Keywords Studios H1 performance weighed down by investment

Jamie Gordon
-
2
Keywords Studios H1 performance weighed down by investment
International video gaming technical and creative services provider Keywords Studios PLC (LON: KWS) saw revenue growth of up to 33% across all seven sectors of its business; however its end of period results in H1 were weighed down by investment in testing operations and four acquisitions. The Group’s revenues were up c.39% on a year-on-year basis, up from €110.0 million for H1 2018 to €153.1 million for H1 2019.

The Company’s two largest sectors witnessed the best performance. The Functional Testing and Game Development service lines represented a total of 39% of pro forma Group revenues. Profit before tax increased 15% on-year, from €16.0 million for H1 2018 to €18.4 million for H1 2019.

This performance was offset by expansion costs and investement in early stage businesses acquired in 2018, which are now approaching commercial launch. Keywords Studios also established Functional Testing operations in Katowice, Tokyo and Mexico City, as well as Localization Testing in Katowice and Player Support in Mexico City. The Company’s net debt was up from €0.1 million at 31 December 2018, to €9.0 million at 30 June 2019. This was led by its four acquisitions which totalled €7.0 million. Keywords Studios comments

Andrew Day, Chief Executive, stated,

“We were pleased by the strong performance of the Group in the first half, incorporating as it does the anticipated lower growth VMC business acquired in October 2017. Particularly steep increases in activity of some of our service lines in the first half required us to invest rapidly in expanding capacity to meet that demand. As we move into the second half, we expect to be able to leverage that investment to the benefit of margins in the second half.”

“Demand from new game streaming services has continued to drive volume increases for us, and we continue to benefit from clients increasing the number of services acquired from Keywords with 113 clients now taking 3 or more services (99 as at 31 December 2018). I’m particularly pleased with the progress in building our Game Development services which we first entered only two years ago and, with further acquisitions still to come, is well set to become our largest service line by revenue.”

“We continue to review a healthy pipeline of acquisition candidates in line with our strategy to build our business both organically and through acquisition. The new, enlarged banking facility will give us the flexibility and headroom to deliver that strategy and further enhance shareholder value.”

Investor notes

With a warning that the Company’s profits would be weighed towards the second half, their shares dipped 2.74% or 47.00p to 1,669.00p a share 31/07/19 12:25 BST. Liberum Capital analysts downgraded its stance from ‘Buy’ to ‘Hold’, and Peel Hunt reiterated their ‘Sell’ rating on Keywords Studios stock, having previously downgraded it from ‘Hold’. The Company’s p/e ratio is currently 39.17 and their dividend yield stands at 0.10%. Elsewhere in the tech sector, there were updates from; Biome Technologies plc (LON: BIOM), Midwich Group PLC (LON: MIDW), Boku Inc (LON: BOKU) and Telit Communications Plc (LON: TCM).

Intu shares plummet as tough retail environment weighs

Dina Caruso
-
2
Intu shares plummet as tough retail environment weighs
Intu posted a deeper loss before tax on Wednesday in its half year results as changes to the retail environment weigh. Shares in the business were trading over 23% lower following the announcement. The shopping centre landlord said that loss before tax deepened to £856.4 million during the six months ended 30 June, down even further from the £506.5 million figure for the same period in 2018. Net rental income decreased by 17.9% to £205.2 million, and 7.7% on a like-for-like basis. Intu added that it expects this decline to run at a similar level through the remainder of the year as the impact of recent administrations and CVAs are resolved. In order to reduce net external debt, the company has been forced to cut its dividend for 2019. “The first half of 2019 has been challenging for intu. We have experienced further downward pressure on like-for-like net rental income and property values resulting from a higher level of administrations and CVAs as some retailers struggle to remain relevant in a multichannel world,” Matthew Roberts, Intu Chief Executive, commented on the results. “These challenges, facing intu and the whole sector, have been well-documented and, while there are no quick fixes, I am confident that we can address them head on. Over the past nine months we have carried out the most comprehensive review of the business that intu has ever undertaken,” Intu’s Chief Executive continued. The shopping centre landlord drew upon recent concerns surrounding the “death of the store” as consumers seek online shopping alternatives to brick-and-mortar shops. Intu affirmed “the right stores in the right locations still play a vital role for retailers” as 85% of all retail transactions still touch a physical store. Indeed, the challenging retail environment to have hit the UK high street has been well documented by several retailers as they see staff cuts and store closures. “We know radical transformation is required and have developed a new, ambitious five year strategy to reshape our business and address the challenges we face, with a priority to fix our balance sheet. With the people changes we have made, we now have the right leadership team in place with the appropriate skill sets to deliver this plan and drive the business forward,” Intu’s Chief Executive added. Shares in Intu Properties plc (LON:INTU) were trading at -23.46% as of 11:56 BST.

Intelligent Ultrasound Group develops AI software in H1

Jamie Gordon
-
5
Intelligent Ultrasound Group develops AI software in H1
AI based ultrasound software and simulation company Intelligent Ultrasound Group PLC (LON: MED) saw increased sales and testing of its new AI based offerings within its IU Simulation Division and IU Clinical AI Division during the first half of 2019. As the first half ended, the Company signed its first long-term licence and co-development agreement for their AI software with a leading ultrasound equipment manufacturer. The Intelligent Ultrasound Group also formed an alliance with Mediscan Systems to use AI and simulation to improve patient care in India and develop the Group’s ultrasound scan image library.

The IU Simulation Division saw sales up 24% on a year-on-year basis – from £2.5 million for H1 2018 to £3.1 million for H1 2019 – driven by North American revenue contribution. The Group also performed the first demonstration of their ScanNav AnatomyGuide to clinicians.

The Company’s cash balance dipped from £5.6 million to £3.5 million on-year for the first half.

Intelligent Ultrasound Group comments

IUG Chairman Riccardo Pigliucci, said, “This has been an excellent first half of the year, with Simulation Division sales increasing by 24% and excellent progress made by our Clinical AI Division, which recently announced the signing of the its first long-term agreement with a major ultrasound machine manufacturer, which could be transformational for the Group. We look forward to continuing growth in Simulation sales and winning additional contracts with original equipment manufacturers for our growing range of AI based image analysis software.” This update followed the Group’s change to AI led tech and a name change in January. Commenting on the change, the Chairman said, “The Board believes that the new name reflects the fact that the Group is no longer just a global leader in ultrasound training through simulation, but has expanded into the development of artificial intelligence (AI) software to guide and support doctors and sonographers in clinical ultrasound scanning.”

Investor notes

The Company’s shares are down 4.35% or 0.50p to 11.00p a share 31/01/19 08:22 BST. The Group’s p/e ratio and dividend yield are currently unavailable, their market cap is £18.01 million. Elsewhere in the tech sector; Sophos Group plc (LON: SOPH), MiriAd Advertising plc (LON: MIRI), Zoo Digital Group plc (LON: ZOO) and Vela Technologies Plc (LON: VELA).

Just Eat posts 98% drop in half year profits

Dina Caruso
-
0
Just Eat posts 98% drop in half year profits
Just Eat (LON:JE) posted a sharp fall in pre-tax profits on Wednesday in its half year results, but shares remained in the green. The results come just days after the business announced it had agreed in principle on the key terms of an £8.2 billion all-share deal with its rival Takeaway.com. For the six months to 30 June, Just Eat’s pre-tax profit amounted to £0.8 million, down 98% from the £48.1 million figure posted a year prior. The 98% decline in pre-tax profit reflects its planned investments in delivery and iFood, Just Eat said. The food delivery company added that half year revenue came to £464.5 million, up 30% compared to the first half of 2018. Just Eat saw a recovery in UK order growth to 11.2% in the second quarter, giving 9.3% order growth for the first half. European markets showed good growth, with strong order performances in Italy and Switzerland. Moreover, Australia returned to revenue and order growth in the second quarter, and Canada was profitable in the first half with continuing positive order momentum. Marketing costs amounted to £83.8 million, up from the £68.8 million figure recorded for the first half of 2018. https://platform.twitter.com/widgets.js The company recently revealed that it will be offering delivery from Gregg’s stores through its service.
“We’ve been working at pace and made good progress in the first half of the year to become the preferred food delivery app for our customers, with a broader choice of restaurants, a better user experience and a more personalised and impactful approach to communication,” Peter Duffy, Interim Chief Executive Officer, commented on the results.
“Performance in our UK business strengthened in Q2, our Canadian and European businesses are performing well and Australia has returned to top line growth with our delivery operations achieving gross profitability. These are strong foundations for Just Eat to build on, as the business continues to drive forward,” Peter Duffy continued.
Shares in Just Eat plc (LON:JE) were trading at +2.4% as of 11:02 BST Wednesday.

Nationwide: UK house price growth slows in July

Dina Caruso
-
1
Nationwide: UK house price growth slows in July
UK house price growth remained subdued in July, new data from Nationwide revealed on Wednesday. Annual house price growth remained below 1% for the eighth month in a row in July, with the monthly rise at 0.3%. House prices also increased by 0.3% when compared to the same period a year earlier. In June, Nationwide data showed a house price growth of 0.5% compared to June 2018.
“While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months,” Robert Gardner, Nationwide’s Chief Economist, commented on the data.
“Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued. Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable,” Nationwide’s Chief Economist continued.
“Housing market trends will remain heavily dependent on developments in the broader economy. In the near term, healthy labour market conditions and low borrowing costs will provide underlying support, though uncertainty is likely to continue to exert a drag on sentiment and activity.” Indeed, as the nation’s departure date from the European Union approaches, the possibility of leaving without a deal is creating uncertainty among consumers. Just last week, Boris Johnson won the Conservative leadership contest, becoming the new Prime Minister of the UK. But how will the new Prime Minister lead the nation out of the European Union in a way that does the least harm to British business in the long-run?
“Taking a longer-term view, housing market activity has been broadly stable in recent years, with the number of properties changing hands equal to around 5% of the total number of homes in the UK,” Nationwide’s Chief Economist added.

Aston Martin posts half-year loss, shares plunge

Dina Caruso
-
2
Aston Martin posts half-year loss, shares plunge
Aston Martin (LON:AML) posted a pre-tax loss on Wednesday in its half year results, sending shares down. Shares in the luxury sports car manufacturer were trading over 18% lower following the announcement. Founded in 1913, Aston Martin is one of the UK’s most iconic brands and has become synonymous with James Bond. In its half year results for the period ending 30 June, Aston Martin made a pre-tax loss of £78.8 million, swinging to red from the £20.8 million pre-tax profit it had made during the same period the year prior. Last week, Aston Martin issued a trading update in which it cut its sales and profit expectations for the financial year. The warning highlighted the challenging global macro-economic environment that was impacting the business. “As described in our trading statement on 24 July, both our retail and wholesale volumes have increased year-on-year,” Dr Andy Palmer, Aston Martin Lagonda President and Group CEO, said in a company statement. “However, we are disappointed that our projections for wholesales have fallen short or our original targets impacted by weakness in two of our key markets as well as continued macro-economic uncertainty. Accordingly, we have taken action to reduce wholesale guidance for 2019. We are also improving efficiency across the business, whilst protecting the brand,” the President and Group CEO continued. “With the UK’s exit from the European Union imminent, we have enacted our plans to ensure operational readiness for the supply of parts and cars. We remain focused on execution of the Second Century Plan, financial discipline, long-term sustainable growth and ensuring we have the right funding structure in place. The strength of our brand underpins our confidence in the long-term opportunities ahead.” Shares in Aston Martin Lagonda Global Holdings plc (LON:AML) were trading at -18.56% as of 09:43 BST Wednesday.

Fastjet revenues rise and losses narrow during first half

Jamie Gordon
-
2
Fastjet revenues rise and losses narrow during first half
British-South African low-cost airline holding company Fastjet PLC (LON: FJET) have seen their share price dip during Tuesday trading despite narrowing their first half losses and widening their revenues on a year-on-year comparison. The Company’s revenues grew from little under $14.5 million to over $19.7 million; revenues from Fastjet Zimbabwe grew 19% to $12.1 million. Losses after tax narrowed from $14.6 million to just under $4.5 million. Further, the Group announced that operating expenses were down $0.7 million on-year, and revenue per passenger was up 38% on the previous year.

Fastjet comments

Commenting on the results, Chief Executive Officer Nico Bezuidenhout said,

“It is pleasing to note the improved results for the first half, seasonally the weakest period of the year, as they illustrate the positive impact the Company’s stabilisation efforts have had on the financial performance of the business.”

“Key metrics such as revenue per available seat kilometre showed a year-on-year improvement of 39% in H1 2019; this is now 140% higher than the corresponding period in 2016.”

“In addition to our improved financial results we were also pleased to win again Best Low-Cost Carrier in Africa at the Paris Air Show last month, demonstrating our continued commitment to delivering exceptional service for our customers.”

“Whilst the stabilisation process, now concluded, was no-doubt painful, it is encouraging to see the benefit in improved financial results and a stronger foundation for the future. I would like to thank our shareholders, employees, suppliers and customers for their continued support over the past year.”

Investor notes

The Company’s shares closed down 1.69% or 0.025p at 1.45p a share 30/07/19 16:30 BST. Its p/e ratio and dividend yield are currently unavailable, its market cap is £56.06 million. Elsewhere in aviation, there have been updates from; John Menzies plc (LON: MNZS), Wizz Air (LON: WIZZ), Thomas Cook (LON:TCG) and Ryanair Holdings Plc (LON:RYA).

Low and Bonar shares collapse as losses quadruple on-year

Jamie Gordon
-
0
Low and Bonar shares collapse as losses quadruple on-year
Building materials company Low and Bonar plc (LON: LWB) have seen its share price dive after its losses widened drastically on a year-on-year basis. One positive piece of news is that the Company’s net debt narrowed from £140.3 million to £99.0 million on-year for the first half. However, their revenues shrunk 9.3% to £157.9 million, underlying operating margin narrowed from 5.6% to 1.6% and operating profit dropped from £9.6 million to £2.7 million. More worryingly though, is that statutory operating loss widened from £9.5 million to £38.9 million, stat loss before tax grew from £12.3 million to £41.7 million and the Company’s interim dividend fell from 1.05p per share to nothing during the period.

Low and Bonar comments

Daniel Dayan, Executive Chairman, said:

“The first half of 2019 has been another extremely challenging period for Low & Bonar. As a result of the Group’s poor performance, I was appointed Executive Chairman at the beginning of July 2019, temporarily combining the roles of Chairman and Chief Executive. Our priorities remain unchanged, which are to transform the Group’s operational performance and ensure a strong and sustainable financial position. Progress has been made, notably through the equity raise, the development and implementation of projects to improve facilities at Asheville and at CTT, the resolution of CTT’s quality problems and the disposal of Civil Engineering. Whilst this performance improvement plan is being implemented, the Board remains focused on maximising shareholder value and will consider all strategic options.”

Looking forwards, the Group’s statement read, “2019 is a year of transition as the Group simplifies its portfolio and structure, while also working to resolve legacy issues and improve operational performance against a backdrop of market softness in several segments and geographies. Following a very weak first quarter, performance improved in the second quarter of the year although still behind that of the prior year as a result of both challenging market conditions and manufacturing inefficiencies. It is evident that a number of the Group’s end markets remain difficult and it is likely that heightened levels of uncertainty will persist into the second half. Against this backdrop the Group is focused on delivering the benefits of the ongoing strategic initiatives and further cost saving actions in order to meet the Board’s expectations for the continuing business for the remainder of the year.”

Investor notes

Following the update, the Company’s shares dropped 17.33% or 1.68p to 8.04p a share 30/07/19 15:56 BST. The Group’s p/e ratio is currently -0.67 and their dividend yield (when paid out) is 14.95%. Elsewhere in property development and estate agency news, there have been updates from; LSL Property Services plc (LON: LSL), Countryside Properties PLC (LON: CSP), Ashley House Plc (LON: ASH) and Persimmon plc (LON: PSN).

Nostrum Oil & Gas proposes acquisitions and H1 revenues down

Jamie Gordon
-
6
Nostrum Oil & Gas proposes acquisitions and H1 revenues down
Kazakhstan focused oil and gas producer Nostrum Oil and Gas PLC (LON: NOG) posted steady results for the first half of 2019, and notified investors of proposed acquisitions of sites in Kazakhstan. The Company stated that production was in line with expectations and that the first half was financially positive. Despite this, revenues are expected to finish at US $174 million for H1 2019, down from $191 million for H1 2018.

Nostrum Oil & Gas also announced that their cash position was $120 million, extending from $75.7 million on-year. Total debt is expected not to exceed $1,133 million.

Average H1 2019 production after treatment was 31,096 bopd and average sales volume was 29,210 bopd. The Company discussed the acquisition of assets in North West Kazakhstan.

Nostrum Oil & Gas comments

“H1 production was in line with expectations. We haven’t yet finalised the testing of the Northern wells due to some technical issues. We are continuing work on both wells and will be testing the Frasnian section of well 41 next, as this is the horizon from which well 40 produces. The results from the testing of the Vorobyovski horizon in well 41 & 42, which confirmed gas saturation, have led to us now drilling well 361 in the Northern area to target this horizon. Our focus remains on trying to find ways to grow production in the near term and we are working to complete our own analysis alongside the studies with PM Lucas and Schlumberger in the North East and West of the field.”

“GTU 3 continues to progress with hot commissioning now underway and final commissioning targeted for the end of Q3 2019. Financially the first half was positive as production was in line with expectations and product prices were higher than our budget leading to higher than forecast revenue and operating cash flow. On the strategic front we are working towards bringing the acquisition of Positive Invest to shareholders whilst at the same time working on the strategic review of our business.”

Investor notes

The Company’s shares have dipped 0.55% or 0.25p to 45.40p a share 30/07/19 13:55 BST. Peel Hunt reiterated their ‘Add’ rating on Nostrum Oil & Gas stock, while Numis has their stance ‘Under Review’. Neither their p/e ratio nor their dividend yield is currently available, their market cap is £84.10 million. Elsewhere in the oil and gas sector, there have been updates from; Reabold Resources PLC (LON: RBD), Trinity Exploration and Production PLC (LON: TRIN), Union Jack Oil PLC (LON: UJO) and Nu-Oil and Gas PLC (LON: NUOG).

Greencore revenues struggle in challenging quarter for groceries

Jamie Gordon
-
5
Greencore revenues struggle in challenging quarter for groceries
Convenience foods manufacturer Greencore Group plc (LON: GNC) has seen its reported revenues decline during the third quarter of its financial year and the year-to-date, following what the company described as a challenging quarter for the UK grocery sector. Group continuing operations revenues dipped 2.9% during Q3 2019 and 4.0% for the year-to-date. The Company’s revenues also dropped in its convenience food categories, down 9.8% during Q3 2019, and down 16.9% for the YTD. However, its Food to Go categories were up 0.6% during the quarter and 4.6% so far for the year.

Greencore Group statement

Looking forwards, the Company’s statement read,

“The Group is performing well against its strategic and financial objectives, despite the soft underlying revenue growth in Q3. The final quarter represents a seasonally important period for Greencore and the Group continues to anticipate growth in Adjusted Operating Profit for the full year supported by underlying revenue growth and a good operational performance.”

“In addition, the Group anticipates that FY19 Net Debt:EBITDA, as measured under financing agreements, will be at the lower end of its medium term target range of between 1.5x to 2.0x.”

Regarding its well-performing Food to Go branch, the Company stated, “In the Group’s food to go categories, reported revenue was £250.6m in Q3, an increase of 0.6% on both a pro forma and reported basis, all driven by underlying product revenue growth. This growth reflected weak market conditions with unseasonal weather, a varied trading performance across the customer portfolio, set against a strong comparative period. Year to date, reported revenue in food to go categories was £697.8m, an increase of 4.6% on both a pro forma and reported basis.”

Investor notes

After a slight recovery, the Company’s shares are currently down 5.02% or 11.30p to 213.80p a share 30/07/19 13:56 BST. Peel Hunt analysts have reiterated their ‘Hold’ stance, while Shore Capital reiterated their ‘Buy’ stance on Greencore Group stock. The Group’s p/e ratio is 14.91 and their dividend ratio stands at 2.61%. Elsewhere, there have been updates from other food and drink retailers; NWF Group plc (LON: NWF), Cranswick plc (LON: CWK), Nestle SA (SWX: NESN) and Fuller, Smith and Turner plc (LON: FSTA).
1...1,3391,3401,341...1,796Page 1,340 of 1,796