Shares in Bovis Homes up 5% on “encouraging” trading
Bovis Homes has reported that it is in line with expectations, as the housebuilder built 3% more homes than last year.
The group said on Wednesday that it has seen “encouraging” early signs for trading this year and that it expects a record year of profit.
Bovis Homes built 3,759 homes last year, selling for an average price of £273,000.
Following the positive trading update this morning, shares in the group rose by 5%.
The “significant” increase in operating margin for the year comes amid caution in the property market as Brexit uncertainty continues.
“The significant improvement in operational performance across all areas of the business is expected to deliver a record year of profits for the group,” said Greg Fitzgerald, the chief executive.
“We are looking forward to delivering the first homes from our new housing range in 2019 and continuing to make further operational and financial progress,” he added.
“The industry fundamentals remain strong with customer demand for new homes supported by attractive mortgage finance and government initiatives, in particular, Help to Buy.”
Shares in Bovis Homes (LON: BVS) are trading +4.77% (1148GMT).
UK Inflation rate falls to 2.1% in December
UK inflation fell to 2.1% in December, down from 2.3% in November, according to the latest figures from the Office for National Statistics (ONS).
The fall was largely driven by a lowering of petrol prices, the ONS said. The drop proved in line with analyst expectations.
Inflation has been largely falling since reaching a six month high of 2.7% in August.
Last month’s inflation figure proves closer to the Bank of England’s target of 2%, suggesting that a future rate hike may prove unlikely.
Back in December, the Bank of England opted to keep interest rates on hold in light of continued Brexit-related uncertainty.
Uncertainty only seems set to continue after the Prime Minister was heavily defeated in a Commons vote on her Brexit deal last night.
The head of inflation at the ONS, Mike Hardie, commented: “Inflation eased mainly due to a big fall in petrol, with oil prices tumbling in recent months.
“Air fares also helped push down the rate, with seasonal prices rising less than they did last year. These were partially offset by small rises in hotel prices and mobile phone charges.
“House price growth was little changed in the year to November, with buoyant growth across much of the UK held back by London and the South East.”
Sativa Investments outlines 2019 expansion plans
Sativa Investments (LON:SATI) have made an exciting start to 2019 with the release of a trading update and the announcement of plans for new wellness centres.
Sativa Investments listed on NEX Exchange in March 2018 and was the first London listed cannabis investment vehicle available to UK investors.
In early January the company released a trading update that outlined the progress of their investments.
Geremy Thomas, Sativa Investments Founder & Chief Executive Officer commented on the progress:
“The Company has made significant progress since its admission to the NEX Exchange Growth Market in March last year. The Company’s operations now cover seed growing, in so far as the Company has already successfully grown a hemp crop under the CEO’s own growers’ licence, and along with great strides in developing its medical cannabis business, and has researched, tested, marketed and sold CBD products.
“Sativa now has a solid base on which to build its seed-to-consumer model and this next round of fund raising will allow institutions and other investors to participate in what is expected to be a major UK industry.”
Wellness Centres
Sativa’s trading updates was closely followed by the announcement of plans for Wellness Centres named Goodbody & Blunt. The centres will consist of drop in centres where individuals will be able purchase a range of CBD (cannabidiol) products. CBD products such as oil do not contain psychoactive THC and have long been available for sale in the UK and can be purchased in many supplement stores. While the distribution of CBD is not amazingly groundbreaking it does provide Sativa Investments time to build the Goodbody & Blunt brand in anticipation of recreational legalisation of cannabis with THC in the UK. The UK fired the starting gun on potential recreational legalisation when last year medicinal cannabis was very publicly legalised. Taking the examples of the United States, Canada and a number of countries in Europe, it takes around 3-5 years from medicinal legalisation to recreational legalisation. Sativa Investments have appointed Chris Jones to head up the unit who brings experience from the vaping and mobile phone markets.Brexit: Theresa May faces confidence vote amid deal defeat
Theresa May’s Brexit plan was defeated by a majority of MPs in Parliament on Tuesday, with Labour now launching a vote of no confidence against the government.
The Prime Minister’s Brexit deal was rejected by 230 votes, in a huge blow to the government given it has spent the last two years negotiating it.
After the defeat, May told the Commons that the vote “tells us nothing about what it does support, nothing about how or even if it intends to honour the decision that people took in a referendum”.
Nevertheless, she said she would respect the outcome of the vote. She also said:
“The house has spoken and the government will listen,” she told the Commons earlier today.
The vote is set to take place after Prime Minister’s questions today. Should Labour win the vote, an immediate election would not take place.
May’s government would have two weeks to attempt to regain confidence from MPs, or an alternative government would be allowed to form.
Nevertheless, both Tory rebels and DUP MPs have allegedly pledged to give their support to the Prime Minister, meaning a Labour victory seems unlikely.
Still, uncertainty about the road ahead remains. If May survives a no-confidence she will likely head back to Brussels to renegotiate.
Thus fur, however, the EU has dismissed the option of further talks.
The European Council Chief Donald Tusk took to twitter hinted that the only possible resolution would be to cancel Brexit.
He tweeted:
https://platform.twitter.com/widgets.jsIf a deal is impossible, and no one wants no deal, then who will finally have the courage to say what the only positive solution is?
— Donald Tusk (@eucopresident) January 15, 2019
JP Morgan reports 18% fall in revenue
Following “challenging market conditions”, JP Morgan (LON: JMC) reported an 18% fall in revenue for the fourth quarter of 2018.
The group’s quarterly profit that was reported on Tuesday fell below analysts’ expectations for the first time in 15 quarters.
Despite the poor revenue results, the lender reported a 67% rise in profits to $7.1 billion. The rise in profit was a record for the fourth quarter.
Earnings also grew to a record of $32.5 billion, whilst fixed-income trading fell to $1.9 billion (£1.5 billion).
“Despite a challenging quarter, we grew markets revenue in the investment bank for the year with a record performance in equities and solid performance in fixed income,” said Jamie Dimon in a statement.
Dimon also warned against the political shutdown in the US and the effects it may have on results.
“We urge our country’s leaders to strike a collaborative, constructive tone, which would reinforce already-strong consumer and business sentiment,” he said.
“Businesses, government and communities need to work together to solve problems and help strengthen the economy for the benefit of everyone,” added Dimon.
Shares in JP Morgan fell 8.7% last year amid the concerns surrounding a US/China trade war. They are currently trading down 1.29% (1557GMT).
Dignity shares edge up on “stronger than expected” Q4 results
Dignity reported a “stronger than expected” fourth quarter on Tuesday.
Operating profit for the funeral provider expects to be £79 million, which is ahead of market expectation.
In their trading update, Dignity said the stronger than expected profit was due to a comparable market share remaining robust and showing small growth year on year; the funeral average income remaining higher than anticipated; and overheads being lower than expected, partly due to the timing of some marketing spend which will now occur in 2019.
“Good progress continues to be made on the Transformation Plan. Following the price reductions introduced in 2018, the Board continues to expect average funeral incomes to be lower in 2019 than in 2018 and there are therefore no changes to the Board’s expectations for 2019,” said the group in a statement.
The funeral provider has struggled over the past year, due to increased competition from rival Co-op funeral group. The price war between providers has hit profits for Dignity. In the three weeks to September 29, profits for the group took a 27% hit to £11.1 million.
In addition, the Competition and Markets Authority said in November that they would launch an investigation into the UK funeral market, which caused shares to slide.
“The scale of these price rises does not currently appear to be justified by cost increases or quality improvements,” said the CMA at the time of the news.
Analysts at broker Peel Hunt said on the trading update that it was “a pleasing surprise”.
Shares in the group (LON: DTY) are trading +0.49% at 723,50 (1440GMT).
Marks and Spencer names locations of store closures
Marks and Spencer (LON:MKS) have announced the names of the stores that are set to close as part of the high street chain’s restructuring plans.
The retailer announced the closure of 17 store locations last year, as it looks to streamline costs and revive its fortunes.
The closures are set to put as many as 1,000 jobs at risk, as the company looks to compelte the closure of 100 stores by 2022.
It also plans to cut the amount of space in stores dedicated to clothing, one of the worst performing divisions for the company.
Sacha Berendji, the M&S retail, operations and property director, commented on the closures:
“We’re continuing to transform M&S with pace and as part of this we are making good progress with our plans to close over 100 stores – radically reshaping our store estate to become more relevant for our customers.”
“Proposing to close stores is never easy, for our colleagues, customers or the local community, but it is vital for the future of M&S. Where we have closed stores, we are continuing to see an encouraging number of customers choosing other nearby locations and shopping on M&S.com.”
The stores named are as follows:
- Ashford
- Barrow
- Bedford
- Boston
- Buxton
- Cwmbran
- Deal
- Felixstowe
- Huddersfield
- Hull
- Junction One Antrim Outlet
- Luton Arndale
- Newark
- Northwich
- Rotherham
- Sutton Coldfield
- Weston-super-Mare
Ashmore Group shares fall amid “modestly negative” investment performance
Ashmore Group shares (LON:ASHM) fell on Tuesday after the company said its investment performance was “modestly negative” in q2.
Assets under management were up by 0.4% to £76.7 billion at the end of December from £76.4 million in September.
This was as a result of net inflows of $0.5 billion mitigating a negative investment performance of £0.2 billion.
According to the trading update, Ashmore said that ‘net inflows were delivered in the corporate debt, blended debt, equities, multi-asset and overlay/liquidity themes.’
Meanwhile there was a ‘small net outflow’ in the local currency theme, whilst external debt and alternatives themes remained flat during the quarter.
As a result, the company said investment performance proved ‘modestly negative’ for the period.
“Despite the more challenging markets experienced for much of 2018, client flows remain resilient reflecting investors’ very low allocations to emerging markets and recognition of the value available,” commented chief executive Mark Coombs.
“The effect of tax-related stimulus on the US economy and its support for the US dollar started to fade towards the year end, removing the main headwind for emerging markets outperformance.
“The reduction in emerging markets asset prices despite improving economic growth suggests underweight investors will continue increasing allocations to emerging markets, and a return to the positive market trends experienced in 2016 and 2017.”
Shares in Ashmore are currently -2.63% as of 11:44AM (GMT) as the market reacts to the update.
Persimmon annual profit set to be “modestly” ahead of market
Persimmon announced on Tuesday morning that it expected its annual profit to be “modestly” ahead of current market expectations.
Total group revenue was 4% higher than the year earlier, coming in at £3.7 billion. This compares to the £3.6 billion figure in 2017.
New housing revenues increased by 4% to £3.55 billion.
Additionally, legal completion volumes increased by 406 new homes, a 3% increase to 16,449, including private sales of 13,341 new homes.
Average selling price was roughly £215,560 for the year ended 31 December 2018. This price is 1% higher than the £213,321 recorded in 2017.
“The UK housing market has continued to benefit from robust employment levels, low interest rates and a competitive mortgage market, which has supported confidence and customer demand across the regions,” the house building company said.
The company has said that expects its pre-tax profits for 2018 to be “modestly” ahead of the current market consensus. Persimmon has benefited from the new developments opened throughout 2018.
The company concluded with a reflection on the current UK housing markets and the current economic uncertainty surrounding the UK’s departure from the European Union. Indeed, Brexit uncertainty has pushed UK house prices to a six-year low, as reported by Reuters.
“As we look forward to the 2019 spring season Persimmon is in an excellent market position. Whilst the future performance of the UK economy is currently subject to increased levels of uncertainty the Group is well positioned with its strong outlet network together with the availability of a range of attractive house types at affordable prices across the regions of the UK, supported by a high quality land bank and conservative financial structure.”
“We will give an update on our assessment of the housing market over the early weeks of 2019 when we announce our results for the year ended 31 December 2018 on Tuesday 26 February 2019.”
Amid a difficult climate for the UK property market, we took a look at whether London house prices would recover in the year ahead.
At 10:18 GMT today, shares in Persimmon plc (LON:PSN) were trading at -0.4%.
Gym group shares drop on weakened adjusted earnings
The Gym Group announced its pre-closure trading update for 2018 on Tuesday morning. Adjusted earnings are expected to be weakened from a lower opening programme and the impact associated with outlet conversions from its Lifestyle Fitness acquisitions. Shares in the group dropped by almost 5.5% this morning on the back of the announcement.
Total revenue has grown 35.6%, increasing to £123.9 million for the year ended 31 December 2018.
Year-end net debt was recorded at £46 million as a result of the easyGym acquisition and investment in 17 new openings.
The company has released an expected full year adjusted earnings for 2018 to be roughly £37 million.
In 2017, the company opened a new 16,000 square feet outpost on White Hart Lane, just moments from Tottenham Hotspur FC’s new stadium.
CEO of The Gym Group, Richard Darwin, commented on the announcement:
“The Gym Group continues to deliver strong, profitable growth whilst also establishing the platform for a bigger business in the future. The pace of expansion was significant in 2018: we opened 17 new gyms, converted the acquired Lifestyle sites, acquired easyGym and over the last 30 months have doubled the number of gyms in our estate. We have recently reached the milestone of 750,000 members, demonstrating the ongoing appeal of our business model.”
“Looking forward we have a good pipeline of new sites and expect to open a further 15-20 gyms in 2019. We are well placed to continue to generate high levels of growth whilst maintaining strong returns on capital. We are confident that in 2019 we will continue to develop and build the business to deliver another year of profitable growth for shareholders.”
The group reported that its total year-end membership numbers were ahead by 19.3%, to 724,000. This figure compares to the 607,000 recorded in December 2017. Additionally, it posted its average members of 693,000, which is up 31.2%.
Elsewhere on the stock market today, Boohoo revised its full-year sales outlook following a strong Christmas sales period.
At 09:48 GMT today, shares in GYM Group plc (LON:GYM) were trading at -5.42%.