Galliford Try performing in line with expectations

Jamie Gordon
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0
Galliford Try performing in line with expectations
British construction and housebuilding company Galliford Try plc (LON: GFRD) posted a consistent sales rate for the full year and says their profits before tax remain in line with analysts’ expectations. The Company says they will publish a full data set in September, but noted that it maintained its strong margin and continued to improve its customer satisfaction over the year ended 30 June 2019.

Galliford Try net debt stood at £60 million as of 30 June 2019, and average net debt was in line with previous full year guidance, at £187 million. The Company added that the results published in September would include the previously reported £40 million of ‘exceptional items’.

Galliford Try comments

Company Chief Executive, Graham Prothero, commented,

“The Group has continued to perform well, supported by good housing demand. We expect our full year results and average net debt to be in line with previous guidance.”

“We are making strong progress against the operational targets we set out in 2017. We are reviewing our 2021 volume targets to ensure that growth is controlled, and our gearing is managed. Despite the weaker economic outlook, Linden Homes continues to see robust demand, with operating efficiencies driving strong margins and improving customer satisfaction. Partnerships & Regeneration is well on track with its aspirations for exciting growth in both revenue and margins, with some key wins in the period and further good opportunities across the market. We are pleased that the restructure of the Construction business is now complete. The business is now firmly focused on its core strengths of regional building operations, together with profitable operations in highways and water, all of which are now performing effectively. I look forward to the next financial year with the appropriate strategic priorities in place across the Group.”

Investor notes

Following the update, the Company’s shares have rallied 5.97% or 36.5p during morning trading on Wednesday, up to 647.5p a share 17/07/19 10:44 BST. Peel Hunt analysts reiterated their ‘Add’ stance, while Liberum Capital analysts reiterated their ‘Buy’ rating on Galliford Try stock. Elsewhere in property development and estate agency news, there have been updates from; Ashley House Plc (LON: ASH), Persimmon plc (LON: PSN), McKay Securities plc (LON: MCKS), MJ Gleeson PLC (LON: GLE), Somero Enterprises Inc (LON: SOM), Bovis Homes Group plc (LON:BVS) and Telford Homes plc (LON: TEF).  

IRN-BRU maker AG Barr goes flat

Andrew Hore
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1
IRN-BRU maker AG Barr goes flat

IRN-BRU owner AG Barr (LON: BAG) lost more than one-quarter of its value after its pre-close trading statement. Volumes have been hit as AG Barr tries to improve margins.
Interim revenues are expected to decline 10% to £123m. Even with an improvement in the second half, pre-tax profit is still likely to be one-fifth lower.
Volumes
The soft drinks maker had been focusing on volume rather than margin in the previous financial year, because of the changes in the market, such as the soft drinks industry levy on the more sugary drinks.
Since March the focus has been on pushing up prices in order...

Rio Tinto cost guidances affected by operational challenges

Jamie Gordon
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9
Rio Tinto cost guidances affected by operational challenges
Iron ore company Rio Tinto plc (LON: RIO) changed its iron ore cost guidance following lower output caused by operational challenges and adverse conditions. The Company noted that iron ore output in the Pilbara region in Australia was down by 7% in Q2, caused by tropical cyclone Veronica and a fire at Cape Lambert. This caused production for the three months to June in Australia to fall to 79.7m tonnes, while shipments fell 3% to 85.4m tonnes. Following these developments, the Company cut its annual volume guidance to 320 to 330 million tonnes. On Tuesday, it adjusted its guidance up from $13-$14 to $14-15 per tonne. Further, the Company adjusted its cost estimate for its Oyu Tolgoi copper project in Mongolia. It said that the estimate rose from $5.3 billion to between $6.5 and $7.2 billion, and that production would be delayed until at least 2022. This delay was attributed to what the Company described as the consideration of new mine designs and represents a delay of between 16 and 30 months. Currently, however, copper production was down 13% in Q2, while bauxite was up 1%, aluminium plateaued and titanium dioxide production grew 31%.

Rio Tinto comments

Company chief executive J-S Jacques said, “We saw a challenging operational performance across our portfolio in the first half, while also investing in future growth at Richards Bay Minerals and Resolution. Whilst we experienced operational and weather issues at our iron ore operations in Australia, pricing and market demand has remained robust. We remain focused on safely improving and optimising the performance and productivity of our assets in order to drive future cash flow. This, combined with our value over volume strategy and the disciplined allocation of capital, will continue to deliver superior returns to our shareholders in the short, medium and long term.”

Investor notes

The Company’s share price dipped 0.53% or 26p to 4,842p a share 16/07/19 15:04 BST. Analysts from Barclays Capital reiterated their ‘Underweight’ stance, Liberum Capital reiterated their ‘Buy’ stance and Deutsche Bank reiterated their ‘Hold’ stance. Elsewhere in the mining and minerals sector, recent updates have come from; Bushveld Minerals Limited (LON: BMN), Kavango Resources PLC (LON: KAV), Anglo Asian Mining plc (LON: AAZ), Anglo Asian Mining plc (LON: AAZ) Pan African Resources (LON: PAF), Keras Resources PLC (LON: KRS), Jubilee Metals Group PLC (LON: JLP) and Ariana Resources plc (LON: AUU).

Burberry sales growth led by brand transformation

Jamie Gordon
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3
Burberry sales growth led by brand transformation
London-based fashion brand Burberry Group plc (LON: BRBY) has seen sales rise in the first quarter, on the back of the Company’s efforts to adjust the public’s perceptions of the brand.

“Excellent consumer response to Riccardo Tisci’s product with new collections delivering strong double-digit percentage growth compared to prior year equivalent collections, in line with our expectations.” The Company said in its statement.

The Company noted that sales in men’s and women’s apparel grew by ‘a double digit percentage’, and that retail revenue grew from £479 million to £498 million during the quarter. Regarding the roll-out of its new image, Burberry said that its new product range made up 50% of its store offering by the end of the quarter, and that 23 stores were now aligned with the Company’s creative vision. It added that it continued to shift consumer perceptions of the brand with social media traction, press coverage and organic endorsement from influencers.

Burberry comments

Marco Gobbetti, Chief Executive Officer of the Company, added the following insights,

“This was a good quarter in our multi-year journey to transform Burberry. We increased the availability of products designed by Riccardo, while continuing to shift consumer perceptions of our brand and align our network to our new creative vision. The consumer response was very promising, delivering strong growth in our new collections. We are on track with our plans and we confirm our outlook for FY 2020.”

The Company’s trading highlights continued,

“Asia Pacific grew by a high single-digit percentage driven by Mainland China up mid-teens […] EMEIA grew by a low-single digit percentage supported by tourist spend, which particularly benefited the UK […] Americas was flat, the US grew by a low-single digit percentage but Canada was negatively impacted by a later markdown period.”

“Accessories declined with the benefit from new styles more than offset by the softer performance of lines from previous collections.”

“Space -2% including the planned non-strategic store rationalisation programme.”

Investor notes

Following the update, the Company’s shares rallied 11.93% or 237.5p to 2,228.00p a share 16/07/19 14:26 BST. Elsewhere in retail and on the highstreet, there have been updates from; Associated British Foods plc (LON: ABF), H&M (STO: HM-B), Sports Direct International Plc (LON: SPD), and Superdry (LON: SDRY).

City of London Investment Group shares dip on mixed results

Jamie Gordon
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2
City of London Investment Group shares dip on mixed results
Specialist asset management company City of London Investment Group PLC (LON: CLIG) sees increased funds under management but reduced pre-tax profits. The Company focuses on emerging markets and closed-end funds. In its trading update for the full year ended 30 June 2019, City of London Investment Group stated that its funds under management were up 6% from £3.9 billion to £4.2 billion year on year. However, the Company’s overheads also grew from £12.5 million to £12.9 million on-year, and pre-tax profits fell from £12.8 million to £11.4 million for the year ended 30 June.

The Company noted these results were unaudited.

City of London Investment Group statement

The Company’s update continued with the following strategic and financial updates, “The core EM strategy outperformed (by approximately 300 bps, net of fees) for the full year as discounts narrowed and country allocation was positive. The Developed, Opportunistic Value (formerly GTAA) and Frontier strategies all recorded negative relative performance due to a combination of negative NAV and country allocation effects.”

“For the year to 30 June 2019, the Group expects that pre-tax profits will be approximately £11.4 million, including NCI profit of £0.2million, (2018: £12.8 million, NCI nil). Profits after an anticipated tax charge of £2.4 million (21% of pre-tax profits) will be approximately £9.0 million (2018: profits of £10.1 million after a tax charge of £2.7 million, representing 21% of pre-tax profit) of which £8.8m will be attributable to shareholders of the Company. Basic and fully diluted earnings per share are expected to be 34.9p and 34.1p respectively (2018: 39.5p and 39.3p).”

“The Board is recommending a final dividend of 18p per share (2018: 18p). This would bring the total dividend payment for the year to 40.5p, including the special dividend of 13.5p paid in March (2018: 27p, special nil). Dividend cover, excluding the special dividend, equates to 1.3 times (2018: 1.47 times).”

Investor notes

After dipping by over 2.7%, the Company’s shares are currently not live; they closed at 430.00p per share 16/07/19 13:46 BST. Elsewhere in wealth management, there have been updates from; Miton Group PLC (LON: MGR), Walker Crips Group plc (LON: WCW), Liontrust Asset Management PLC (LON: LIO), Mattioli Woods (LON:MTW), Intermediate Capital Group plc (LON:ICP) and Babcock International Group PLC (LON:BAB).

CloudCall shares dip despite improved revenues

Jamie Gordon
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1
CloudCall shares dip despite improved revenues
Cloud-based communications technology company CloudCall Group plc (LON: CALL) displays on-year improvement in financial performance in its trading update for the first half 2019. The Company’s financials displayed comparative growth in H1 revenues, which were up 30% from 2018 to £5.2 million. Recurring revenues were up 34% on-year for the same period on-year, with the US market making up 40% of recurring revenues. New order volumes were up 44% year-on-year for the first half and users are up 37% versus H1 2018, to almost 37,000. In Q2 2019, monthly net user growth exceeded 1,000 per month. The Company added that it agreed terms with Shawbrook Bank for a £3 million debt facility, and that it had cash resources of £4.5 million through its own cash, its credit facility and its expected R&D tax credit. “Churn remains low and factoring in upsells, net renewal rates from existing customers remain above 100%, helping to drive revenue and user growth.” The Company said.

CloudCall comments

CEO of the Company, Simon Cleaver, stated, “As our ‘net user growth’ KPIs clearly show, the first half of 2019 was another period of solid quarteron-quarter acceleration, and I fully expect this trend to continue for the remainder of the year.” “The “four pillars of growth” strategy we have in place is delivering results and despite some of our initiatives running at different speeds, is clearly already growing sales and visibly strengthening our pipeline of opportunities.” “Whilst I am obviously pleased to note sales are growing strongly, and that we tracked above our target of 1,000+ net new users per month in Q2, for me, the standout development of the half has been the quantum change in larger customers that are considering adopting CloudCall’s services. A number of these are very large, which if won, would have a significant impact.” The Company said in its statement, “At its Capital Markets Day in January 2019, the Company explained that investments being made are expected to drive growth in four areas (‘the four pillars of growth’), pushing the important ‘net user growth’ KPI to over 1,000 per month on average for 2019. We are therefore pleased to report that in Q2 2019, monthly net user growth averaged 1,027.” “Over the full 6-month period, monthly net user growth averaged 932, taking the total number of users to just under 37,000, an increase of 37% against H1 2018. A full breakdown of our average monthly net user growth since these investments were made can be seen below.”

Investor notes

The Company’s shares dipped 11.26% or 13.40p to 105.60p a share 16/07/19 11:01 BST. Elsewhere in the tech sector, there were updates from; TP Group PLC (LON: TPG), Mobile Streams Plc (LON: MOS), Sophos Group plc (LON: SOPH), MiriAd Advertising plc (LON: MIRI), Zoo Digital Group plc (LON: ZOO), Vela Technologies Plc (LON: VELA), Remote Monitored Systems PLC (LON: RMS).

TP Group positions itself to disturb space and security sectors

Jamie Gordon
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2
TP Group positions itself to disturb space and security sectors
Professional services and technology company TP Group PLC (LON: TPG) posted a positive update for the first half, on its position in the global technological solutions market.

The Company said that developments in its Artificial Intelligence technology allowed it to compete with the largest tech players in regard to intelligence and security applications.

TP Group added that its global reach, customer base, technology profile and space industry presence were furthered by a tech agreement with Battelle Inc. and the acquisition of Sapienza Consulting Holding BV.

TP Group comments

The Company’s statement continued with the following outlook, “In the first half of 2019 the Group has established positions in new and emerging systems and equipment. We are providing innovative solutions for life-support, crew habitation and renewable energy systems in a range of environments. This has led to a significant increase in our sales pipeline as our global customers rely upon these systems and equipment for their performance and security.”

“The Group is now well placed to explore the well-funded and highly active US space and defence sectors and continues to evaluate further strategic partnership and acquisition opportunities, whilst also continuing to drive underlying organic growth.”

“The Board remains confident in current trading and expects the Group to deliver full year results in line with market forecasts.”

Investor notes

The Company’s share price dipped 1.89% or 0.12p following the update, down to 6.50p a share 16/07/19 11:12 BST. Elsewhere in the tech sector, there were updates from; Mobile Streams Plc (LON: MOS), Sophos Group plc (LON: SOPH), MiriAd Advertising plc (LON: MIRI), Zoo Digital Group plc (LON: ZOO), Vela Technologies Plc (LON: VELA), Remote Monitored Systems PLC (LON: RMS) and Tekmar Group Plc (LON: TGP).

Bushveld Minerals posts resource estimate for Brits Project

Jamie Gordon
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4
Bushveld Minerals posts resource estimate for Brits Project
Vanadium producer Bushveld Minerals Limited (LON: BMN) provided its maiden Mineral Resource estimate for the Brits Vanadium Project (the “Brits Project”). The Brits Project is located in South Africa and is directly along strike from the Bushveld Vametco Alloys Mine (Bushveld-Vametco), which as this update revealed, contains a higher grade of vanadium than this latest Project. The Company reported aggregate inferred and indicated mineral resources across all seams of 66.8Mt at an average grade of 1.58% vanadium in magnetite; this was at a cut-off grade of 20% in whole rock for 175,400 tonnes of contained vanadium.

Indicated Mineral Resources tonnages stand at 44.9Mt with an average grade of 1.59% for 115,600 tonnes of contained vanadium across all three seams.

The Lower Seam has a cut-off grade of 20%, with 55.5Mt at an average grade of 1.58% vanadium in magnetite for 1237,000 tonnes of contained vanadium. This makes up approximately 83% of the total Mineral Resource.

Bushveld comments

The Company’s statement continued,

“A geological trend of decreasing grade in vanadium for magnetite-rich layers from west to east in the Bushveld Complex accounts for the lower grades on the Brits Project in comparison to the grades at the operating Vametco Mine.”

“The Mineral Resource is reported up to a depth of 150m below surface and based on the drilling on the western and central blocks of the farm Uitvalgrond Portion 3 which extends over a strike length of approximately 1.65km to the most eastern fault where the last line of drilling was completed. As such there is potential to increase the resource on the remaining eastern unexplored portion of the farm on a strike length of 1km.”

Fortune Mojapelo, CEO of the Company, commented,

“We are pleased to be able to report solid results confirming that we have a high-quality asset at the Brits Project, where its average grade of 1.58% V2O5 in magnetite is among the highest in the world.”

“This represents an important step in the development of Brits – as we recently detailed our path to producing over 8,400 mtV per annum and Brits provides the optionality for additional ore feed for the Vametco plant and, if required, concentrate feed for the Vanchem plant.”

Investor notes

The Company’s shares are trading down 0.48% or 0.11p to 23.88p a share 16/07/19 10:56 BST. Analysts from Peel Hunt reiterated their ‘Buy’ stance on Bushveld Minerals stock. Elsewhere in the mining and minerals sector, recent updates have come from; Kavango Resources PLC (LON: KAV), Anglo Asian Mining plc (LON: AAZ), Anglo Asian Mining plc (LON: AAZ) Pan African Resources (LON: PAF), Keras Resources PLC (LON: KRS), Jubilee Metals Group PLC (LON: JLP), Ariana Resources plc (LON: AUU) and Caledonia Mining Corporation Plc (TSE: CAL).

Trinity E&P issues production and operational update

Jamie Gordon
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2
Trinity E&P issues production and operational update
Trinidad and Tobago focused oil exploration and production company Trinity Exploration and Production PLC (LON: TRIN) posted positive updates on average production and an operational update on its drilling programme. Trinity Exploration said that average production volumes for H1 2019 stood at 3,008 bopd, up 8.6% from the 2,771 bopd for H1 2018. For the first quarter, average production stood at 3,020 bopd, and in the second quarter the average volume was 2,996 bopd. The Company added that depending on oil prices and investment, they expected average production for 2019 to stand between 3,000 and 3,300 bopd. Current output is expected to be bolstered by the 2019 drilling programme commencing, with the Company’s rig mobilised and the first well set to be spud on July 18 2019.

Cash balance is up on-year, from $12.3 million at 31 March 2018, to $17.8 million at 30 June 2019.

Trinity Exploration and Production

Bruce Dingwall CBE, Executive Chairman of the Company, commented,

“Our strong balance sheet and robust base production mean that we are delivering our financial and production targets, and at the same time, ensuring that we can take advantage of any strategic opportunities that may arise. We remain focused on maximising output and returns for shareholders and continue to evaluate the best ways of protecting and enhancing those returns through prudent treasury management, industry leading operating practices and technical innovation. Given the strength of our business model, the ongoing work programme and visibility afforded by our balance sheet, we continue to face the future with confidence.”

Regarding its forecast for the rest of the year,the Company’s statement read,

“The second half of the year is expected to be extremely active for the Company with the recommencement of the onshore drilling programme. With the Group’s ongoing and continued focus on controlling costs and development of its assets, it remains well placed to provide significant upside to shareholders both in terms of production and returns. Within the H2 drilling campaign the Company will be drilling its first HAW, the FR 996 well. This well is the first of a series of HAW wells that the Group expects to drill and complete in the near term. Although not commonly deployed onshore in Trinidad, HAWs are now the industry standard in many basins around the world and have been modelled by the Company to yield initial production rates and reserves of more than 2x those achieved from conventional vertical wells.”

“The Group’s focus for the medium term continues to be delivering the first phase of the TGAL development, which has the potential to deliver standalone peak production rates in the range of 5,000 – 6,000 bopd. As the TGAL project matures, discussions on the project, and on the Galeota licence as a whole, are generating good traction and momentum with the supply chain, the regulators and with Heritage, the Group’s partner.”

Investor notes

The Company’s shares dipped 4.84% or 0.49p to 10.62p a share 16/07/19 10:48 BST. Elsewhere in the oil and gas sector, there have been updates from; Union Jack Oil PLC (LON: UJO), Nu-Oil and Gas PLC (LON: NUOG), PetroTal Corp (CVE: TAL), Hurricane Energy plc(LON: HUR), TLOU Energy Ltd (ASX: TOU), Eland Oil and Gas PLC (LON: ELA), IGas Energy PLC (LON: IGAS) and Anglo African Oil and Gas (LON: AAOG).

Sports Direct shares crash after results delay

Dina Caruso
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2
Sports Direct shares crash after results delay
Sports Direct said on Monday that it will be delaying the publication of its preliminary results, sending shares in the business crashing. Shares in Sports Direct (LON:SPD) were trading roughly 10% lower on Monday following the announcement. Sports Direct said that the reasons for the delay in the publication of its results are due to the complexities surrounding the integration of House of Fraser, which it purchased last year. The company also blamed increased scrutiny of its accounts. Sports Direct said that its results will be delayed beyond the date it had previously anticipated, which was originally expected to be later this week. “The reasons for the delay are the complexities of the integration into the Company of the House of Fraser business, and the current uncertainty as to the future trading performance of this business, together with the increased regulatory scrutiny of auditors and audits including the FRC review of Grant Thornton’s audit of the financial statements of Sports Direct for the period ended 29 April 2018,” Sports Direct said in a statement. “These factors have led to a need for the Company to compile more information than in previous years for the audit of period ended 28 April 2019, and has therefore impacted on preparations for and responses to increased challenges in connection with this audit,” the business added. House of Fraser was purchased by Mike Ashley’s Sports Direct last August in a £90 million deal. Before the deal, the department store had announced that it was going into administration. With the UK high street crisis taking its toll, several retailers face tough trading conditions along with store closures and staff cuts. Almost 2,500 high street shops closed in 2018, according to PwC research complied by the Local Data Company. Banks and financial Services led the figures, closely followed by fashion retailers. Shares in Sports Direct International plc (LON:SPD) were trading at -9.57% as of 16:36 BST Monday.
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