Essentra announces acquisition of Innovative Components
Milton Keynes-based plastic and fibre product supplier Essentra PLC (LON: ESNT) announced today that it had acquired US company Innovative Components.
The Company completed the acquisition of Innovative Components for an undisclosed cash-free, debt-free consideration funded from ‘existing facilities’, and said it would report its new addition under its components division. ICs manufacturers pins, handles and knobs in the North American market.
Attached to the update, Essentra posted ICs’ revenues for the full-year ended 31 December 2018, which stood at $11 million.
H&M shares rise as summer sales begin brightly
H&M said on Thursday that it has begun the summer season well as sales are estimated to rise for the month of June.
Shares in the fashion retailer (STO:HM-B) rose over 9% on the announcement.
The Swedish company said in its half-year results that sales of the summer collections got off to a “very good” start.
Net sales in the month of June is predicted to grow by 12% in local currencies compared with the same month a year earlier.
As for its half-year results, the company’s net sales increased by 11% from 1 December 2018 to 31 May 2019. In local currencies, net sales increased by 5%.
H&M, whose pre-tax profit for the second quarter amounted to 5.9 billion crowns, said that it also successfully launched an online store in Mexico during the quarter.
“The H&M group continues to increase full-price sales, reduce markdowns and increase market share, showing that customers appreciate our collections and the improvements we are making to the product assortment and the customer experience,” said Karl-Johan Persson, CEO.
“Sales developed well in most markets. We had strongest growth in countries such as the US where we grew sales by 17 percent, in Mexico by 25 percent, in India by 39 percent, in Russia by 19 percent and in Poland by 11 percent in local currencies. We also grew in the UK and Sweden where we took market share despite challenging market conditions,” the CEO continued.
Indeed, several retailers have been struggling for survival in the UK with the development of the high street crisis. As tough trading conditions take their toll, British retailers have had to face staff cuts and store closures.
In 2018, almost 2,500 stores were closed in the UK, with fashion retailers experiencing the second highest number of store closures on the high street.
In December, H&M issued a trading update revealing a 12% rise in sales for the three months to the end of September, yet investors remained unconvinced by the group’s recover as shares dropped.
As of 11:14 CEST Thursday, shares in H&M Hennes & Mauritz AB (STO:HM-B) were up 9.41%.
Superdry delays release of annual results
Superdry (LON:SDRY) announced on Thursday that it will be delaying the release of its annual results.
Shares in the company were trading just over 2% higher on Thursday morning.
The British fashion retailer said in a statement that it will announce its preliminary results for the 52 weeks ended 27 April on 10 July, rather than on 4 July as previously stated.
The company said that it will be making a non-cash onerous lease and store impairment provision in its full year results, which will benefit the underlying profit before tax in FY19 and subsequent years.
It is because of the “complexity” of the work related to this, in addition to the company’s recent changes in management, that it will be delaying the publication of its results.
Superdry has, however, said that underlying profit before tax for the financial year is expected to be in line with the revised market expectations published at the beginning of May.
The fashion retailer kicked-off the month of May by issuing another profit warning in its trading update for the fourth quarter of the year.
Superdry said that though group revenue was up 3.6% over the course of the year, full-year profit was likely to come in “below the range of market expectations”.
Its founder Julian Dunkerton was recently re-appointed back to the board following a public disagreement with the company’s management.
Dunkerton, who founded the brand in Cheltenham in 1985, returned to the company this year amid a series of profit warnings and after disagreeing with its strategy.
The company had asked its shareholders back in March to reject Julian Dunkerton’s return to the board.
Superdry joins the list of retailers struggling for survival amid the high street crisis to hit the UK. Indeed, the fashion retailer saw its half-year profits crash 49% at the end of last year.
Shares in Superdry plc (LON:SDRY) were up 2.23% on Thursday as of 09:19 BST.
Stagecoach reshuffles Board and profits fall
Scottish-based train and bus company Stagecoach Group plc (LON: SGC), the UK’s largest transport firm, has posted a 63% dip in annual profits owing to the loss of its North American business.
While the company’s pre-tax profit jumped 30% – on a continuing operations basis – to £101.2 million, revenue fell to £1.88 billion. This dip of approximately a third led a fall in full-year pre-tax profit to £23.6 million, down from £63.8 million on-year.
Chief Executive comments
Martin Griffiths, Chief Executive of Stagecoach, maintained a positive outlook with his comments in the Company’s update today. “I am pleased to report good financial results as we reposition the business,” “We continue to focus on driving growth at our core high quality bus and coach operations in the UK, but we have no intention to bid for new UK rail franchises on the current risk profile offered by the Department for Transport.” “We have maintained our expectation of earnings per share for 2019/20.”Changes to the Board
Alongside the latest round of results, the Company announced a series of changes to its Board of Directors. Aside from the change of heart of Karen Thompson, who has decided to remain as Stagecoach‘s Non-Executive Director, all scheduled departures from the Board will take place before the Company’s AGM on the 30th of August 2019. Regarding the Board reshuffle, the Company’s statement read, “Deputy Chairman, Will Whitehorn, will step down from the Board on 30 June 2020, when he will have served for nine years and be regarded as non-independent based on the criteria for independence stated in the UK Corporate Governance Code.”“Will Whitehorn will be succeeded as Deputy Chairman by Ray O’Toole, who joined the Board as a Non-Executive Director in September 2016 and is currently Chairman of the Health, Safety and Environmental Committee and the Remuneration Committee. Ray O’Toole, who is also a member of the Audit and Nomination Committees, has extensive senior experience in the public transport sector in the UK, mainland Europe and North America.”
“In addition, Non-Executive Director, Dame Jayne-Anne Gadhia, has indicated that she will be stepping down from the Board on 31 July 2019 and will therefore now not seek election at the 2019 Annual General Meeting. Dame Jayne-Anne is stepping down to take up the new full-time role of Chief Executive at financial services start-up, Snoop.”Positive outlook for Stagecoach
“Stagecoach, the UK’s biggest bus and coach operator may have been driven down a narrower path than it had scheduled by its corporate sat nav, thanks to shareholder pressure and yet another rail franchise disqualification, but the newly-focused group should now put the board back in the driving seat.”
“The focus on cost-effective coach fares and greener vehicles should fare well. Already the UK’s biggest investor in hybrid-electric bus technology, Stagecoach has invested more than £1 billion in new greener buses over the past decade and a further £80m-plus will see it operating more than 350 new buses and coaches in the UK in 2019/20.”
Investor notes
Only in the early knockings of the new financial year, the outlook doesn’t look as bleak as the fall in earnings might suggest. The Company have kept their full-year dividend steady at 7.7p per share, and shares have rallied modestly by 1.96% or 2.3p in Wednesday morning trading, up to 119.9p per share 26/06/19 12:30 GMT. Analysts did not find a consensus on Stagecoach stock, with Deutsche Bank reiterating their ‘Buy’ rating while Liberum Capital reiterated their ‘Hold’ stance.REC: employers more confident in hiring, investing and UK economy
Employers’ confidence in the UK economy and in their own hiring and investing has improved since the Brexit extension, new data from the Recruitment and Employment Confederation (REC) revealed on Wednesday.
The European Union previously agreed to postpone Brexit for an additional six months until the October 31. With the date coinciding with Halloween, the UK could have a rather poetic ending to their time in the European Union.
According to the Recruitment and Employment Confederation’s JobsOutlook survey, employers’ confidence in making hiring and investment decisions has increased by four percentage points, returning positive at +1.
Confidence in the UK economy has also increased, growing by 3 percentage points but still remaining negative at -26.
“The strength of our jobs market is one of the biggest assets the UK has, as it keeps people in work and raises their pay. Ensuring we protect the flexibility and opportunity it offers should be at the heart of any new government’s agenda,” said Neil Carberry, Chief Executive of the Recruitment and Employment Confederation.
“Today’s survey shows that businesses believe in their own prospects and are ready to grow if the pall of economic uncertainty is removed. The contrast between employers’ view of their own prospects and their view of the wider economic picture remains stark, however. Resolving this will require cool heads through the summer and autumn, so that companies can rely on a smooth and stable new relationship with the EU – not the chaos of a no deal exit,” the Chief Executive continued.
“JobsOutlook again shows how concerned employers are about skills shortages. Recruiters are helping with this, with 92% of hirers saying knowledge and expertise is key to choosing a partner who can help them navigate uncertain times.”
Elsewhere in UK politics, the race to leadership of the Conservative Party is reaching its final lap as Boris Johnson and Jeremy Hunt are the final two candidates to contest the party’s leadership and replace Theresa May.
The Conservative Party’s 160,000 members will now vote to chose the replacement.
Keeping the lid on single-use plastic: Chilly’s Bottles
Earlier this week, Boots announced that it would aim to remove all plastic bags from its stores by 2020. The switch, which began on Monday, will phase out the use of plastic bags across all of its outlets and eliminate 900 tonnes of single-use plastic each year.
Boots is not alone to have made the switch, with McDonald’s also deciding to remove plastic lids from its McFlurry ice cream in all UK restaurants from September, also attempting to align itself with more environmentally friendly policies.
The plastic bags that Boots has eliminated and the plastic lids removed from McDonald’s are examples of single-use plastic. These plastics are only used once by consumers before they are thrown away or recycled.
These single-use plastics, also called disposable plastics, are petroleum based and are not biodegradable, having a detrimental impact on the natural environment.
Whilst some companies, such as Boots and McDonald’s, have been removing single-use plastics from their stores, others have been set up to precisely meet the demand for reusable alternatives, such as bottles, cutlery and straws.
One brand to do so is Chilly’s. The brand was founded in 2010 by James Butterfield and Tim Bouscarle, aiming to provide consumers with the ability to always have water available to them, without having to purchase single-use plastic bottles.
“Chilly’s mission is to accelerate the adoption and everyday use of reusable products. We aim to do this through creating products for an active urban lifestyle, with the perfect balance of distinctive style and unrivalled performance,” the company’s website reads.
The original product to be born from this idea was the eco-friendly Chilly’s Bottle. The bottle has a modern and stylish design that combines the convenience of a single-use plastic bottle with the technology and environmentally friendly benefits of traditional flasks, the company website reads.
Since the original bottle, Chilly’s has also rolled out reusable coffee cups, as well as a range of accessories such as toilet brushes, ice cube trays and reusable straws.
It’s current bottle range includes the new Sea Life Edition that celebrates World Oceans Day.
In 2018 Will the Artist painted his Chilly’s Bottle white as a base for hand drawn illustrations of sea life, in order to raise awareness about the plastic polluting our oceans.
The four Sea Life Edition bottles, each boasting a different sea creature, can be purchased from Chilly’s online store.
In addition to its online site, Chilly’s bottles can be purchased in over 100 nationwide and independent stores in the UK and across Europe.
Creditinfo and ACGF partner to develop credit risk scorecard for Afghan SMEs
Creditinfo Group, a leading global credit information and fintech services provider, announced on Wednesday that it will enter into a strategic partnership with Afghan Credit Guarantee Foundation (ACGF).
The partnership will develop a Credit Risk Scorecard aimed at small-to-medium enterprises (SMEs) in Afghanistan.
Being the first small-to-medium enterprise credit scorecard to be developed for the Afghanistan market, it is expected to not only increase profitable lending to the market, but also provide a range of societal benefits such as increased employment.
Creditinfo, a global supplier of credit bureaus and credit risk solutions, has been active in Afghanistan since 2013. Established in 1997, it is headquartered in Reykjavík, Iceland.
ACGF was established in 2014, after a decade of strong performance by its institutional predecessor Credit Guarantee Facility for Afghanistan. It is a charitable foundation based in Cologne, Germany.
The partnership between the two will lead to an innovative method for assessing the credit risk of small-to-medium enterprises granting credit, according to a company statement.
“Our unique insight into the Afghan credit market, combined with our previous work with the Central Bank of Afghanistan, will help in creating a robust and reliable measure of SME credit worthiness in the country,” said Benjamin Riley, Senior Global Consultant at Creditinfo.
“This will have a significant positive impact on the national economy, by opening up access to more affordable and stable credit to SMEs,” Benjamin Riley continued.
“Globally, SMEs are the driving force behind economic growth, generating employment
opportunities and wealth. However, access to affordable and stable credit is a key factor in the success of the sector,” Bernd Leidner, Chairman of Management Board at ACGF, added.
“Afghanistan is no different in this respect. For years, we have been dedicated to opening up financial access to Afghan businesses. Our next initiative, alongside our trusted partner Creditinfo, will ensure we’re providing the local market with the required tools, consultancy and advice to not just survive, but thrive.”
Earlier this year, Creditinfo also announced that it was set to open a new regional hub in Muscat, after its partnership with the Central Bank of Oman.
Vela Technologies notes Candy Ventures investment in Vibe Group
Tech-based disruptor investor Vela Technologies Plc (LON: VELA) has noted that Candy Ventures has bought up a 23% stake in Luke Massie’s ticket resale platform Vibe Group.
It is understood that Candy Ventures – private investment fund of property billionaire Nick Candy – paid a seven figure sum its stake in Vibe Group, and will now take its place alongside existing stakeholders Vela Technologies and Scott Fletcher.
In response to the update, Nick Candy commented,
“I recognise a lot of entrepreneurial qualities in Luke that I know are crucial for a tech start-up to achieve great things. He has identified real demand from consumers and developed some game-changing products. Candy Ventures is excited for the potential of this investment.”
He added that he was attracted to Vibe’s “game-changing products”Luke Massie followed by saying that,
“This is a significant milestone for the Vibe Group. To have the backing from Nick Candy and his experienced team at Candy Ventures, as well as the continued support from Scott and Vela, is a huge endorsement for the brand.”
“We are gathering momentum at an incredible pace and making major progress in product development. We always put the consumer first and build products that add value to their everyday lives.”
Vela Technologies comment
Vela currently holds a 3.1% stake in Vibe Group, and following the update, the company’s statement wrote, “The Board of Vela (AIM: VELA) notes the media commentary regarding Vibe Group Holdings Limited (“Vibe Group”) and the investment by Candy Ventures, a private investment company owned by Nick Candy, in Vibe Group. Candy Ventures has made an undisclosed investment into Vibe Group for a 23 per cent. equity stake in Vibe Group.”“Following this investment, and based on Companies House filings, Vela holds 5,674 ordinary shares in Vibe Group equivalent to approximately 3.1 per cent. of the issued share capital of Vibe Group.”
https://platform.twitter.com/widgets.jsConfirmation that Nick Candy has bought a 23% stake in our investee co Panu Vibe Group #VibeTickets #VibePay #AIM #CandyVentures #NickCandy Nick Candy takes stake in Luke Massie’s Vibe Group https://t.co/GyH1xppRu6 via @BClouduk
— Vela Technologies (@velatechplc) 24 June 2019
Share price update
The Company’s shares rallied following the regulatory update, up 6% or 0.0057p to 0.1p a share at the end of Tuesday trading 25/06/19 14:44 GMT. Elsewhere in the tech-related sector; Remote Monitored Systems PLC (LON: RMS), Tekmar Group Plc (LON: TGP), Redcentric PLC (LON: RDN), Codemasters Group Holdings Limited (LON: CDM) and Amino Technologies Plc (LON: AMO) provided trading updates.CBI: retail sales crash at fastest annual pace since 2009
Retail sales crashed in June at the fastest annual pace since March 2009, data from the Confederation of British Industry (CBI) reveals.
The CBI’s monthly retail sales balance fell to -42 from -27 in May.
The CBI said that the plunge is likely to be impacted by the relatively cooler weather compared with the same period last year.
Among the retail sector, grocers were the largest contributors to the decline in sales volumes, the CBI data shows.
The hardware & DIY and footwear & leather sub-sectors also reported declines, the CBI said.
Internet sales across the sector stalled in the year to June, the weakest growth since 2009. However, internet sales are expected to pick up again in the following month, though the pace they will do so at will be below the long-run average.
16% of retailers said that sales volumes were up for the month of June compared to last year, comparing to 58% that said they were down.
“This month’s drop in sales should be taken with a pinch of salt, given the backdrop of last June’s heatwave and the start of the World Cup. But even accounting for both factors, underlying conditions on the High Street remain challenging. Retailers are having to continually compete for the attention of value-conscious shoppers, in the age of digital disruption,” said Alpesh Paleja, CBI Principal Economist.
Indeed, last year is particularly difficult to outperform given the summer heat wave and the FIFA Men’s World Cup, which created a summer atmosphere of celebration among the nation.
“The new Prime Minister must help support retailers by reducing the high cumulative burden of costs they face. This should start by urgently reviewing the dire business rates system, which is unfairly impacting UK high streets and deterring much needed investment’,” Alpesh Paleja continued.
The CBI said that though its expects the UK to return to a subdued growth path in the future, Brexit uncertainty and global trade tensions prevail.
Fashion retailer New Look revealed on Tuesday a deeper annual loss in its full year results, whilst Carpet Right (LON:CPR) also made headlines as it posted a narrower loss for the full year.
New data from Kantar also emerged on Tuesday, revealing that supermarket sales rose modestly as the poor weather kick-starts the summer season.
Benchmark on target for full year despite H1 loss
Aquaculture technology firm Benchmark Holdings PLC (LON: BMK) have reported a positive outlook for the full year despite a loss in the first half.
The Company stated that despite the loss, it posted a 3% increase in revenues – now up to £78.3 million – and found that growth in Genetics, Health and Knowledge Services offset the drop in advanced nutrition, despite what were described as ‘challenging’ conditions in the shrimp market.
For the first half, the Company posted an adjusted EBITDA of £7.5 million, up 25% from £6 million for H1 2018. This, the Company said, reflected the effects of cost control and increasing capacity in Norway, as well as the contribution of high value products and an increase in the value of biological assets as a result of growing sales.
However, Benchmark then had to report their £9.1 million loss for the first half, which they said was related to higher finance costs and increased depreciation on recent investments. Further, the H1 for the previous year had the added benefit of a £9.2 million tax credit.
In response to the latest round of results, the Company said full year guidance and results would remain “broadly in line with expectations”.
Elsewhere in the tech-related sector; Remote Monitored Systems PLC (LON: RMS), Tekmar Group Plc (LON: TGP), Redcentric PLC (LON: RDN), Codemasters Group Holdings Limited (LON: CDM) and Amino Technologies Plc (LON: AMO) provided trading updates.
Benchmark comments
The Company’s Chief Executive, Malcolm Pye, said, “We have delivered growth in Adjusted EBITDA and made progress against our strategic priorities despite challenging conditions in the shrimp markets.” “We continue to implement operational and structural efficiency initiatives and we expect the Group to deliver broadly in line with market expectations for the full year.” “We are starting to see benefits from the investments we have made into a number of areas including our new facility in Salten, Norway.” “These investments, combined with the successful completion of our refinancing, leaves us well placed to deliver on our five year strategy to drive future growth and profitability.”Preceding this round of results
Earlier in June, the Company announced the successful undertaking of a refinancing venture and placement of a new senior bond issue. In its statement, Benchmark said, “the Company has today successfully completed a new senior secured floating rate listed bond issue of NOK 850 million (USD $95m equivalent). The bond which matures in June 2023, has a coupon of three months NIBOR* + 5.25% p.a. with quarterly interest payments. This new bond issue will refinance Benchmark’s existing $90m credit facility. DNB Markets acted as Sole Bookrunner for the bond issue. As envisaged, a $15m RCF has been provided by DNB Bank ASA.”“The bond issue was significantly oversubscribed and marks the Company’s entry into the Nordic region debt and securities market, which is globally recognised for its investment in aquaculture, providing the Company with access to a sector specialist investor base.”
Further, the Company announced talks to end its joint venture salmon breeding operation with AquaChile. Company Chief Executive Malcolm Pye stated, “We are pleased to have the opportunity to fully own the world class salmon breeding facility currently owned by the JV and to reinvest the funds to move towards full scale production and commercialisation”. “Whilst this marks a change to Benchmark’s approach to the market, it is a positive step towards fulfilling our key objective of accelerating our establishment of a strong local presence in this important market, in line with our strategy.”