REACT restructuring and sales growth narrow losses
British industrial cleaning company React Group PLC (LON: REAT) posted a narrower first half loss owing to what the Company described as the ‘success of restructuring’ and improved sales.
For the six months through March, the company’s gross profit was up 23% to £419,000, which was led by revenue growth of 8%, up to £1.6 million.
This improved performance caused losses to shrink from £306,000 to £59,000 on-year and while this is still a loss, it resembles a marked improvement and the effects of a change in strategy to a formula that may soon start working.
Further, in its statement, REACT lauded the work done in regard to personnel restructuring (new appointments) and financial restructuring (counting costs and debt collection).
UK gig economy more than doubles in three years, new data shows
The British gig economy has more than doubled over the past three years, now accounting for almost 5 million workers, a report by the TUC and the University of Hertfordshire reveals.
The gig economy is a labour market characterised by the prevalence of short-term contracts or freelance work, according to one definition.
Back in 2016, 1 in 20 working adults were employed in the gig economy. Now a tenth of working adults are in this arena.
As app-driven purchases and services become more popular, many are making the switch to freelance and flexible jobs. This kind of employment allows people to work for multiple employers during flexible hours that better match their lifestyle.
Moreover, research from ETZ Payments reveals that 4.3 million middle class workers have switched to working freelance from traditional jobs.
These employees span across a range of industries such as fintech, finance and medicine.
The flexible style of work is beneficial to both individuals and the country – in 2016, the gig economy contributed £119 billion to the UK economy.
“The gig economy is growing and evolving with more and more Brits choosing to work in this style. App technology is helping the gig economy to grow by providing needed work, but it needs to develop further to ensure that workers are getting paid for their work correctly and on time,” said Nick Woodward, CEO of ETZ Payments.
“It is hugely unnerving to see that many Brits are being dissuaded from pursuing working in the gig economy due to inconsistent and late payments and shocking to see that this is causing over a tenth of freelance workers to turn to payday lenders,” the CEO of ETZ Payments continued.
Earlier in March, UK employment hit its highest rate since records began, according to the Office for National Statistics.
Elsewhere in employment, recent data from the REC shows that employers’ confidence in the UK economy and in their own hiring and investing has improved since the extension of the original Brexit date.
The Renewables Infrastructure Group makes wind farm investments
British renewable energy trust The Renewables Infrastructure Group Ltd (LON: TRIG) announced that it had made two investments in onshore wind power in France, for what is understood to be an undisclosed fee.
It made an investment in a smaller venture, the Epine wind farm in northern France, which it acquired from Nordex (ETR: NDX1) and TTR Energy and has a 36 megawatt output.
The larger project it undertook was the acquisition of all shareholder loans and a 34.6% equity interest in holding company Fujin, which owns five wind warms in France with a collective generation output of 87.8 megawatts.
The Renewables Infrastructure Group comment
In its statement, the Company told investors, “The Board of TRIG is pleased to announce that the Company has made two onshore wind investments, increasing the proportion of the portfolio in France from 10% to 13%.”“The Fujin portfolio was acquired with project finance in place which is fully amortising during the subsidy period whilst Epine is in the process of raising project finance which will amortise on the same basis.”
“These investments have both been financed from the Company’s cash resources following its recent fund raise.”
Investor notes
The Trust’s shares have rallied modestly in early morning trading, up 0.55% or 0.7p to 128.5p a share on Friday morning 28/06/19 11:05 GMT. Elsewhere in the wind power sector, there have been recent updates from Tekmar Group Plc (LON: TGP) and Remote Monitored Systems PLC (LON: RMS).Arc Minerals encounters significant copper mineralisation
African-continent-based Copper, Gold and Cobalt mining company Arc Minerals Ltd (LON: ARCM) has announced that it has come across ‘significant copper mineralisation‘ at the Cheyeza East venture, in what was the Company’s maiden drill programme.
Of the two holes drilled, it was the second that intersected and identified the zones of significant mineralisation at Cheyeza East, the company said.
Arc Minerals comments
On the Cheyeza East target area, the Company said in its statement:“The Cheyeza Target Area was one of several areas identified by both the geophysics and geochemistry work programs completed last year. As reported on the 5th June 2019, of particular interest is a 3km by 0.8km area at Cheyeza East where up to 2,792 ppm copper in the soils has been identified and where these two initial holes were drilled.”
“Drilling is continuing at Cheyeza East to test its full extent, both along strike and down dip.”
In response to today’s updates, Arc Minerals Executive Chairman Nick von Schirnding attached the following statement to the press release:“This has been a very satisfactory start to our drilling campaign in Zambia and I am pleased to see that the anomaly identified by the detailed geophysics and geochemistry completed last year has produced results. The drill cores have now been sent for assay and we expect results imminently. Additionally, we have identified another significant anomaly in the west of our licence areas and a further update will follow.”
Investor notes
Following the news, the Company’s shares saw a healthy rally of 6.38% or 0.15p during trading on Thursday, up to 2.5p per share.Elsewhere in the mining sector, recent updates have come from; Ferrexpo Plc (LON: FXPO), Altus Strategies Plc (LON: ALS), Kefi Minerals plc (LON: KEFI) and Galantas Gold Corp (CVE:GAL).
FairFX gains credit broker licence and changes name to Equals Group
E-banking company FairFX (LON: FFX) announced that it would change its name to Equals Group (LON: EQLS) with recent developments to company structures and functions leading the change.
FairFX – Equals Group name change
The Company said the change reflected an evolution, and ultimately the reduced importance of its FX (Forex) business. “The decision to change the Company’s name reflects the evolution of both its operations and product offering, which have diversified in recent years beyond the heritage foreign exchange businesses of international payments and travel money, and further into integrated money management solutions for consumers and businesses, covering banking and payments.”“Since 2017, the Group has almost tripled in size in terms of turnover and its operations have broadened into three significant businesses – FairFX, CardOneMoney and City Forex. The unification of these businesses under a new, distinctive brand will provide further benefits for the Group in terms of supply chain management and efficiency. Whilst foreign exchange expertise and revenues continue to be integral to the Group, the increasing importance of non-FX related activities necessitated a change to a new umbrella brand identity, under which all the services of the Group can be represented. The Group believes this will approach will also optimise customer acquisition, retention and engagement.”
The Company said that the Equals Group brand would be rolled out across its range of products through the course of 2019. It added that this programme would be completed by the year’s end and would ‘optimise cross-selling of products’. In response to the name change, Company CEO Ian Stafford-Taylor said: “The inspiration for the new name comes from a simple piece of insight: that our relentless focus on solving everyday problems by applying our ingenuity equals a better way for our customers to manage their money. Ultimately, we’re helping them to save time and money with a more human touch; an approach which has built great customer loyalty in our business. With a series of new products set to launch in the second half of the year, which will strengthen our position in the SME money management space, it’s a truly exciting time for us and our customers to be moving forward as Equals.”Credit Broker Licence
The company announced that through its subsidiary – Spectrum Payment Services Ltf – it had been granted permission to provide credit facilities by the FCA. This step forward allows the group to act as a broker for loan products to its SME and retail clients. With FairFX (or Equals Group) acting as broker, all loans will be provided by third parties authorised by third party lenders. The loans will not appear on FairFX’s balance sheet and there will be no credit risk for the Group.“Having achieved this regulatory status, following significant investment in its digital banking platform in 2018 and 2019, the Group expects to launch an innovative, highly digitised revolving credit product in partnership with iwoca – an award-winning specialist lender to SME’s – in the coming months. It is intended that this will help small and medium sized businesses to apply and receive a decision in minutes and immediately receive funds. Business customers will be able to choose to receive funds directly into their account or onto prepaid card, either virtual or physical, which will be issued by FairFX Group under its Mastercard membership. With the benefit of FairFX’s membership of Faster Payments, funds could be spent directly and immediately; for instance, in cases where stock needs to be purchased or an urgent invoice be settled.” The Company said in its statement.
In response to this update, Managing Director of Banking Products at FairFX, Adam Rigler, commented: “I am delighted to be able to make this announcement as it is a key milestone on our journey to offering a full range of services to our customers. We now have a clear road ahead to roll out our card-based revolving credit product in the near future, which will radically simplify the process of applying for a receiving funds for a small or medium sized business.”Investor notes
The Company’s shares are currently trading down 1.21% or 1.5p at 123p per share as of Thursday afternoon 27/06/19 14:56 GMT. As of the end of June, the Company’s P/E ratio stands at 71.10.Elsewhere in the e-banking and fintech sector, there are updates from; PayPal (NASDAQ: PYPL), Nationwide (LON: NBS) and Klarna Bank.
Itaconix losses narrowed by restructuring
Chemical producer Itaconix PLC (LON: ITX) posted a narrower loss on-year, in its latest round of results.
The Company attributed the narrowed loss to a restructuring programme undertaken in 2018 – the result of which was a cut to costs by £2 million a year.
Pre-tax losses narrowed from £10.17 million to £7.26 million on-year, and revenues grew from £0.55 million to £0.66 million, with product revenues up 12.9% from £0.54 million to £0.61 million.
Despite losses persisting, the group remain positive and place confidence in revenue growth in their polymer technology platform in 2019.
Itaconix comments
In response to the results, Company CEO John R. Shaw commented: “We are positioned for revenue growth and a focus on profitability with a reduced cost base and global partners in place for our current major products. While the ramp up in 2019 sales was initially delayed, revenue growth is accelerating, with underlying pre-tax losses for the full year decreasing and remaining in line with expectations.” In his report, the Company CEO added: “In June 2018, we announced the downsizing of our research, development, marketing, and administrative operations in Deeside, Wales, to focus on revenue growth and profitability in our three core product areas. As of February 2019, the Group had no employees at the facility.” “After raising new funds and significantly reducing our cost base in 2018, the pace of revenue growth from the uptake of our existing polymers into customer formulations remains our primary focus and the key dynamic to monitor for managing our costs and our cash to reach profitability. The Board firmly believes that the products, active customer projects, and global partnerships are in place to increase overall use of our polymers, gain larger accounts, and generate significant new revenue growth going forward.” It is worth noting, however, that uncertainty persists: “Ultimately, it is uncertain whether our range of Itaconix products will be purchased in sufficient quantity for the Group to be successful in the commercial market. Progress in 2018 has been made to address costs whilst looking to fill unused capacity through developing existing and new commercial partnerships.”Investor notes
The Company’s shares dipped in morning trading on Thursday, down 5.43% or 0.12p a share to 2.18p per share 27/06/19 12:47 GMT. Other recent losses in the chemical and medical tech related sector include; Surgical Innovations Group Plc (LON: SUN), ValiRx Plc (LON:VAL) and NetScientific PLC (LON:NSCI).Wincanton continues meeting expectations ahead of AGM
British logistics provider Wincanton plc (LON: WIN) announced today that it continued to trade in line with expectations.
The update came as part of the Company’s official AGM statement released to investors and press, in which the company confirmed news of the five year contract it had won with Morrisons Supermarkets (LON: MRW), which entailed providing transportation to the supermarket’s stores from three distribution facilities.
Wincanton AGM statement
The Company announced the AGM statement, “Wincanton, a leading provider of supply chain solutions in the UK & Ireland, will hold its Annual General Meeting today at 11 am at the offices of Buchanan, 107 Cheapside, London, EC2V 6DN, at which Dr Martin Read CBE, Chairman, will make the following statement:” The AGM statement read as follows:“The Board confirms that Wincanton continues to trade in line with expectations.”
“As previously announced on 14 June 2019 Wincanton has been appointed by Wm Morrison Supermarkets PLC (“Morrisons”) to provide transportation services from three distribution centres to its stores. The new five-year contract will see Wincanton manage all transportation planning and operations from the three locations to support Morrisons’ network of stores. Wincanton will also be responsible for vehicle maintenance through its fleet management business, Pullman Fleet Services, at five Morrisons sites.”
“As set out in our Full Year results, a final dividend of 7.29p per share in respect of the year ended 31 March 2019 will be payable, subject to approval at today’s AGM, on 2 August 2019 to those shareholders on the register on 5 July 2019.”
Investor notes
The Company’s shares dipped slightly in morning trading on Thursday, down 0.75% or 2p to 265p a share. Numis and Liberum Capital analysts were in consensus, with both reiterating their respective ‘Buy’ stances on Wincanton stock.Zoo Digital shares rally despite posting full-year loss
Cloud software provider Zoo Digital Group plc (LON: ZOO) announced that it had swung to a full-year loss owing to shrinking margins.
The company were able to book a rise in revenue to $28.8 million. However, this success was offset by the Company booking a $1.3 million loss for the full year through March, down $6.3 million from the $5 million profit on-year.
Further, the Company’s adjusted Ebitda fell from $2.4 million to $0.4 million, with its Ebitda margin also shrinking from 8.4% to 1.4%.
Zoo Digital CEO comments
With an unsurprisingly optimistic outlook, Company CEO Stuart Green alluded to the effects of the contracting DVD and Blu-ray market in his reaction to the update:“We have worked hard over the course of the year to enhance our offering, build up our network and differentiate ourselves further from the competition. ZOO now has the technology, the people and the local expertise to enable our clients to deliver content across multiple territories and in multiple languages simultaneously and efficiently. To be chosen as a primary vendor of localisation services for large media companies requires us to demonstrate significant global capacity, and in this regard, we have made excellent progress that puts us in good stead as we continue to grow.”
“Trading in the new year has begun well. Whilst the significant decline in legacy DVD and Blu-ray formats in our digital packaging segment has continued, now leading us to not forecast any significant income from this business line in the future, this has been offset by strong growth related to Over-the-Top (OTT) delivery. We expect ZOO to be confirmed as a preferred vendor to a greater number of clients and lines of business during the course of the year ahead. Our caution around timing is reflective of the dynamic nature of the OTT marketplace and recent experience.”
“The end market into which we are selling our cloud-powered services continues growing and the traction that we are gaining with each of our services gives us great confidence that the business is well placed to meet opportunities and growth in the years to come.”Price Monitoring Extension
Shortly after posting their recent round of results, the Company posted another regulatory update, informing investors and press that they were to undertake a second price monitoring extension. “A second and final Price Monitoring Extension has been activated in this security. The auction call period is extended in this security for a further 5 minutes.” “Following the first price monitoring extension this security would still have executed more than a pre-determined percentage above or below the price of the most recent automated execution today. London Stock Exchange electronic order book users have a final opportunity to review the prices and sizes of orders entered in this security prior to the auction execution.”Investor notes
The Company’s shares have rallied during trading on Thursday morning, up 8.77% or 5p to 62p a share. Analysts from finnCap have reiterated their ‘Corporate’ stance on Zoo Digital stock for the second time in June. Elsewhere in the tech sector; Vela Technologies Plc (LON: VELA), Remote Monitored Systems PLC (LON: RMS), Tekmar Group Plc (LON: TGP), Redcentric PLC (LON: RDN) and Codemasters Group Holdings Limited (LON: CDM) provided trading updates.Klarna and H&M expand partnership to include US market
Fashion retailer H&M and Swedish bank Klarna announced on Thursday that they have expanded their current partnership to include the US market.
H&M and Klarna are aiming to further integrate H&M’s digital and physical stores to provide a “seamless” shopping experience to consumers.
The partnership, which covers all H&M channels online and in-store, will provide smooth payments and include Klarna’s “Shop Now, Pay Later” scheme.
Klarna Bank, the Swedish fintech company founded in 2015, recently received an investment by the American singer, rapper, record producer, television personality, entrepreneur and actor, Snoop Dogg. He also promoted the business as part of a marketing campaign where he was renamed as “Smooth Dogg”.
Snoop Dogg’s investment firm, Casa Verde, has previously added cannabis companies to its portfolio.
Klarna took to Twitter to announce the growth of the partnership:
https://platform.twitter.com/widgets.js “Shopping at H&M should be convenient, relevant and inspiring and we are happy to soon offer fashion fans in selected markets a whole new way of paying their fashion finds. Klarna has helped us develop an H&M-unique payment solution that offers our fans a truly modern shopping experience no matter where and how they choose to shop,” Daniel Claesson, Head of Business Development at H&M Group, commented on the announcement. “The foundation of the Klarna and H&M partnership is a commitment to continuously develop smarter, simpler and engaging shopping experiences. The future of retail is a high touch experience across channels which will delight customers, drive value and build loyalty,” Michael Rouse, the Chief Commercial Officer at Klarna, added. H&M also revealed on Thursday that it has experienced a bright start to the summer season as sales are estimated to rise for the month of June, sending shares up over 9%. Shares in H&M Hennes & Mauritz AB (STO:HM-B) were trading at +9.42% as of 12:26 CEST Thursday.We @Klarna are excited to grow our partnership with @hm to the US! 🇺🇸🙌Together, we’ll develop an unrivalled shopping experience across touchpoints for consumers in one of the world’s most exciting retail markets! 🛍️🎉https://t.co/57U5QnoiRw pic.twitter.com/GPOpQeUfYO
— Klarna (@Klarna) June 27, 2019
UK car production falls for 12 consecutive months, no-deal Brexit “not an option”
UK car manufacturing has dropped for 12 consecutive months, new data on Thursday from the Society of Motor Manufacturers and Traders (SMMT) reveals.
A no-deal Brexit is “not an option” now for the automobile sector, according to the Chief Executive of SMMT.
According to the industry body, UK car production dropped 15.5% in the month of May, as 21,239 fewer units were manufactured throughout the month.
Overall output for the year is now down 21% as May’s drop contributes to 12 consecutive months of decline.
The decline in overall UK output is partly caused by some manufacturers deciding to bring forward plant shutdown plans to April, in anticipation of the original Brexit date in March for the UK’s departure, the SMMT said.
“12 consecutive months of decline for UK car manufacturing is a serious concern and underlines yet again the importance of securing a Brexit deal quickly. The sector is facing multiple seismic challenges simultaneously: technological, environmental and economic,” SMMT Chief Executive Mike Hawes commented on the data.
“The ongoing political instability and uncertainty over our future overseas trade relationships, most notably with Europe, is not helping and, while the industry’s fundamentals remain strong, a brighter future is only possible if we secure a deal that can help us regain our reputation as an attractive location for automotive investment. No deal is not an option,” the Chief Executive continued.
A no-deal Halloween departure form the European Union could be scary for the automobile sector.
For the month of May, manufacturing for domestic buyers fell by 25.9%, whilst overseas orders were down 12.6%.
Exports accounted for 80.9% of all cars produced, which underlines the importance of maintaining free and frictionless trade, the SMMT said.
In UK politics, the race to lead the Conservative Party is reaching its final lap with Boris Johnson and Jeremy Hunt as the final two candidates to contest the party’s leadership.