Premier Foods saw its market share and sales growth in Q1

Jamie Gordon
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Premier Foods saw its market share and sales growth in Q1
British food manufacturer Premier Foods Plc (LON: PFD) looks set to meet expectations for the full year as the Company booked sales growth in the first quarter 2019. For the 13 weeks ended 29 June 2019, Premier Foods saw total Group sales rise 1.1% and UK sales grow 2.6%. Branded sales grew 2.9% and 4.9% in these brackets respectively. The Group’s largest brand, Mr Kipling, saw sales grow 10% during the quarter. The Company said that its campaign of increased marketing investment fro the year was already underway; with Mr Kipling and Batchelors already aired and more yet to come.. It added that it saw market share gains in 7 out of 8 of its top brands and that its expectations for the full year remained unchanged. Premier Foods comments

Alastair Murray, Acting Chief Executive Officer of the Company, responded to today’s update,

“I am pleased to report an encouraging start to the year with Group sales up +1.1% and ahead +2.6% in the UK. As we previously noted, we are increasing our consumer marketing investment this year and both Mr Kipling and Batchelors have already benefited from TV advertising campaigns in the first quarter. Many of our largest brands have built on strong category positions and grown market share, and we achieved branded growth in the quarter of nearly 3%. These figures provide evidence that the Company’s strategy is delivering results. Our expectations for the full year remain unchanged.”

Investor notes

The Company’s share price rose 0.37% or 0.14p to 37.59p a share 17/07/19 12:36 BST. Shore Capital analysts retained their ‘Hold’ stance on Premier Foods stock. Elsewhere, there has been news from other food and drink retailers; 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).  

Arbuthnot Bank shares rally on bumper H1 profits

Jamie Gordon
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1
Arbuthnot Bank shares rally on bumper H1 profits
Commercial bank Arbuthnot Banking Group Plc (LON: ARBB) has seen its share price rally in morning trading on Wednesday after the Company posted significant year-on-year profit growth for the first half. The Company’s H1 pre-tax profits jumped on a year-on-year basis, up from £1.2 million during H1 2018 to £2.9 million for H1 2019. Similarly, underlying profit before tax was up from £2.7 million to £3.4 million for the first half.

Arbuthnot also noted that customer loans grew to £1,275 million and customer deposits grew to £1,829 million during H1 2019, up from £1,097 million and £1,547 million respectively by the end of H1 2018.

Further, it added that it had raised £39.5 million of regulatory capital and agreed the purchase of the £266 million Mortgage Portfolio. However, while the Company’s Assets Under Management grew 4.5% from December 2018, they were down 4% year-on-year for H1, from £1,069 million to £1,029 million.

Arbuthnot Bank comments Commenting on the results, Sir Henry Angest, Company Chairman and Chief Executive, said, “The Group has had a good start to the year. We have raised new capital, grown our existing businesses and continued to deliver on our plans to diversify. We have also agreed to buy a mortgage portfolio which should help to improve the returns of the Group.”

Investor notes

The Company’s dividend per share grew from 15p for H1 2018, to 16p for H1 2019. However, earnings per share were down from 21.7p to 16.6p and net assets per share dropped from £15.40 to £13.21.

The Group’s shares have rallied 1.84% or 25p to 1,385p a share during morning trading on Wednesday 17/07/19 11:54 BST. Numis analysts reiterated their ‘Buy’ stance on Arbuthnot stock.

Elsewhere in the banking sector, there have been updates from; Deutsche Bank (ETR: DBK), Lloyds Banking Group (LON: LLOY) and Nationwide (LON:NBS).

Hotel Chocolat revenues spike 14% on new store openings

Jamie Gordon
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2
Hotel Chocolat revenues spike 14% on new store openings
British chocolatier Hotel Chocolat Group Plc (LON: HOTC) posted impressive revenue growth in its full year trading update, for the year ended 1 July 2019. With profits expected to be in line with market expectations for FY19, Hotel Chocolat revenues rose to £132 million – a 14% increase on FY18 revenues.

The Group’s strong performance was bolstered by the expansion of its outlet portfolio, with the Company opening 16 new locations during the year. The Company said these branches contributed 5% to sales year-on-year. It added that two of these store openings were in the US and two were in Tokyo, Japan, as part of a joint venture.

Hotel Chocolat comments

Angus Thirlwell, Co-Founder and Chief Executive Officer of Hotel Chocolat, said:

“I’m really pleased with our performance this year, delivering strong growth across all parts of the Hotel Chocolat multi-channel, direct-to-consumer model. New activities in the year included openings in the US and Japan; the launch of the Velvetiser – our in-home drinking chocolate system; and the introduction of our VIP ME rewards card scheme, all of which present substantial future growth opportunities.”

“Our pace of innovation is relentless. In our drinks and ices range we are seeing the most prolific new product Instagramming in our history, with Billionaire’s Sundaes, Choc Shakes and Vegan Chocolate-Dipped Lollies generating lots of excitement”.

Investor notes

The Company’s shares rallied 1.69% or 6p following the update, up to 361p a share 17/07/19 11:30 BST. Analysts from Peel Hunt and Liberum Capital have reiterated their respective ‘Buy’ stances on Hotel Chocolat stock. Elsewhere, there has been news from other food and drink retailers; Distil PLC (LON: DIS), Coca-Cola (NYSE: KO), Patisserie Holdings Plc (LON: CAKE) and Kerry Group Plc (LON: KYGA).

Telit Communications moves to profit but H1 revenues shrink

Jamie Gordon
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1
Telit Communications moves to profit but H1 revenues shrink
Telit Communications PLc (LON: TCM), who describe themselves as a global enabler of the Internet of Things, has moved from a loss to a profit year-on-year for the first half, but has seen their net revenue narrow during the period. Without providing a figure, the Company said, “Profitability is expected to show continued improvement with a positive profit in cash.” Whereas in H1 2018, the Company made a loss of $5.7 million in cash. Improvement was also seen in net cash. As of 30 June 2019, Group net cash stood at $44.0 million, up from $34.0 million at 31 December 2018. However, while the Company’s continuing business revenue grew 7.2% from $167.5 million to $179.5 million for the first half, total Group revenue dipped from $201.7 million in H1 2018, to $189.5 million fro H1 2019. This was despite two months contribution from the automotive business, which was sold in February this year.

Telit Communications comments

Company Chief Executive, Paolo Dal Pino, stated,

“We are now a more efficient organisation, focusing on growing our industrial IoT products and services, while improving the overall profitability of the business. We remain on track with our operational and financial targets.”

The group’s statement added, “The Group traded in line with the Board’s expectations for the first half and is on course to continue to do so for the full year.”

Investor notes

The Company’s shares dipped 2.24% or 3.8p during early morning trading on Wednesday, down to 166.2p a share 17/07/19 11:08 BST. Analysts from finnCap remained unchanged in their ‘Corporate’ stance on Telit Communications stock. Elsewhere in the tech sector, there were updates from; 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), Vela Technologies Plc (LON: VELA) and Remote Monitored Systems PLC (LON: RMS).

Galliford Try performing in line with expectations

Jamie Gordon
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0
Galliford Try performing in line with expectations
British construction and housebuilding company Galliford Try plc (LON: GFRD) posted a consistent sales rate for the full year and says their profits before tax remain in line with analysts’ expectations. The Company says they will publish a full data set in September, but noted that it maintained its strong margin and continued to improve its customer satisfaction over the year ended 30 June 2019.

Galliford Try net debt stood at £60 million as of 30 June 2019, and average net debt was in line with previous full year guidance, at £187 million. The Company added that the results published in September would include the previously reported £40 million of ‘exceptional items’.

Galliford Try comments

Company Chief Executive, Graham Prothero, commented,

“The Group has continued to perform well, supported by good housing demand. We expect our full year results and average net debt to be in line with previous guidance.”

“We are making strong progress against the operational targets we set out in 2017. We are reviewing our 2021 volume targets to ensure that growth is controlled, and our gearing is managed. Despite the weaker economic outlook, Linden Homes continues to see robust demand, with operating efficiencies driving strong margins and improving customer satisfaction. Partnerships & Regeneration is well on track with its aspirations for exciting growth in both revenue and margins, with some key wins in the period and further good opportunities across the market. We are pleased that the restructure of the Construction business is now complete. The business is now firmly focused on its core strengths of regional building operations, together with profitable operations in highways and water, all of which are now performing effectively. I look forward to the next financial year with the appropriate strategic priorities in place across the Group.”

Investor notes

Following the update, the Company’s shares have rallied 5.97% or 36.5p during morning trading on Wednesday, up to 647.5p a share 17/07/19 10:44 BST. Peel Hunt analysts reiterated their ‘Add’ stance, while Liberum Capital analysts reiterated their ‘Buy’ rating on Galliford Try 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), MJ Gleeson PLC (LON: GLE), Somero Enterprises Inc (LON: SOM), Bovis Homes Group plc (LON:BVS) and Telford Homes plc (LON: TEF).  

IRN-BRU maker AG Barr goes flat

Andrew Hore
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1
IRN-BRU maker AG Barr goes flat

IRN-BRU owner AG Barr (LON: BAG) lost more than one-quarter of its value after its pre-close trading statement. Volumes have been hit as AG Barr tries to improve margins.
Interim revenues are expected to decline 10% to £123m. Even with an improvement in the second half, pre-tax profit is still likely to be one-fifth lower.
Volumes
The soft drinks maker had been focusing on volume rather than margin in the previous financial year, because of the changes in the market, such as the soft drinks industry levy on the more sugary drinks.
Since March the focus has been on pushing up prices in order...

Rio Tinto cost guidances affected by operational challenges

Jamie Gordon
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9
Rio Tinto cost guidances affected by operational challenges
Iron ore company Rio Tinto plc (LON: RIO) changed its iron ore cost guidance following lower output caused by operational challenges and adverse conditions. The Company noted that iron ore output in the Pilbara region in Australia was down by 7% in Q2, caused by tropical cyclone Veronica and a fire at Cape Lambert. This caused production for the three months to June in Australia to fall to 79.7m tonnes, while shipments fell 3% to 85.4m tonnes. Following these developments, the Company cut its annual volume guidance to 320 to 330 million tonnes. On Tuesday, it adjusted its guidance up from $13-$14 to $14-15 per tonne. Further, the Company adjusted its cost estimate for its Oyu Tolgoi copper project in Mongolia. It said that the estimate rose from $5.3 billion to between $6.5 and $7.2 billion, and that production would be delayed until at least 2022. This delay was attributed to what the Company described as the consideration of new mine designs and represents a delay of between 16 and 30 months. Currently, however, copper production was down 13% in Q2, while bauxite was up 1%, aluminium plateaued and titanium dioxide production grew 31%.

Rio Tinto comments

Company chief executive J-S Jacques said, “We saw a challenging operational performance across our portfolio in the first half, while also investing in future growth at Richards Bay Minerals and Resolution. Whilst we experienced operational and weather issues at our iron ore operations in Australia, pricing and market demand has remained robust. We remain focused on safely improving and optimising the performance and productivity of our assets in order to drive future cash flow. This, combined with our value over volume strategy and the disciplined allocation of capital, will continue to deliver superior returns to our shareholders in the short, medium and long term.”

Investor notes

The Company’s share price dipped 0.53% or 26p to 4,842p a share 16/07/19 15:04 BST. Analysts from Barclays Capital reiterated their ‘Underweight’ stance, Liberum Capital reiterated their ‘Buy’ stance and Deutsche Bank reiterated their ‘Hold’ stance. Elsewhere in the mining and minerals sector, recent updates have come from; Bushveld Minerals Limited (LON: BMN), Kavango Resources PLC (LON: KAV), Anglo Asian Mining plc (LON: AAZ), Anglo Asian Mining plc (LON: AAZ) Pan African Resources (LON: PAF), Keras Resources PLC (LON: KRS), Jubilee Metals Group PLC (LON: JLP) and Ariana Resources plc (LON: AUU).

Burberry sales growth led by brand transformation

Jamie Gordon
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3
Burberry sales growth led by brand transformation
London-based fashion brand Burberry Group plc (LON: BRBY) has seen sales rise in the first quarter, on the back of the Company’s efforts to adjust the public’s perceptions of the brand.

“Excellent consumer response to Riccardo Tisci’s product with new collections delivering strong double-digit percentage growth compared to prior year equivalent collections, in line with our expectations.” The Company said in its statement.

The Company noted that sales in men’s and women’s apparel grew by ‘a double digit percentage’, and that retail revenue grew from £479 million to £498 million during the quarter. Regarding the roll-out of its new image, Burberry said that its new product range made up 50% of its store offering by the end of the quarter, and that 23 stores were now aligned with the Company’s creative vision. It added that it continued to shift consumer perceptions of the brand with social media traction, press coverage and organic endorsement from influencers.

Burberry comments

Marco Gobbetti, Chief Executive Officer of the Company, added the following insights,

“This was a good quarter in our multi-year journey to transform Burberry. We increased the availability of products designed by Riccardo, while continuing to shift consumer perceptions of our brand and align our network to our new creative vision. The consumer response was very promising, delivering strong growth in our new collections. We are on track with our plans and we confirm our outlook for FY 2020.”

The Company’s trading highlights continued,

“Asia Pacific grew by a high single-digit percentage driven by Mainland China up mid-teens […] EMEIA grew by a low-single digit percentage supported by tourist spend, which particularly benefited the UK […] Americas was flat, the US grew by a low-single digit percentage but Canada was negatively impacted by a later markdown period.”

“Accessories declined with the benefit from new styles more than offset by the softer performance of lines from previous collections.”

“Space -2% including the planned non-strategic store rationalisation programme.”

Investor notes

Following the update, the Company’s shares rallied 11.93% or 237.5p to 2,228.00p a share 16/07/19 14:26 BST. Elsewhere in retail and on the highstreet, there have been updates from; Associated British Foods plc (LON: ABF), H&M (STO: HM-B), Sports Direct International Plc (LON: SPD), and Superdry (LON: SDRY).

City of London Investment Group shares dip on mixed results

Jamie Gordon
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2
City of London Investment Group shares dip on mixed results
Specialist asset management company City of London Investment Group PLC (LON: CLIG) sees increased funds under management but reduced pre-tax profits. The Company focuses on emerging markets and closed-end funds. In its trading update for the full year ended 30 June 2019, City of London Investment Group stated that its funds under management were up 6% from £3.9 billion to £4.2 billion year on year. However, the Company’s overheads also grew from £12.5 million to £12.9 million on-year, and pre-tax profits fell from £12.8 million to £11.4 million for the year ended 30 June.

The Company noted these results were unaudited.

City of London Investment Group statement

The Company’s update continued with the following strategic and financial updates, “The core EM strategy outperformed (by approximately 300 bps, net of fees) for the full year as discounts narrowed and country allocation was positive. The Developed, Opportunistic Value (formerly GTAA) and Frontier strategies all recorded negative relative performance due to a combination of negative NAV and country allocation effects.”

“For the year to 30 June 2019, the Group expects that pre-tax profits will be approximately £11.4 million, including NCI profit of £0.2million, (2018: £12.8 million, NCI nil). Profits after an anticipated tax charge of £2.4 million (21% of pre-tax profits) will be approximately £9.0 million (2018: profits of £10.1 million after a tax charge of £2.7 million, representing 21% of pre-tax profit) of which £8.8m will be attributable to shareholders of the Company. Basic and fully diluted earnings per share are expected to be 34.9p and 34.1p respectively (2018: 39.5p and 39.3p).”

“The Board is recommending a final dividend of 18p per share (2018: 18p). This would bring the total dividend payment for the year to 40.5p, including the special dividend of 13.5p paid in March (2018: 27p, special nil). Dividend cover, excluding the special dividend, equates to 1.3 times (2018: 1.47 times).”

Investor notes

After dipping by over 2.7%, the Company’s shares are currently not live; they closed at 430.00p per share 16/07/19 13:46 BST. Elsewhere in wealth management, there have been updates from; Miton Group PLC (LON: MGR), Walker Crips Group plc (LON: WCW), Liontrust Asset Management PLC (LON: LIO), Mattioli Woods (LON:MTW), Intermediate Capital Group plc (LON:ICP) and Babcock International Group PLC (LON:BAB).

CloudCall shares dip despite improved revenues

Jamie Gordon
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1
CloudCall shares dip despite improved revenues
Cloud-based communications technology company CloudCall Group plc (LON: CALL) displays on-year improvement in financial performance in its trading update for the first half 2019. The Company’s financials displayed comparative growth in H1 revenues, which were up 30% from 2018 to £5.2 million. Recurring revenues were up 34% on-year for the same period on-year, with the US market making up 40% of recurring revenues. New order volumes were up 44% year-on-year for the first half and users are up 37% versus H1 2018, to almost 37,000. In Q2 2019, monthly net user growth exceeded 1,000 per month. The Company added that it agreed terms with Shawbrook Bank for a £3 million debt facility, and that it had cash resources of £4.5 million through its own cash, its credit facility and its expected R&D tax credit. “Churn remains low and factoring in upsells, net renewal rates from existing customers remain above 100%, helping to drive revenue and user growth.” The Company said.

CloudCall comments

CEO of the Company, Simon Cleaver, stated, “As our ‘net user growth’ KPIs clearly show, the first half of 2019 was another period of solid quarteron-quarter acceleration, and I fully expect this trend to continue for the remainder of the year.” “The “four pillars of growth” strategy we have in place is delivering results and despite some of our initiatives running at different speeds, is clearly already growing sales and visibly strengthening our pipeline of opportunities.” “Whilst I am obviously pleased to note sales are growing strongly, and that we tracked above our target of 1,000+ net new users per month in Q2, for me, the standout development of the half has been the quantum change in larger customers that are considering adopting CloudCall’s services. A number of these are very large, which if won, would have a significant impact.” The Company said in its statement, “At its Capital Markets Day in January 2019, the Company explained that investments being made are expected to drive growth in four areas (‘the four pillars of growth’), pushing the important ‘net user growth’ KPI to over 1,000 per month on average for 2019. We are therefore pleased to report that in Q2 2019, monthly net user growth averaged 1,027.” “Over the full 6-month period, monthly net user growth averaged 932, taking the total number of users to just under 37,000, an increase of 37% against H1 2018. A full breakdown of our average monthly net user growth since these investments were made can be seen below.”

Investor notes

The Company’s shares dipped 11.26% or 13.40p to 105.60p a share 16/07/19 11:01 BST. Elsewhere in the tech sector, there were updates from; 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), Vela Technologies Plc (LON: VELA), Remote Monitored Systems PLC (LON: RMS).
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