Metro Bank secures £375m after share placing
Metro Bank (LON:MTRO) announced it has secured £375 million as a result of a share placing on Thursday.
The high street challenger bank surpassed its original target of £350 million amid interest among both existing and new shareholders.
The bank had been struggling in recent months after its share price lost 75% of its value since January amid an accounting error.
Vernon Hill, Chairman and co-founder at Metro Bank commented on the successful capital raise:
“I am really pleased with the support we have received from both existing and new shareholders, and for their confidence and belief in Metro Bank’s strategy. The Placing was significantly oversubscribed and as a consequence we raised a total of GBP375 million. Although we’ve faced challenges in the past few months, we remain fully focused on providing the outstanding service and convenience that our customers expect of us. This growth capital will enable us to continue to expand the business and implement our strategic initiatives.”
The Bank of England’s Prudential Regulation Authority also welcomed the move, stating:
“Metro Bank is profitable and continues to have adequate capital and liquidity to serve its current customer base,”
“It has raised additional capital in order to fund future growth.”
Shares in the troubled bank have plummeted this year amid concerns over its financial health.
Last week rumours circulated over messaging app WhatsApp that the bank would become insolvent and that customers should remove their funds.
The bank was then forced to dismiss the social media speculation after various customers turned up to branches to empty their accounts and safety deposits.
This followed another blunder in January when the lender admitted that some commercial loans had been wrongly classified as posing less risk.
Metro Bank was founded back in 2010 by Anthony Thomson and Vernon Hill. It is now a constituent of the FTSE 250 on the London Stock Exchange.
Shares in the London-listed bank are currently +17.44% as of 11:06AM (GMT).
EasyJet warns on outlook citing Brexit-related uncertainty
EasyJet warned on Friday of its outlook in the second half of its financial year, citing Brexit-related market uncertainty and economic fragility in Europe.
The budget airline revealed in its results for the first half of the financial year that it expects revenue per seat at constant currency in the second half to be slightly down. According to EasyJet, this outcome has been driven by the continuous negative impact of Brexit-related market unpredictability in addition to the wider macroeconomic slowdown to hit Europe.
EasyJet previously warned at the start of April of its financial performance in the second half of the year. It pointed towards Brexit uncertainty impacting consumer demand in the market.
For the first six months of its financial year, passenger numbers increased by 4.9 million, up 13.3%. Additionally, EasyJet said that its headline loss before tax amounted to £275 million.
It cited the impact of the Gatwick drones at the end of last year, which caused chaos just days before Christmas. This contributed to an increase in the airline’s headline cost per seat, which grew in total by 3.9% additionally driven by fuel price increases, the impact of foreign exchange and underlying cost inflation.
“EasyJet has performed in line with expectations in the first half,” Johan Lundgren, EasyJet’s Chief Executive, commented on the results.
“I am pleased that despite tougher trading conditions, we flew more than 41 million customers, up 13% on last year, performed well operationally with 54% fewer cancellations in the period and customer satisfaction with our crew is at an all-time high. We have also continued to make good progress on our strategic initiatives in holidays, loyalty, business and with data,” the Chief Executive continued.
“Cost control remains a major priority for EasyJet. Our focus is on efficiency and on innovation through data and we are on track to deliver more than £100m in cost savings during 2019.”
“We are well-equipped to succeed in this more difficult market through a number of short term customer and trading initiatives for the summer; measures to improve our operational resilience; and by focusing on what is most important to customers – value for money, punctuality and great customer service. All this is underpinned by a market leading balance sheet.”
EasyJet is not the only airline to face difficulty lately. In fact, elsewhere in the industry, Cobalt airline suspended all operations and WOW air suspended all flights amid financial difficulties.
Amazon backs Deliveroo’s latest £450 million funding round
Amazon (NASDAQ:AMZN) is set to invest in the popular UK food delivery app, Deliveroo. News emerged of the deal just days after rival Uber’s listing on the New York Stock Exchange.
Revealed in an exclusive Sky News report, Amazon is leading a new £450 million fundraising round in Deliveroo.
“This new investment will help Deliveroo to grow and to offer customers even more choice, tailored to their personal tastes, offer restaurants greater opportunities to grow and expand their businesses, and to create more flexible, well-paid work for riders,” Will Shu, founder and CEO of Deliveroo, commented.
“Amazon has been an inspiration to me personally and to the company, and we look forward to working with such a customer-obsessed organisation,” the founder and CEO continued.
“This is great news for the tech and restaurant sectors, and it will help to create jobs in all of the countries in which we operate.”
In addition to Amazon’s funding, Deliveroo’s existing investors T. Rowe Price, Fidelity Management and Research Co, and Greenoaks also contributed funds.
The British online food delivery company was founded in 2013 and is based in London. It currently operates in two 200 cities in countries such as Britain, the Netherlands, France, Germany, Belgium, Spain and Ireland – to name a few.
Its deal with Amazon, the multinational technology company based in Seattle, Washington, is just days after Uber Technologies (NYSE:UBER) made it stock market debut, selling shares on the New York Stock Exchange. Uber Eats rivals Deliveroo in the food delivery market.
In the lead up to its stock market debut, doubts emerged over whether Uber’s IPO would ever be profitable when the ride-hailing firm released details of its IPO plans. Moreover, Uber drivers across the UK were prepared to strike against pay and work conditions.
Elsewhere for Amazon, it announced earlier this week that it was set to partner with another British company, high street retailer Next (LON:NXT), to launch a click and collect service which will allow Amazon parcels to be collected in store.
At 19:59 GMT -4 Thursday, shares in Amazon.com Inc. (NASDAQ:AMZN) were trading at +1.95%.
Shares in Uber Technologies Inc (NYSE:UBER) were last trading at +4.13%.
Boris Johnson confirms Tory Leadership bid
Zany ex foreign secretary Boris Johnson confirms he’ll be throwing his hat into the ring for the Tory leadership once Theresa May stands down.
The Boris question
The controversial character and former Mayor of London was quoted as acknowledging that no vacancy currently existed in Downing Street, but at a business event in Manchester, he responded to a question about his potential candidacy by saying,“Of course I’m going to go for it.”Mr Johnson resigned from the cabinet last year in protest at Theresa May’s prospective withdrawal agreement. As a prominent Leave campaigner, the question will remain whether he would be the right person for the job, at least in the eyes of Leave voters who feel betrayed by the incumbent government’s inaction and who would perhaps favour a No Deal scenario to a period of extended negotiations.
https://platform.twitter.com/widgets.jsOf course I’m going to go for it — says @BorisJohnson about the Conservative leadership speaking at @BIBAbroker in Manchester #BIBA2019 pic.twitter.com/IR5AzTT3s1
— Huw Edwards (@huwbbc) May 16, 2019
The coming contest and Theresa May
Johnson will join the growing list of Number Ten hopefuls, with the coveted role surprisingly not being viewed as a political hot potato, but perhaps a moment to claim some accolade, with any future premiership likely to be more proactive than that of Mrs May. Formally announced contenders so far include International Development Rory Stewart and Pensions Secretary Esther McVey. Commons Leader Andrea Leadsom said that she was “considering” joining the leadership contest and several other members of the Conservative high ranks have been touted to follow suit, including; Michael Gove, Amber Rudd, Sajid Javid, Dominic Raab, Jeremy Hunt, Liz Truss and Penny Mordaunt. Mrs May has said that she will resign once the House of Commons reaches a compromise and backs her Brexit deal. Talks are continuing to be held with senior Conservatives who are insisting that the incumbent prime minister sets a date for her departure from office. Mrs May’s priorities, at least publicly, are elsewhere this week. Somewhat diverting from the predictable Brexit script, the PM has been stressing the importance of online security and managing the impact of social media, as well as drawing attention to the need to de-stigmatise mental health.https://platform.twitter.com/widgets.js The latter point, at least, earned the prime minister as much flak as praise. While questions of proportional funding are contentious, the number of mental health staff has continued to decline during Theresa May’s time in office, with a total cut of 6,610 mental health nurses between 2010 and 2017.Last night we lit Downing Street in green to mark the start of #MentalHealthAwarenessWeek.
We must all work together to make sure that looking after our mental health is as natural and positive as looking after our physical health. pic.twitter.com/PRBDPXYnc0 — Theresa May (@theresa_may) May 14, 2019
Sophos profits jump with subscription revenues
Cyber security firm Sophos (LON:SOPH) booked positive full-year results with healthy profits driven by an increase in subscription revenue, despite a year the company described as “challenging”.
Profits and expanded customer base
The company reported impressive expansion of their customer base, finishing the year with 335,000 term customers, which represents an increase in excess of 35,000 new term customers over the course of the year. This growing client base supported growth in revenues, which led the pre-tax profit growth. The company finished the year up $54 million, up $95 million from their $41 million from the previous year. Additionally, the 15.9% increase in subscription revenue pushed total group revenue up 11.2% to $711 million.Sophos comments on impressive performance
“FY19 was a challenging year, primarily due to a difficult compare. However, we are pleased with the strategic progress we made during the year as we drive Sophos’ transition to be a market leader in next-generation cybersecurity,” the company said. “The demand environment for cybersecurity solutions continues to be robust, and we are confident that we are well positioned competitively, especially as more organisations move to adopt next-generation cybersecurity offerings,” CEO Kris Hagerman added. “We believe the drivers are in place for continued future revenue growth, principally driven by growth in our subscription business, especially in our next-generation products. We also expect a return to operating profit margin leverage, following a reduction in the current year as the one-off benefit seen in FY19 from reduced variable performance-related pay unwinds,” he added.Sophos portfolio potential
The company’s shares have rallied 13.94% or 47.4p since trading began on Thursday morning, with shares currently trading at 387.5p. UBS and Shore Capital analysts are in consensus on their ‘Buy’ stance regarding Sophos stock, while Liberum Capital reiterated their ‘Hold’ rating.Anglo Asian Mining reports pre-tax profits of $25.2m, shares rally
Anglo Asian Mining shares rallied during Thursday trading on the back of a promising set of full-year results for 2018.
The AIM-listed mining company reported pre-tax profits of $25.2 million, up from US$5.7 million a year ago.
This was as a result of production proving to be at the upper range of the forecasts, at 83,736 gold equivalent ounces compared to expectations of between 78,000 to 84,000 GEOs.
Overall, total production for the full-year rose 17%, and on a year-on-year basis to 83,736 GEOs.
Gold production increased the most, up by 22%. Silver production also rose to 210,184 ounces, compared to 172,853 ounces recorded in 2017.
Conversely, copper production fell to 1,645, down from 1,991 the previous year.
The company recorded total annual sales of Gold bullion of 59,481 ounces, up from 43,496 ounces a year ago.
These were completed at an average of $1,265 per ounce, unchanged from 2017.
Meanwhile, the cost of gold production decreased in the lowest quartile to $541 per ounce during the period.
Anglo Asian Mining also announced a final dividend of $0.04 per share, resulting in a dividend of $0.07 per share for the year.
Shares in the London-listed firm are currently up 4.26% as of 13:13, as the market takes stock of the figures.
Anglo American rallies on diamond vessel approval
Mining multinational Anglo American Plc (LON:AAL) has seen its share price rally in morning trading following its announcement that its plans to construct a new diamond recovery vessel had been approved.
Strong start continues
The world’s largest provider of platinum was already reeling after it announced an extension to its dividend in February this year, and it seems that strong start to 2019 is set to continue. The firm announced that it expected some reduced output in its diamond and copper sectors compared to last year, but some of the fears surrounding any long-term depletion in diamond production should be at least partially offset by today’s announcement. The company’s plans to construct the custom-built diamond recovery vessel are set to go ahead, and marks the continued erosion of the lamented De Beers monopoly of the diamond industry which extended from the 19th century. That being said, these latest plans were approved by Debmarine Namibia, which is a 50:50 joint venture between the Government of the Republic of Namibia and De Beers.Increased yields prompting a positive outlook
“This highly attractive investment offers a three-year payback, a more than 25% IRR and an EBITDA margin of more than 60% – typical of the high quality of our brownfield growth options”, said Mark Cutifani, Chief Executive of Anglo American. “We will continue allocating appropriate levels of capital in a disciplined manner across Anglo American’s wider organic pipeline of near- and medium-term growth opportunities, including the world-class Quellaveco copper development in Peru, that we expect to contribute towards our 20-25% production growth by 2023.” Set to become the seventh component of the Debmarine Namibia fleet, the new vessel is set to add 500,000 carats to annual production, which would represent a 35% increase on Debmarine’s current output. The vessel is set to have a total capital cost of $468 million, and is expected to begin production in 2022.Anglo American portfolio potential
The company’s share price is currently trading up 58p or 3.03% since trading began on Thursday morning, with shares currently trading at 1,972p a share 16/05/19 11:55 GMT. Corporate analysts were unable to reach a consensus on rating Anglo American stock, with Citigroup reiterating their ‘Buy’ stance, Barclays Capital reiterating their ‘Equal Weight’ position, UBS remaining unchanged in their ‘Sell’ rating and Credit Suisse reiterating their ‘Outperform’ stance, having upgraded their rating earlier in May.Thomas Cook £1.5 billion loss and the Brexit effect
British travel company Thomas Cook (LON:TCG) has seen its losses widen in the first half, which has led the company to consider bids for its assets and revise its expectations for the second half.
Summer sun quells Winter fun
Much to the chagrin of Thomas Cook beneficiaries, the market wouldn’t emulate the trope of the HBO hit series – Winter did not come. “The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, particularly in the Nordic region, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer,” said Chief Executive Peter Fankhauser. The travel giant posted an underlying EBIT loss of £245 million, which widened by £65 million during the six month period ending 31 March 2019. This, the company added, was driven by lower demand for its tour operator businesses and uncertainty across all its markets, the risk of which had only been partially mitigated by reducing capacity across the board.Writing down value, lowering expectations
Much of the recent figure has been attributed by analysts to the company writing down the value of its subsidiary MyTravel Group, which it acquired for £1.1 billion in 2007. Regardless of the reason, the company opted to tap the nerve of Brexit uncertainty and said that a great deal of the blame for ongoing market frigidity could be placed at the feet of consumer uncertainty and Brexit negotiations. “This combined with higher fuel and hotel costs, is creating further headwinds to our progress over the remainder of the year,” added Fankhauser. The result of this, the company said, was that it expected to revise its second half expectations, with H2 earnings set to fall short of the same period in the previous financial year.Bids and lending and an attempt to stop revenues freezing over
The once go-to holiday group is perhaps falling between the cracks of luxury long-haul and cut-price competitors, and perhaps its board recognises this. It said that it had already received “multiple bids” for the whole or parts of its airline business and has yet refused to rule out any possibilities, stating that it would provide an update, “in due course”. However, the company shouldn’t be written off just yet. The firm said that it has already secured a £300 million bank ‘financing facility’ with its lenders, which is set to work alongside its existing revolving credit and bonding facilities, which currently amount to £875 million and are set to mature in November 2022. The new facility is designed to help the company provide additional liquidity for the 2019-2020 Winter season, and Thomas Cook said its availability was dependent on its progress in carrying out the strategic review of the Group Airline. It will be available from the 1st of October this year and will mature on the 30th of June 2020.Thomas Cook as a portfolio prospect
Too big to fail or just a bigger FlyBe (LON:FLYB)? The firm’s share price has fallen 3.74p or 16.25% in morning trading, down to 19.26p a share 16/05/19 10:51 GMT. Analysts from UBS remain unchanged in their ‘Neutral’ assessment of Thomas Cook stock, while Numis have their stance ‘Under Review’.Burberry annual revenue flat despite turnaround plan
Burberry (LON:BURB) reported its final results for the year on Thursday, sending shares downwards.
The luxury brand said that revenue for the year to March-end was £2.72 billion, broadly flat on figure of £2.73 billion the year before.
However, pre-tax profit, climbed 7% to £441 million a reported basis, nevertheless, on a adjusted basis profit dropped 6% to £443 million.
Burberry is in the midst of implementing a turnaround plan amid years of faltering sales.
The brand announced the departure of longstanding creative director Christopher Bailey last year.
Ricardo Tisci, formerly at Givenchy, replaced Bailey, and has been tasked with revitalising the iconic British brand.
Since taking on the role, Tisci has re-worked the brand’s branding, introducing a new signature monogram print, designed by Peter Saville, into the collection.
https://platform.twitter.com/widgets.js Nevertheless, investors proved less than impressed with these latest results, particularly in light of weak single digit sales figures across Asia. Burberry has been particularly affected by the economic slowdown in China, which has deterred spending on luxury goods. Marco Gobbetti, chief executive of Burberry commented: “We made excellent progress in the first year of our plan to transform Burberry, while at the same time delivering financial performance in line with expectations. Riccardo Tisci’s first collections arrived in stores at the end of February and the initial reaction from customers is very encouraging. The implementation of our plan is on track, we are energised by the early results and we confirm our outlook for FY 2020.” Shares in the company are currently down -4.81% as of 11:21AM (GMT).Coming soon#ThomasBurberryMonogram @GigiHadid pic.twitter.com/6ooyjTj38t
— Burberry (@Burberry) May 13, 2019