Trident Resources posts its maiden loss
After forming in 2018, mining asset acquisition firm Trident Resources Plc (LON:TRR) has recorded its first – though minor – loss.
The dip came as the company are said to be continuing their pursuit of a reverse takeover opportunity in the mining sector. The loss totalled a sum of £128,000 for the six months through October 2018, and came after the company raised £4 million in its initial public offering in April – with plans to invest in mining opportunities once it had been incorporated.
“In the short time since the IPO, the company has seen a strong flow of potential acquisition opportunities, which are consistent with the acquisition criteria set out in our IPO prospectus,” Trident Resources said in a statement.
“The market volatility and global economic uncertainty that characterised the end of 2018, and which has persisted into 2019, has led to a reduction in the capital available to the mining sector,” it added.
“This scarcity of capital reinforces my belief that the company is in an advantageous position from which to secure an acquisition that creates value for shareholders.”
As of 14/01/19, Trident shares were selling at 20.5p a share.
Van Elle downgrades outlook with H1 profit slump
Engineering and geotechnical contractor Van Elle Holdings Plc (LON:VANL) have seen their share price dip sharply as they book a sharp profit dive for the first half, which has forced the company to revise its gull-year financial outlook.
Full-year expectations hampered by difficult H1
The firm reported a 55% slump in first half profits, which has caused Van Elle to have to downgrade its expectations for the full year, as the company state project delays and high overheads will cause them to miss their targets. The latest company statement revealed that for the six months through December 2018, pre-tax profit had dropped to £2.4 million, which came as a result of revenue falling 18% to £42.9 million. Following these results, the company announced that it was to reduce its interim dividend by 29% to 1p per share. Also, that in the third quarter, contract margin performance in the general piling division had been weaker than expected and that several projects had been delayed. Chief Eexcutive, Mark Cutler, said, “As a result and despite good momentum being carried in from the first half, we don’t believe we will be able to deliver the significant step up in performance during the second half that we anticipated at the time of our trading statement in December 2018,” “These challenges have been frustrating, but it is pleasing to see outlook for the final quarter remaining robust and with a strong pipeline of target projects providing good forward visibility.” “Whilst we are mindful of the wider market environment, we are confident that the initiatives we are taking will develop a strong platform for future strong, profitable growth.”A period of transition
Since its listing on the AIM in 2016, Van Elle has gone through a series of difficult events. With the departure of its founder – who later returned to try and stage a coup within the board of directors – and the reduced workload following the collapse of Carillion (LON:CLLN), the firm were already facing a difficult H1. This has only been compounded with the arrival of a new Chief Executive, among other more recent senior management changes, and the £300,000 restructuring charge this ensued. “This is a transitional year for the business and since my arrival in August 2018, I have been undertaking a full review of the business,” Mark Cutler said. “As part of this process I have been taking action to refine the group’s commercial approach, streamline operations, strengthen the leadership team and re-focus on our key customers. This is already creating a strong platform from which to pursue our growth strategy. “The third quarter has been more challenging than we anticipated, with a disappointing performance in general piling and several project delays. As a result and despite good momentum being carried in from the first half, we don’t believe we will be able to deliver the significant step up in performance during the second half that we anticipated at the time of our trading statement in December 2018. “These challenges have been frustrating, but it is pleasing to see outlook for the final quarter remaining robust and with a strong pipeline of target projects providing good forward visibility. “Whilst we are mindful of the wider market environment, we are confident that the initiatives we are taking will develop a strong platform for future strong, profitable growth.”Van Elle as it stands
The company’s shares are currently trading at 64.06p, down 19.42% or 15.44p since markets opened 16/01/19 14:53 GMT. Analysts from Peel Hunt have downgraded their stance on Van Elle stock, from ‘Buy’ to ‘Hold’.Yellow Cake asset value rises with uranium prices
After making its debut on the AIM mid-way through 2018, uranium buyer Yellow Cake Plc (KIN:YCA) said that its net asset value rose in December, in line with increasing uranium prices.
Continued success for Yellow Cake
The company said that for the three months through December 2018, its net asset value had risen 5.9% to £2.53 per share, which represented a 27% jump since its initial public offering in July. Within the same time frame of July to December, uranium oxide prices had jumped 25% to $28.50 per pound. Yellow Cake Chief Executive, Andre Liebenberg, said, “We look to the future with optimism as countries around the world implement new uranium programmes and extend the lifecycle of existing projects,” “Our investment thesis remains sound and we are confident in the long-term outlook for the uranium price.”A positive outlook following their IPO
Following July’s successful IPO, the company’s Chief Executive said that, “Due to an exceptional set of circumstances, uranium is one of the few commodities yet to recover from the recent commodities bear market and we believe that uranium is currently fundamentally and structurally mispriced,” He added, “Yellow Cake’s long-term supply contract with Kazatomprom has allowed us to secure a highly significant and strategic position in physical uranium, at a competitive price, and to offer that exposure to a potential resurgence in the uranium price to investors, while avoiding direct exposure to exploration, development, mining and processing risk.” Peter Bacchus, Chairman and Chief Executive of Bacchus Capital said, “The highly successful initial public offering of Yellow Cake demonstrates the depth and breadth of interest emerging in uranium as a commodity, and reflects the U.K. market’s continued strong support for the natural resources sector where an opportunity presented is on-theme, clearly articulated and compelling in nature.”The outlook for 2019
Yellow Cake look set to expand and start 2019 on a positive footing. The company’s shares are currently trading at 226.5p 16/01/19 14:39 GMT, up 5.7p or 2.58% since trading began this morning. As of December, Berenberg analysts reiterated their ‘Buy’ stance on Yellow Cake stock.Cineworld projects 7.2% revenue hike as US market performs
Cinema chain Cineworld Group Plc (LON:CINE) has predicted a 7.2% full-year jump in revenues, on-year, with strong performance in the US market on the back of a series of box office big-sellers in 2018.
For the year to 31st of December 2018, the firm said that it expected to report revenue growth of 7.2% across its US, UK and ROW (Rest of World) revenue segments, with the US market expected to return a revenue spike of 8.6% on-year.
This progress comes as a result of strong box office performances by popular action movies – such as ‘Black Panther’, ‘Avengers: Infinity War’ and ‘Incredibles 2’ – which performed to or beyond expectations.
As proof of the success of such titles, group admissions to Cineworld grew 2.6% to a record level of 308 million – though this figure has also been attributed to Cinewrld’s ongoing refurbishment programme and the company’s expansion of its premium formats.
During the course of the 2018 financial year, the company opened 13 new sites and announced new agreements with IMAX, 4XD and ScreenX – which include plans to install 55 IMAX projectors, 80 4DX screens and 100 new ScreenX auditoriums.
The company then stated its positive outlook for 2019, with a spokesperson saying Cineworld were “well positioned” for another year of growth, citing an equally strong film slate for 2019, which includes titles such as, ‘Avengers: Endgame’, ‘Godzilla: King of the Monsters’ and ‘Toy Story 4’. Similarly, the company said its integration and development plans with Regal are ‘progressing well’ and that its US refurbishment programme was on track.
The company’s shares are currently trading down 12.6p or 4.56% at 264p per share 16/01/19 14:36 GMT. Analysts from Peel Hunt have reiterated their ‘Add’ stance for Cineworld stock.
Pearson revenues decline, shares slide
Pearson shares fell more than 6% on Wednesday after the publishing firm issued a trading update.
The publishing and education firm updated the market on its guidance for the year, with full-year results set to be announced on 22 February.
Pearson said it expects adjusted operating profit to be in the region of £540-£545 million for the year, proving in line with previous guidance of £520 to £560 million.
The company added that it expects adjusted earnings per share of between 70.0p and 71.0p, as a result of one-off tax benefits and a lower finance charge previously disclosed in q3.
Underlying revenues were fell 1% year on year, as a result of a decline in US Higher Education Courseware (US HECW) of 5% and US K12 courseware.
Pearson said that this decline was ‘largely offset by the rest of the business growing in aggregate at over 1%’. Overall, revenue in North America dipped 1%.
John Fallon, Chief Executive said:
“We have made good progress in 2018, returning Pearson to underlying profit growth. We are also building a platform to enable Pearson to achieve its full digital potential, empowering more people around the world to learn the knowledge and skills to flourish in the changing world of work. There is much still to do, but we are increasingly confident in Pearson’s potential to grow and prosper.”
Shares in Pearson (LON:PSON) are currently down -6.37% as of 14:26PM (GMT).
Snap Inc shares fall on CFO departure
The Snap chief financial officer is quitting from the group, less than a year after starting.
Tim Stone will be leaving the tech company in order to pursue other opportunities,” said Snap in a SEC filing.
“On January 15, 2019, Tim Stone, our Chief Financial Officer and principal financial officer, notified us of his intention to resign to pursue other opportunities. Mr. Stone has confirmed that this transition is not related to any disagreement with us on any matter relating to our accounting, strategy, management, operations, policies, regulatory matters, or practices (financial or otherwise),” said Snap in a statement.
“Mr. Stone’s last day has not been determined. Mr. Stone will continue to serve as Chief Financial Officer to assist in the search for a replacement and an effective transition of his duties, including through our scheduled full year 2018 financial results announcement.”
Following the news, shares in the group tumbled 8%.
Stone is the latest in a series of high profile positions that have left the group. Last year, Vice President of Marketing Steve LaBella, the Chief Strategy Officer Imran Khan and Human resources chief, Jason Halbert all resigned.
In the filing released on Wednesday, the group said they would post Q4 earnings on February 5, which are expected to be towards the top end of earnings guidance.
Shares in the group (NYSE: SNAP) are currently trading -0.15% at 1410GMT.
Sterling recovers with no-deal Brexit unlikely
In what was a largely tight-lipped appearance before the Treasury Committee, Governor of the Bank of England Mark Carney cited today’s Sterling rebound as being due to a no-deal Brexit scenario looking less likely.
Following a sharp dip yesterday, in the build up to the historic meaningful vote in Commons, Carney told members of the house that today’s recovery reveals that financial markets are entertaining the possibility that the Brexit process will be extended, and consequently that a no-deal appears a more distant reality.
Will it ever get boring?
With what has been a deal of two years in the making – and despite the prime minister’s best efforts to badger opponents into supporting whatever she put on the table – the reality of an extended Brexit negotiation period looks ever-more-likely. The problem is still the same, though. Theresa May has two weeks to table an alternative, but this leaves little-to-no time for this deal to be agreed by the EU and British MPs, let alone any time to ratify and amend the legal article before the deadline. Before procedural issues though, the problem remains of what deal are we actually looking for? Ms May has outlined a deal that ends the freedom of movement while attempting to maintain a good relationship with the EU, but this is altogether too vague. It is clear perhaps, that the UK should not waste the EU’s time, and should send negotiators to Brussels with something our Parliament actually supports.Mark Carney’s outlook for the near future
Looking forwards, Mark Carney stated that he remained confident in the UK banking sector’s ability to weather a hard Brexit; pointing toward capital reserves that could be used to support lending. He did, however, warn that pundits would be right to expect market volatility to continue in coming months. Not only are Brexit tropes set to rear their heads a few more times, but the Governor of the BoE warned that the UK should be wary of the implications of a Chinese economic slowdown which is set to continue in 2019.The Sterling Domesday scenario covered by the BoE
During the session, BoE policymaker Richard Sharp made an important point, the British economy will suffer most if investors lose faith in the government’s ability to manage financial affairs. So one would be right to ask, what do the BoE foresee as the market’s reaction to a Brexit worst case scenario? – a ‘disorderly’ Brexit. According to Mark Carney, a scenario in which Sterling plunges 25% and 8% is knocked off the UK GDP is not tenable, on the basis that such as a collapse would be caused by the imposition of tariffs and economic dislocation, and also that the BoE altering interest rates would have a long-term – not immediate – impact.What has been learned?
Nothing surprising – the pound looks set to waver on political uncertainty, and ifanything of substance were going on, Carney would be reluctant to comment in a public forum, should his remarks contribute to the concerns of investors who are already biting their nails. One upshot is that the Governor of the BoE reassured MPs that despite disagreements over derivative contracts, no rift exists between the Bank of England and the European Central Bank; which still holds ten of trillions of pounds worth of contracts in the City.Lloyds share price hits 6-week high following PM May’s defeat
Lloyds share price (LON:LLOY) has hit a 6-week high following Theresa May’s devastating defeat in the house of commons.
Lloyds share price was up over 1% on Wednesday touching 56.5p. Lloyds had fallen as low as 50p during December as uncertainty over Brexit negotiations hit UK assets.
Theresa May’s crushing defeat on the Brexit deal moves the country closer towards a number of scenarios that will soften the impact of Brexit.
The first of these options, as requested, by Jeremy Corbyn is a general election. Although this is unlikely in the short term, a general election could see Jeremy Corbyn, a proponent of a softer Brexit and staying in the customs union, as prime minister.
Staying in the customs union would reduce any negative impact on trade and have less of an impact on the economy which would be a positive for Lloyds share price.
Despite being rubbished initially, there is growing momentum for a second referendum, the question on the paper is anyone’s guess, but again such a scenario is likely to avoid the no deal or hard Brexit damaging to the UK economy and Lloyds share price.
The third scenario, and one that would avoid the UK going to the polls again, is the revoking or extending of Article 50. A revocation would provide the government more time to formulate a plan that can actually make it through parliament, a would an extension. It may also stop Brexit altogether.
In any of these scenarios the forecast devastation of the UK economy would be avoided and provide the potential for plenty of upside in the Lloyds share price.
Lloyds reported a 18% increase in profit after tax in the nine months to 30th September reflecting the reduction in litigation and PPI costs.
Lloyds is set to report full year results 20th February.
Pub Group shares rise over strong Christmas trading
City Pub Group (LON: CPC) has reported a positive start to the year, revealing strong Christmas trading.
In the 52 weeks to the end of December, the group reported a 1.6% increase in like-for-like sales.
Sales were particularly strong over the Christmas period, where the six weeks to January 6, like-for-like sales were up by 7%.
City Pub Group opened 11 new sites over 2018, including its £2.2 million acquisition of Chapel 1877 in Cardiff. The deal was brokered by GVA’s Cardiff hotels and leisure team.
John Coggins, associate director at GVA, said about the deal: “On behalf of the vendor, Bevan Holdings we received multiple expressions of interest for the business, a reflection of Chapel 1877’s appeal within the city.”
“The Chapel is an ideal fit for the City Pub Company’s growing portfolio of 42 pubs across the south of England and Wales and we’re delighted to have completed on the confidential sale in a matter of weeks with excellent assistance from Gordon Dadds Solicitors.”
Turnover for the group increased by 22% to £45.6 million, thanks to increased volume. The pub chain said that it would benefit from the higher prices introduced at the end of the year in 2019.
“Trading was very encouraging over the festive period and throughout 2018, particularly post-Easter. We have grown very rapidly over the last two years, performed well and our new sites are showing their potential,” said Clive Watson, the group’s chief executive.
“Our low gearing puts us in an enviable position to take advantage of attractive acquisition opportunities that present themselves. If we enter a period of uncertainty caused by Brexit, there is much we can continue to achieve organically,” he added.
Shares rose 4% on Wednesday morning. They are currently trading +4.31% at 205,50 (1225GMT)
In other news, Wednesday also saw a strong trading update released by Bovis Homes, despite Brexit uncertainty.
London house prices fall as Brexit uncertainty bites
London house prices fell 1.2 per cent month-on-month in November, according to the latest official figures from the Office for National Statistics (ONS).
Overall, annual house price growth in the UK hit 2.8 per cent for the month, with London and the South-East dragging down figures.
The statistics revealed that the lowest growth was indeed in the capital, with prices falling by 0.7% over the year to November 2018, remaining unchanged from the month before.
Meanwhile, the average UK house price came in at £231,000 in November 2018, proving £7,000 more the same month in 2017.
However, on a non-seasonally adjusted basis, average house prices in the UK dipped by 0.1% between October and November 2018.
Many London based property agents have been feeling the impact of a subdued market in the capital, with buyers deterred amid ongoing economic uncertainty.
Back in July, Foxtons (LON:FOXT) reported a loss for the half-year as a result of the lessening demand in London.
Moreover, Foxtons also announced the closure of six London branches back in November, amid a “challenging market”.
Similarly, Kevin Roberts, director of the Legal & General Mortgage Club, commented on the latest house price figures: “The ongoing political uncertainty is clearly causing some buyers and sellers to take a wait-and-see approach when it comes to the property market.”