Shell updates strategy and provides financial outlook to 2025
The Anglo-Dutch oil and gas company Royal Dutch Shell (AMS:RDSA) has updated investors on its strategy on Tuesday, in addition to setting out a financial outlook until 2025.
The company also revealed that it remains on track to deliver on its previous 2020 commitments.
The company’s Chief Executive Officer, Ben van Beurden, summed up the key points of the update as follows:
“Increased organic free cash flow outlook, greater potential distributions to shareholders and confidence in our world class investment case given our high-margin portfolio, improving returns and a globally recognised brand.”
Shell has delivered on a range of commitments since its last Management Day in 2017. This includes achieving $10 billion additional cash flow from operations from new projects.
“We have reshaped our company with a focus on value and have demonstrated a clear track record delivering on our ambitious promises made at our Management Day in November 2017,” the Chief Executive Officer of Royal Dutch Shell, commented on the announcement.
As for its financial outlook, Shell aims to complete its $25 billion share buyback programme – which is one of the world’s largest share buyback programmes – by the end of next year.
Looking ahead to 2025, van Beurden has set out a “robust” financial outlook, which includes the potential to make distributions to shareholders of $125 billion in the form of dividends and share buybacks. This compares to the roughly $52 billion in shareholder distributions between 2011-2015.
Shell also aims to increase organic free cash flow to roughly $35 billion in 2025 at $60 per barrel.
In terms of its strategy update, it has re-focused its strategic themes into three categories. These categories are Core Upstream, Leading Transition and Emerging power.
“All this adds up to a forward-looking strategy that ensures Shell is well-placed to continue to deliver a world class investment case and thrive in the energy transition,” the Chief Executive Officer continued.
In May, Shell posted a 2% decrease in its profits for the first quarter but still beat a company-provided consensus. It also revealed its highest-third quarter profits in four years at the end of 2018.
At 10:15 CEST Tuesday, shares in Royal Dutch Shell plc (AMS:RDSA) were trading at -1.04%.
BRC: UK retail sales drop 2.7% in May
UK retail sales dropped by an annual 2.7% last month according to data from the British Retail Consortium.
According to the British Retail Consortium’s data, the decrease is the biggest fall since 1995.
Additionally, like-for-like sales decreased by 3.0%. Total three-month average for food came in at 1.9%, followed by the total three-month average for non-food at -1.1%.
“With the biggest decline in retail sales on record, the risk of further job losses and store closures will only increase,” Helen Dickinson OBE, Chief Executive of the British Retail Consortium, commented on the data. “With retail conditions the toughest they have been for a decade, politicians must act to support the successful reinvention of our high streets and local communities,” the Chief Executive continued.
The Chief Executive emphasised the striking differences between May 2019 and May 2018. The latter year brought the UK continuous sunshine, with the atmosphere of the nation driven by the lead up to the World Cup, in addition to the Royal Wedding. May 2019, however, has merely added to the political and economic uncertainty that already existed.
Paul Martin, UK Retail Partner at KPMG, also commented on the data saying that “April may have provided retailers with some light reprieve thanks to Easter, but May’s staggering fall of 3% like-for-like is a stark reminder of the industry’s ongoing issues, which for many require urgent attention.”
Indeed, both in store and online retailers have struggled for survival among the tough trading conditions to hit the UK high street. Retailers across the country have battled for survival amid store closures and staff cuts.
As for the performance of the Food and Drink sector, Susan Barratt CEO at IGD said “we’ve now entered a tough period for year-on-year sales comparisons with the Royal Wedding last May, the men’s football World Cup from June and exceptionally warm weather throughout last summer.”
Perhaps 2018 was a year of highs in comparison to a year of political and economic uncertainty that has unravelled so far, as yearly comparisons show.
PayPal to invest in Swedish fintech start-up Tink
PayPal will back the Swedish fintech company Tink in a €10 million investment.
Launched in 2012 with the aim of improving banking, Tink began with a consumer app which has today become a platform that provides tools to users in order to “let anyone build the future of financial services across Europe,” its website reads.
Based in Stockholm, the fintech company allows banks and other fintech start-ups to obtain financial data with more ease.
The investment will be used to expand its current team, develop more products and establish connections with other banks, according to Reuters. This investment follows the €56 million raised earlier this year in February from investors, including Insight Venture Partners.
Tink currently has 150 employees serving 9 European markets from two offices.
According to Tink’s Chief Executive and Co-Founder, Daniel Kjellén, “this is where the market is heading.”
“You see two mega trends in banking: a move from analog to digital and from closed to open,” the Chief Executive and Co-Founder continued.
Fintech, short for financial technology, is the technology that competes with the more traditional financial methods in the delivery of financial services. Technology is used as a a method to improve financial services and the activities that occur in the sector.
Elsewhere in fintech, Klarna Bank, another Swedish company, recently received an investment from the American singer, rapper, record producer, television personality, entrepreneur and actor, Snoop Dogg. Snoop Dogg’s investment firm, Casa Verde, previously added cannabis companies to its portfolio, but also decided to purchase a stake in the Swedish fintech start-up.
In the UK, fintech companies such as Crowd Cube, Monzo and PayBase are leading the way, with Funding Circle (LON:FCH) being the first UK fintech company to be listed on the London Stock Exchange.
As of 18:22 GMT -4 Monday, shares in PayPal Holdings Inc (NASDAQ:PYPL) were last trading at -3.85%.
Coca-Cola HBC posts positive forecast following bumper Q1
Coca-Cola HBC (Hellenic Bottling Company) AG (LON:CCH), the third largest Coca-Cola (NYSE:KO) bottling anchor targets a steady annual rate of growth for the next six years.
The company has produced a sales record of over two billion unit cases and achieved an Ebit margin of 10.2% in 2018.
Its forecast released earlier today targeted a comparable earnings before interest margin of 11% by 2020, and a margin improvement of 20 to 40 basis points per annum from 2020.
The most notable forecast however, is that the company are targeting an average revenue growth of 5-6% per year on a constant currency basis, until 2025.
Coca-Cola HBC comments
“In 2016 we set out a bold plan for 2020 to deliver strong growth in revenue and margins,” said Coca-Cola HBC Chief Executive, Zoran Bogdanovic. “We are delivering against these targets and we go into the final stages of this plan as a considerably stronger and more capable organisation.” “Today we have announced a new and ambitious plan to continue our strong growth to 2025 which, guided by our vision to become the leading 24/7 beverage partner, targets another step up in financial performance.” “The plan builds on our recent consistent, strong performance and the considerable progress we have made in strengthening our business.”Bumper Year for Coca-Cola HBC continues
This forecast follows news from earlier in the year, that the company’s Q1 revenue had jumped 4.7% on-year, On the posting of the results, Bogdanovic commented, “We have started the year well, delivering solid growth in revenues despite the impact of this year’s late Easter. Volume growth accelerated compared to last year and our ongoing revenue growth management initiatives continue to deliver improvements in price/mix.” “This good start sets us up well to deliver on our plans and make 2019 another year in which we achieve FX-neutral revenue growth above our targeted range with another step up in margins.” Further, the company successfully acquired Serbia’s foremost confectionery company, Bambi (LON:BMBI). “This acquisition represents an excellent opportunity to create additional value for Coca‑Cola HBC, its customers and shareholders. It adds iconic, complementary consumer brands to our portfolio of leading beverage brands, as well as consumer-focused innovation capabilities. It further strengthens our relevance with customers and allows us to increase our presence in key consumption occasions, such as the start of the day, on the go and at home snacking and refreshment.” said the company’s Chief Executive.Investment notes
Despite the positive news, the company’s shares dipped during trading on Monday, down 4.73p or 0.17% and closing at 2,847.27p per share 03/06/19 16:39 GMT. UBS and Deutsche Bank analysts reached a consensus with their ‘Buy’ stances on Coca-Cola HBC stock, while Shore Capital have their rating ‘Under Review’.Trump sparks tensions with Sadiq Khan before even landing
President of the US, Donald Trump, has sparked tensions with the Mayor of London, Sadiq Khan, before even stepping foot on UK soil.
During his journey to London Stansted, the President took to Twitter to express his views concerning the Mayor of London.
According to Trump, Sadiq Khan has done a “terrible” job as Mayor of the capital, whilst also being “foolishly nasty” towards the President of the US. Additionally, Trump called the Mayor of London a “stone cold loser” who should focus his time on combating “crime in London” rather than on Trump.
Moreover, Trump said that Khan reminds him of their “very dumb and incompetent” mayor of New York City, Bill de Blasio.
Despite these comments, Trump finished by adding that he look forward to be a “great friend” to the United Kingdom, equally looking forward to his visit.
https://platform.twitter.com/widgets.js.@SadiqKhan, who by all accounts has done a terrible job as Mayor of London, has been foolishly “nasty” to the visiting President of the United States, by far the most important ally of the United Kingdom. He is a stone cold loser who should focus on crime in London, not me……
— Donald J. Trump (@realDonaldTrump) June 3, 2019
https://platform.twitter.com/widgets.js “This is much more serious than childish insults which should be beneath the president of the United States,” responded a spokesman for Khan, according to the BBC. “Sadiq is representing the progressive values of London and our country warning that Donald Trump is the most egregious example of growing far right threat around the globe,” Khan’s spokesman continued. The President of the US will be greeted with the return of the giant baby blimp that will take to the skies of London in honor of his arrival. The Trump baby blimp was also flown over Parliament Square back in July 2018 during the US President’s visit to the capital. Permission to fly the baby blimp was granted by the Greater London Authority, lead by Khan, and the Civil Aviation Authority. At the end of last week, the FTSE 100 and other major European indices sank following Trump’s announcement that he will impose a 5% tariffs on all Mexican goods. These are set to begin on the 10th June, beginning with a 5% tariff that will gradually increase.….Kahn reminds me very much of our very dumb and incompetent Mayor of NYC, de Blasio, who has also done a terrible job – only half his height. In any event, I look forward to being a great friend to the United Kingdom, and am looking very much forward to my visit. Landing now!
— Donald J. Trump (@realDonaldTrump) June 3, 2019
FTSE 100 sinks as Trump imposes shock tariffs on Mexico, CBI warns on Brexit
The FTSE 100 and other major European indices sank on Friday morning after Donald Trump announced he would impose a 5% tariffs on Mexican goods.
The measures would come into place 10th June starting with a 5% tariff which he says would gradually increase.
“Deciding that, if he can’t have a physical wall, he will create an economic one, Donald Trump announced that the US would be imposing a 5% tariff on all Mexican imports, with that tariff gradually increasing ‘until the Illegal Immigration problem is remedied’. This news basically came out of nowhere, especially since last November saw the President sign the United States-Mexico-Canada Agreement, with that deal now potentially completely upended.” said Connor Campbell, Market Analyst at Spreadex.
The fall in equity markets came as the Confederation of British Industry (CBI) warned a no-deal Brexit would lead to ‘severe’ and ‘long-term damage’ to small British businesses.
“Firms large and small are clear that leaving the EU with a deal is the best way forward,”
“Short-term disruption and long-term damage to British competitiveness will be severe if we leave without one” wrote the CBI Director-General, Carolyn Fairbairn.
This is a message the CBI has carried for sometime but latest instalment comes as the Conservative party embarks on a leadership contest with the majority of participants backing the option of a no-deal Brexit.
FTSE 100 sinks
Markets reacted violently to the shock news with the FTSE 100 falling as much 1% in early trade. As of 10.05am in London trading on Friday, 90% of the FTSE 100 constituents were down on the day in a broad based sell off. Some positivity could be observed in Whitbread who announced a £2 billion tender offer in an effort to return further cash to shareholders. European markets fell in tandem with the Footsie as the German Dax and French CAC fell substantially more than 1%.
Short-term disruption and long-term damage
The fall in equity markets came as the Confederation of British Industry (CBI) warned a no-deal Brexit would lead to ‘severe’ and ‘long-term damage’ to small British businesses.
“Firms large and small are clear that leaving the EU with a deal is the best way forward,”
“Short-term disruption and long-term damage to British competitiveness will be severe if we leave without one” wrote the CBI Director-General, Carolyn Fairbairn.
This is a message the CBI has carried for sometime but latest instalment comes as the Conservative party embarks on a leadership contest with the majority of participants backing the option of a no-deal Brexit.
Cannabis Sector: The Green Organic Dutchman announces SpinCo warrant distribution
The Green Organic Dutchman, a Toronto-based cannabis company, announced on Thursday the distribution of SpinCo Unit warrants to elected shareholders.
The warrants will be distributed to shareholders that elected to receive them following a February news release from the firm. This is set to take effect next week on the 3rd of June.
The company also announced the appointment of Mr. Daniel Brody as Chief Executive Officer of SpinCo.
Brody currently holds the post of Vie President, Investor Relations and will replace David Doherty.
In the statement, SpinCo thanked Mr. Doherty for his contribution to SpinCo during his time at the company.
Earlier this month, the cannabis firm also announced that it had secure a cannabis supply agreement with Alberta Gaming, Liquor & Cannabis.
Commenting on news of the agreement, the company’s chief executive, Brian Athaide, said:
“Alberta is an important market for us as we continue to expand our distribution channels across Canada,”
“With our production facilities in Hamilton, Ontario and Valleyfield, Quebec coming online in phases, we are thrilled to start distributing TGOD’s premium certified organic cannabis to AGLC.”
As of 2019, The Green Organic Dutchman is the largest licensed producer of certified organic cannabis. The firm launched an IPO in May last year, raising over $115 million.
The company operates primarily in Canada, Europe, the Caribbean and Latin America.
Shares in The Green Organic Dutchman (LON:TGOD) are currently trading flat as of 14:00PM (GMT).
Elsewhere in the Cannabis sector, on Wednesday Highlands Natural Resources (LON:HNR) announced a new collaboration with an analytical chemist to further develop its Zoetic cannabinoid business. Shares ticked up on the back of the news.
FirstGroup to sell Greyhound buses, shares fall
FirstGroup announced on Thursday it is looking to sell its Greyhound buses business in the US.
The Aberdeen-based transport company also said that it is considering spinning off its UK bus business, First Bus, which it said it has “concerns with the current balance of risk and reward”.
FirstGroup revealed the decision in its final results for the year to 31 March.
Overall, adjusted operating profit proved ahead of company expectations at £332.9 million, boosted by growth and margin expansion in its First Student and First Bus operations.
Net cash inflow totalled £197.3 million, which also proved above expectations.
Ultimately, the company narrowed losses from the year before at an annual loss of The group’s annual loss was £97.9 million, compared to £327 million the year before.
Commenting, Chief Executive Matthew Gregory said:
“Our trading performance was ahead of our expectations for the year, with First
Student returning to growth with increased margins, First Bus delivering growth
and higher margins, and First Rail adjusted profit ahead of expectations in the
year; Greyhound faces challenging market conditions but we are seeing early
results from the plan we put in place last year.
FirstGroup is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
Alongside the UK, the group has operations in the US, Canada and Ireland.
Shares in the firm (LON:FGP) are currently trading down -2.54% as of 13:24PM (GMT).