TUI losses widen following hot British summer and weaker pound
Travel company TUI (ETR:TUI1) revealed its first-quarter results of the financial year on Tuesday through a stock market announcement. The results show a deeper earnings as a result of weather conditions, a change in consumer demand from the western to the eastern Mediterranean and a weaker pound. Shares in the company dropped over 4% during early trading on Tuesday.
Underlying EBITA loss deepened to -€83.6 million for the three months through December. This compares to a -€36.7 million on-year.
Group turnover grew 4.4% to €3.7 billion. Additionally, customer volumes across all markets jumped by 1.2% to 3.7 million.
Sterling drops after lowest UK GDP growth reading since 2012
Sterling weakened on Monday after the release of UK growth figures that showed the pace of growth had declined to the lowest levels since 2012.
Growth in Q4 2018 stumbled to 0.2% as the service sector was only are to post growth and Business Investment declined.
Growth for 2018 fell to 1.4% down from 1.8% on 2017 sending GBP lower against most major currencies.
GBP/USD was trading at 1.2902 at lunchtime in London.
The fall in GBP/USD compounds a poor February for sterling thats seen the currency pair drop over 200 points.
1.4% fall in Business investment in Q4, the 4th consecutive quarterly fall in a row https://t.co/HjIDTfZktM pic.twitter.com/kNjKFmpYRB
— ONS (@ONS) 11 February 2019
Europe wide weakness
The decline in the UK’s growth rate was attributed to lower factory orders and activity in the automotive sectors. Fear over Brexit were blamed for the poor figures as businesses held back on making decisions until the UK government gave more certainty on the withdrawal process. Despite Brexit being blamed for the weakness, the UK’s disappointing GDP’s figures comes hot on the heels of a raft of data from mainland Europe suggesting the economic picture is weak throughout the continent. Italy have recently confirmed they are in a technical recession and Germany could well do the same following a 1.6% decline in factory orders suggesting Europe’s biggest economy is taking a turn for the worse. While Italy’s politicians blamed their recession on ongoing Eurozone austerity, Germany’s woes are firmly driven by a declining demand for goods, especially automotives – something that was also evident in the UK economy.UK services strength
The UK’s service sector was the only area of the economy that grew with strong growth in IT. Business investment was weak, posting the fourth quarter of decline. Head of GDP Rob Kent-Smith commented on the data: “GDP slowed in the last three months of the year with the manufacturing of cars and steel products seeing steep falls and construction also declining. However, services continued to grow with the health sector, management consultants and IT all doing well. “Declines were seen across the economy in December, but single month data can be volatile meaning quarterly figures often give a better indication of the health of the economy. “The UK’s trade deficit widened slightly in the last three months of the year, while business investment again declined, now for the fourth quarter in a row.”Lonmin production hit after miner fatalities
Lonmin (LON:LMI) updated the market on its production numbers for the first quarter of 2019.
The platinum miner said production was down 166,000 tonnes to 2.2 million tonnes, down 7.0% on the same period last year.
This was as a result of two fatalities, which led to stoppages as the company worked towards reviewing safety conditions.
The statement added that the incidents had occurred after a 15-month fatality free period.
Ben Magara, Chief Executive Officer, said: “The loss of our colleague is deeply regretted and we extend our deepest condolences to his family and friends. Our first quarter’s production is always our most disturbed and challenging period.
Looking ahead to the next quarter, Magara said:
“I am encouraged by the increase in the PGM basket price driven by Palladium and Rhodium. Going forward into the second quarter, the Lonmin team continues to focus on safe mining production. We are therefore maintaining our sales, costs and capex guidance for 2019. The challenges of this quarter and the volatility of the exchange rate underscore the vulnerability of our business and the importance of a sustainable solution for the company.”
Lonmin is a platinum mining company that is primarily focused in South Africa.
Shares in Lonmin are currently +8.55% as of 13:53AM (GMT).
Elsewhere in the markets, Tower Resources shares (LON:TWR) rallied after the company announced it had made a gas discovery nearby one of its wells.
Meanwhile, SSE shares (LON:SSE) remained flat after the company updated the market on its performance during the last three months of 2018.
Zinc Media confirms incoming chief executive
Zinc Media (LON:ZIN) confirmed the appointment of Mark Browning as its new incoming chief executive.
The media, communication and production company said Browning is set to join the board and commence is role on the 23rd of April 2019.
Following his departure, previous chief executive David Galan is set to assume a role as a non-executive director of Zinc Media.
Peter Bertram, Chairman, commented on the announcement:
“We look forward to Mark joining the Company and are pleased that his start date is now confirmed. We are excited for him to begin a new strategy to build Zinc Media’s ambitions in the TV and digital markets, using his vast experience in the field.
Furthermore we are delighted that David has agreed to step into a role as a non-executive director of the Company and believe that his knowledge and experience in re-shaping the Group over the last few years will continue to be valuable to the Board and in helping to ensure a smooth transition for Mark.”
Zinc Media operate a range of television production companies. These include Blakeway, Brook Lapping, Films Of Record and Reef Television.
It works with TV broadcasters such as the BBC, Channel 4 and Channel 5.
Shares in the media firm are down marginally as of 13:16PM (GMT). Shares are currently trading down -1.23% as of 13:17AM (GMT).
SSE issues profit warning after losing 160,000 customers
SSE issued a profit warning on Friday after revealing it had lost 160,000 customers in the last three months of 2018.
The energy giant also said that a European Court ruling, which halted state aid for UK energy companies, would also impact earnings.
Accordingly, the company reduced its earnings forecast per share to be between 64p to 69p.
The company said it would be maintaining its full-year dividend of 97.5p per share.
Alistair Phillips-Davies, chief executive of SSE, commented: “We continue to make good progress in our core businesses of regulated energy networks and renewable energy, complemented by flexible thermal generation and business energy sales. We have also demonstrated our ability to create value for shareholders through the recent sales of stakes in our telecoms business and selected onshore wind farms with expected proceeds of over £1bn. We are also making progress in assessing the options for the future of the energy services business.
“SSE has a clear strategy and good long-term prospects for its high-quality core businesses and assets that contribute to the transition to a low carbon economy and will support the creation of value and delivery of our dividend plan in the years to come.”
SSE is considere to be one of the “big six energy providers” in the UK.
Nevertheless, the country’s largest energy firms have been struggling as of late.
Fierce competition and rising energy prices have led many of the top providers to shed a considerable amount of customers.
Rival provider British Gas, which is owned by Centrica (LON:CNA), lost 1.3 million energy accounts in 2017 alone.
SSE shares (LON:SSE) are currently up marginally at +0.47% as of 11:01AM (GMT).
Tower Resources shares rally amid gas discovery
Tower Resources shares (LON:TWR) rallied on Friday after the company updated the market on its Brulpadda well.
The oil and gas exploration company said it “reported a significant gas condensate discovery” located in the Outeniqua basin, offshore South Africa, neighbouring its Brulpadda well.
According to the company statement, the company said that:
‘Total have stated that they believe the new discovery could hold between 500 million to over one billion barrels of oil equivalent and they now intend to drill several further exploration wells on Block 11B/12B to test additional prospects.’
At the start of the year, Tower Resources announced its intention to raise £1.7 million in capital for its Cameroon project.
The company said it would raise the funds through the placing 170 million new ordinary shares at 1p each, with the listing set to take place at the end of January.
Tower resources is an AIM-listed company. It was admitted to the London Stock Exchange in 2005.
The firm has projects in Cameroon, Namibia, South Africa and Western Sahara.
Shares in Tower Resources are currently trading +16.67% as of 10:41AM (GMT).
Shaftesbury: footfall was “robust” over Christmas
Shaftesbury (LON:SHB), the London West End property investor, announced a trading and finance update on Friday for the period 1 October 2018 to 7 February 2019. The company has said that footfall and trading was “robust” over the period.
Shares in the property investor dropped slightly during early trading on Friday.
Shaftesbury is a real estate investment trust with a portfolio that extends across 15 acres in London’s West End. It focuses on retail, restaurants and leisure in the highly popular locations around Carnaby, Seven Dials and Chinatown. Moreover, its portfolio includes substantial ownership in East and West Covent Garden, Soho and Fitzrovia.
Over the Christmas and New Year festivities, footfall in Shaftesbury’s locations was “robust”. Indeed, its occupiers generally reported a turnover growth when compared to the year prior. This seems to differ from the national reports of a tough trading climate as Shaftesbury’s restaurants, cafes, pubs and bars were all particularly busy over the holidays.
Tough trading conditions have been well publicised throughout 2018, perhaps contributing to a growing consumer anxiety in spending. Shaftesbury’s properties, however, seem to have not suffered as profoundly as other retailers.
On Boxing Day, average footfall across the UK dropped by 3.1%, and reports of decreasing footfall were also evident earlier on in 2018.
Chief Executive Brian Bickell commented on the announcement:
“During the important trading season leading up to and including the Christmas and the New Year holidays, footfall in our locations has been robust and our occupiers generally reported growth in turnover compared with the same period in 2017. In contrast to reports of subdued leisure spending nationally, our restaurants, cafes, pubs and bars were particularly busy throughout the festive period.”
Additionally, the company reported a resilient demand for its regular space as occupancy remains high. Equally, it has made progress on larger schemes such as the let of Thomas Neal’s Warehouse and the submission of a planning application for 72 Broadwick Street.
At 09:47 GMT Friday, shares in Shaftesbury plc (LON:SHB) were trading at -0.34%.
Thomas Cook outlook unchanged amid turbulent summer bookings
Thomas Cook released a first-quarter trading statement on Thursday for the three months ended 31 December. The company has said that the financial year has begun in line with expectations, making no changes to its full-year expectations outlined last November. However, the company said it had been hit by a reduced demand for winter sun and British consumer uncertainty.
First-quarter revenue was up 1% to £1,656 million. Underlying operating loss increased by £14 million to £60 million against a strong period the year earlier.
Thomas Cook’s announcement comes hours after its rival TUI issued an unscheduled update, warning of a UK profit squeeze.
Chief Executive of Thomas Cook, Peter Frankhauser, said: “Where Summer 2018 bookings started very strongly, bookings for Summer 2019 reflect some consumer uncertainty, particularly in the UK, and our decision to reduce capacity which will both mitigate risk in our tour operator business and help our airline to consolidate the strong growth achieved last year.” This consumer uncertainty could reflect the wider unpredictability of consumer spending patterns as the UK Brexit date looms. “As expected, the knock-on effect from the prolonged summer heatwave and high prices in the Canaries have impacted customer demand for winter sun,” he continued. “We’ve made further good progress in transforming our business with a rigorous focus on managing our cost base while innovating to deliver high-quality holidays for our customers. Our strategic alliance with Expedia is now live in all our key markets. In addition, we are set to open 20 new own brand hotels this summer, including three Casa Cooks and eight Cook’s Clubs, and have announced two new hotel projects with Fosun in China.” In November, Thomas Cook announced a second profit warning in two months. It warned that profits were set to be £30 million lower than expected. By the end of the year, however, the CEO of Thomas Cook said that bookings seemed more promising for 2019. For the UK, this increase in bookings does not seem so optimistic. At 15:19 GMT today, shares in Thomas Cook Group plc (LON:TCG) were trading at +4.31%.Snoop Dogg’s venture capital firm: a closer look
Last month, Snoop Dogg (whose real name is Calvin Cordozar Broadus Jr.) announced that he had invested in a Swedish fintech company. The American singer, rapper, record producer, television personality, entrepreneur and actor purchased a stake in Klarna Bank, in order to expand his tech investment portfolio.
Snoop Dogg’s venture capital firm, Casa Verde, is best known for adding cannabis companies to its portfolio. As countries around the world begin to change their perception of the drug, cannabis is proving to be one of the hottest sectors to invest in.
Several European countries have decriminalised the use of the drug for recreational purposes. Though not legalised in the UK for recreational use, the British government has made certain exemptions that allow specialist GPs to prescribe cannabis for medicinal purposes.
Legislators across the pond, however, seem to have gotten there earlier. In Canada, the use of medical cannabis has been permitted since 1999. Whereas in the United States, cannabis for medicinal purposes is legal in 29 states.
Snoop Dogg’s firm Casa Verde boasts a variety of companies that are active in the cannabis sector.
Metrc is a company first deployed in December 2013 for the State of Colorado’s Marijuana Enforcement Division. It is a track and trace system that provides end to end tracking and tracing of marijuana plants and products. This allows production to maintain compliance with applicable laws. The next company, Dutchie, advertises itself as “the easiest way to order cannabis products from the best dispensaries near you”. Operating as an on-demand cannabis delivery service, the platform allows users to place an online order of the highest cannabis products, pick it up or have it delivered within an hour. Following on is the biopharmaceutical company, Oxford Cannabinoid Technologies. The company aims to combine cannabinoid medicine with scientific research and drug development. By searching for a deeper understanding of how the drug works, Oxford Cannabinoid Technologies hopes to investigate further the medical potential of cannabis to apply to a range of different therapeutic areas. Next is Green Bits, a company that merges cannabis with fintech. Green Bits aims to provide cannabis retailers with an easy-to-manage platform through its development of a point-of-sale product. Moreover, Trellis is a seed-to-sale management software that assists in the cultivation process of cannabis production. The inventory management software allows producers to maintain compliance. Moving into the cannabis media sector Merry Jane is a media platform that advertises all things cannabis. It allows users to locate their closest dispensaries, whilst updating them on the latest sector news. Additionally, another cannabis media company that has a place in Casa Verde’s portfolio is Miss Grass. Miss Grass has an online magazine section and an online shop that allows users to purchase a range of CBD products. The Casa Verde portfolio isn’t limited there. Green Tank is a company that offers vaporizer hardware, purpose-built for cannabis oils. Equally, Vangsters has a presence on the portfolio, the cannabis industry’s largest hiring platform. Cannalysis, the accredited analytical cannabis laboratory that services Southern California, is also present. As is the largest online marketplace for wholesale cannabis, Leaflink, and Eaze, the cannabis e-commerce and delivery platform. According to Crowdcube, Cannabis firms are one of the most likely to be funded in 2019. Can you see yourself investing in the sector?Jaguar Land Rover reports £3.4bn quarterly loss
Jaguar Land Rover (JLR) reported a record £3.4 billion quarterly loss in its latest results, as car sales and demand in China continues to fall.
The British carmaker, which is owned by India’s Tata Motors, posted the loss for the final quarter of 2018.
Jaguar Land Rover attributed the disappointing quarter to a slowdown in China.
With regards to outlook for the upcoming year, the company said it expects a loss.
As a result, JLR said it is looking to cut 4,500 jobs, as it looks to mitigate falling car sales.
Ultimately, car sales were down almost 10,000 during the quarter.
Ralf Speth, JLR’s chief executive, said: “Jaguar Land Rover reported strong third-quarter sales in the UK and North America but our overall performance continued to be impacted by challenging market conditions in China.”
Back in November of last year, the car manufacturer posted a loss for the third quarter, reporting a fall in sales of 13.2%.
The company revealed pre-tax losses of £90 million, again flagging falling demand in China.
Earlier in 2018, the firm announced the termination of 1,500 temporary contract jobs at its West Midland base, citing challenges relating the diesel car taxes and Brexit uncertainty.
Jaguar Land Rover was formed as part of a merger between Jaguar and Land Rover back in 2013. It was previously owned by American automative giant Ford.
Shares in Tata Motors (NSE:TATAMOTORS) are currently trading +2.63% as of 14:19PM (GMT).