, as the soft drink giant alluded to poor weather conditions hampering trading. Zoran Bogdanovic, Chief Executive Officer of Coca-Cola HBC AG, commented: “In a quarter in which unseasonably cold and wet weather significantly depressed industry volume growth in a number of our countries, we are pleased to have gained or maintained share in the majority of our markets and to have made progress with our commercial strategy which delivered a step-up in price/mix and ongoing growth in key areas of strategic focus such as Trademark Coke, Adults, Zeros and innovation. We are also proud to have been named by the Dow Jones Sustainability Index (INDEXDJX: W1SGI) as Europe’s most sustainable beverage company for the 6th time in 7 years. Bogandovic added “As we look to the full year, we are pleased to have seen an acceleration in Q4, giving us confidence that 2019 will be a year of solid top-line growth and good margin expansion.” Coca Cola also updated other investors on activity including the recent acquisition of acquisition of Acque Minerali S.r.l, a privately-held natural mineral water and adult sparkling beverages business in Italy. This will come as a relief to shareholders of Coca Cola, who have seen a relatively successful financial 2019 with positive results being posted throughout the year. Coca Cola expect to deliver full year FX-neutral revenue growth of 4.0-4.5%.
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