AJ Bell shares soar 33% on debut
AJ Bell began trading on Friday, with shares surging over 30% to 213p.
The investment firm’s price was set at 160p this morning, valuing the group at around £651 million.
AJ Bell floated 108,264,032 ordinary shares – 26.6% of its issued share capital.
“The IPO is a significant milestone for the business and I see it as firing the starting gun on our next phase of growth, which I’m massively excited about leading the business through,” said founder and boss Andy Bell.
“The demand for our IPO from both blue-chip institutions and our own customers was a real endorsement of our business and the market opportunities that lie ahead of us, and I’m pleased to welcome our new shareholders on board.”
The company reported revenues of £89.7 million, up 19% last year. Pre-tax profit was up 31% to £28.4 million.
London has had several disappointing London listings this year including Aston Martin and Funding Circle amid market volatility and Brexit fears.
A banker who did not want to be named said of the Aston Martin and Funding Circle debuts: “This is brutal. The IPO market stinks for growth stocks which do not have an earnings track record.”
Shares in AJ Bell (LON: AJB) are currently trading +33.63% at 216p (1049GMT).
Bitcoin hits fresh lows, falling below $3,300
Bitcoin has fallen to a record low for 2018, falling below $3,300 on Friday.
According to CoinDesk, bitcoin price data plummeted 11% in the past 24 hours dropping to lows of $3,293.31.
The cryptocurrency has fallen over 80% from all-time highs of almost $20,000.
Naeem Aslam, the chief market analyst at Think Markets, said: “The price of bitcoin has crippled on the back of this and I think it is likely that the price may not only drop below the $2,000 mark but with this kind of momentum behind it, the price can test the $1,500 level.”
“Simply put, the bad news keeps coming just like cockroaches coming out of a hole.”
Cryptocurrencies are a controversial form of currency since their entrance into the mainstream finance scene, given their unregulated nature.
Government officials and financial institutions have expressed concerns over its decentralised nature.
JP Morgan Boss (NYSE: JPM) Jamie Dimon famously said that it was a “fraud” only fit for use by drug dealers, murderers and “people living in places such as North Korea”.
Bank of England Governor Mark Carney has also called for a crackdown, saying: “Authorities are rightly concerned that given their inefficiency and anonymity, one of the main reasons for their use is to shield illicit activities. This cannot be condoned. Anarchy may reign on the dark web, but in the UK it’s just a song that your parents used to listen to.”
Following the fresh low, it seems that the so-called ‘Bitcoin Bubble’ has well and truly burst.
Berkeley Group raises profit guidance, shares rise
Berkeley Group announced on Friday that it will raise its profit guidance for the year by over 5%.
The housebuilder will raise profit forecast after a “resilient” start to the year. This is despite pre-tax profit for the first of the year falling from £539.9 million a year ago to £401.2 million.
Revenue also fell from £1.66 billion to £1.65 billion.
Chief executive Rob Perrins said: “With the resilient start to the year, Berkeley is increasing its pre-tax profit guidance for the current year by at least 5% and now anticipates a similar split between the first and second half to last year when 55% was earned in the first six months of the year.”
“This is in the context of a short-term outlook that is clearly uncertain due to the ongoing Brexit process and a number of headwinds in the operating environment in London and the South East. This uncertainty affects sentiment and confidence which has a consequential adverse impact on investment levels and transaction volumes with a number of developers withdrawing from these markets.”
George Salmon, who is an equity analyst at Hargreaves Lansdown, said: “Upgraded profits and a balance sheet that looks even more resolute has given the group the confidence to promise a steady flow of shareholder returns all the way out to 2025.”
“However, there’s only so much the group can do to look after its share price. Sentiment will remain closely tied to the Brexit barometer, since London could well be in the eye of the storm should a disorderly departure trigger a housing meltdown.”
“While the shares remain something of a binary bet on Brexit in the short-term, looking further afield Berkeley’s niche operating model and enviable track record mean we think it should be a long-term winner,” he added.
Shares in Berkeley Group (LON: BKG) are trading +3.04% (1006GMT).
Halifax: House price growth is slowest in 6 years
New figures from Halifax have shown that UK house prices are growing at the slowest rate in six years.
The figures released today reveal house prices grew just 0.3% in the three months to the end of November compared to the same period last year.
This is compared to the 1.5% annual growth that was recorded in October.
The average house in the UK will now set you back £224,578.
“House price growth has slowed as we approach the end of the year, falling from 1.5% in October to 0.3% in November, with the average cost of a home now £224,578. While this is the lowest rate of growth in six years, it remains within our forecast range of 0% to 3% for 2018,” said Russell Galley, the managing director at Halifax.
“High employment, wage growth and historically low mortgage rates continue to make home ownership more affordable for many, though the need to raise a significant deposit still acts as something of a restraint on the market. This is largely offset by a relatively limited supply of new and existing properties for sale, which continues to sustain house prices nationally.”
October also saw the number of mortgage approvals grow the highest level since January 2018.
The UK housing market has significantly cooled over the year, particularly in London and the south-east.
Last week saw the Bank of England’s Brexit analysis, which warned that a no-deal scenario could lead to house prices plunging by 30%.
FTSE 100 continues to slide to lowest point since Brexit vote
The FTSE 100 sunk to its lowest point in two years on Thursday, hit hard by the arrest of Huawei’s Meng Wanzhou and fears surrounding the US/China trade war.
At its lowest, the blue-chip index was down 191 at 6,730 – its lowest since the EU referendum in 2016.
Connor Campbell from Spreadex said: “Perhaps embarrassed by their overly positive reaction to Monday’s trade truce news, the markets nosedived on Thursday, with the US open only serving to exacerbate what was already a nasty set of losses.”
“The Huawei arrest appears to be the straw that broke the camel’s back. The rapidly dwindling good-feeling towards the US and China’s vague trade war ceasefire turned actively hostile on Thursday, investors fearing that, 90-day truce or not, the relationship between the two superpowers might be about to take a turn for the worse,” he added.
Once again, one of the biggest fallers of the day was Thomas Cook (LON: TCG). Shares plunged 13.6% at 29.72p despite regaining value this week. The FTSE reshuffle also sent shares down after groups including Royal Mail (LON: RMG) and Just Eat (LON: JE) were relegated. Shares in Just Eat fell over 5% whilst Royal Mail shares fell almost 1% after Deutsche Bank cut target price by 16%. In more positive news, shares in Ted Baker (LON: TED) were up rose 63p to 1,530p after a trading update amid a dispute over workplace culture. Nick Bubb, the independent retail analysts, said: “Ahead of the much-awaited Ted Baker Q3 update today (for the 16 weeks to Dec 3rd), we flagged that the better than feared trading update from Joules yesterday provided some encouragement that Ted Baker’s trading update might also not be as bad as some had feared, despite the recent share price slump…And the headline of the statement is bullish.” Shares in Paddy Power (OTCMKTS: PDYPY) also fell over 6% on Thursday on the news that UK’s biggest gambling firms have agreed to stop advertising during live sports broadcasts.Just Eat shares down 5% on FTSE 100 relegation
Just Eat shares fell 5% on Thursday after the group was dropped from the FTSE 100.
The reshuffle was announced on Wednesday’s close, where the food delivery company was relegated following a torrid six months with profit warnings and a drop in share price.
The share price in the group since July has fallen from 883.4p to a November-low of 533.8p.
Analysts have cut their forecasts from by around 28% this year due to heavy investment carried out by Just Eat.
Since falling off the FTSE 100, Barclays (LON: BARC) has also cut its price target.
“We see limited macro risk for Just Eat. In our view, while some customer might forego ordering takeaway food to save costs, others might trade down from higher segments to Just Eat for the same reason,” said Barclays.
“The underlying marketplace business is performing well and earnings upside/downside into the coming years will largely be driven by discretionary investments into marketing and logistics.”
“To reflect updated guidance, and as we expect those investments to continue, we reduce our earnings estimates for 19/20 by [around] 16%.”
The food delivery company, which is now part of the FTSE 250, was replaced by engineering firm Spirax-Sarco (LON: SPX).
With no surprise to many, the Royal Mail (LON: RMG) was also relegated from the FTSE 100 after its share price more than halved since its peak in May.
Replacing the Royal Mail was the insurance company Hiscox (LON: HSX). The share price has more than doubled in the past five years and the group was won the insurance company of the year at the City A.M. awards.
Shares in Just Eat (LON: JE) are currently trading -5.13% at 536,00 (1607GMT).
Lyft announces IPO registration
Lyft has filed a draft registration with US authorities for an initial public offering (IPO).
According to a statement released on Thursday, the ride-hailing app has begun the process to go public ahead of Uber.
The price range or the number of shares that will be put on offer has not yet been determined.
“The initial public offering is expected to commence after the SEC completes its review process, subject to market and other conditions,” said Lyft in a statement.
A person familiar with the matter said in October that Lyft will be working with JPMorgan Chase & Co., Credit Suisse Group AG and Jefferies Financial Group Inc. or organise the IPO for the first half of 2019.
A spokesperson from the group said earlier this year: “A variety of factors will determine if and when Lyft goes public, but in the meantime, we are focused on building our business, which continues to grow.”
If the company is to go public at the start of 2019, it would go public before rival Uber.
Uber’s chief executive, Dara Khosrowshahi, has confirmed that his company are still planning for a planned public offering in the second half of this year.
Lyft was launched in 2012 by John Zimmer and Logan Green. It is thought to be worth about $15 billion (£11.75 billion). Uber is valued at approximately $120 billion.
Biome Technologies receives additional grant funding, shares jump
Biome Technologies has announced on Thursday that it has been awarded an additional £0.6 million of grant funding. Indeed, the leading bioplastics and radio frequency technology business has been awarded additional funding to support a project focused on the production of a novel bioplastic building block. Shares in the group increased by almost 6.5% on the announcement.
Biome Technologies is a commercially driven technologies group with two divisions; Biome Bioplastics Limited and Stanelco RF Technologies Limited. Biome Bioplastics Limited is a market-leading developer of bio-based and biodegradable plastics.
CEO of Biome Technologies, Paul Mines, commented on the announcement:
“The UK government has set a target of eliminating all avoidable plastic waste by 2042. Bioplastics will play a crucial role in achieving this target by reducing waste. However, current bioplastic technology is limited by price and performance in some applications. Our development programme is intended to change that position by preparing a new generation of polymers with improved functionality.”
Biome Technologies has led a £6 million development program over the last five years.
The aim of the project is to develop a range of novel highly functional bio-based and biodegradable polymers, bringing them to market by using industrial biotechnology techniques. Seven universities, and roughly 25 scientists, engineers and other partners are currently involved in the project. The UK Government’s Industrial Strategy outlines 4 Grand Challenges. One of these includes Clean Growth, which aims to put the UK at the frontline of future industries. A main focus of this is the use of renewable materials. Additionally, a recent report by bioeconomy consultants NNFCC outlined that plant-based plastics have the potential to create 34,000 jobs whilst contributing £1.92 billion to the UK economy in the next decade alone. The use of renewable energy has been on the rise in recent years, with nations across the globe increasingly taking part to reduce their environmental footprint. Clearly, plant-based and biodegradable polymers will both contribute positively to the UK’s economy over the next decade and reduce our environmental footprint as they are plant-based rather than oil-based. Thursday’s market news also includes the FTSE 100 slumping to a two-year low. Elsewhere, Thames Water profits were damaged by extreme weather and fines and Ted Baker announced its revenue has been hit by “external trading conditions”. At 08:04 GMT today, shares in Biome Technologies plc (LON:BIOM) were trading at +6.48%.Ted Baker faces “challenging external trading conditions”
Ted Baker has released a trading update on Thursday for the 16-week period from 11 August to 1 December. The global life style brand has outlined its “resilient performance despite challenging external trading conditions” during the period.
Group revenue decreased by 0.2% during the period when compared to last year’s results. The company has said that this figure reflects the anticipated decline in wholesale sales as a result of the timing of delivers. Indeed, the company insists that poor delivery timing has largely impacted its retail sales performance.
Wholesale sales for the period dropped by 6.5%. This result was anticipated because of the timing of wholesale deliveries in the first half of the year.
Ted Baker has also outlined the challenging external trading conditions that impacted a variety of its markets.
Trade in the UK, Europe and the East Coast of America was affected by “unseasonal weather”. Moreover, the group was also hit by the “well-publicised” challenges faced across the UK high street. One leading high street name who has been hit by the challenging trading climate is John Lewis, reporting a 99% fall in its profits. In fact, the UK high street is currently facing the toughest conditions in the past five years. Following the UK’s scorching summer of World Cup success, retail sales dropped by 0.8%, a much larger drop than anticipated. Total retail sales including e-commerce increased by 2.3% across the period. Additionally, e-commerce sales increased by 18.0%. These sales are a significantly important component of the group’s retail channel. Indeed, e-commerce represents 30.3% of total retail sales for the period. CBE, Founder and Chief Executive of Ted Baker, Ray Kelvin, commented on the results: “We are pleased with the brand’s continued expansion, which is a reflection of the strength of the Ted Baker brand and the design and quality of our collections.” “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.” Earlier this week, shares in the group fell 13% following a petition accusing Ted Baker’s owner of inappropriate comments and behavior. At 12:33 GMT today, shares in Ted Baker plc (LON:TED) were trading at +1.02%.Euromoney acquires BoardEx and The Deal for $87.3 million
Euromoney Institutional Investor plc has announced on Thursday that it will acquire BoardEx and The Deal. Indeed, the global business information and events group will acquire 100% of the equity of the two companies from its parent company TheStreet. Following the announcement, shares in Euromoney dropped 4% this morning.
By combining the two platforms and integrating them with Euromoney’s existing portfolio, the company aims to create a powerful workflow tool to serve multiple industries.
Euromoney Institutional Investor is a global, multi-brand information business. Moreover, it provides critical data, price reporting, insight, analysis to different markets. The company is a member of the FTSE 250.
Euromoney will acquire BoardEx and The Deal for $87.3 million, funded from its existing facilities.
BoardEx is an executive periling and relationship mapping platform. It provides its users with detailed profiles of over one million of the world’s business leaders. Equally, The Deal is a “trusted” source of information, data and intelligence. In the US, its digital subscription is one of the leading brands on the market in deal-driven intelligence.
Both products acquired by Euromoney are well suited to its current portfolio. In fact, all three serve a variety of shared customer groups, including investors, banks and professional services firms.
CEO of Euromoney, Andrew Rashbass, commented on the acquisition:
“I am excited by the acquisition of BoardEx and The Deal, which brings two additional high-quality assets into Euromoney’s portfolio and supports our transition towards a next generation 3.0 business model. The businesses are perfectly placed to grow further under Euromoney ownership, with the Group’s existing data expected to enhance the BoardEx platform. We look forward to working with the management team and our new colleagues around the world to develop these leading brands and take advantage of the compelling growth opportunities they offer.”
Other market news also includes ContourGlobal’s announcement that it will sell its stake in MW concentrated solar power facilities. Elsewhere, the FTSE 100 has slumped to a two-year low with Melrose, Glencore and Antofagasta taking the biggest hit. Additionally, Thames Water reported a 60% plunge in its profits as a result of extreme weather and regulatory penalties.
At 12:02 GMT today, shares in Euromoney Institutional Investor plc (LON:ERM) were trading at -4.06%.