Compass foodservice growth driven by North American operations

Jamie Gordon
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3
Compass foodservice growth driven by North American operations
Multinational contract food service provider Compass Group plc (LON: CPG) posted healthy growth in the third quarter, which the company attributed to strong performance by its North American operations. The Company said that revenue growth of 8.5% in its North American business would help it deliver on its 4-6% full-year revenue guidance for the full year. Overall, organic Group revenue grew 6.3% during Q3, and in addition to its American business, Compass noted improving performance in its ‘Rest of the World’ operations. Revenue growth for the first three quarters of FY19 was 6.5%. The Company said they were still focused on delivering efficiencies in management and performance, and said its margin for the first three quarters was in line with the margin for the first three quarters of FY18.

Compass statement

Looking forward’s the Company’s statement provided the following outlook,

“Compass continues to perform strongly. Revenue growth in North America is excellent and Rest of World is improving. Better than anticipated margin improvement in Rest of World and the mix effect of North American growth is offsetting the more difficult volume environment in Europe.”

“We now expect full year organic growth at the top of our 4-6% range and therefore the margin is expected to be in line with the prior year*. We remain mindful of the macro uncertainty in parts of Europe and its impact on the business.”

“We continue to be excited about the significant structural market opportunity globally and the potential for further revenue, margin and profit growth combined with further returns to shareholders over time.”

Investor notes

The Company’s share price has rallied 2.91% or 57.14p to 2,021.64p a share 25/07/19 14:58 BST. Liberum Capital and UBS analysts reiterated their respective ‘Buy’ stances on Compass stock, while Shore Capital retained its ‘Hold’ stance. Elsewhere, there have been updates from other food and drink retailers; SSP Group PLG (LON: SSPG), Dominos Pizza Poland (LON: DPP), Premier Foods Plc(LON: PFD) and Hotel Chocolat Group Plc (LON: HOTC).

Hansard Global posts modest FY growth with second half overheads

Jamie Gordon
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4
Hansard Global posts modest FY growth with second half overheads
Long-term savings and financial services operator Hansard Global plc (LON: HSD) reported full-year growth, with an impressive first half weighed down by legal and development expenditure on Japanese and European projects in the second half. New business for the year ended 30 June 2019 was £155.9 million in Present Value of New Business Premiums terms, up 6.3% compared to £146.6 million for FY 2018. During the fourth quarter, new business was up from £36.8 million to £47.6 million between Q4 2018 and Q4 2019.

Hansard Global added that its venture in teh UAE delivered stong growth. Assets Under Administration rose to £1.08 billion at 30 June 2019, in line with market movements.

Hansard Global comments

Gordon Marr, Group Chief Executive Officer, commented:

“We are delighted to have achieved a 6% growth in sales in the 2019 financial year given the amount of regulatory change taking place in our market. While we have incurred a number of costs for the full year to support future growth and improve operational efficiency, our implemented strategy in the UAE is proving a significant success and we look forward to capitalising on our recently announced licence in Japan during the course of the current financial year.”

On its FY performance, the Company said, “We are guiding that profits for the second half of FY 2019, while positive, will be significantly lower than those reported for H1 2019. The reasons for this include previously announced initiatives such as the development costs for a new administration system and licensing and development costs for our Japanese proposition, together with increased litigation defence costs, lower surrender charge income from contractholder withdrawals and lower fee income from Hansard Europe.”

Investor notes

Following the update on Q2 costs, the Company’s shares were down 3.93% or 1.75p to 42.80p a share 25/07/19 11:40 BST. The Company currently has a dividend yield of 10.40% and a p/e ratio of 9.09. Elsewhere in asset and investment management, there have been updates from; AJ Bell PLC (LON: AJB), Intermediate Capital Group plc (LON: ICP), Highcroft Investments plc (LON: HCFT) and City of London Investment Group PLC (LON: CLIG).

Countryside Properties Q3 results in line with FY19 expectations

Jamie Gordon
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4
Countryside Properties Q3 results in line with FY19 expectations
British housebuilding and urban redevelopment company Countryside Properties PLC saw steady performance with mixed results for the Company’s third quarter. The number of completions was flat on a year-on-year basis at 1,055 homes for Q3 2019, compared to 1,060 for Q3 2018. Private average selling price also plateaued at £374,000 for Q3; at £376,000 for the same period last year. Regarding deterioration, sales outlets dropped by 4 on-year, to 56, and net debt widened (in line with expectations), from £91.9 million to £128.2 million on-year. In terms of improvement, net reservation rates were up 12% from 0.89 to 1.00 between Q3 2018 and 2019. Total forward order book was also up 17% from £967 million to £1,135 million for the same period.

Countryside Properties said performance remained in line with expectations.

Countryside Properties comments

Ian Sutcliffe, Group Chief Executive, commented,

“We have maintained our growth trajectory, while continuing to improve build quality and customer satisfaction. The business is performing well and we are laying the foundations for future growth. We have continued to invest, with the increased production from our modular panel factory in Warrington now being realised. We continue to secure new business opportunities across both divisions. The demand for housing of all tenures remains unfulfilled and we are encouraged by positive sales rate trends despite the ongoing political uncertainty.”

Looking forwards, the Company’s statement read,

“We continue to see strong customer demand across both divisions for all tenures of homes. As previously referenced, we have a significant delivery programme in the fourth quarter due to the phasing of construction. However, we are fully reserved for private sales for the full year and fully sold for both PRS and Affordable homes. With build programmes on track, our focus now continues to be one of converting our private for sale reservations into completions in the fourth quarter. We are active on a total of 135 sites (Q3 2018: 122 sites) and remain on track to deliver full year expectations.”

Investor notes

Following the update, the Company’s shares rallied healthily before stabilising, now up 0.33% or 1.00p to 299.60p a share 25/07/19 12:18 BST. Peel Hunt reiterates its ‘Buy’ stance on Countryside properties stock. Elsewhere in property development and estate agency news, there have been updates from; Ashley House Plc (LON: ASH), Persimmon plc (LON: PSN), McKay Securities plc (LON: MCKS) and MJ Gleeson PLC (LON: GLE).  

AJ Bell £50bn AUA driven by platform business

Jamie Gordon
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2
AJ Bell £50bn AUA driven by platform business
Online investment and stockbroker platform AJ Bell PLC (LON: AJB) has seen growth in its usership and Assets Under Administration during its third quarter, which it said largely owed to success in its platform business. The Company said that customer numbers were up 5% during the quarter, up 9,843 to 210,765 during Q3. Platform AUA was lifted by net inflows of £1.0 billion, £0.2 billion of DB pension transfers and favourable market movements of £1.6 billion. Overall, platform AUA rose 7% during Q3, to £43.4 billion. AJ Bell noted that AUA increased 13% across all divisions over the year, and AUA broke the £50 billion mark.

AJ Bell statement

In a summary of results for the Company as a whole, the Comany said, “Total customer numbers increased 5% in the quarter to 224,644, with total assets under administration (“AUA”) breaking through the £50 billion mark to stand at £50.7 billion, an increase of 6% over the quarter and 13% over the past year. In comparison, the FTSE All-Share index increased by 2% over the quarter and fell by 3.5% over the year.”

Andy Bell, Chief Executive Officer of the Company, added the following comments,

“Trading in the third quarter of our financial year remained strong across our advised and direct to consumer platform. We continue to focus on the needs of advisers and customers, making it as easy as possible for them to invest and this has resulted in assets under administration breaking through the £50 billion mark. People need to save more via their pensions and ISAs for the long term and our platform and investment solutions help them do that easily and cost effectively.”

Investor notes

Since the update, the Company’s shares have rallied 3.43% or 14.70p to 442.90p a share 25/07/19 11:35 BST. Numis analysts upgraded their stance on AJ Bell stock from ‘Reduce’ to ‘Hold’. Elsewhere in asset and investment management, there have been updates from; Intermediate Capital Group plc (LON: ICP), Highcroft Investments plc (LON: HCFT), City of London Investment Group PLC (LON: CLIG) and Miton Group PLC (LON: MGR).

Intermediate Capital reports steady Q1 and rise in AUM

Jamie Gordon
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2
Intermediate Capital reports steady Q1 and rise in AUM
Asset management firm Intermediate Capital Group plc (LON: ICP) issued a steady but positive trading statement for the first quarter of the financial year, with growth in Assets Under Management and the Company expecting to exceed forecasts. The Group said that total AUM was up 4% compared to 31 March 2019, with €2.1 billion of new money raised in Q1. Third party fee earning AUM was also up 5% at €31.0 billion compared to 31 arch. The new money earned during the quarter also included €0.8 billion for our new Europe Mid-Market fund and €0.6 billion of segregated mandates raised for the Company’s Senior Debt Partners strategy. Intermediate Capital also added that it had observed ‘disciplined deployment’ across its strategies, and stated that all funds were set to meet or exceed expectations.

Intermediate Capital comments

COmpany CEO, Benoit Durteste, said, “The new financial year has started strongly. We have raised €2.1bn of new money across seven strategies. Our disciplined investment processes and outstanding fund performance, underpin our fundraising.”

“Our new Europe Mid-Market strategy – an offshoot of our successful European Corporate fund strategy – has attracted significant inflows, demonstrating our ability to identify attractive new, adjacent strategies for our clients. We are making good progress with our two other newer strategies, Infrastructure Equity and Sale & Leaseback, and remain alert to the growth opportunities that will come from expanding our more mature strategies.”

Investor notes

Following the update, the Company’s shares have rallied 0.64% or 9.00p to 1,421.00p a share 25/07/19 11:09 BST. Shore Capital analysts reiterated their ‘Hold’ stance on Intermediate Capital stock.

Elsewhere in asset and investment management, there have been updates from; Highcroft Investments plc (LON: HCFT), City of London Investment Group PLC (LON: CLIG), Miton Group PLC (LON: MGR) and Walker Crips Group plc (LON: WCW).

Diageo boosted by gin and GoT inspired ranges

Dina Caruso
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0
Diageo boosted by gin and GoT inspired ranges
Diageo, the owner of Gordon’s gin, reported an operating profit of £4 billion in its preliminary results on Thursday.
The British multinational alcoholic drinks company said that, for the year ended 30 June 2019, operating profit rose 9.5% to £4 billion. Diageo said that a strong growth in gin continued with Tanqueray and Gordon’s growing to double digit in Europe and Turkey, and Western Europe continued to gain market share in gin. Diageo also added that ready to drink jumped 17% in Europe and Turkey as it was driven by the Gordon’s premix range. Equally, the company said that scotch represented 25% of its net sales. Growth was driven by Johnnie Walker, which delivered a strong performance with net sales up 7%. This category benefitted from the successful launch of “White Walker by Johnnie Walker,” inspired by the popular TV series Game of Thrones. “Diageo has delivered another year of strong performance. Organic volume and net sales growth was broad based across regions and categories, with new product innovation being a strong contributor. We expanded organic operating margin ahead of our guidance and increased investment behind our brands ahead of organic net sales growth,” Ivan Menezes, Chief Executive, said in a company statement. “Fiscal 19 has been another year of strong free cash flow delivery at £2.6 billion and we have returned £2.8 billion to shareholders via share buybacks. The Board has approved plans for an additional return to shareholders of up to £4.5 billion over Fiscal 20 to Fiscal 22,” the Chief Executive continued.
“Our focus on quality sustainable growth is backed by a culture of everyday efficiency that enables us to invest smartly in marketing and growth initiatives while expanding margins.” “These results reflect the steady progress we are making and as we look ahead we see attractive opportunities to deliver consistent growth and create shareholder value. In the medium term I expect Diageo to maintain organic net sales growth in the mid-single digit range and to grow organic operating profit ahead of net sales in the range of 5%- 7%.” Earlier this week Fever-Tree, the producer of carbonated mixers often paired with gin, said that the UK saw a moderation in growth rates for the first half of 2019. Shares in Diageo plc (LON:DGE) were trading at -1.89% as of 10:51 BST Thursday.

AstraZeneca reveals 12% rise in first half product sales

Dina Caruso
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3
AstraZeneca reveals 12% rise in first half product sales
AstraZeneca said on Thursday in its first half results that it had seen a 12% rise in product sales over the period. Shares in AstraZeneca were trading almost 6% higher on Thursday morning following the announcement. The multinational pharmaceutical company said that its performance in the first half of 2019 confirms its return to growth, driven by the strength of its new medicines. First-half product sales rose 12% to $11,183 million. Moreover, AstraZeneca said that its second quarter saw every sales region and all three therapy areas deliver an encouraging performance. This includes the sustained performance of new medicines to $2,385 million. Likewise, the company’s fourth-quarter performance of 2018 was also boosted by new medicines.
“The momentum generated last year continued into the first half, consolidating AstraZeneca’s return to growth based on the strength of our new medicines,” Pascal Soriot, Chief Executive Officer, said in a company statement. “Five of these new medicines are anticipated to be blockbusters this year, supporting sales across both Oncology and BioPharmaceuticals. Emerging Markets, the US and Japan all grew strongly, and we delivered an encouraging turnaround in Europe in the second quarter. Selective investment in sustainable growth also continued, particularly in Emerging Markets and in our launch programmes,” the Chief Executive Officer continued. “Additional regulatory approvals for Lynparza in ovarian cancer in the EU and Japan, together with approvals for Breztri and Bevespi in COPD in Japan, illustrated further progress from our pipeline.” “Accompanying earnings growth this year, we are pleased to upgrade our Product Sales guidance and we are committed to working on our operating leverage and driving cash generation over the long term.” Earlier in June AstraZeneca said that it had received approval from the European Union for its Lynparza drug. Shares in AstraZeneca plc (LON:AZN) were up 5.49% as of 10:22 BST Thursday.

Poor weather hits Unilever’s ice-cream sales

Dina Caruso
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3
Poor weather hits Unilever’s ice-cream sales
Consumer goods giant Unilever (LON:ULVR) posted its half-year results on Thursday, revealing that poor weather had hit its ice cream sales in Europe and North America. Shares in Unilever were trading over 1% lower on Thursday morning. Underlying sales were up 3.3% for the first half of 2019, led by its emerging market business which grew 6.2%. Unilever added that growth in its markets was mixed, however. Market growth in Europe and North America was held back by the impact of the weather on ice cream sales. In the emerging markets it continued to see good momentum, particularly in China and South East Asia. India saw a strong market growth, though it moderated, which Unilever said was expected. Argentina remains hyperinflationary and high levels of pricing continue to weigh on consumer demand, Unilever added. “We have delivered consistent growth within our guided range for 2019, led by our emerging markets,” CEO Alan Jope said in a company statement. “Accelerating growth remains our top priority and we continue to evolve our portfolio and seek out fast growth channel and geographical opportunities, as well as address those performance hotspots where growth is falling short of our aspirations,” Alan Jope continued. “For the full year, we continue to expect underlying sales growth to be in the lower half of our multi-year 3-5% range, an improvement in underlying operating margin that keeps us on track for the 2020 target and another year of strong free cash flow. Our sustainable business model and portfolio of purpose-led brands are key to delivering superior long-term financial performance.” Earlier this year in April, Unilever revealed a stronger-than-expected growth in its underlying sales for its first-quarter of 2019. In its full-year 2018 results, the consumer goods giant said it had seen continued profitable growth despite the “volatile” market conditions. Shares in Unilever plc (LON:ULVR) were trading at -1.23% as of 09:46 BST Thursday.

GSK appoints HSBC’s Jonathan Symonds

Dina Caruso
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1
GSK appoints HSBC’s Jonathan Symonds
GlaxoSmithKline (GSK) announced on Wednesday that Jonathan Symonds will succeed Sir Philip Hampton as Non-Executive Chairman of its board. The British multinational pharmaceutical company said that this is set to come into effect later this year in September. Jonathan Symonds is currently the Deputy Group Chairman of HSBC (LON:HSBA). He has also been a former Chief Financial Officer of both Novartis AG and AstraZeneca plc – GSK’s rivals. “Jon has exceptional experience in life sciences, and in the financial management and governance of major, global companies. Throughout his career he has demonstrated a passion for science, and is known for his integrity and professionalism,” Vindi Banga, the company’s Senior Independent Director, said in a company statement. “We are delighted that Jon will lead the Board through this next phase for GSK, and we look forward to him joining in September,” Vindi Banga continued. Jonathan Symonds added: “I am delighted to be joining GSK, at what is a really important time for the company as it seeks to create value from its new R&D approach, and to create two, new world-leading companies, one focussed on Pharmaceuticals and Vaccines, the other on Consumer Healthcare.” GSK, which is headquartered in Brentford, London, also posted its second quarter results on Wednesday, delivering growth in both its sales and earnings. Group sales amounted to £7.8 billion, 7% higher than the same period last year. Meanwhile, adjusted earnings for the second quarter came in at 30.5 pence per share, up 9% on last year. In June, pharmaceutical company Stada (OTCMKTS:STDAF), announced its acquisition of six brands, one of which was a paediatric cough remedy from GSK. Shares in GlaxoSmithKline plc (LON:GSK) were trading at -0.1% as of 12:38 BST Wednesday.

Deutsche Bank reveals €3.1 billion loss after transformation charges

Dina Caruso
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3
Deutsche Bank reveals €3.1 billion loss after transformation charges
Deutsche Bank posted a second quarter net loss of €3.1 billion on Wednesday, following strategic transformation charges of €3.4 billion. Shares in the bank were trading over 3.5% lower on Wednesday morning. At the beginning of the month the German bank announced plans to radically transform its business model. It said that the restructuring actions will see it axe 18,000 full-time equivalent employees. Deutsche Bank said that, since the announcement of the transformation plans, over 900 employees have already been given notice or informed that their role will be eliminated. Had the transformation charges been excluded, Deutsche Bank said that second quarter net income would have been €231 million against €401 million in the prior year period. Meanwhile, pre-tax profit would have been €441 million compared to the €711 million euros in the second quarter of 2018. “We have already taken significant steps to implement our strategy to transform Deutsche Bank. These are reflected in our results,” Christian Sewing, Chief Executive Officer, said in a company statement. “A substantial part of our restructuring costs is already digested in the second quarter. Excluding transformation charges the bank would be profitable and in our more stable businesses revenues were flat or growing. This, combined with our solid capital and liquidity position, gives us a firm foundation for growth,” the Chief Executive Officer continued. Earlier this year, Deutsche Bank and Commerzbank (ETR:CBK) abandoned talks of a potential merger amid shareholder concerns over the complexities of the proposed move. Had the merger gone ahead, it would have created Europe’s fourth largest banking institution. Shares in Deutsche Bank AG (ETR:DBK) were trading at -3.74% as of 11:53 CEST. Shares in Commerzbank AG (ETR:CBK) were trading at -0.7% as of 11:54 CEST.
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