SSP Group sees revenues grow in Q3

Jamie Gordon
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3
SSP Group sees revenues grow in Q3
British airport and train station focused catering company SSP Group PLG (LON: SSPG) saw further progress in its financial performance during the Company’s third quarter, despite what continues to be an uncertain period for the air travel sector. The Company said it made progress on its strategic initiatives during the third quarter, with revenues up 9.2% on a constant currency basis. This was comprised of a like-for-like sales growth of 2.0% and net gains of 7.2%. Based on actual exchange rates, Group revenues increased 10.3% year-on-year during the period. For the first three quarters from 1 Octoebr 2018 to 30 June 2019, Group revenues increased 7.6%. This included; like-for-like sales growth of 2.0%, net contract gains of 5.2% and 0.4% due to the impact of Stockheim. On an actual exchange rate basis, Group revenue increased by 8.3% on-year. SSP Group said their expectations remained unchanged for the full year.

SSP Group statement

With more in-depth insight, the Group’s statement read,

“In the UK, like-for-like sales growth was in line with our expectations, with stronger like-for-like sales growth in the air sector compared to rail. In Continental Europe, like-for-like sales continued to be held back by slower passenger growth in the Nordic countries and the impact of airport redevelopment activity in this region and in Spain. In North America, like-for-like sales growth was driven by increasing passenger numbers, although some of our airports have been impacted by the grounding of Boeing Max 737 aircraft and the transfer of passengers away from our terminals. In the Rest of the World, like for like sales growth has been mixed, with good performances in Egypt and the Middle East slightly offset, as anticipated, by the cessation of operations at Jet Airways in India and slower growth in China. Looking forward to the rest of the year, we anticipate like-for-like sales growth for the Group to be around 2%.”

“Net contract gains were good, driven by Continental Europe and North America, where the mobilisation of new contracts has been slightly ahead of schedule. Looking forward, we expect net gains in the full year to be slightly ahead of our expectations at around 5%, and as usual they will be accompanied by pre-opening costs.”

Investor notes

Following the update, the Company’s shares rallied 1.03% or 7p a share during Friday morning trading 19/07/19 13:00 BST. Shore Capital and Liberum Capital analysts reiterated their ‘Buy’ rating, while HSBC reiterated their ‘Hold’ rating and Morgan Stanley upgraded their stance from ‘Underweight’ to ‘Equal Weight’. Elsewhere, there have been updates from other food and drink retailers; Dominos Pizza Poland (LON: DPP), Premier Foods Plc(LON: PFD), Hotel Chocolat Group Plc (LON: HOTC), Distil PLC (LON: DIS) and Coca-Cola (NYSE: KO).  

Dominos Pizza Poland shares spike on H1 Systems Sales

Jamie Gordon
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2
Dominos Pizza Poland shares spike on H1 Systems Sales
Pizza delivery company Dominos Pizza Poland (LON: DPP) has seen its share price jump during Friday morning trading, with sales increasing especially in its online sector. The Group noted that System Sales grew 10% during H1 2019 on a year-on-year basis, with 80% of delivery sales coming from online orders. From March 2019, the Company said like-for-likes had been ‘building’, such as 6% growth in like-for-like order between March and June 2019. Operationally, Dominos Pizza Poland has 67 stores across 28 town and city locations, with 4 new stores having opened during H1 2019. Further, during the first half the Company agreed for three corporate stores to be acquired by two sub-franchisees and three to be taken under management by one existing sub-franchisee.

Dominos Pizza Poland comments

Nick Donaldson, non-executive Chairman of DP Poland, said, “The first half of 2019 has seen momentum return to like-for-like performance following the strong comparatives driven by TV advertising in January and February 2018. Like-for-like order count has grown 6% since March. Total System Sales grew 10% in the first half as a result of like-for-like performance and new store openings. Our efforts in sub-franchisee recruitment are bearing fruit with 2 additional sub-franchisees acquiring/agreeing to acquire 3 corporate stores between them this month We have also entered into 3 more management contracts with 1 of our existing sub-franchisees.”

Investor notes

The Group’s shares rallied 11.29% or 0.88p following the update, up to 8.62p per share 19/07/19 09:26 BST. Peel Hunt analysts reiterated their ‘Buy’ stance on Dominos Pizza Poland stock. Elsewhere, there have been updates from other food and drink retailers; Premier Foods Plc (LON: PFD), Hotel Chocolat Group Plc (LON: HOTC), Distil PLC (LON: DIS), Coca-Cola (NYSE: KO), Patisserie Holdings Plc (LON: CAKE) and Kerry Group Plc (LON: KYGA).

eve Sleep proves a nightmare

Andrew Hore
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0
eve Sleep proves a nightmare

Mattress seller eve Sleep (LON: EVE) is a great example of how overhyped companies can gain a fancy valuation, but the share price will slump when they get nowhere near to meeting expectations.
A Channel 4 programme brought eve Sleep to the attention of the consumer and investing public. That may have prompted an earlier flotation than might have happened, although it is difficult to know. This was certainly an immature business.
High hopes, low results
In 2016, prior to flotation, revenues were £12m and losses were nearly as high. Yet, when the company joined AIM in May 2017 it was valued a...

Young people most likely to get caught in the SVT trap

Dina Caruso
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0
Young people most likely to get caught in the SVT trap
The lack of financial education among young people is causing them to fall into the Standard Variable Tariff trap, new research from Comparethemarket reveals. The younger generation of bill payers is more likely to be on a Standard Variable Tariff, the research shows. Additionally, only 26% of 18-24-year olds know that you are automatically moved onto a Standard Variable Tariff when your current fixed energy contract expires, 7% less than adults in the UK. General knowledge regarding the cost of energy usage and monthly charges is also low among young people, as two in five are not able to say how much they pay monthly and nine in ten how much they pay per kilowatt. This is, however, something that the majority of bill payers are unable to understand. The research also shows that missing bill payments are more likely amongst young people, with nearly twice as many for 18-24-year olds, when compared to the average. “Making the right financial decisions from an early age can help set yourself up for a lifetime. For a young adult setting out on their own for the first time, taking on the responsibility of paying bills can be a daunting task,” Peter Earl, head of energy at comparethemarket.com, commented in a statement. “It’s crucial to take a little time out when it comes to choosing the right tariff for your circumstances. More often than not it makes financial sense to lock into a fixed rate tariff, which could save you hundreds of pounds a year on your energy bill.”

Edenville Energy shares rally with record coal production

Jamie Gordon
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1
Edenville Energy shares rally with record coal production
Tanzania-focused coal production company Edenville Energy (LON: EDL) reported improved output at its flagship Rukwa Coal Project in its latest operational update. Following the overburden stripping and exposing of coal announced on June 27 2019, coal mining has now commenced in the Northern Mining Area. The coal in this area measures collectively at approximately 20 metres thick and up to 40 metres thick in some areas, which is dense compared to previously mined areas with approximately 3.5 metre thickness.

Analysis of the unwashed area is yielding energy values of 6,200kcal/kg and up to 6,800kcal/kg – up from previous areas with an average of 5,000kcal/kg. Further, average daily coal production is increasing with 730 tonnes produced between 1 July and 15 July 2019; this included production of 102 tonnes of washed coal produced on 15 July 2019 in a single shaft.

Edenville Energy comments

Rufus Short, Chief Executive Officer of Edenville, commented, “It has only been three weeks since mining in the Northern Area commenced and extensive coal measures have already been uncovered. This is encouraging and the coal quality has so far exceeded what we expected from measures so close to the surface. As the Project is developed further, we believe that significant quantities of coal can be extracted from the Northern Area with our current mining fleet. This, coupled with the plant improvements we have made, should enable Edenville to become cashflow positive within the next 9 months, as we target an initial washed coal production of 6,000 tonnes per month, which we consider to be a breakeven level, increasing to 10,000+ tonnes per month thereafter.” Looking forwards, the Company’s statement read, “Once sufficient material from the Northern Area is available, the Directors expect the wash plant to move back to a double shift basis. As well as increased throughput rates, the Directors believe the recent upgrades to the plant will result in less plant downtime and allow a more consistent production profile to be achieved at the Project.”

Investor notes

Following the update, the Company’s shares have rallied 8.25% or 0.0049p to 0.065p a share 18/07/19 14:11 BST. Elsewhere in the mining and minerals sector, recent updates have come from; Kavango Resources PLC (LON: KAV), Ariana Resources plc (LON: AUU), Rio Tinto plc (LON: RIO), Bushveld Minerals Limited (LON: BMN), Anglo Asian Mining plc (LON: AAZ), Anglo Asian Mining plc (LON: AAZ) and Pan African Resources (LON: PAF).  

Anglo American “broadly” on track to meet annual targets

Dina Caruso
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2
Anglo American “broadly” on track to meet annual targets
Anglo American (LON:AAL) said on Thursday in its second quarter production report that it remains “broadly” on track to deliver its full year production targets. Shares in the multinational mining company were down almost 1% on Thursday afternoon. For the company’s second quarter ended 30 June, copper production was up 1% to 159,100 tonnes driven by a strong performance at Los Bronces and Collahuasi. De Beers’ diamond production dropped by 14% to 7.7 million carats as Anglo American continues to produce to market demand and Venetia transitions from open pit to underground. Platinum production increased by 3% to 520,300 ounces and palladium decreased by 1% to 347,200 ounces, due to a change in mix of production from each operation. “Production is up 2% for the quarter, due to the successful ramp-up at Minas-Rio and strong performance at Metallurgical Coal following the longwall moves and plant upgrade work in Q1,” Mark Cutifani, Chief Executive of Anglo American, commented in the results. “Kumba Iron Ore continues to improve following Q1 production challenges. De Beers, in view of prevailing market conditions, will continue to produce to demand for the year.” “We remain broadly on track overall to deliver this full year’s production targets, with an increase to Minas-Rio guidance offsetting two reductions at De Beers and Kumba Iron Ore.” Earlier in May, Anglo American saw its share price rally following an announcement that its plans to construct a new diamond recovery vessel had been approved. It also kick-started the year announcing that it expected copper and diamond production to decline in 2019. Shares in Anglo American plc (LON:AAL) were down 0.59% as of 14:41 BST Thursday.

Boku growth in mobile payment volumes pushes up revenue

Jamie Gordon
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2
Boku growth in mobile payment volumes pushes up revenue
Continuing the growing shift to financial tech solutions, Mobile payment platform Boku Inc (LON: BOKU) posted its results for the first half of FY19, and reported growth in revenues alongside spikes in payment volumes and active usership. The Group stated that their Total Payment Volume was up 49% on a year-on-year basis for H1, up from $1.5 billion to $2.3 billion. Further, Monthly Active Users of the Boku platform in June 2019 were 48% higher than in June 2018, at 15.3 million compared to 10.3 million. Regarding Boku Identity, monitoring activity increased more than sixfold during the quarter, with 74 million numberrs monitored in June 2019, compared to 12 million monitored in June 2018. Processed transactions were also doubled on-year on a proforma basis, up from 70.6 million in H1 2018, to 140.9 during H1 2019. As a result, Group Revenue for H1 was expected to finish at between $22.5 million and $23 million, up by over 33% from $16.9 million for H1 2018. The Company added that it expected Mobile Identity to represent between 14% and 16% of total reveneus for the period. Adjusted EBITDA was also noted to be on track to meet full year expectations. However, the Group’s cash at 30 June 2019 was $27.8 million, down from $32.3 million at 30 June 2018. Moreover cahs balance was $22.2 million in June 2019, down from $24.4 million for December 2018.

Boku comments

Jon Prideaux, Boku’s CEO, commented,

“I am delighted with our first half results which show Boku maturing into a multi-product company, without missing a step in our Payments business.”

“With Monthly Active Users continuing to grow strongly, we are proving once again the value that Boku brings to our global digital clients. Of course, the law of large numbers dictates that Payments volumes will not continue to grow at such high percentages indefinitely, but with our significant scale driving operational gearing, the incremental revenues we generate from Payments will continue to drop straight through to EBITDA, affording us the opportunity to make ongoing investments in future growth.”

“Our first such investment, Boku Identity, is off to a flying start and yet we have barely begun to realise the full potential of this new venture. Having acquired Danal Inc, now fully integrated as Boku Identity, at the beginning of the year, the first half of 2019 has been focused on setting ourselves up for sustainable global expansion in what is a new and emerging market. We expect this progress on Identity to continue and accelerate in the second half.”

“Identity is not the only innovation we are pursuing. Our recently announced partnership with Grab in South East Asia demonstrates that there is plenty of potential to grow our Payments business through partnerships with mobile wallets and other alternative payment methods.”

“I am hugely excited by the pipeline of opportunities that we have created in both Payments and Identity and I look forward to providing further updates as the year progresses.”

“We maintain our full year guidance for revenues and adjusted EBITDA, with the normal seasonal bias and further scale up in identity revenues expected in H2 2019.”

Investor notes

The Company’s share price dipped 5.12% or 6.6p following the update, down to 122.40p a share 18/07/19 14:27 BST. Peel Hunt analysts reiterated their ‘Buy’ stance on Boku stock. Elsewhere in the tech sector, there were updates from; Telit Communications Plc (LON: TCM), TP Group PLC (LON: TPG), Mobile Streams Plc (LON: MOS), Sophos Group plc (LON: SOPH), MiriAd Advertising plc (LON: MIRI), Zoo Digital Group plc (LON: ZOO) and Vela Technologies Plc (LON: VELA).

Water companies to invest £12 billion in five years under regulator plans

Dina Caruso
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2
Water companies to invest £12 billion in five years under regulator plans
Water companies in England and Wales face pressure to increase investment under the regulator Ofwat’s latest price review. Ofwat unveiled proposals on Thursday that involve water companies investing an additional £6 million each day, every day, for the next five years. Equating to £12 billion collectively, the additional investment will be used to improve services for future generations, including by building reservoirs, moving water to where its needed most and protecting the environment. The price review also includes ambitious new targets to drive water companies to cut pollution incidents by more than a third, reduce supply interruptions by almost two-thirds, help 1.5 million customers who are struggling to pay their bills and cut leakage to save enough water equivalent to the needs of the population of Manchester, Leeds, Leicester and Cardiff. At the same time, Ofwat expects customers to see their water bills cut by £50, the regulator said in its price review. “The package we are unveiling today signals a brighter future for customers, with better services, a healthier natural environment and lower bills,” Ofwat Chief Executive, Rachel Fletcher, commented. “To get there we are calling for extra investment of £6 million each and every day to improve the environment and provide services for a growing population. At the same time we expect to see customers’ bills cut by an average of £50,” the Chief Executive continued. “These are seriously stretching goals for the sector, but we know they can be achieved. We have seen three water companies leading the way and we now want the rest to show the ambition and drive to deliver this new era for customers and the environment.” Earlier this year, Severn Trent (LON:SVT) warned on the future of the water sector in its annual results. Profits at Thames Water dropped at the end of last year following regulatory penalties and extreme weather.

UK retail sales up in June

Dina Caruso
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0
UK retail sales up in June
UK retail sales were up for the month of June, new data from the Office for National Statistics revealed on Thursday. The quantity bought in June was up 1% when compared with May, and growth was particularly driven by non-food stores. In the three months to June, the quantity bought was up 0.7%. Growth occurred across all sectors apart from food stores and department stores. The Office for National Statistics said, however, that this was a slowdown compared to the stronger growth of 1.6% in the three months to May. The data also reveals that online sales as a proportion of all retailing fell to 18.9% in June, down from the 19.3% reported in May. Whilst department stores continued to struggle, second-hand stores such as charity shops and antique dealers were among some of the largest contributors to the growth. Department stores were the only sector to reveal a decline in the non-food stores category at -0.2% for the amount spent and -0.4% for the quantity bought. June was the sixth consecutive month-on-month decline for department stores, according to the data. As the UK high street crises takes its toll on stores, businesses have been struggling amid store closes and staff cuts. The British department store House of Fraser was saved last year by Mike Ashley’s Sports Direct in a £90 million deal. Before the deal, the department store had announced that it was going into administration. Elsewhere in retail, online company ASOS (LON:ASC) also made headlines on Thursday after it issued its third profit warning in the past seven months, sending shares down.

SSE remains steady and retains full-year outlook

Jamie Gordon
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4
SSE remains steady and retains full-year outlook
Perth-based energy company SSE PLC (LON: SSE) remained stable in the first quarter as it prepares for its AGM. The Company noted that renewable energy output was lower than the forecast volume for the three month period but despite this, the Group said they would retain their previous outlook provided for the financial year 2019-2020 given in May 2019. SSE also repeated their commitment to recommending a full-year dividend of 80p per share for 2019-2020, which is in line with their five-year dividend plan.

SSE comments

Company Chief Executive, Alistair Phillips-Davies, said,

“The early months of our financial year have brought some short-term challenges and some encouraging longer-term developments, but the key months of our financial year lie ahead. I am confident we will make good progress in delivering against our strategic priorities, including the five- year dividend plan out to 2023.”

“The fact the UK has become the first major economy to legislate for net zero emissions by 2050 is a key development in the fight against climate change and reinforces SSE’s strategic focus on regulated electricity networks and renewable energy, and our commitment to creating value through the low carbon transition.”

The Company’s outlook read as follows, “The key months in SSE’s financial year are still to come, but the overall outlook provided in May 2019 in relation to adjusted operating profit across a number of SSE’s business units in 2019/20 remains unchanged. This is despite lower than expected output of renewable energy in the three months to 30 June, with the shortfall in output equivalent to less than 4% of the annual forecast total. As stated in May, the outlook for adjusted operating profit includes suspended Capacity Market payments totalling £148m. Group adjusted net finance costs and group capital and investment expenditure in 2019/20 continue to be in line with that set out in May.”

Investor notes

Following the update, the Company’s shares rallied 1.00% or 11.50p to 1,164.50p per share 18/07/19 12:10 BST. Morgan Stanley reiterated their ‘Equal Weight’ stance, while Deutsche Bank reiterated their ‘Hold’ rating on SSE stock. Preluding the Company’s disappointing renewables performance, other updates from the renewable energy sector, there have been recent updates from; SIMEC Atlantis Energy (LON: SAE), Aquila European Renewables Income Fund (LON: AERI) PowerHouse Energy Group (LON: PHE), The Renewables Infrastructure Group Ltd (LON: TRIG) and Tekmar Group Plc (LON: TGP).
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