UK government borrowing falls, record surplus for January
UK government borrowing from April through to January was £21.2 billion, marking £18.5 billion less than the year before.
According to the Office for National Statistics (ONS), net borrowing for the month was in a record surplus of £14.9 billion, an increase of £5.6 billion from last January.
This marked the largest surplus for the UK government since records began in 1993.
This was attributed to a rise in self-assessment income tax as well as capital gains tax.
Howard Archer, chief economic adviser to the EY Item Club, commented: “A record high surplus on the January public finances provides a much-needed welcome boost for Chancellor Philip Hammond as he faces a worrying backdrop to his Spring Statement on 13 March.
“With the economy clearly struggling early on in 2019 after a sharp slowdown in the fourth quarter of 2018 and the Brexit situation highly uncertain, the chancellor will have a lot on his mind when he presents the Spring Statement.
“It looks highly likely that he will have to announce downgraded growth forecasts from the OBR [Office for Budget Responsibility] at least for the near term, with possible negative ramifications for expected budget deficits.”
The chancellor Philip Hammond is set to deliver his next budget statement on the 13th of March.
Whilst the chancellor will be busy putting together his speech, the rest of the UK government has been preoccupied with the deflection of three of its Conservative MPs, making it even harder to pass any legislation in parliament.
On Wednesday, Anna Soubry, Sarah Wollaston and Heidi Allen joined the Independent Group, resigning their membership from the Tory party.
The Independent Group now includes 8 Ex-Labour MPs and 3 Conservative deflectors.
Purplebricks shares plunge after cutting sales forecasts
Purplebricks shares (LON:PURP) plunged more than 30 percent on Thursday after the company cut its sales forecasts for the year.
The online real estate agent said that anticipated revenue will ‘not be sufficient to meet expectations’ for the year ahead.
Whilst Purplebricks said revenue would be 15-20% ahead of the year before, the company warned on a challenging trading environment for the UK housing sector, resulting in the cutting of forecasts.
The company also cited “headwinds” in Australia as a further challenge, in the announcement.
In addition, Purplebricks announced the departure of two high-profile executives. Both Lee Wainwright, UK CEO, and Eric Eckardt, US CEO are set to leave the firm.
Whilst Mr Wainwright is leaving for ‘personal reasons’, the company did not disclose the reasons for Mr Eckardt’s departure.
Michael Bruce, CEO and co-founder, said: “Although there are macro and industry headwinds across markets we are well placed to capitalise on the significant opportunity for growth that exists in each country, albeit not entirely as we would have wanted before our year end. The UK is leading the way with continued profitable growth and a strategy to deliver greater success. I am also excited to be taking the reins of the US business. The team in Australia are building on the changes they implemented late last year and Canada is delivering on plan and expectations. The Board remains confident of the long-term growth potential of the business and the opportunity to deliver substantial value for shareholders.”
Shares are currently down -28.24% as of 10:54AM (GMT).
Barclays posts profits of £3.5bn, shares rise
Barclays (LON:BARC) reported profits of £3.5 billion for the year, sending shares upwards on Thursday.
Barclays reported the same profit in 2018 as the year before, remaining flat amid costs relating to various litigation cases.
In addition, the bank announced it had set aside £150 million due to “anticipated economic uncertainty” as a result of Brexit.
https://platform.twitter.com/widgets.js In the last few years, Barclays has been dealt with numerous fines relating to misconduct and PPI claims. Most recently, the bank was hit with a $15 million penalty back in December by a New York regulator. The New York State Department of financial services investigation concluded that the bank had violated local banking law when it attempted to unmask a whistleblower. A £642,430 penalty dealt by the UK’s financial watchdog, the Financial Conduct Authority (FCA) had already proceeded the New York fine. Barclays results follow Lloyds (LON:LLOY) annual results published on Wednesday, and HSBC (LON:HSBA) on Tuesday. Whilst Lloyds shares rose after the bank posted profit growth for the year, HSBC shares fell after the bank revealed it had been affected by the economic slowdown in China. Barclays shares are currently +3.13% as of 10:29AM (GMT).NEWS: Listen to Barclays Group CEO Jes Staley share highlights from our Full Year 2018 Results. Follow #BarclaysResults for updates throughout the day.
— Barclays Bank (@Barclays) February 21, 2019
CyanConnode set for further growth in 2019 – Presentation at the UK Investor Magazine Investor Evening 31st January 2019
John Cronin, Executive Chairman of CyanConnode (LON:CYAN) presented at the UK Investor Magazine Investor Evening 31st January. CyanConnode is a specialist in Internet of Things (IoT) technology with a focus on smart meters.
The group have won a number of significant contracts in India and the Nordics and having posted a 400% increase in profit in 2018, John Cronin was confident about further growth in 2019.
CyanConnode Presentation – UK Investor Magazine Investor Evening 31st January 2019 from UK Investor Magazine on Vimeo.
Centrica warns energy price cap will weaken 2019 results
Energy supplier Centrica (LON:CNA) has warned of the consequences the national price cap on energy bills will have on its 2019 financial performance. Shares in the Windsor-based energy company dropped over 11% during early trading.
Centrica is the UK’s largest energy supplier with over 12 million customers.
The price cap on default energy tariffs was set in motion on the 01 January this year, and is expected to save 11 million UK households roughly £76 each. These customers are said to be overcharged for their energy bills under the default tariffs.
Though Centrica reported a 12% increase in its 2018 operating profit, it has warned that the energy price cap would lead to a one-off negative adjusted profit impact of roughly £70 million in the first quarter of 2019.
“We have been very clear that we do not believe a price cap is a sustainable solution for the market, and is likely to have unintended consequences for customers and competition,” Centrica commented in its financial results.
“We expect the price cap to result in some negative near-term impact on earnings and cash flow in UK home, particularly in 2019, before we have fully realised planned cost efficiencies,” the company continued.
The owner of the UK’s largest energy supplier, British Gas, has made its opinion clear of the energy price cap. Last December, the company said it would launch a legal challenge to the government’s energy price cap. A judicial review against the price cap was sought just days before the cap was set to begin.
Ofgem announced earlier this month that the energy price cap would be raised by £117 for customers on default tariffs, including standard variable tariffs on 01 April. The increase is expected to impact around 15 million UK households.
Earlier this month, energy supplier E.On was the first major company to announce price hikes in response to the new Ofgem cap set to begin in April.
At 08:55 GMT Thursday, shares in Centrica plc (LON:CNA) were trading at -11.41%.
Summit Germany dips amid probe
Commercial real estate company Summit Germany Ltd (LON:SMTG) saw their shares dip in trading on Wednesday following an announcement that the offices of their major shareholder, Summit Real Estate Holdings (TLV:SMT), had been searched as part of an ongoing investigation.
Summit in deep water
The investigation is into insider trading in Israel, and the Israeli Security Agency interviewed SREH officers including Summit Germany managing director Zohar Levy. “The company understands that this is part of a broader investigation into an individual’s securities dealings in a number of companies listed on the Tel Aviv Stock Exchange and does not directly involve Summit Germany,” the company said in a statement.SMTG as a portfolio prospect
Tel Aviv-listed SREH owns 50.9% of the German property investor, and as such, a prudent investor would perhaps hold fire on any long-term commitments until the events of the ongoing investigations are allowed to transpire. The firm’s shares have dipped in Wednesday trading in the wake of the day’s announcements. Shares are currently down 0.15 EUR or 11.44% at 1.19 EUR 20/09/19 15:38 GMT.Transense Technologies rallies on new contract
Oxford-based technology transfer and sensor system supplier Transense Technologies Plc (LON:TRT) have seen their share price rally in Wednesday trading with the company announcing that they had secured a new contract.
Not a tyred matter
Transense announced on Wednesday that they had secured a further contract via their Ghanaian partner, to supply tyre monitoring systems for trucks at the Norgold Mine in Burkina Faso. These systems are to be supplied on a rental basis through the West African Tyre Services. ‘This method allows mining companies to benefit from the productivity gains and overhead savings provided by using the system without any of the associated capital cost, while providing Translogik with a recurring revenue stream,’ the company said.Transense as a portfolio candidate
This latest contract after the company announced the delivery of 50 of its iTrack II units to be installed in North Africa. The firm’s shares are currently trading up 1.5p or 2.16% to 71p per share 20/02/19 14:32 GMT. Analysts from finnCap have reiterated their ‘Corporate’ stance on Transense stock.Temple Bar Investment Trust performance slips with volatility
British investment trust and value-based stock-picker Temple Bar Investment Trust (LON:TMPL) posted a net negative annual performance for the full year through December.
The company attributed the disappointing results to volatility in international markets, with political and macroeconomic phenomena causing a tentative outlook and stifled liquidity.
The company’s returns on net assets for the full year stood at negative 11.2% by the end of December – this compared to a total return of 9.5% on the FTSE All Share Index.
“So far this year there have been encouraging signs that the anti-value stance of the market might be beginning to reverse and performance in January was impressive as a result,” chairman Arthur Copple said.
“It is still, however, very early days.”
“We continue to face several political and economic risks over the short to medium term, not least the ramifications of Brexit negotiations.”
“A return to more volatile market conditions, while undoubtedly offering a bumpy ride, is likely to play to Temple Bar’s strengths.”
“Our preference — stated on many occasions — is to focus on an individual company’s financial strength and performance rather than seek to predict the direction of markets.”
“Through maintaining our approach of investing in a diversified portfolio of mainly UK domiciled companies and with strict adherence to a value based approach we believe that Temple Bar can continue to prosper, notwithstanding future uncertainties.”
“Furthermore, Temple Bar is well positioned to maintain its policy of paying a high and growing dividend for the foreseeable future.”
Temple Bar as a portfolio candidate
The company declared a final dividend for the year of 20.47p per share, after paying three interim dividends of 8.75p during the course of 2018. At the end of December, the firm’s top holdings were GlaxoSmithKline (LON:GSK), Shell(AMS:RSDA), Capita (LON:CPI), BP (LON:BP) and Travis Perkins (LON:TPK). After a modest rally on Wednesday morning, Temple Bar shares are currently trading up 0.52p or 0.041% at 1,268.52p per share 20/02/19 13:55 GMT.Laura Ashley warns on annual profits, cites “turbulent market”
Laura Ashley has warned on annual profits, citing a “turbulent market” in its interim results.
The retailer reported a pre-tax loss of £1.5 million, compared to a £4.3 million profit the year before. Meanwhile, sales fell by 8.7% to £122.9 million.
The loss was attributed to a 4.2% fall in like-for-like sales. During the period, Laura Ashley closed four stores.
The businesses Furniture and Decorating offerings also witnessed a share decline in sales, with furniture plummeting by 14.4% and decorating down 12.4%.
Its fashion division performed better with an 11.8% increase in like-for-like sales.
The retailer announced a series of store closures in 2018, with 40 UK stores facing the axe.
Instead, Laura Ashley said it would be focusing upon growing its operation in China.
Since 1998, the company has been majority controlled by MUI Asia Limited.
Its been a difficult few years for the retail sector, with various well-known high street stores, including Laura Ashley announcing closures.
Retailers such as New Look, M&S (LON:MKS) and Waitrose all shut down sites in 2018, blaming falling footfall.
Also on Wednesday, shopping centre landlord Intu (LON:INTU) also reported a full in annual profits, causing shares to fall.
Intu cited an uncertain economic environment as well as difficult trading across the retail sector in general.
Shares in Laura Ashley (LON:ALY) are currently trading -1.46% as of 13:07PM (GMT).
Blancco Technology H1 profit with revenue hike
Data security firm Blancco Technology Group have managed to turn a profit for the first half, with strong Data Centre and Enterprise growth sparking a revenue jump of almost 20%.