Premier Oil reduces net debt ahead of full year results
Premier Oil released a trading update on Thursday ahead of its 2018 Full Year Results. The UK oil company said that it has reduced its debt to $2.3 billion at the end of 2018. This figure is below its previous $2.4 billion guidance.
The estimated net debt figure of $2.3 billion is a $390 million reduction from 2017.
Full-year production was 7% higher compared to 2017, making it a record year for the company. It produced 80,500 barrels of oil equivalent per day (boepd). November and December production alone averaged 92 kboepd, remaining above forecast.
Halfords shares crash on latest profit warning
Shares in Halfords have crashed after the retailer issued yet another profit warning.
The retailer said that expected profits have fallen from the previous estimate of £70 million down to between £58 million and £62 million this year.
Halfords said on Thursday that sales in the group fell due to weaker consumer confidence and the mild weather.
“This has been a challenging third quarter for the business, driven by exceptionally mild weather and ongoing weak consumer confidence. Together, these factors have led us to reduce our profit expectation,” said Graham Stapleton, the chief executive.
“Halfords is a robust business and we firmly believe that the strategy we outlined in September is the right direction for the business,” he added.
The group’s last profit warning came in May last year when the bike specialist said profits would come in flat. In September, the retailer said that profits would not rise in 2020.
Stapleton joined Halfords in January after the former boss left to join Marks & Spencer.
Shares in Halfords (LON: HFD) are trading down 19.45% (1009GMT).
DFS profit outlook unchanged amid Brexit uncertainty
DFS furniture announced on Thursday that it will keep its full-year profit outlook unchanged. Additionally, the company has also announced that its CFO Nicola Bancroft will retire.
For the five months to 30 December 2018, DFS has had a good underlying sales growth of 10%, despite the “challenging consumer environment“.
Additionally, it saw a like-for-like growth across all of its brands and a strong 22% growth in online sales. Reported gross sales grew 29% measured against the same period from the previous financial year.
DFS will not alter its full-year profit expectations.
The company has said that it is “mindful of the risk of near-term political and economic uncertainty,” alluding to Brexit. As a result of Brexit uncertainty, it will not alter its profit expectations despite its strong sales figures. Addressing the uncertain economic and political climate, the company said: “While we have achieved a good sales performance, helped by latent demand, we remain cautious around our full-year outlook, and as such our profit expectations for the full year remain unchanged. “ “We are mindful of the broader political and economic uncertainty and the further risk this may pose to consumer confidence and lead times for the proportion of our made-to-order products that we source overseas. However, we do expect benefits of previous and ongoing investments in our online activities, our final-mile two-man logistics and the continued integration of Sofology, together with progress being made at Dwell and Sofa Workshop, to help mitigate this challenging market environment.” “It is worth reiterating that the Group has historically capitalised on any adverse trading conditions to build our market position and we continue to believe that our cash generation and long-term growth prospects will drive attractive returns for our shareholders.” Moreover, the company has announced that CFO Nicola Bancroft will retire afte six years with the company. Elsewhere, Tesco shares were up during early trading as a result of its strong Christmas performance. At 09:51 GMT today, shares in DFS Furniture plc (LON:DFS) were trading at +3.66%.Tesco shares up on “strong” Christmas sales
Sales at Tesco grew over the Christmas period, thanks to various Christmas offers.
Tesco reported a 2.6% increase in like-for-like sales in the group’s UK supermarkets.
Dave Lewis, the chief executive, said:
“As a team, we have achieved a lot in the last 19 weeks. In the UK we delivered significant improvements in our competitive offer and this is reflected in a very strong Christmas performance which was ahead of the market.”
“In Central Europe, the reshaping of our business continues and we are confident of the outcome we envisaged. In Asia, negotiations with suppliers are concluding satisfactorily and we can see this in our simpler, clearer, more impactful offer for customers.”
“We have more to do everywhere but remain bang on track to deliver our plans for the year and as we enter our centenary we are in a strong position,” he added, in a statement.
Sales over the Christmas period were boosted thanks to offers on vegetables, lamb and beef joints and wine.
Ed Monk from Fidelity Personal Investing said: “Lamb and beef joints proved a big hit with shoppers, as did Tesco’s ‘Festive 5’ vegetable offer.”
“With the potential merger of rivals Sainsbury’s and Asda threatening to dethrone it as the nation’s biggest grocer, and German discounters snapping at its heels too, that’s good news and further endorsement of the turnaround being enacted by boss Dave Lewis.”
In other news, Marks & Spencer revealed a dip in sales over the Christmas period. Like-for-like sales fell by 2.2%. UK clothing sales declined by 4.8%, food sales were down by 1.2%.
Shares in the group (LON: TSCO) are trading up 2.31% (0924GMT).
M&S reveals dip in sales over Christmas
Shares in Marks & Spencer fell this morning as the retailer revealed a fall in sales over the Christmas period.
In the 13 weeks to 29 December, like-for-like sales fell by 2.2%. UK clothing sales declined by 4.8%, food sales were down by 1.2%.
Marks & Spencer was particularly hit abroad, where closing stores have led to a 15.1% fall in sales.
Steve Rowe, the group’s chief executive, has said that November was “a very challenging trading period” due to mild weather, a reduction in consumer confidence and high competition.
Lee Wild, who is the head of equity strategy at Interactive Investor, said: “Like all the established UK retailers, Marks & Spencer has been warning for years that online competition and discount stores are stealing business, and that’s reflected in these third-quarter results.”
“Cautious consumers, mild weather and an uninspiring offering across clothing and food haven’t helped,” he added.
Richard Lim, who is the chief executive of research analysis firm Retail Economics, blamed the fall in sales at Marks and Spencer of the retailer’s “outdated business model”.
“These results are worse than expected. It’s increasingly evident that Christmas is becoming an online event and these figures reaffirm the polarisation of shopping habits. Put simply, the retailer is burdened with too many stores, unsuitable space and … spiralling operating costs,” he added.
Shares in the firm opened 1.4% lower but have recovered and are currently trading up 1.08% at 280,70 (0903GMT).
Topps Tiles sales slip in Q1
Home wares retailer Topps Tiles plc (LON:TPT) have seen their sales dip for the first quarter of the financial year – despite positive updates during mid-2018 – amid what they have described as a ‘challenging market backdrop’.
The company’s sales are down 1.4% for the 13 week period through December 29th, but the company said it was making ‘good progress’ on the back of recruiting an experienced sales force, and said it was looking to further strengthen its team, especially in its commercial elements.
“Against a challenging market backdrop and a strong period of performance in the prior year we believe the business has performed robustly over the first quarter”, Chief Executive Matthew Williams said.
“We remain excited by both the opportunity for profitable growth that our expansion into commercial segment will bring and the continued opportunity to further strengthen our market leading position overall.”
“We are building an encouraging pipeline of future potential projects and are on track to open two new showrooms during the second quarter; bringing the total to four”.
Despite disappointing sales, Topps shares are trading up 2.22% or 1.41p at 65.11p. Peel Hunt and Liberum Capital analysts have reiterated a ‘Buy’ stance on Topps Tiles stock, while Cantor Fitzgerald reiterate a ‘Hold’ stance.
Ted Baker rallies after strong Christmas
British fashion retailer Ted Baker plc (LON:TED) have emulated their 2017 success over the Christmas period, and have seen their shares rally in trading today, despite admitting that the adverse conditions experienced in 2018 are set to continue.
High street slowdown and a decline in wholesale turnover was compounded by controversy surrounding Founder and Chief Exec Ray Kelvin, which marred the company in the run-up to the Christmas period.
However, the company have bounced back with sales for the five-week period from December the second up 12.2% on-year, and up 10.5% on a constant currency basis.
Despite challenges, acting Chief Executive Lindsay Page said the company were in line to meet expectations, “against a backdrop of increased promotional activity”
“The Ted Baker brand has delivered a good performance across both our stores and e-commerce business, despite the continuing challenging external trading conditions across our markets,”
“This result again reflects the strength of the brand and the quality of our collections.”
The company owes much of its recent success to the expansion of its online retail opportunities. E-commerce sales spiked 18.7% during the period, to make up 25.7% of net sales.
Before taking a backseat, Founder Ray Kelvin noted that,
“The investment in our flexible business model ensures that the Ted customer has multiple channels to engage with the brand and underpins our long term development. Our global e-commerce business continues to grow well and is complemented by our digital marketing strategy and unique stores that showcase the brand.”
The company’s shares are currently trading up 17.2% or 278p at 1,894p per share. Without consensus – Peel Hunt analysts reiterate their ‘Hold’ stance, Liberum Capital reiterates their ‘Buy’ stance and RBC Capital Markets reiterate their ‘Outperform’ stance on Ted Baker stock.
Apple to cut iPhone production by 10%
Following a cut to its revenue forecast, Apple (NASDAQ: AAPL) is reportedly slashing iPhone production by 10% over the next three months.
The tech giant will reportedly produce between 40 million and 43 million iPhones over the next three months, down from previous plans to produce between 47 million and 48 million devices.
Reports from the Nikkei come after Apple issued a shock warning earlier this month, revealing revenues for the final three months of 2019 will come in at about $84 billion, despite the previous guidance of between $89 billion to $93 billion. This was Apple’s first profit warning in 16 years.
“People are looking for a January rally effect as they place bets for the new year. Apple puts a bit of a sour tone on that,” Daniel Morgan, senior portfolio manager of Synovus Trust said. “It raises concerns about whether current estimates for the quarter are too high,” he added.
The group has blamed China’s economic slowdown for the warning.
When announcing the cut in revenue forecast, Tim Cook said: “We did not foresee the magnitude of the economic deceleration, particularly in greater China.”
“We believe the economic environment in China has been further impacted by rising trade tensions with the United States,” he added.
In other Apple-related news, it was reported that Cook made $136 million as the group’s chief executive last year after receiving a record-bonus.
Taylor Wimpey ends 2018 with completions and price boost
House builder Taylor Wimpey plc (LON:TW) have shared the prosperity of their successful counterparts with a high rate of home completions and a boost to their average sale price and on-year revenues, as December drew to a close.
In addition to the number of completions rising 3% to 14,947 and average selling prices up 2% to £301,000, Taylor Wimpey’s yearly order book was up from £1.63 to £1.78 billion on-year.
The company’s positive results come on the back of a net private reservation of 0.80 per outlet, up from 0.77 on-year, and the fact that their 14% cancellation rate is still classed as ‘low’.
Taylor Wimpey Chief Executive, Pete Redfern, said, “Despite wider macroeconomic uncertainty, the housing market remained stable during 2018 and we had a good trading performance”
“We are continuing to deliver against our strategy and ended the year in a positive position, underpinned by our strong order book and balance sheet.”
“As we enter 2019, we maintain our guidance for stable volumes although are mindful of market sensitivity.”
“We are confident that our focused strategy of managing the business through the cycle and driving further operational improvements will enable us to continue to deliver a high-quality product and service to our customers, long term value for shareholders and growth into 2020.”
UK property is wholly uncertain at the moment. While many have forecastedoom and gloom amid uncertainty – and the burst of the London bubble – nothing is set in stone. A prudent investor would proceed with caution and enjoy moments of resurgence as they occur, while overstating their significance.
Taylor Wimpey shares are currently trading up 5.98% or 8.4p at 148.8p per share 09/01/19 13:48 GMT. Shore Capital analysts have reiterated their ‘Buy’ stance on Taylor Wimpey stock, while Peel Hunt analysts have reiterated their ‘Hold’ stance.
Anglo African O&G to raise £6m for expansion
Anglo African Oil and Gas plc (LON:AAOG) have announced they are to raise £6 million for expansion of their pre-existing operations and drilling into new geological features.
The independent oil and gas firm base their operations in the Democratic Republic of Congo. They are planning to increase the output of existing wells in their Tilapia Field – including the completion of their TLP-103C well – and drill deeper into Mengo and Djeno Sands features , which are shared by surrounding oil fields. Thus far, results have been positive, with the TLP-101 being brought back into production and now recording an output of 55 bopd during a two-week test period. A notion has been tabled to use TLP-102 as a water injector for TLP-101, which could lift output to 400 bopd.David Sefton, Executive Chairman for AAOG, said, “The money raised in this Placing enables us to complete the TLP-103C well, the results from which so far have hopefully repaid shareholders’ confidence in the Company. We are therefore very grateful for the continued support of our long-term shareholders who have made this Placing possible. We are particularly grateful that they have moved so quickly to finance the Company against the backdrop of such market turbulence.”
“We remain extremely excited about the potential for TLP-103C. The confirmation of oil in multiple reservoirs, and with greater aggregate oil columns than expected, should with positive results from further testing, enable the Company quickly to effect a material increase in production and cashflows. However, we are currently drilling towards the Djeno and a success there could prove even more significant than the excellent results achieved so far in the R2 and the Mengo. We hope to be in a position to announce initial results on the Djeno before the end of this month.”
The AIM-listed firm have said the £6 million will be raised via a placement of 60 million new ordinary shares at a price of 10p a share. The company will pay regular dividends to these shareholders once sustainable production of 1000 bopd is achieved, provided that oil prices remain over 30 USD pb.“We should also make clear that this Placing replaces the capital that was available to the Company under the Sandabel Capital L.P. (“Sandabel”) facility that has now been cancelled. There are no outstanding loan notes due to Sandabel, or any other lender, and the loan notes that were issued to Sandabel were all converted into Ordinary Shares last year.”
“This Placing therefore marks a line in the sand for the funding of the TLP-103C well and we look forward to providing further updates on its progress in due course.”
Anglo African shares are currently trading down at 10.25p a share, a dip of 8.48% or 0.95p since trading began this morning. Analysts from finnCap have retained their ‘Corporate’ stance on Anglo African stock.