https://platform.twitter.com/widgets.js UK inflation levels have been falling since reaching a six-month high of 2.7% in August. In December, inflation fell to 2.1%, casting doubts on an impending rate hike by the Bank of England. Indeed, earlier this month, The Bank of England’s Monetary Policy Committee unanimously opted to hold interest rates, after downgrading its economic outlook to 1.2% of GDP. This central bank had previously forecast growth of 1.7% back in November.The CPIH 12-month rate was 1.8% in January 2019, down from 2.0% in December 2018 https://t.co/mJHB1j4pH9 pic.twitter.com/xn5SjaV7wA
— ONS (@ONS) 13 February 2019
UK inflation dips to 1.8% in January
UK inflation dipped to 1.8% in January as a result of falls in electric, gas and fuel prices, according to the latest official figures.
The Office for National Statistics (ONS) said that the introduction Ofgem’s energy price gap helped ease inflation over the period.
This marks a two-year low for inflation, and below the Bank of England’s target of 2%.
Mike Hardie, ONS head of inflation, said: “The fall in inflation is due mainly to cheaper gas, electricity and petrol, partly offset by rising ferry ticket prices and air fares falling more slowly than this time last year.”
Dunelm shares rise amid half-year profit boost
Dunelm reported its interim results on Wednesday, with a boost in like-for-like sales sending profits higher.
The FTSE-250 furniture maker said pre-tax profit for the six months to 29 December, was £70 million, an increase of 16.7% year on year. The company also said it had free cash flow of £91.2 million.
Accordingly, Dunelm increased its interim dividend increased by 7.1% to 7.5 pence per share.
Brexit
Alongside updated the market on its interim results, Dunelm also revealed it has commenced stockpiling some of its best-selling items ahead of Brexit.
Whilst the company said it imports less than 1% of its goods from EU countries, it said it had nonetheless ‘identified some risks arising from potential disruption at ‘deep-sea’ ports in the period following exit’.
Dunelm also said that approximately 2.5% of employees are EU nationals, and that the company will support its employees obtaining ‘settled status’ when needed.
Nick Wilkinson, Chief Executive Officer, commented:
“It’s been a good first six months with our strong performance reflecting the focus we have placed back on the core Dunelm business. The like-for-like revenue growth, both in stores and online, demonstrates the progress we are making in improving our multichannel proposition whilst maintaining the breadth and depth of our specialist customer offer in homewares. On top of this, good operational discipline and keeping things simple, is driving a better financial performance.”
“We traded well through our key Winter Sale period and remain pleased with our performance to date. As previously highlighted, we are cautious about the outlook for the remainder of the financial year due to the continuing political uncertainty in the UK. We are confident in delivering market expectations(5) for the full year assuming no material change in the macro-economic environment.”
“Looking to the future, we will continue to grow the business as we become a truly multichannel homewares destination, making Dunelm the first choice for even more customers, and further strengthening our market leading position.”
Dunelm shares are currently trading +3.21% as of 11:23AM (GMT).
Bushveld Minerals shares rise after Imaloto update
Bushveld Minerals (LON:BMN) issued an operational update on its subsidiary, Lemur Holdings, sending shares up.
The company said it has finished reviewing the power part of Imaloto, and has now commenced evaluating the coal mine aspect.
Bushveld Minerals also said that it had completed due diligence for the project preparation finance with a lender, and continues to engage with lenders on project financing.
Lemur Holdings is the company’s coal and power subsidiary.
Prince Nyati, CEO of Lemur Holdings Limited, commented:
“The completion and review of the Bankable Feasibility Study for the power component of the Imaloto Project represents a key milestone achieved as we press ahead in ensuring Lemur delivers on the potential of the Imaloto Project. The Project’s bankable feasibility study shows that the Imaloto Project is feasible and can deliver significant economic returns. More importantly, the Imaloto power project is the most advanced Independent Power Project (“IPP”) baseload project in Madagascar.
He continued: “It will have transformational developmental benefits for the country’s southwest region, where the government has already implemented significant road infrastructure expansion. The coal reserve and transmission line is capable to support the generation capacity in excess of 60MW in the medium to long term as suppressed demand is unlocked in the region.
Bushveld Minerals is a vanadium producer. The firm is listed on the AIM-market of the London Stock Exchange. Its operations are focused in South Africa and Madagascar.
Shares in Bushveld Minerals are currently +1.74% as of 10:41AM (GMT).
Shefa Yamim: Preparing for diamond and precious stone production
Shefa Yamim (LON:SEFA) is targeting gem stone prospects in the Kishon region of Northern Israel, in particular diamonds, sapphires and ruby.
The company has recently hit significant milestones such as the recognition of a new mineral in their Carmel Sapphire and a technical economic evaluation that puts their mining process towards the lower end of costs when compared to their peers.
Michael Rosenberg of Shefa Yamim presented at the UK Investor Magazine Investor Evening 31st January and detailed this year’s plans and their pursuit of a mine-to-market strategy.
Nissan cuts profit forecast amid Ghosn scandal
Nissan cut its profit forecast for the year ahead as the Japanese car company continues to suffer the fall-out from the Ghosn scandal.
The car-maker revised its 2018 operating profit forecast to be 450 billion yen (£3.2 billion), down from 540bn yen, citing weaker car sales.
It now expects revenues of 11.6 trillion yen, as opposed to 12 trillion yen.
Nissan reportedly sold 4.02 million vehicles over the course of the first nine months of the year, marking a fall of 2.1%.
Whilst the firm enjoyed growth in Japan, China and other markets, Nissan suffered a decline in sales across America and Europe.
Nissan is also facing a one-off compensation charge of 9.2 billion yen (£64.7 million) to former chief executive and chairman Carlos Ghosn between 2009 and 2017.
Ghosn was initially arrested on suspicion of underreporting his pay between 2011 and 2015.
In December, Mr Ghosn was re-arrested by Japanese authorities on suspicion of aggravated breach of trust.
Since 1999, Nissan has been a member of the Renault-Nissan-Mitsibushi Alliance, of which Mr Ghosn had been a key proponent.
At the time of his initial arrest, Nissan released the following statement, stating that Ghosn had been “reporting compensation amounts in the Tokyo Stock Exchange securities report that was less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation”.
“Numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly’s deep involvement has also been confirmed.”
“Nissan deeply apologises for causing great concern to our shareholders and stakeholders. We will continue our work to identify our governance and compliance issues, and to take appropriate measures.”
Shares in the company (TYO: 7201) are currently trading +1.87% as of 14:32PM (GMT).
Cabot Energy shares crash amid $3.7 million capital raise
Cabot Energy announced plans to raise $3.7 million in capital through a discounted share rights issue on Tuesday, sending shares downwards.
The oil and gas company said it had already conditionally raised £2,082,899 (approx. $2.7 million) at an issue price of 10 pence per share.
It said it is also proposing to raise the additional £770,000 (approx. $1 million) through the issue of up to 7,700,000 shares at the same price per share.
Scott Aitken, Chief Executive Officer, said: “This Fundraising will facilitate the partial settlement of amounts owed to the Group’s creditors, predominantly trade creditors of Cabot Canada, following cost overruns of the Canadian work programme early in 2018, before the new executive team took over. We continue to engage in constructive discussions with our creditors and would like to thank them for their continued support as we secured discounts and rescheduling of payments due.”
James Dewar, Independent Interim Non-Executive Chairman of Cabot Energy, added: “The proposals outlined today deliver the short-term capital required to safeguard Cabot Energy’s future. It follows a forensic assessment of the Company’s financial position and consideration of all available options, including asset sales, and what is being recommended by the Board we believe is in the best interest of all Shareholders. The funds will enable the Company to deliver on its creditor settlement agreements and provide a platform for the growth financing plan by the end of Q1 2019.”
Cabot Energy is an AIM-listed company. It has operations in Australia, Canada as well as Italy.
Shares in the firm (LON:CAB) are currently trading -41.50% as of 12:16PM (GMT).
Elsewhere across the markets, Kodal Minerals shares (LON:KOD) rose after the company said it had completed drilling at its Bougouni Lithium Project.
In the Retail sector, Debenhams shares (LON:DEB) were up after the department store said it had secured an additional £40 million in funding.
Kodal Minerals completes drilling at Bougouni
Mineral exploration and development company, Kodal Minerals (LON:KOD), has announced its final assay results for the drilling completed at its Bougouni Lithium Project.
The Bougouni Lithium Project is based in Southern Mali. Kodal Minerals’ primary focus is on the development of this project, advancing it towards production. The recently completed Maiden JORC Resource Estimate placed the Bougouni Lithium Project in the top 15 hard rock lithium projects globally.
CEO of Kodal Minerals, Bernard Aylward, commented on the announcement:
“The final assay results for the Bougouni drilling programme, completed in November and December 2018, reported today highlight the excellent continuity and width of the pegmatite mineralization at the Sogola-Baoule and Boumou prospects. These results will be incorporated into the geological and mineralization model that will update our JORC Mineral Resource.”
“Kodal is continuing the fast track development of the Bougouni lithium project and has recently met with both the Mali Minister of Mines and delegation to provide an update on the Project. The first step is to complete the update of the JORC Mineral Resource as this will be utilized for the future mine design and scheduling. The Company is also finalizing the metallurgical testwork and the engineering design of the proposed processing plant.”
Highlights from the Sogola-Baoule prospect on Bougouni includes an intersection of up to 31 meters at 1.33% lithium oxide, 27 meters at 1.06% and 30 meters at 1.06%.
Highlights from the Boumou prospect includes 11 meters at 1.32% lithium oxide and 11 meters at 1.03%.
Mineral resource estimate remains on schedule for announcement by the end of February 2019, the company said.
In January, the lithium mining firm confirmed a new deal that gives exclusive rights to expand its operation at a lithium mining opportunity in Mali. Kodal said that the new project would be close to the existing Bougouni Project.
At 10:19 GMT on Tuesday, shares in Kodal Minerals plc (LON:KOD) were trading at +2.84%.
Debenhams shares soar amid credit facilities extension and sourcing partnership
Department store chain Debenhams announced on Tuesday that it has agreed to extend its credit facilities and a sourcing partnership with Li & Fung. Shares in the company soared 39% during trading on Tuesday morning.
It has agreed to an additional 12-month senior secured credit facility. The additional facility provides £40 million on increased liquidity headroom, which will be available to draw as required.
Additionally, the new facility agreement will be a bridge to facilitate a broader refinancing and recapitalisation. Against this backdrop, the company has said it will continue to engage constructively with with its stakeholders. It intends to conclude a “comprehensive refinancing” by the end of the period.
Earlier this January, Moody’s Investors Service downgraded Debenhams’ outlook from stable to negative.
Debenhams has also entered into an agreement with Li & Fung. Li & Fung is a Hong Kong based leading supply chain solutions partner for consumer brands and retailers. The agreement aims to develop a strategic sourcing partnership and is expected to eventually cover a material part of its own-brand sourcing, delivering benefits for both of its customers and stakeholders. CEO of Debenhams, Sergio Bucher, commented on the announcement: “Today’s announcement represents the first step in our refinancing process. The support of our lenders for our turnaround plan is important to underpin a comprehensive solution that will take account of the interests of all stakeholders, and deliver a sustainable and profitable future for Debenhams.” “In addition, the partnership agreement we are announcing today with Li & Fung will be a key part of our turnaround plan. It gives us access to state-of-the-art technology in the LF Digital platform, providing end-to-end visibility across our supply chain. This will help us anticipate and respond more quickly to trends and our customers’ preferences, as well as delivering better quality product.” Debenhams recently announced that it is planning to close 90 stores. Likewise, it may axe 10,000 jobs as it battles against plummeting profit and sales. Shares in Debenhams plc (LON:DEB) were trading at +39.35% as of 10:13 GMT on Tuesday.Stagecoach announces short-term rail franchise with Department for Transport
Stagecoach Group plc (LON:SGC) announced on Tuesday that its subsidiary, East Midlands Trains Limited, has agreed a new short-term rail franchise with the Department for Transport. Shares in the company were trading slightly higher during early trading on Tuesday.
The new franchise will begin on 3 March 2019 and is expected to run until at least 18 August of the same year. The Department for Transport has the discretion to extend the franchise by up to 24 weeks on terms that have been agreed, Stagecoach said.
Stagecoach has outlined the benefits and improvements that customers and communities will experience as a result of the franchise. Under the agreement, the £1.5 billion Midland Main Link upgrade is set to improve capacity and reduce journey times. Additionally, the continuation of the investment programme will improve stations and trains, including accessibility improvements. Moreover, it will see the roll out of smart ticketing in March, as part of a wider National Rail scheme.
East Midlands trains will focus on ensuring readiness for the new franchise. This includes plans to add extra seats from 2020.
Under the agreement, revenue risk will sit primarily with the Department for Transport.
East Midlands Trains is set to earn a modest sum under the contract. A profit sharing arrangement with the Department for Transport will be applicable. In December, Stagecoach reported its results for the first-half of the financial year. The bus and rail operator revealed a pre-tax loss of £23 million for the first six months of the year, comparing to the £97 million profit earned the year prior. It slashed its dividend for the full year to April 2018, causing shared to drop over 7% in June. After severe weather across the country during early 2018, UK bus regional revenue dropped by 0.1% on a like-for-like basis. In London, revenue drop was significantly larger at 4.3%. At 09:36 GMT Tuesday, shares in Stagecoach Group plc (LON:SGC) were trading at +1.63%.AA’s motor insurance division sees strong growth, roadside breakdown stumbles
AA’s (LON:AA) motor insurance division has experienced a “solid” operational performance throughout the financial year ending 31 January 2019. However, its roadside breakdown business continues to stumble. This was announced in a pre-closing trading update on Tuesday ahead of its full financial year results announcement on 3 April.
Trading EBITDA is expected to not be below then £340 million mark, which remains within the company’s guided range of £335 million – £345 million.