Stagecoach reshuffles Board and profits fall

Jamie Gordon
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2
Stagecoach reshuffles Board and profits fall
Scottish-based train and bus company Stagecoach Group plc (LON: SGC), the UK’s largest transport firm, has posted a 63% dip in annual profits owing to the loss of its North American business. While the company’s pre-tax profit jumped 30% – on a continuing operations basis – to £101.2 million, revenue fell to £1.88 billion. This dip of approximately a third led a fall in full-year pre-tax profit to £23.6 million, down from £63.8 million on-year.  

Chief Executive comments

Martin Griffiths, Chief Executive of Stagecoach, maintained a positive outlook with his comments in the Company’s update today. “I am pleased to report good financial results as we reposition the business,” “We continue to focus on driving growth at our core high quality bus and coach operations in the UK, but we have no intention to bid for new UK rail franchises on the current risk profile offered by the Department for Transport.” “We have maintained our expectation of earnings per share for 2019/20.”  

Changes to the Board

Alongside the latest round of results, the Company announced a series of changes to its Board of Directors. Aside from the change of heart of Karen Thompson, who has decided to remain as Stagecoach‘s Non-Executive Director, all scheduled departures from the Board will take place before the Company’s AGM on the 30th of August 2019. Regarding the Board reshuffle, the Company’s statement read, “Deputy Chairman, Will Whitehorn, will step down from the Board on 30 June 2020, when he will have served for nine years and be regarded as non-independent based on the criteria for independence stated in the UK Corporate Governance Code.”

“Will Whitehorn will be succeeded as Deputy Chairman by Ray O’Toole, who joined the Board as a Non-Executive Director in September 2016 and is currently Chairman of the Health, Safety and Environmental Committee and the Remuneration Committee. Ray O’Toole, who is also a member of the Audit and Nomination Committees, has extensive senior experience in the public transport sector in the UK, mainland Europe and North America.”

“In addition, Non-Executive Director, Dame Jayne-Anne Gadhia, has indicated that she will be stepping down from the Board on 31 July 2019 and will therefore now not seek election at the 2019 Annual General Meeting. Dame Jayne-Anne is stepping down to take up the new full-time role of Chief Executive at financial services start-up, Snoop.”  

Positive outlook for Stagecoach

In response to these updates today, Associate Director of Fidelity Personal Investing’s share dealing service, Emma-Lou Montgomery, commented:

“Stagecoach, the UK’s biggest bus and coach operator may have been driven down a narrower path than it had scheduled by its corporate sat nav, thanks to shareholder pressure and yet another rail franchise disqualification, but the newly-focused group should now put the board back in the driving seat.”

“The focus on cost-effective coach fares and greener vehicles should fare well. Already the UK’s biggest investor in hybrid-electric bus technology, Stagecoach has invested more than £1 billion in new greener buses over the past decade and a further £80m-plus will see it operating more than 350 new buses and coaches in the UK in 2019/20.”

 

Investor notes

Only in the early knockings of the new financial year, the outlook doesn’t look as bleak as the fall in earnings might suggest. The Company have kept their full-year dividend steady at 7.7p per share, and shares have rallied modestly by 1.96% or 2.3p in Wednesday morning trading, up to 119.9p per share 26/06/19 12:30 GMT. Analysts did not find a consensus on Stagecoach stock, with Deutsche Bank reiterating their ‘Buy’ rating while Liberum Capital reiterated their ‘Hold’ stance.

REC: employers more confident in hiring, investing and UK economy

Dina Caruso
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1
REC: employers more confident in hiring, investing and UK economy
Employers’ confidence in the UK economy and in their own hiring and investing has improved since the Brexit extension, new data from the Recruitment and Employment Confederation (REC) revealed on Wednesday. The European Union previously agreed to postpone Brexit for an additional six months until the October 31. With the date coinciding with Halloween, the UK could have a rather poetic ending to their time in the European Union. According to the Recruitment and Employment Confederation’s JobsOutlook survey, employers’ confidence in making hiring and investment decisions has increased by four percentage points, returning positive at +1. Confidence in the UK economy has also increased, growing by 3 percentage points but still remaining negative at -26. “The strength of our jobs market is one of the biggest assets the UK has, as it keeps people in work and raises their pay. Ensuring we protect the flexibility and opportunity it offers should be at the heart of any new government’s agenda,” said Neil Carberry, Chief Executive of the Recruitment and Employment Confederation. “Today’s survey shows that businesses believe in their own prospects and are ready to grow if the pall of economic uncertainty is removed. The contrast between employers’ view of their own prospects and their view of the wider economic picture remains stark, however. Resolving this will require cool heads through the summer and autumn, so that companies can rely on a smooth and stable new relationship with the EU – not the chaos of a no deal exit,” the Chief Executive continued. “JobsOutlook again shows how concerned employers are about skills shortages. Recruiters are helping with this, with 92% of hirers saying knowledge and expertise is key to choosing a partner who can help them navigate uncertain times.” Elsewhere in UK politics, the race to leadership of the Conservative Party is reaching its final lap as Boris Johnson and Jeremy Hunt are the final two candidates to contest the party’s leadership and replace Theresa May. The Conservative Party’s 160,000 members will now vote to chose the replacement.

Keeping the lid on single-use plastic: Chilly’s Bottles

Dina Caruso
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1
Keeping the lid on single-use plastic: Chilly’s Bottles
Earlier this week, Boots announced that it would aim to remove all plastic bags from its stores by 2020. The switch, which began on Monday, will phase out the use of plastic bags across all of its outlets and eliminate 900 tonnes of single-use plastic each year. Boots is not alone to have made the switch, with McDonald’s also deciding to remove plastic lids from its McFlurry ice cream in all UK restaurants from September, also attempting to align itself with more environmentally friendly policies. The plastic bags that Boots has eliminated and the plastic lids removed from McDonald’s are examples of single-use plastic. These plastics are only used once by consumers before they are thrown away or recycled. These single-use plastics, also called disposable plastics, are petroleum based and are not biodegradable, having a detrimental impact on the natural environment. Whilst some companies, such as Boots and McDonald’s, have been removing single-use plastics from their stores, others have been set up to precisely meet the demand for reusable alternatives, such as bottles, cutlery and straws. One brand to do so is Chilly’s. The brand was founded in 2010 by James Butterfield and Tim Bouscarle, aiming to provide consumers with the ability to always have water available to them, without having to purchase single-use plastic bottles. “Chilly’s mission is to accelerate the adoption and everyday use of reusable products. We aim to do this through creating products for an active urban lifestyle, with the perfect balance of distinctive style and unrivalled performance,” the company’s website reads. The original product to be born from this idea was the eco-friendly Chilly’s Bottle. The bottle has a modern and stylish design that combines the convenience of a single-use plastic bottle with the technology and environmentally friendly benefits of traditional flasks, the company website reads. Since the original bottle, Chilly’s has also rolled out reusable coffee cups, as well as a range of accessories such as toilet brushes, ice cube trays and reusable straws. It’s current bottle range includes the new Sea Life Edition that celebrates World Oceans Day. In 2018 Will the Artist painted his Chilly’s Bottle white as a base for hand drawn illustrations of sea life, in order to raise awareness about the plastic polluting our oceans. The four Sea Life Edition bottles, each boasting a different sea creature, can be purchased from Chilly’s online store. In addition to its online site, Chilly’s bottles can be purchased in over 100 nationwide and independent stores in the UK and across Europe.

Creditinfo and ACGF partner to develop credit risk scorecard for Afghan SMEs

Dina Caruso
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0
Creditinfo and ACGF partner to develop credit risk scorecard for Afghan SMEs
Creditinfo Group, a leading global credit information and fintech services provider, announced on Wednesday that it will enter into a strategic partnership with Afghan Credit Guarantee Foundation (ACGF). The partnership will develop a Credit Risk Scorecard aimed at small-to-medium enterprises (SMEs) in Afghanistan. Being the first small-to-medium enterprise credit scorecard to be developed for the Afghanistan market, it is expected to not only increase profitable lending to the market, but also provide a range of societal benefits such as increased employment. Creditinfo, a global supplier of credit bureaus and credit risk solutions, has been active in Afghanistan since 2013. Established in 1997, it is headquartered in Reykjavík, Iceland. ACGF was established in 2014, after a decade of strong performance by its institutional predecessor Credit Guarantee Facility for Afghanistan. It is a charitable foundation based in Cologne, Germany. The partnership between the two will lead to an innovative method for assessing the credit risk of small-to-medium enterprises granting credit, according to a company statement. “Our unique insight into the Afghan credit market, combined with our previous work with the Central Bank of Afghanistan, will help in creating a robust and reliable measure of SME credit worthiness in the country,” said Benjamin Riley, Senior Global Consultant at Creditinfo. “This will have a significant positive impact on the national economy, by opening up access to more affordable and stable credit to SMEs,” Benjamin Riley continued. “Globally, SMEs are the driving force behind economic growth, generating employment opportunities and wealth. However, access to affordable and stable credit is a key factor in the success of the sector,” Bernd Leidner, Chairman of Management Board at ACGF, added. “Afghanistan is no different in this respect. For years, we have been dedicated to opening up financial access to Afghan businesses. Our next initiative, alongside our trusted partner Creditinfo, will ensure we’re providing the local market with the required tools, consultancy and advice to not just survive, but thrive.” Earlier this year, Creditinfo also announced that it was set to open a new regional hub in Muscat, after its partnership with the Central Bank of Oman.

Vela Technologies notes Candy Ventures investment in Vibe Group

Jamie Gordon
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5
Vela Technologies notes Candy Ventures investment in Vibe Group
Tech-based disruptor investor Vela Technologies Plc (LON: VELA) has noted that Candy Ventures has bought up a 23% stake in Luke Massie’s ticket resale platform Vibe Group. It is understood that Candy Ventures – private investment fund of property billionaire Nick Candy – paid a seven figure sum its stake in Vibe Group, and will now take its place alongside existing stakeholders Vela Technologies and Scott Fletcher. In response to the update, Nick Candy commented, “I recognise a lot of entrepreneurial qualities in Luke that I know are crucial for a tech start-up to achieve great things. He has identified real demand from consumers and developed some game-changing products. Candy Ventures is excited for the potential of this investment.”
He added that he was attracted to Vibe’s “game-changing products”
Luke Massie followed by saying that,

“This is a significant milestone for the Vibe Group. To have the backing from Nick Candy and his experienced team at Candy Ventures, as well as the continued support from Scott and Vela, is a huge endorsement for the brand.”

“We are gathering momentum at an incredible pace and making major progress in product development. We always put the consumer first and build products that add value to their everyday lives.”

Vela Technologies comment

Vela currently holds a 3.1% stake in Vibe Group, and following the update, the company’s statement wrote, “The Board of Vela (AIM: VELA) notes the media commentary regarding Vibe Group Holdings Limited (“Vibe Group”) and the investment by Candy Ventures, a private investment company owned by Nick Candy, in Vibe Group. Candy Ventures has made an undisclosed investment into Vibe Group for a 23 per cent. equity stake in Vibe Group.”

“Following this investment, and based on Companies House filings, Vela holds 5,674 ordinary shares in Vibe Group equivalent to approximately 3.1 per cent. of the issued share capital of Vibe Group.”

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Share price update

The Company’s shares rallied following the regulatory update, up 6% or 0.0057p to 0.1p a share at the end of Tuesday trading 25/06/19 14:44 GMT. Elsewhere in the tech-related sector; Remote Monitored Systems PLC (LON: RMS), Tekmar Group Plc (LON: TGP), Redcentric PLC (LON: RDN), Codemasters Group Holdings Limited (LON: CDM) and Amino Technologies Plc (LON: AMO) provided trading updates.

CBI: retail sales crash at fastest annual pace since 2009

Dina Caruso
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0
CBI: retail sales crash at fastest annual pace since 2009
Retail sales crashed in June at the fastest annual pace since March 2009, data from the Confederation of British Industry (CBI) reveals. The CBI’s monthly retail sales balance fell to -42 from -27 in May. The CBI said that the plunge is likely to be impacted by the relatively cooler weather compared with the same period last year. Among the retail sector, grocers were the largest contributors to the decline in sales volumes, the CBI data shows. The hardware & DIY and footwear & leather sub-sectors also reported declines, the CBI said. Internet sales across the sector stalled in the year to June, the weakest growth since 2009. However, internet sales are expected to pick up again in the following month, though the pace they will do so at will be below the long-run average. 16% of retailers said that sales volumes were up for the month of June compared to last year, comparing to 58% that said they were down. “This month’s drop in sales should be taken with a pinch of salt, given the backdrop of last June’s heatwave and the start of the World Cup. But even accounting for both factors, underlying conditions on the High Street remain challenging. Retailers are having to continually compete for the attention of value-conscious shoppers, in the age of digital disruption,” said Alpesh Paleja, CBI Principal Economist. Indeed, last year is particularly difficult to outperform given the summer heat wave and the FIFA Men’s World Cup, which created a summer atmosphere of celebration among the nation. “The new Prime Minister must help support retailers by reducing the high cumulative burden of costs they face. This should start by urgently reviewing the dire business rates system, which is unfairly impacting UK high streets and deterring much needed investment’,” Alpesh Paleja continued. The CBI said that though its expects the UK to return to a subdued growth path in the future, Brexit uncertainty and global trade tensions prevail. Fashion retailer New Look revealed on Tuesday a deeper annual loss in its full year results, whilst Carpet Right (LON:CPR) also made headlines as it posted a narrower loss for the full year. New data from Kantar also emerged on Tuesday, revealing that supermarket sales rose modestly as the poor weather kick-starts the summer season.

Benchmark on target for full year despite H1 loss

Jamie Gordon
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0
Benchmark on target for full year despite H1 loss
Aquaculture technology firm Benchmark Holdings PLC (LON: BMK) have reported a positive outlook for the full year despite a loss in the first half. The Company stated that despite the loss, it posted a 3% increase in revenues – now up to £78.3 million – and found that growth in Genetics, Health and Knowledge Services offset the drop in advanced nutrition, despite what were described as ‘challenging’ conditions in the shrimp market. For the first half, the Company posted an adjusted EBITDA of £7.5 million, up 25% from £6 million for H1 2018. This, the Company said, reflected the effects of cost control and increasing capacity in Norway, as well as the contribution of high value products and an increase in the value of biological assets as a result of growing sales. However, Benchmark then had to report their £9.1 million loss for the first half, which they said was related to higher finance costs and increased depreciation on recent investments. Further, the H1 for the previous year had the added benefit of a £9.2 million tax credit. In response to the latest round of results, the Company said full year guidance and results would remain “broadly in line with expectations”. Elsewhere in the tech-related sector; Remote Monitored Systems PLC (LON: RMS), Tekmar Group Plc (LON: TGP), Redcentric PLC (LON: RDN), Codemasters Group Holdings Limited (LON: CDM) and Amino Technologies Plc (LON: AMO) provided trading updates.

Benchmark comments

The Company’s Chief Executive, Malcolm Pye, said, “We have delivered growth in Adjusted EBITDA and made progress against our strategic priorities despite challenging conditions in the shrimp markets.” “We continue to implement operational and structural efficiency initiatives and we expect the Group to deliver broadly in line with market expectations for the full year.” “We are starting to see benefits from the investments we have made into a number of areas including our new facility in Salten, Norway.” “These investments, combined with the successful completion of our refinancing, leaves us well placed to deliver on our five year strategy to drive future growth and profitability.”

Preceding this round of results

Earlier in June, the Company announced the successful undertaking of a refinancing venture and placement of a new senior bond issue. In its statement, Benchmark said, “the Company has today successfully completed a new senior secured floating rate listed bond issue of NOK 850 million (USD $95m equivalent). The bond which matures in June 2023, has a coupon of three months NIBOR* + 5.25% p.a. with quarterly interest payments. This new bond issue will refinance Benchmark’s existing $90m credit facility. DNB Markets acted as Sole Bookrunner for the bond issue. As envisaged, a $15m RCF has been provided by DNB Bank ASA.”

“The bond issue was significantly oversubscribed and marks the Company’s entry into the Nordic region debt and securities market, which is globally recognised for its investment in aquaculture, providing the Company with access to a sector specialist investor base.”

Further, the Company announced talks to end its joint venture salmon breeding operation with AquaChile. Company Chief Executive Malcolm Pye stated, “We are pleased to have the opportunity to fully own the world class salmon breeding facility currently owned by the JV and to reinvest the funds to move towards full scale production and commercialisation”. “Whilst this marks a change to Benchmark’s approach to the market, it is a positive step towards fulfilling our key objective of accelerating our establishment of a strong local presence in this important market, in line with our strategy.”

Investor notes

The Company’s shares slightly dipped in trading on Tuesday, down 5.72% or 2.35p to 38.66p a share 25/06/19 14:35 GMT. Analysts from Numis reiterated their ‘Buy’ stance on Benchmark stock.

Remote Monitoring Systems shares dip despite losses narrowing

Jamie Gordon
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2
Remote Monitoring Systems shares dip despite losses narrowing
Remote surveying and inspections services company Remote Monitored Systems PLC (LON: RMS) saw their share price dive during trading on Tuesday morning following their latest trading update. The Company booked an increase in revenue, up to £857,970 for the year ended December 31st 2017, from £788,718 on-year. Contingently, earnings were up £800,000. However, this was only enough to narrow their previous rate of loss rather than eradicate their loss altogether. As such, for the year through December, net losses amounted to £1.1 million, narrowing from £1.9 million on-year. Elsewhere in the tech sector; Tekmar Group Plc (LON: TGP), Redcentric PLC (LON: RDN), Codemasters Group Holdings Limited (LON: CDM), Amino Technologies Plc (LON: AMO) and MTI Wireless Edge Limited (LON:MWE) provided trading updates.

Remote Monitored Systems comments

Regarding ‘outlook’, the company stated that, “The Group continues to make progress across all elements of its business.” “Geocurve, having experienced a slower than expected start to 2019, has prioritised profitability over growth. Cost saving measures have been implemented with the intention of becoming self-financing in 2019, albeit with revenues expected to be lower than those in 2018.”

“GyroMetric, which will be conducting trials for two major wind turbine manufacturers in 2H 2019, has recently signed a contract for a technical cooperation with a major UK supplier to the energy and petrochemical industries and as a result of the recent successful recruitment of a Technical Sales Director, a number of promising opportunities in new sectors, where lead times are typically shorter, are already being pursued.”

“The Board is determined to deliver value to shareholders and continues to examine opportunities to grow both organically and through acquisition of complementary businesses and technologies which can enhance growth in shareholder value.”

The Company’s chairman, Nigel Burton, stated, “2018 saw significant change for the Company, with the transition to a largely new Board and closure of the loss making training business all completed in January 2018. The business now comprises Geocurve, a leading provider of survey and inspection services, and the 58% interest in GyroMetric Systems, which provides digital monitoring and safeguarding systems for rotating shafts. During the year Geocurve grew significantly, with revenues up by 34%, whilst two investments were made in GyroMetric Systems. The name of the company was changed to reflect the new focus and direction of the business, with a new website launched in November.”

Stock update

Following the update, Remote Monitoring Systems shares are currently trading 22.14% or 0.15p at 0.54p a share 25/06/19 13:45 GMT.  

AMC Group opens new factory to supply growing demand for healthier food

Dina Caruso
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0
AMC Group opens new factory to supply growing demand for healthier food
AMC Group announced that it has opened a new plant-based and allergen-free production facility, aiming to supply the growing demand for healthier lifestyle choices. In addition to providing over 100 jobs to the local area, the site is totally free from all of the 14 main allergen groups and produces freshly-squeezed juice and plant-based and free-from products, the company said. AMC Group said that the 55,000 sq ft factory is now fully up and running. It provides juice, yoghurt and soup to a range of brands, large and small retailers and food service restaurants. The factory aims to provide the growing consumer demand for healthier food options. Indeed, as more consumers make the switch to plant-based diets for a variety of reasons, plant-based and free-from products are in growing demand. According to AMC Group, the factory can squeeze 960 oranges per minute, delivering 50% of the fruit weight as juice via six juice extractors. The juice facility has the capability to provide the whole of the UK with freshly-squeezed juice. AMC Group has secured Sainsbury’s as its first business, providing it freshly-squeezed juice. Additionally, it has just begun production of a number of premium lemonades for Waitrose’s summer range, Truly Scrumptious. “There’s an exciting future in store for the site. Plant-based products are in huge demand and there is a gap in the market for a dairy-free factory producing fresh, quality products at scale,” Mike Bullock, Fresh Foods Director at AMC Group, commented on the announcement. Several businesses have begun to accommodate the healthier lifestyle choices made by consumers. Greggs (LON:GRG) saw its sales boosted by the launch of its vegan sausage roll, targeting consumers who pursue a plant-based diet. Nestle (SWX:NESN) announced last year that it was set to make additional cuts to sugar, salt and saturated fat quantities in its product in order to draw in more health-conscious consumers. The food industry is not the only sector to begin accommodating the switch, with the UK’s first 100% vegan hotel opening in the Highlands. According to the Guardian, the number of people in the UK eating a completely plant-based diet quadrupled to 600,000 between 2014 to 2018.

Gear4music earnings drop and swings to net loss

Dina Caruso
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0
Gear4music earnings drop and swings to net loss
The largest UK based online retailer of musical instruments and music equipment, Gear4music (LON:G4M), revealed a 34% drop in earnings on Tuesday. Shares in the business were trading almost 8% lower following the announcement. For the 13 months ended 31 March, Gear4music said that its earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 34% to £2.3 million. The company, which said that its active customers were up 53% to 727,000, also posted a net loss of £163,000. Despite swinging to loss, the business said that it has made “swift strategic operational changes” to reduce the risk of this continuing into the year ahead. Revenue increased 48% to £118.2 million, and gross profit grew 32% to £26.9 million. Gear4music, which issued a profit warning in January, said that it remains confident of continued strong growth and delivering profit improvement in the following year. “Alongside delivering strong revenue growth in the period, we have worked hard to implement a number of commercial and operational initiatives to address the previously reported issues,” Andrew Wass, Chief Executive Officer, commented on the results. “Our FY20 H1 focus is on improving gross margins and ensuring a robust operational infrastructure is in place ahead of our peak H2 trading period, and I am pleased to report these actions are already yielding positive results,” the Chief Executive Officer continued. “We are confident that we have the right strategy, customer proposition, financial resources and focus, to overcome the challenges of FY19, and achieve our objectives of maximising customer satisfaction and delivering value to shareholders.” The business said that it has taken decisive action to address the underlying causes of the profitability challenges faced over the previous year. Gear4music operates from a head office in York, selling own-brand musical instruments and music equipment alongside other premium brands. It sells to the UK, Europe and recently the Rest of the World. Shares in Gear4music Holdings plc (LON:G4M) were trading at -7.83% as of 12:14 BST Tuesday.
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