Barratt Developments full year outlook “modestly” ahead of expectations
Barratt Developments, one of the UK’s largest residential property development businesses, announced that its full year outlook is modestly above its previous expectations.
From 01 January to 05 May, total forward sales amounted to £3.37 billion, up 2.4% compared to the £3.29 billion figure from last year.
Barratt Developments, who has been awarded the Home Builder Federation’s maximum 5 Star customer satisfaction rating for ten consecutive years, said that it has made good progress on medium term targets.
The business delivered a strong performance since the beginning of the current calendar year, driven by a good customer demand and a stable market backdrop.
“This has been another strong period for the Group. As Britain’s largest housebuilder we remain firmly committed to delivering industry-leading build quality and customer service and we are proud to have been awarded 5 stars for customer satisfaction for ten years in a row,” David Thomas, Chief Executive, commented on the results.
“Trading since the beginning of the year has been strong, the outlook for the year is modestly ahead of our previous expectations and we are encouraged by our continued progress in driving operating efficiencies through the business,” David Thomas continued.
“Whilst we continue to monitor the market closely, we are confident of delivering a good financial and operational performance in FY19.”
As for the company’s outlook, Barratt Developments expects to grow volume towards the lower end of its medium term target range.
Despite the political and economic uncertainty surrounding the UK’s departure from the European union, Barratt Developments believes it is in a strong position to cope with the consequences of Brexit.
At the end of last year, a report from the Royal Institution of Chartered Surveyors said that UK property was at its weakest since 2012, with Brexit concerns continuing to prevail across the market into 2019.
In March, house prices fell 1.6% according to latest Halifax figures.
At 08:28 BST Thursday, shares in Barratt Developments plc (LON:BDEV) were trading at +0.68%.
Morrisons posts q1 results but political uncertainty looms
Morrisons (LON:MRW) posted a first quarter trading statement on Thursday in which it cited the political and economic uncertainty that continued to impact consumer confidence.
For the 13 weeks to 5 May, like-for-like sales excluding fuel were up 2.3% – 0.2% from retail and 2.1% from wholesale. Including fuel, the figure amounted to 2.7%.
Total sales excluding fuel came to 2.4%. During the key Easter period, like-for-like sales were up 1.7% compares to the same period a year prior.
Morrisons noted the political and economic uncertainty to hit the UK, but insisted its retail sales performance was “robust”.
The additional extension of the UK’s departure from the European Union has only prolonged the political uncertainty that hit the nation.
“We are improving the shopping trip and becoming more competitive for customers, and are pleased with another quarter of positive like-for-like sales,” David Potts, Chief Executive, commented on the results.
“We will continue this important work, including on those favourite items we know our customers want to buy at Morrisons,” David Potts continued.
Morrisons said that it expects the market to remain competitive and challenging during the year ahead. It said that its second quarter results will have to compete against last year’s favourable summer weather and England’s World Cup success.
Elsewhere in the industry, data from Kantar revealed that Asda has overtaken Sainsbury’s (LON:SBRY) in main store sells.
Sainsbury’s £7.3 billion takeover of Walmart owned Asda (NYSE:WMT) was recently blocked by the Competition and Markets Authority because it risked creating a “poorer overall shopping experience.” The CMA said that consumers would not benefit from the merger due to an expected increase in prices, reductions in the quality and range of products on offer and a poorer shopping experience for UK consumers.
At 08:04 BST Thursday, shares in WM Morrison Supermarkets plc (LON:MRW) were trading at -1.36%. Shares in Sainsbury’s (LON:SBRY) were last trading at -0.062%.
Fine Wine Q&A Session with Daniel Walker of OenoFuture
Even to those with sharp business acumen and a love of savoring a glass of fine wine, investing in the wine market can seem intimidating at first glance. One such individual who has made the leap from prestigious investment career in the City to the world of fine wine is Daniel Walker. Daniel who now heads up the investment arm at OenoFuture who were recently named as the best fine wine investment company in Europe at The European Global Business & Finance Awards. We spoke to Daniel to learn what it takes to succeed in the fine wine investment and how the wine market has always provided stability in times of economic fragility.
Daniel, you started out working for trading companies and later moved into the commodities sector and private hedge funds. What was it like moving from an investment career in the City to a fine wine investment company?
I began my career working for trading companies, but I soon realised that this sector wasn’t satisfying my core values and ambitions. I enjoyed incredible success heading up the investment arm of a large London-based company and quickly proved my skills at generating market-beating returns.
My accomplishments during this period of my life propelled me to seek out new challenges. It was actually in a wine bar where I was enjoying a drink after work with colleagues that the monumental potential in fine wine investment first hit me. I was then put in touch with the founder of OenoFuture, Daniel Carnio, by a mutual friend and we realised how our respective areas of expertise could complement each other. Since the fine wine market can be daunting for outsiders, even those who have a background in investment, Daniel spent many hours convincing me that I could excel in the wine market despite my previous lack of exposure.
What excites you about the fine wine market and why do you think it should be on investors’ radars right now?
When I’m speaking to potential investors I like to start by pointing out that the wine market has always provided stability in times of economic fragility. We’re living through interesting times when market stability cannot be relied on and I continually encourage investors to diversify their portfolios and seek out new opportunities.
What is so exciting about the wine market to me is that wine is a unique commodity in that it can be both collected and consumed. Whenever bottles of rare wines are consumed, the rarity of the remaining bottles of that wine increases and so does their value. This is a hugely attractive factor for an investor, especially when coupled with the fact that more and more wealthy individuals in developing countries are buying and consuming fine wines.
What makes OenoFuture different from all the other fine wine investment companies out there?
I believe our approach is unique in the market because since the very beginning Daniel Carnio has had a vision to pursue less well-known wine regions which are rich in potential. Daniel’s exceptional wine knowledge combined with our financial expertise makes us perfectly placed to get ahead of the curve. Instead of focusing all our attention on traditional blue chip investment strategies like Bordeaux En Primeur campaigns, we’re able to specialise in top boutique estates from California and Italy that are the true rising stars of the fine wine world. Californian wines in particular have rocketed 48% since the announcement of Brexit and we expect this trend to continue as the wine world wakes up to the potential tucked away in these under-the-radar regions.
And finally, what does the future look like for the fine wine market? How do you think the market will react in the longer term to the potential effects of Brexit?
Of course, it’s impossible to talk about the future without mentioning Brexit! At the moment there is still huge uncertainty and that’s being reflected in the markets. The good news is that the fine wine market has historically displayed a remarkably low correlation to to mainstream assets like stocks and shares. Also global corporate debt is at 13tn and I think this is another key factor that could explain why investors are seeking asset backed financial refuges in times of market turmoil. Investing is like riding a bike, if you don’t remain in constant motion, the likelihood is that you will lose balance. So it is impertative to adapt and modify depending in the market environment.
It is still impossible to predict what impact Brexit will have in the longer term, but the resilience of the fine wine market has been proven time and time again. Thanks to the continued strong growing demand for fine wine from countries like China and the United States, the world’s appetite for fine wine is hungrier than ever before. One final thought to end on for those worried about the impact of Brexit – when Brexit was announced sterling quickly fell to a 30-year low, whereas the wine market saw a spike of 25%!
Keystone Law shares dip despite full year profits
UK-based Legal services provider Keystone Law Group Plc (LON:KEYS) have seen their share price dip during trading today, despite reporting bumper annual profits in their recent trade update.
Recruitment and revenue
The company stated that its annual results had ‘comfortably’ topped market expectations with revenue growth led by new lawyers recruited last year and during the current year, contributing to full-year profits. The firm said that their number of principle lawyers has increased from 244 to 247 and in line with this, adjusted pre-tax profits for the full year through January 31st stood at £5.1 million, up 56.8% on-year. Revenue was also up 35.1% to £42.7 million.Keystone commented on their recent update
“I am happy to report that the business has performed strongly throughout our first full year as a public company and as such has delivered good growth across all the business KPIs. Revenue and profit growth have converted to cash and this means that we are in a position to pay out a dividend of 2/3rds adjusted PAT which is in line with what we said at the time of the IPO,” said James Knight, Chief Executive Officer of Keystone Law. “The current year has started well and the activity of the existing lawyers, together with the strength of our recruitment pipeline, gives me great confidence that the business will deliver another year of strong performance and profit growth. I look forward to another exciting year of growth and development as we continue to pursue our strategy for success.”Portfolio considerations
In line with policy established in the initial public offering, the company proposed a dividend of 6.5p a share, meaning the firm’s full-year dividend amounts to 9p a share. The company’s shares are currently trading down 17p or 3.35% since markets opened on Wednesday morning, at 490p a share 08/05/19 16:27 GMT.Trump tweets corroborate tax avoidance claims
The bombastic tangerine has done it again. Incumbent POTUS Donald Trump has lashed out on Twitter in response to doubters of his business acumen. Ironically, his conceited keyboard mashing will leave many (further) doubting his basic common sense – or lack there-of – and many of his political and legal advisors screaming into their proverbial pillows.
The self-dubbed peoples’ champion has yet to claw back industrial jobs from China, and when he isn’t comparing haircuts with Kim Jong-Un, the subpoena-dodging head of state busies himself with refusing the Democrats’ calls to disclose his tax returns. This hollow continuum was somewhat unsettled today, however, with the New York Times publishing printouts from Trump’s official Internal Revenue Service tax transcripts.
Trump Face Value
The IRS transcript states that Trump‘s core businesses lost a total of $1.17 billion over the period of a decade, from 1985-1994. His real estate portfolio, hotels and casinos began the slump with a loss in excess of $46 million in 1985 and peaked with losses of over $250 million in both 1990 and 1991. A legal spokesperson for the president has stated that the information published by the NYT is, “demonstrably false”, and that the reports, “about the president’s tax returns and business from 30 years ago are highly inaccurate”. Indeed, such findings, if verified, would prove problematic in light of the president touting himself as a self-made business success during the 2016 campaign trail. But all is well, the president decided to give us a de facto verification this morning.Remorseless Economicus
Keen to protect his image as a reputable business tycoon, and more likely to keep his ego afloat, Trump responded to the NYT reports directly. He confirmed that at least officially, his businesses did indeed run at a loss. More significantly, and with a degree of hollow hilarity, he admitted to not paying ANY income tax for eight of the ten years in question.https://platform.twitter.com/widgets.jsReal estate developers in the 1980’s & 1990’s, more than 30 years ago, were entitled to massive write offs and depreciation which would, if one was actively building, show losses and tax losses in almost all cases. Much was non monetary. Sometimes considered “tax shelter,” ……
— Donald J. Trump (@realDonaldTrump) 8 May 2019
https://platform.twitter.com/widgets.js So, reporting losses to avoid paying tax, not exactly a shock revelation. What should irk readers though, is the audacity of a man who proclaims allegiance with the common citizen but shirks the responsibility of contributing to the social securities and insurances that keeps afloat the society he not only lives in but benefits from. He is hardly the only individual, nay the only politician guilty of this, but holding the office of president is an honour, and being so brazen about his misdeeds is frankly insulting. Trump’s flagrant disregard of any sense of civic duty is not only disheartening but a slap in the face to centuries-old constitutional democracy built on reciprocal rights and responsibilities, which he as president is supposed to embody and protect.….you would get it by building, or even buying. You always wanted to show losses for tax purposes….almost all real estate developers did – and often re-negotiate with banks, it was sport. Additionally, the very old information put out is a highly inaccurate Fake News hit job!
— Donald J. Trump (@realDonaldTrump) 8 May 2019
Conflict of Interests
Realising this is probably getting a bit morbid, we’ll keep this brief. Trump has stated that his tax returns are not available because they are being audited, yet his former personal attorney, Michael Cohen, in fact testified that this was not the case. Irrespective of the fact that auditing should not, and logistically does not, have any bearing on whether one’s taxes are able to be reviewed, Trump is the first in recent times to break the presidential precedent of releasing tax return data. The Democrats are now pursuing the release of this information on grounds of a potential conflict of interests, which, if we know anything about our friend Mr Trump, seems prudent. I mean, what would the US’s 259th richest man – with extensive ongoing business interests – possibly have to hide?Elegant Hotels shares rise following interim results
Elegant Hotels reported its interim results for the six months to March-end on Wednesday, sending shares up.
The luxury hotel operator said that revenue increased by 3% to $43.7 million, compared to $42.5 million the year before.
This was attributed to an ‘encouraging performance’ at Treasure Beach, which the group recently acquired.
Elegant Hotels said that average daily rates were down 1% to $532 from $539 the previous year. Meanwhile, occupancy increased 1% to 68%.
RevPAR, which stands for revenue per available room, rose 1% at $364.
Overall, group adjusted EBITDA increased 7% to $16.4 million.
Adjusted profit before tax jumped 5% to $12 million.
Commenting on the latest figures, Sunil Chatrani, Chief Executive of Elegant Hotels, said:
“Elegant Hotels continues to perform well in the context of a competitive market and against a backdrop of ongoing uncertainty in its core visitor market of the UK. We are particularly pleased with the contribution during the period of our most recently acquired property, Treasure Beach, and are constantly assessing a range of opportunities for further expansion, whilst ensuring our balance sheet remains robust.
We continue to execute our strategy in a measured and consistent manner, and we have good visibility of bookings for the remainder of the financial year. As a result, we remain comfortable with the FY19 outlook versus market expectations and confident in the Group’s longer-term prospects.”
Elegant Hotels operates seven luxury hotels in Barbados, as well as a beachfront restaurant called Daphne’s.
Shares in the hotel group (LON:EHG) are currently trading +2.17% as of 13:58PM (GMT).
Joules appoints Asda director as CEO
Joules has appointed Nick Jones, Asda’s commercial director as its new chief executive, the brand announced on Wednesday.
The clothing and homeware retailer said that he will be replacing outgoing CEO Colin Porter, who recently announced his departure after eight years at the helm.
Mr Jones is set to join the company towards the end of the year, and he will assume his role following a short transition period.
Ian Filby, Non-Executive Chairman, commented on the appointment:
“On behalf of the Board and everyone at Joules, I am thrilled to welcome Nick as our next CEO. Nick’s extensive retail, brand and strategy credentials, as well as a clear alignment with the Joules values, made him the outstanding candidate for the role.
Nick will join an exceptional management team and the Board has every confidence in their abilities to lead Joules through the next stages of the Group’s long-term growth and development.”
Nick Jones added:
“I am delighted to be joining Joules at such an exciting time in the company’s development. I have long admired Joules for its distinctive brand, its outstanding products and designs, and its connection with its customers.”
Joules was established in 1999 by Tom Joule. Alongside its own stores, it also has concessions in John Lewis, Next and Topshop.
In the US, its products are also stocked in Von Maur, Neiman Marcus and Nordstrom.
It has been listed on the AIM-market of the London Stock Exchange as of 2016.
Shares in the retailer are currently trading down -0.72% as of 13:06PM (GMT).
SIG shares dip on sales blip
FTSE 250 listed British construction product supplier SIG Plc (LON:SHI) have seen their share price fall in morning trading, with the firm’s recent trading update revealing a decline in on-year sales for the first four months.
Narrow silver lining
SIG are an international supplier of roofing, insulation, commercial interiors and specialist construction materials. The company were able to report that like-for-like sales in their exteriors division had risen 0.4% and sales in mainland Europe were up 2.4%. However, the firm were unable to emulate the bumper sales of their British construction materials counterpart, Travis Perkins (LON:TPK), who booked an impressive first quarter.“Trading conditions remain challenging and the outlook in many of our end markets remains uncertain, notably in the UK,” SIG said.To snuff out any reason to celebrate, the company reported that overall like-for-like sales for the four months through April were down 2.6% on-year, revenues form continuing operations had fallen by 3.4% and the adverse 1.3% currency movement this figure includes was only partially offset by a 0.5% improvement from more working days. Distribution comprised the largest cause of weakened revenue, with sales falling 15% on a like-for-like basis.
SIG comments on the recent update
“However, this has been more than offset by the margin and cost actions taken over the last twelve months and as a result, the board continues to expect significantly improved profitability in SIG distribution in the current year,” SIG said in its statement. “The board believes it can sustain the pace of transformation during 2019 and, providing there is no further deterioration in market conditions, the board remains confident, despite any impact of the French ransomware attack noted above, that the underlying profitability for the full year will be delivered in line with management expectations.”Portfolio considerations
Notably, the company brought a much lower and more focused base to business in 2019, which was intentional in line with weak market conditions. The business’s share price has dipped since markets opened, down 0.4p or 0.28% to 143.2p per share. Liberum Capital, Shore Capital and Peel Hunt analysts all reiterated their ‘Buy’ rating on SIG stock, while UBS reiterated their ‘Sell’ stance.Travis Perkins rallies with positive Q1 sales
Northampton-based home improvement and builders’ merchant Travis Perkins Plc (LON:TPK) have seen their share price rally in morning trading on the back of improved on-year sales in Q1.
This news follows prior uncertainty with the departure of the company’s CEO last month and speculation that the company were planning to sell their struggling plumbing division.
Bumper start
The company said that sales were up 5.4% in Q1, with like-for-like sales rising 7.3% for the three months through March. Further, merchant like-for-like sales bounced 10.6% and there was even ‘good recovery’ in Wickes, which posted a 10.5% sales growth. Despite a 4% fall in like-for-like sales in the plumbing and heating division, the company said that performance in other divisions meant it was on track to meet expectations for the full year.Travis Perkins comments on the trade update
“We have delivered strong sales growth in the first quarter of the year, which reflects both our focus on excellent customer service and the weak comparator in 2018,” said chief executive John Carter. “This performance is all the more encouraging given the impact of the on-going political uncertainty on our end markets.” “In plumbing and heating the milder winter has impacted sales compared to 2018, but our branches and specialist online channels have continued to perform well.” “The work to operationally separate plumbing and heating is progressing to plan and is expected to be completed in the second quarter.” “We are making good progress on cost reduction activities and expect to meet our cost reduction targets this year.”Portfolio considerations
The firm’s shares are currently trading up 30.5p or 2.17% at 1,434.5p per share 08/05/19 12:19 GMT.‘Overall expectations for the group in 2019 remain unchanged.’Analysts have struggled to find a consensus, with Peel Hunt reiterating its ‘Hold’ stance, Liberum reiterating its ‘Buy’ stance, UBS reiterating its ‘Neutral’ rating and Shore Capital analysts downgrading their rating from ‘Hold’ to ‘Sell’.
Imperial Brands shares dip despite H1 profits
Bristol-based British tobacco multinational Imperial Brands Plc (LON:IMB) have seen their share price dip despite impressive growth in its vaping division.