Unilever sales hit by strike in Brazil
Consumer goods giant Unilever saw sales fall slightly in the first half of the year, but said it expects its full year results to remain unaffected.
Sales dipped in the first half, with pre-tax profits falling €3.2 billion, down from €3.3 billion for the same period in 2017. Underlying sales rose 1.9 percent however, with emerging markets sales up 4.4 percent.
The group said last month figures were likely to be negatively affected by truckers strikes in Brazil, which led to €150 million of lost sales in just 11 days. Brazil is one of Unilever’s largest markets, contributing 6.5 percent to its overall revenues.
In a statement released on Thursday, the group said that whilst the problems in Brazil “presented a significant headwind in the second quarter”, it expects the effect “to partially reverse in the second half of the year”.
The group added that it continued to evolve its portfolio in both Europe and North America, increasing the production of organic, natural, vegan, health and wellness products in response to consumer demand.
Unilever remained positive going forward, saying its full year expectations remain unchanged.
“Our expectation for the full year is unchanged,” CEO Paul Polman said.
“We expect underlying sales growth in the 3-5 per cent range, an improvement in underlying operating margin and strong cash flow. We remain on track for our 2020 goals.”
Shares in Unilever (LON:ULVR) are currently down 0.18 percent at 4,195.00 (0930GMT).
SSE profits hit by heatwave and gas prices
Profits dropped at energy giant SSE (LON:SSE) over the first quarter, with the UK heatwave and higher gas prices hitting financial results.
The group took an £80 million hit over the three month period, after households used around 10 percent less gas than expected due to the hot weather.
A fall in customer accounts also had an effect, falling to 7.45 million by June 30, down from 7.77 million a year earlier and 7.58 million in March. The negative news “will potentially” impact on its full-year results, the group said, dependent on a range of factors.
“This new financial year has so far been characterised by lower than expected output of renewable energy and persistently high gas prices, but looking ahead, we are very focused on fulfilling our obligations to energy customers and delivering on our key priorities,” said Alistair Phillips-Davies, SSE chief executive, in the trading update.
The group, who is currently in the process of merging its energy and supply business with rival Npower, committed to spending around £6 billion on investment and capital expenditure plans across the five years to March 2023.
Shares in SSE are currently trading down 3.41 percent at 1,337.32 (0914GMT).
Sports Direct shares plummet as Debenhams’ value falls
Sports Direct (LON:SPD) shares took a near 10 percent hit on Thursday morning, after reporting plummeting pre-tax profits.
Pre-tax profits fell to £77.5 million in the year to April, a significant fall from the £281.6 million recorded the year before. The company mainly attributed this to the fall in value of its large stake in Debenhams, who share price has been hit recently by the high street crisis.
Sports Direct’s UK sales were down 2 percent, although this was largely offset by an international sales rise of 3.5 percent.
Despite the disappointing performance, Sports Direct remains confident of maintaining some growth in the coming financial year.
“As the property pipeline and brand relationships accelerate, we are confident in achieving between a 5 percent and 15 percent improvement in Underlying EBITDA for the coming financial period,” Michael Murray, Head of Elevation.
Shares in Sports Direct are currently down 9.68 percent at 393.90 (0854GMT).
Speedy on track to meet full-year expectations
Leading tool and equipment hire provider Speedy (LON:SDY) announced the appointment of its new chairman on Thursday, adding that it was on track to meet full-year expectations.
Revenue for the first quarter of the year increased by 6.6 percent re-disposals, with its hire revenue and services revenues up by 5.5 percent and 8.4 percent respectively.
UK and Ireland hire revenue also saw a marginal increase, up by 1 percent on a like-for-like basis. The group said that there was a “strong pipeline of opportunities” in its international business.
Net debt came in lower that the year previously at £67.0 million, with ROCE for the 12 months to 30 June at 11.8 percent.
The group also announced the appointment of David Shearer as Chairman, who will be taking the role from 1 October. Outgoing Chairman Jan Astrand will remain as a Non-Executive Director of the Company and member of the Nomination Committee until 31 October 2018.
Shares in Speedy are currently down 0.43 percent at 60.24 (0842GMT).
Anglo American report strong production figures across copper and platinum
Mining giant Anglo American (LON:AAL) reported a 6 percent increase in total production on Thursday, after a strong performance from both its copper and platinum divisions.
Copper production for the three months to 30 June increased by 12 percent to 158,000 tonnes, with platinum output set to total 2.4-2.45 million ounces for the full year, an improvement on an earlier forecast of between 2.3 and 2.4 million.
Most of the platinum production growth came from its Mogalakwena plant in South Africa, at which production rose by 17 per cent to 133,400 ounces.
Rough diamond production at its subsidiary, De Beers, also increased by 3 percent, leaving the full year production guidance unchanged at between 34 million and 36 million carats.
The group also commented on their inspection work on a pipeline carrying iron ore from a Brazilian mine to the port, which would be completed by the end of the year.
“A 4km section of the pipeline, where the leaks occurred will be replaced as a precautionary measure and is expected to be completed in Q4 2018, followed by the restart of the operation, subject to required clearance from authorities,” the company said on Thursday.
“There is no change to the earnings impact of the pipeline incident from the guidance provided in April, with a 2018 loss $300 million to $400 million in earnings before interest, taxation, depreciation and amortisation.”
Shares in Anglo American are currently trading down 0.58 percent at 1,681.00 (0832GMT).
Tories threaten general election if Brexit rebels persist
Following an almost disastrous result for Theresa May in yesterday’s vote to amend her customs union plans, the government look on shaky ground as Brexit negotiations continue.
This comes after Mrs May’s divisive but altogether underwhelming Brexit proposal last week, which was dubbed by former Foreign Secretary Boris Johnson as a “semi-Brexit”, that would leave Britain in the “status of a colony”.
Yesterday’s amendment was tabled by Philip Hammond – stating that discussions for a new customs union should be held if a free trade area had not been negotiated by January 2019 – and saw the government win a narrow majority of 307 to 301 votes. Minutes earlier, Commons took pundits by surprise after voting against the government and deciding to remain under EU medicines regulation; but what makes the customs union vote so significant are the tactics used by the Conservative hierarchy, which many would argue bordered on desperation.
Firstly, Remain rebels led by Mr Hammond and Nicky Morgan accused party whips of threatening to table a vote of no confidence against the prime minister, should they have lost the vote to block Mr Hammond’s amendment. One rebel told of how deputy chief whip, Chris Pincher had threatened, “they would pull the third reading of the [trade] bill and call a vote of confidence. He said we’d be responsible for a general election and putting Jeremy Corbyn in No 10. It was appalling behaviour. Totally disgraceful.”
Similarly, in a move that shrieked of lacking confidence, the Tories abandoned their maternity leave partnering pledges, with no other but Conservative Party Chair Brandon Lewis shunning his non-voting partnership with Liberal MP Jo Swinson, who is currently on maternity leave and thus unable to vote. While Mr Lewis was quick to remark “it was an honest mistake made by the whips in fast-moving circumstances. I know how important the pair is to everyone, especially new parents, and I apologise.”. Mrs Swinson was quick to respond, “It was neither honest, nor a mistake.”
While the government will go to Lords with the intent of overturning the amendment decision on EU medicine regulations, it is apparent that we are a long way from the ‘strong and stable’ government being advertised before the Tories lost their majority in Commons last year, with the current direction of travel not suggesting any degree of certainty in the coming weeks.
In addition to rebels in the faction led by Mr Hammond and Mrs Morgan, Mrs May faces pressure from back-benchers described by former prime minister Sir John Major as being worse than the party rebels he had to contend with during the Maastricht Treaty proceedings, during his time in office. Sir Major said, “[…] there is a bit of a Tea Party grouping within the hardline European Research Group and that makes it very difficult to negotiate with them.” This antagonism is only made worse when the figurehead of the group is MP Jacob Rees-Mogg, a potential leadership candidate who is touted by leading Remainer Anna Soubry as being the de facto person in charge of the country.
“I don’t think that [Mrs May is] in charge anymore. I’ve no doubt Jacob Rees-Mogg is running our country,” said Mrs Soubry.
In the wake of recent developments, others including MP Sir Nicholas Soames have called for drastic measures beyond a general election, such as the formation of a national government. In an interview with the Channel 4, Sir Soames commented, “I must say if I had my way we would have a national government to deal with this. It is the most serious problem this country has faced since the war.”
While no deal has yet been agreed with the EU, and plans are still being drafted, doubts over Brexit are only being compounded by doubts surrounding the current state of leadership, and vice versa. Uncertainty only looks set to deepen and any further compromises on her Brexit plan could be costly for Mrs May. Following his resignation as Brexit Secretary, David Davis told Channel 4 News that Mrs May has no space for manoeuvre, and at the moment she makes more compromises, “At that point the majority starts to slip away.”
Going forwards, the idea of a change in government or at least a change in leadership, is gaining traction. The possibility of a ‘no-deal’ on Brexit looks ever-more-likely, and the media spotlight is drifting further away from MPs toeing the Tory party line, and is instead focusing on the camps either rebelling against Theresa May’s Brexit plans, or those doing their best to distance themselves.
In an unfortunate turn of events, it appears the prime minister will have to play the role of a passenger while her party decide whether to allow her to act as canon fodder through what appear to be bleak Brexit proceedings, or whether to attempt to shore up government support with another general and leadership election – with the recent YouGov pole currently putting Labour two points ahead of the Tories.
Google given record fine by European Commission
Google has been fined a record €4.34 billion (£3.9 billion) by the European Commission.
According to the European Commission, the firm had been using Android to illegally “cement its dominant position in general internet search”.
In a statement, an official said: “Google has used Android as a vehicle to cement the dominance of its search engine.”
“They have denied European consumers the benefits of effective competition in the important mobile sphere,” they added.
The fine is the biggest fine ever imposed by the regulator against a firm. The parent company, Alphabet (NASDAQ: GOOG), has 90 days to correct its practices or face further fines.
The fine will not pose any financial pressure on Google, who’s cash reserves totalled almost $103 billion in March.
The European Commission has been investigating Android since 2015, where the regulator has since made three specific allegations of anti-competitive behaviour and said Google was preventing manufacturers from selling mobile devices powered by rival operating systems.
Amino Technologies hikes dividend on inflection point
Amino Technologies Plc (LON:AMO) hike their dividend by 10%, despite a drop in on-year sales.
Amino’s first half revenue fell 17% on-year for the first half, from $49.8 million to $41.2 million. This plays out as a pre-tax profit decrease from $9 to $3.8 million, though these figures are in line with expectations.
“In line with previous guidance, H1 revenues lower than last year due to order phasing by one major customer, and greater second-half weighting as normal seasonality returns,” said an Amino Technologies spokesperson.
“With more than 75% of expected full year revenues secured, and good visibility provided by our order backlog and pipeline, the Board remains confident in full year expectations,” said Keith Todd CBE, Non-Executive Chairman.
Indeed, the firm are not only unshaken by the disappointing first half figures but appear bullish entering the second half, as they prepare to implement their three-step strategy. The AIM-listed set-top box maker intends to more widely distribute IP/Cloud TVs, such as Operator Ready Android models. They then intend to up-cycle their ‘legacy’ devices to next-generation models and enable 24/7 IP delivery on any device.
Analysts from Liberum compound this optimistic view, dubbing Amino as a firm reaching an inflection point. They stand in good stead to turn around poor first half revenue by capturing a “major strategic opportunity” – clients looking to play catch-up on market developments will look to specialists such as Amino to provide “the most cost-effective way to launch anywhere, anytime, any device TV”.
Amino shares are currently trading at 197.36p, down 6.14p or 3.02% since markets opened this morning. Analysts from finnCap have reiterated their ‘Corporate’ stance on Amino Technologies stock, while Liberum Capital have initiated a ‘Buy’ stance.
EU and Japan sign free trade deal
Japan and the European Union have just signed one of the world’s biggest free trade deals, sending a clear message to the US.
The move, which has been described by leaders as a “light in the darkness” of global political uncertainty, is in contrast to the steep import tariffs imposed by Donald Trump.
“[The] impact of today’s agreement goes far beyond our shores. Together we are a making, by signing this agreement, a statement about the future of free and fair trade,” said Jean-Claude Juncker, the head of the EU Commission.
“We are showing that we are stronger and better off when we work together. And we are leading by example, showing that trade is about more than tariffs and barriers. It is about values, principles and finding win-win solutions for all those concerned.”
The free trade deal will eliminate any tariffs on the products traded between Japan and the EU.
One of Japan’s biggest imports from the UK are dairy goods, whilst it’s biggest exports are cars.
EU leader Donald Tusk, who is particularly critical of the Trump administration, was pleased to announce the news of the deal between the EU and Japan.
“Politically, it’s a light in the increasing darkness of international politics. We are sending a clear message that you can count on us. We are predictable – both Japan and [the] EU – predictable and responsible and will come to the defence of a world order based on rules, freedom and transparency and common sense. And this political dimension is even more visible today, tomorrow, than two months ago and I am absolutely sure you know what I mean.”
“Let me say that today is a good day not only for all the Japanese and Europeans but for all reasonable people of this world who believe in mutual respect and cooperation …We are putting in place the largest bilateral trade deal ever. This is an act of enormous strategic importance for the rules-based international order, at a time when some are questioning this order,” he added.
The deal is one of the biggest in the world and covers almost a third of the world’s GDP and 600 million people.
Three ratios for valuing shares
Analysts and traders alike commonly use ratios to analyse stocks and ascertain the potential value of their shares. While no method is fool-proof, each ratio has a specific function which makes them almost co-dependent on one-another, should one wish to gain a more complete insight into a stock.
What must be remembered is that when comparing the ratios of different stocks, one should only compare stocks and shares of the same sector, as some sectors have more rapid growth than others – for instance banks versus pharmaceutical.