John Menzies board reshuffle following profit warning

Jamie Gordon
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John Menzies board reshuffle following profit warning
Aviation services Company John Menzies plc (LON: MNZS) announced a series of board changes following its profit warning last week. The Company announced that its presiding Chairman of the Board, Dr Dermot F Smurfit, will vacate his position on the Company’s board and be succeeded by Philipp Joening, who is the current non-Executive Director. Further, the Company said that the new Deputy Chairman will be David Garman, who currently holds the office of Senior Independent Director.

Menzies Board comments

The John Menzies Board commented on the update, with Dr Smurfit beginning,

“I have greatly enjoyed my time with Menzies during which we have delivered on a number of key corporate and financial objectives. I wish the Group and its 36,000 employees the very best for the future as it embarks on the next stage of its journey. I believe that this now requires an industry specialist to bring Menzies to a new level of excellence. I wish my successor, Philipp Joeinig every success in that mission.”

David Garman, followed,

“On behalf of the Board, we would like to recognise and record our sincere appreciation to Dr Smurfit for his significant contribution to our business. He has been an effective and excellent Chairman and we wish him well with his future endeavours.”

Incoming chairman, Philipp Joeinig, added,

“I am very honoured to have been appointed to succeed Dr Smurfit as Chairman of John Menzies plc. I believe the Group has a very exciting future and I look forward to working with the Board and the management team as we look to progressively grow the business and deliver returns to our shareholders.”

The Company’s details then enclosed the following,

“Dr Smurfit joined the Board in July 2016 and oversaw the $202m transformational acquisition of ASIG Ltd, successfully sectioned the defined benefit pension scheme and, most recently, completed the sale of Menzies Distribution, exiting the Group from the print media logistics sector.”

“Following the Distribution sale, the Group’s transformation is now complete and Menzies is a pure play Aviation Services business that is very well placed to prosper in the fast-moving aviation sector.”

Investor notes

Following the update, the Company’s shares 0.82% or 3.5p to 423.5p a share 12/07/19 12:54 GMT. Shore Capital, Berenberg and Peel Hunt all reiterated their respective ‘Buy’ stances on John Menzies stock. Elsewhere in aviation, there have been updates from; Wizz Air (LON: WIZZ), Thomas Cook (LON:TCG) and Ryanair Holdings Plc (LON:RYA).

Nu-Oil and Gas shares dip on $1.1m Statement of Claim by PVF

Jamie Gordon
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Nu-Oil and Gas shares dip on $1.1m Statement of Claim by PVF
Oil and gas production company Nu-Oil and Gas PLC (LON: NUOG) has seen its share price dip following a statement of claim filed against its subsidiary Enegi Oil Inc, in regard to the Production Lease 2002-01A and interactions with its partner Company at the asset, PVF Energy Services Inc. After signing a Production Sharing Agreement on the 30 January 2017, Enegi and PVF attempted to decide an appropriate course of action to progress the asset, following ‘issues arising during the work programme carried out by PVF’.

According to the Company, it received notice on the 10 July 2019 that PVF had submitted a Statement of Claim to the Supreme Court of Newfoundland and Labrador General Division on 26 June 2019. This was despite the Company having – as it described – made efforts to try to find a resolution within the bounds of the PSA. The sum claimed by PVF totalled C$1,122,325.73.

Nu-Oil and Gas statement

The Company’s statement continued,

“The PSA clearly states that PVF will carry out the work programme ‘at its sole cost, risk and perils’ and that costs properly incurred in carrying out the programme are reimbursable out of production from a well and not by Enegi. The Directors therefore believe that there is no merit in the Claim.”

“Further, the PSA provides for a clear process for the resolution of any dispute or claim arising out of the agreement. PVF has not followed the prescribed process. The Company has taken initial legal advice and is considering its options, one of which is, on this basis, to challenge the jurisdiction of the Court in this matter.”

“The Company does not believe that defending the Claim, against its subsidiary, will have any significant impact on its future activities.”

Executive Chairman of Nu-Oil, Graham Scotton, added the following comments,

“The Company has been attempting to work with PVF in good faith to find an appropriate way forward for Garden Hill, despite the operational issues encountered, and we are surprised and disappointed that PVF has chosen to take this action, in contravention to the terms for dispute resolution and cost recovery in the agreement signed by the parties.”

“The Company is obliged to notify the market of this situation irrespective of our opinion on the basis for the Claim. The situation will take time to resolve, however I do not expect it to affect our ongoing efforts to secure new assets or have any impact on the Company’s funding requirements. I look forward to being able to reappraise the options for Garden Hill, as part of Nu-Oil’s planned portfolio, once this dispute is resolved.”

Investor notes

Following the update, Nu-Oil and Gas shares have made a slight recovery but still sit 10% or 0.023p down on market opening price, at 0.21p a share 12/07/19 12:05 GMT. Elsewhere in the oil and gas sector, there have been updates from; PetroTal Corp (CVE: TAL), Hurricane Energy plc(LON: HUR), TLOU Energy Ltd (ASX: TOU), Eland Oil and Gas PLC(LON: ELA), IGas Energy PLC (LON: IGAS), Anglo African Oil and Gas (LON: AAOG), Nostra Terra Oil and Gas plc (LON: NTOG) and Prospex Oil and Gas Plc (LON: PXOG).

Pan African Resources reports rise in gold mining and processing volumes

Jamie Gordon
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Pan African Resources reports rise in gold mining and processing volumes
Gold ore mining and processing company Pan African resources (LON: PAF) posted increases to its mining and processing in its update for the year ended June 30 2019. The Company told investors in today’s update that gold production from its continuing mining operations spiked 54.1% to 172,442oz and said production from its continued and discontinued operations was up by 7.5%. Its largest operation, Baberton Mines, saw production rise 9.6% to 99,636oz of gold, while Evander mines’ volumes grew from 21,250oz to 26,878oz year on year. Its Elikhulu tailings retreatment plant operation produced 46,201oz of gold, which exclude pre-production gold volumes of 736oz. Pan African Resources added that the plant processed 10.85 million tonnes from the period between September 2018 and June 2019.

Pan African Resources comments

Pan African CEO Cobus Loots added the following insights, “Pan African has emerged at year-end as a safe, low-cost and long-life gold producer, following the successful execution of our strategy. We exceeded the full year production guidance of 170,000 ounces, resulting in the Group’s gold production increasing by 7.5% to 172,442oz – or 54.1% on continuing operations relative to the corresponding reporting period.” “This has been delivered through the cessation of the high cost underground mining at Evander Mines, the successful commissioning of the Elikhulu tailings retreatment plant, and Barberton Mines achieving a significant increase in production. Critically, Barberton Mines achieved a historical milestone of 2 million fatality free shifts during June 2019 and we commend the team for this safety achievement.” “We continue to assess the optionality of our portfolio and are looking to build upon this year’s momentum to drive further growth. Evander’s 8 Shaft Pillar mining is expected to contribute an additional 20,000oz to 30,000oz per annum for the next three years. The Group is currently reviewing the merits of expediting the Egoli project and is assessing funding options. Progress is also being made with the underground mining project feasibility study at Royal Sheba and we look forward to communicating the results to shareholders in the near future.” “We are also very mindful of the positive socio-economic impact that the mining industry has on communities and are proud of the way we manage our stakeholder relations. That said, we continue to experience certain challenges amongst specific stakeholder groups, which have impacted Barberton Mines, and are working in conjunction with law enforcement and other stakeholders to remedy the situation.” “As previously announced, the 2020 financial year production guidance will be approximately 185,000oz, representing an important increase in our year-on-year gold production profile.”

Investor notes

The Company’s shares have rallied 5.71% or 0.6p so far in Friday morning trading, up to 11.1 p per share 12/07/19 11:46 GMT. Peel Hunt analysts reiterate their ‘Buy’ stance on Pan African Resources stock. Elsewhere in the mining and minerals sector, recent updates have come from; Keras Resources PLC (LON: KRS), Jubilee Metals Group PLC (LON: JLP), Ariana Resources plc (LON: AUU), Caledonia Mining Corporation Plc (TSE: CAL), Regency Mines Plc (LON: RGM), Acacia Mining PLC (LON: ACA), Arc Minerals Ltd (LON: ARCM) and Thor Mining PLC (LON: THR).

Sophos rallies on improved revenues and profitability in Q2

Jamie Gordon
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Sophos rallies on improved revenues and profitability in Q2
Provider of next-generation cloud-enabled enduser and network cybersecurity solutions, Sophos Group plc (LON: SOPH) saw its share price rally in Friday morning trading, following a quarterly performance update which saw consistent financial improvement. Sophos Group said subscription revenue was up 10% on a constant currency basis while ‘MSP’ and ‘ARR’ were up 78% on a constant currency basis, to $31.8 million. This pushed overall revenues up 3% despite an 11% reduction in hardware revenue. Enduser billings were also up 17% on constant currency, Network billings grew 1%, Sophos Central billings grew 49% to $64.3 million and the Company’s ‘next gen’ business grew 43% to $100.2 million on a constant currency basis. Overall, billings grew 5% to $183.1 million. Adjusted operating profit was up 10% year in year and Cash Ebidta rose 31%, though reported operating profit was said to be down to ‘breakeven’ due to a one-off restructuring charge.

Sophos Comments

Company Chief Executive Officer, Kris Hagerman, commented on the update,

“This has been an encouraging start to the year which underpins our confidence in our prospects for the full year. The demand environment continues to be strong, and as we noted at the full-year, we believe we have a highly effective and differentiated next-generation security product portfolio that positions Sophos very well. Along with encouraging overall company growth, we saw significant continued growth in our next-generation products, including Sophos Central, Intercept X endpoint, XG Firewall, and our MSP business. Consequently, we believe we are well positioned for continued future growth.”

The Company spoke on the impact of IFRS 16 leasing,

“The results for Q1 FY19 reflect the adoption of IFRS 16 “Leasing”. The impact is consistent with the expected impact disclosed in the Annual Report and Accounts for the year-ended 31 March 2019; though the Directors will continue to monitor industry practice and experience of implementation through the coming months and update their assessment of the impact on the Group if required.”

Investor notes

The Company’s shares have rallied 4.19% or 17.3p to 430p per share 12/07/19 11:26 GMT. Liberum Capital and Deutsche Bank retain their ‘Hold’ stances on Sophos Group stock, while JP Morgan Cazenove upgraded its stance from ‘Neutral’ to ‘Overweight’. Elsewhere in the tech sector; MiriAd Advertising plc (LON: MIRI), Zoo Digital Group plc (LON: ZOO), 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.  

Medicinal cannabis company Freyherr to list on NEX

Dina Caruso
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Medicinal cannabis company Freyherr to list on NEX
Medicinal cannabis company Freyherr revealed plans on Friday to list on the NEX exchange in London, as regulation in Europe begins to relax. The first day of trading is expected to be just a few weeks away on 30 July, Freyherr said in a company statement. Freyherr International Group plc is the UK parent company of a business engaged in the production of medicinal cannabis, cannabis cultivation and the production of cannabis dosing and dispensing packaging. Operations are centred in Slovenia and the business mainly operates within the EU. The laws concerning the use of medicinal cannabis are beginning to relax, and it is now legal for medical purposes in 22 countries within Europe. Additionally, six EU member states are expected to be announcing legislation later on this year, the latest being France. By 2028, the European cannabis market could be worth up to €123 billion, according to the market intelligence firm Prohibition Partners. The benefits of medicinal cannabis have become more widely accepted as the list of conditions that it can be used to treat continues to grow. Medicinal cannabis may help conditions such as epilepsy, glaucoma, Alzheimer’s, Crohn’s disease, Parkinson’s disease and chronic pain, in addition to assisting cancer patients having chemotherapy. Freyherr emphasised that for international cannabis companies, Europe is one of the most difficult markets to enter as a result of its strict regulatory framework, complex licensing and trading requirements and cultural and societal nuances concerning the consumption of the drug. Elsewhere in the cannabis industry, Sativa Group plc recently opened its first store of a planned national chain of CBD wellness retail stores. The first of these opened in Bath at the beginning of the month and provides a range of over 50 CBD products, offering consumers the opportunity to try CBD infused coffee and tea.

Higher services growth at Speedy Hire

Andrew Hore
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Higher services growth at Speedy Hire

Speedy Hire (LON: SDY) continues to grow its services much faster than its hire revenues, according to its AGM trading statement.
In the first quarter of the current financial year, the equipment hire and services provider grew higher margin services revenues by 13.4%, compared with 1.2% growth in hire revenues. The disparity in growth rates is increasing.
In the year to March 2019, continuing revenues were 6% ahead at £389.2m, while underlying pre-tax profit was 19% higher at £30.9m. Services revenues were 10% ahead and hire increased by 3.5%.
Attempts to broaden the smaller company custome...

Walker Crips shares dip on lower profits and flat AUM

Jamie Gordon
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2
Walker Crips shares dip on lower profits and flat AUM
Investment management company Walker Crips Group plc (LON: WCW) said it had consolidated its position by innovating to expand its business base. This came along with the following results as part of the Company’s trading statement for teh full year ended March 31 2019.

The Company said that revenue remained the same as 2018, at £30.5 million. Similarly, Group AUM and Discretionary AUM remained level at £5.0 billion and £3.3 billion respectively, on a year-on-year basis.

Underlying operating profit before tax and exceptional items, however, fell from £906,000 to £434,000 on-year, while reported profit before tax also dropped from £924,000 to £489,000 for the full year.

Walker Crips comments

Attached to the update, Company Chairman David Gelber added the following insights,

“Notwithstanding this, reported revenue has remained stable with a significant improvement in fee income, offsetting the decline in broking commissions of £2.3 million.”

“The Group continues its efforts to help clients achieve greater returns by transferring to our discretionary or portfolio-managed mandates, which also generates more stable fee-based revenue. These efforts, and the decline in less predictable transaction-based shared commission income during the year, mean the ratio of non-broking revenue to total income has improved to 71.6% (2018: 64.1%).”

“We are closely monitoring the Government’s progress around Brexit and the impact of the present uncertainty. Given the Group’s predominantly UK centric customer base and operations, the impact of Brexit manifests in second order effects including lower trading volumes as the uncertainty influences investor sentiment. During this period, we continue to maintain a material cash buffer, regulatory capital headroom and a dividend policy that allows continued investment in new revenue stream initiatives, technologies to improve customer experience and achieve procedural and process efficiencies, and to build our ‘Software as a Service’ offering. We are committed to a programme of tightly controlling non development expenses, pushing through revenue initiatives and creating new product offerings.”

CEO Sean Lam then continued,

“Last year, we embarked upon a new vision – “Walker Crips, a Technology Driven Financial Services Company”. All the core objectives of shareholder value, customer service, operational effectiveness and efficiency, are still there, but only by emphasising and investing in technology as the delivery mechanism will the core objective be achieved. Our transformation is underway and gathering pace as we progress toward this objective.”

Investor notes

The Company’s shares dipped 2.78% or 0.75p to 26.25p a share 11/07/19 14:56 GMT. Elsewhere in wealth management, there have been updates from; Liontrust Asset Management PLC (LON: LIO), Mattioli Woods (LON:MTW), Intermediate Capital Group plc (LON:ICP) and Babcock International Group PLC (LON:BAB).

Liontrust Asset Management net inflows and AUM rise in last quarter

Jamie Gordon
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3
Liontrust Asset Management net inflows and AUM rise in last quarter
Specialist independent fund management company Liontrust Asset Management PLC (LON: LIO) issued a trading update for the period from 1 April to 30 June.

The Company noted that net inflows more than doubled from £320 million for the same period in 2018, to £725 million for the quarter in 2019.

Further, assets under management increased by 11% from £12.7 billion on 31 March, to £14.1 billion on 30 June 2019.

Liontrust Asset Management comments

Company Chief Executive John Ions, said,

“Liontrust has had a successful start to the new financial year, with net inflows of £725 million over the quarter and AuM reaching £14.1 billion on 30 June 2019. This maintains the momentum behind the business of the past year and shows that our growth strategy is on track.”

“This has been achieved through strong long-term investment performance, the quality of Liontrust’s sales and marketing, the increasing breadth of our client base and the robust infrastructure of the business.”

“The level of net inflows also demonstrates the continued attraction of actively managed funds which can demonstrate rigorous and repeatable investment processes.”

“We are well positioned to sustain the Company’s growth trajectory and will accomplish this by maintaining focus on our business strategy, ensuring we continually meet client and investor expectations and through the excellence of our fund management, sales, marketing and administration teams.”

The Company did caveat these projections and insights, however, “These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that have not yet occurred. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. As a result, the Liontrust’s actual future financial condition, results of operations and business and plans may differ materially from the plans, goals and expectations expressed or implied by these forward-looking statements.”

Investor notes

The Company’s shares rallied 2.85% or 22p a share to 794p a share 11/07/19 16:35 GMT. Numis analysts reiterated their ‘Add’ stance on Liontrust stock. Elsewhere in asset management; Mattioli Woods (LON:MTW), Intermediate Capital Group plc (LON:ICP) and Babcock International Group PLC (LON:BAB) posted updates.

European property: what can £650,000 get you?

Dina Caruso
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0
European property: what can £650,000 get you?
The average London property price stands at £654,925 for July 2019, according to current Zoopla estimates. But what if you could spend the equivalent of this elsewhere in the world? We take a look at what roughly £650,000 can get you in three cities dotted around Europe.

Milan, Italy

Located in the northern Italian region of Lombardy, Milan is one of the fashion capitals of the world. From its famous Gothic Duomo that towers over the city, to the Santa Maria delle Grazie convent that houses Leonardo da Vinici’s “The Last Supper”; Milan is a popular destination among tourists as it offers Italian history, art and culture mixed with a cosmopolitan vibe. But what about actually moving to the city for good? According to current Right Move listings, a three bedroom flat in Milan with bright terraces will set you back €682,000. The apartment currently being advertised at the above price is located west of the city in San Siro and is well connected to the centre with metro, tram and bus links close by. The apartment itself has four rooms in a modern building with breathtaking panoramic views over the city.

Budapest, Hungary

Capital City of Hungary, many tourists flock to Budapest each year to experience its nightlife, spas, culture and history for themselves. The city is split by the River Danube, with the Chain Bridge connecting the hills of the Buda district to flat Pest. The equivalent of £648,000 will get you a three bedroom apartment in the heart of Budapest, as listings on Right Move show. The 155 sqm property is located on the third floor of an old classical building with a lift, constructed by the same architect of the Hungarian Opera House. The Hungarian Opera House, one of the city’s most famous landmarks, is directly opposite the apartment. The apartment boasts three bedrooms, one walk in closet, one living room, one work/guest room, two kitchens, two bathrooms, three toilets and a fireplace.

Amsterdam, the Netherlands

Known for its unique yet intricate canal system, Amsterdam is the Capital City of the Netherlands. Home to the Van Gogh Museum, Amsterdam is perhaps better known among young people for its relaxed laws concerning marijuana. According to Right Move, €650,000 can get you a two bedroom apartment just south of the city centre. The apartment is flooded with natural light and is located in one of the most visually charming lanes in Amsterdam Zuid. The property is just a walk away from the Amsterdam Zuid train station, connecting the area to Central Station. A number of primary and secondary schools can be found close to the property. The apartment has a wood floor throughout, with the exception of one of the bedrooms and the kitchen. It also still has several of its original stained-glass features.

Keras Resources positive results in Nayega Manganese test

Jamie Gordon
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2
Keras Resources positive results in Nayega Manganese test
Technologically innovative metal producing company Keras Resources PLC (LON: KRS) saw its share price rally modestly after the test of a 10,000 tonne sample of its Nayega Manganese Project yielded promising results. In concluding highlights, the Company discussed the resource’s properties. It stated that Nayega ore is suited to production of silico-manganese alloy and that Nayega manganese leaches more favourably than South African carbonate ores. The Company added that solutions produced contained minimal impurities, which would be optimal for downstream processing.

The big news, however, came with the following confirmation,

“Significant growth potential for manganese as a replacement for cobalt in lithium-ion batteries as producers look to secure cost competitive, responsibly mined long term raw material supply”

The Company are now seeking off-takers to expand production, with the aim of increasing the resource’s saleable tonnes per month from 6,500 to 13,000.

Keras Resources comments

The Company’s CEO, Russell Lamming, attached the following comments to the update,

“We are exceptionally pleased that the bulk sample from Nayega was successfully delivered on time, within budget and has been underpinned by encouraging chemical analysis which further consolidates the commercial viability of the Nayega mine. The bulk sample produced higher than expected manganese content and, due to the expected relatively high silica content, it has been determined that the ore is better suited to the production of silico-manganese rather than the production of ferro-manganese. The bulk sample results comprehensively proved up the Project from mine to market and we look forward to moving forward following receipt of the Exploitation Permit which is currently outstanding.”

“In addition, with the inherently volatile nature of the downstream manganese alloy market and the growing demand for a cost effective, responsibly mined replacement for cobalt in the production of lithium-ion batteries, we have started additional leach testwork on the Transitional and Saprolitic zones of the Nayega orebody that were not tested in the bulk sample. It is widely understood that reductive leaching is not always amenable to all manganese minerals, let alone able to selectively dissolve the manganese content of the ore, so the initial testwork results are a very encouraging first step. It is our intention to follow up this work with a further detailed testwork programme aimed at optimising the leaching conditions and studying the purification processes required to ensure the production of a battery grade of manganese. I look forward to updating our shareholders when practicable.”

On volumes and production expansion, the Company said, “Current proposed planning, subject to the award of an exploitation license, is to double current production capacity from 6,500tpm to 13,000tpm of saleable ore through a plant upgrade which will include a downstream screening circuit to produce these size fractions. The plant as currently configured is capable of producing some 75,000 tons per annum, which would result in a substantial profit for Keras. However, on receipt of the exploitation licence Keras expects to expand and improve the plant to add more value as well as increasing production. The Company intends this to be financed in conjunction with an offtake agreement rather than equity funding.”

Investor notes

After bouncing over 20%, the Company’s shares have plateaued (relatively), up 4.21% or 0.017p to 0.42p a share 11/07/19 14:33 GMT. Elsewhere in the mining and minerals sector, recent updates have come from; Jubilee Metals Group PLC (LON: JLP), Ariana Resources plc (LON: AUU), Caledonia Mining Corporation Plc (TSE: CAL), Regency Mines Plc (LON: RGM), Acacia Mining PLC (LON: ACA), Arc Minerals Ltd (LON: ARCM), Thor Mining PLC (LON: THR) and Premier African Minerals (LON: PREM).
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