Hunting Group shares fall despite “comfortable” market expectations
Hunting plc (LON:HTG) shares fell on Thursday morning, despite the group saying that they were “comfortable” with market expectations for the full year 2018.
The oil and gas supplier reported a mixed performance, with regional trends weighing on results in certain areas. Performance in the US offshore, Asia Pacific and Middle East markets had improved, but there continued to be lower drilling activity in Europe and across Canada.
The group’s US segment of Hunting Titan returned to profitability over the period, reporting a performance ahead of market expectations. However, other businesses in the group’s portfolio reported an operating loss.
Net cash balance stood in excess of $30 million expected at 30 June 2018.
However, Hunting remained cautious going forward and warned on the impact of weak market conditions.
“Given current market conditions, and the outlook for the remainder of the year, management continue to take a cautious view on the rate of recovery in the wider market in H2 2018, but currently remain comfortable with the market consensus for the 2018 full year outturn,’ the company said.
Shares in Hunting plc (LON:HTG) are currently trading down 2.30 percent at 806.00 (1055GMT).
Morning Round-Up: FTSE & EU shares down, worries on trade war
The FTSE and European share markets began trading marginally up on Thursday morning, before dropping into the negative mid-morning.
The FTSE is currently down 0.11 percent, with the DAX down 0.46 percent and the IBEX down 0.57 percent (1027GMT).
Fiona Cincotta, Senior Market Analyst at City Index, commented on stock movements in the US and Asia overnight:
Gains in US energy stocks, driven by further rises in the oil price, have been offset overnight by selling in the technology sector, resulting in a drop of 165.52 points in the Dow Jones. The S&P 500 also ended down at 2,699 despite having been 0.85% in positive territory at one point during the day’s trading in America.
:The reversal was caused by ongoing worries about the evolving tit-for-tat trade war spat emerging between the US and China, where the rhetoric seems to be heating up. Threats by the White House to curb Chinese investment in the US seems to have hit technology stocks hardest, with the NASDAQ down 1.5% at 7,445.
“Asian stocks followed suit, also dropping to nine month lows overnight, despite the fact that the White House has seemed to be softening its stance slightly on China. The MSCI World Equity Index, considered a good benchmark of equity market sentiment, is down at a three month low, but the USD is up slightly this morning as the market hopes that Trump has been talked down from his earlier tougher stance on China investment.”
The top risers on the FTSE 100 on Thursday are Just Eat (LON:JE), up 3.12 percent, Shire plc (LON:SHP) and Bunzl (LON:BNZL), after they posted an 11pc rise in revenue on Wednesday.
The FTSE’s biggest fallers included Evraz (LON:EVR), down 2.30 percent, NMC Health (LON:NMC) and Primark owner Associated British Foods (LON:ABF), down 2.03 percent.
Cluff Natural Resources raises £2m via share placing
Cluff Natural Resources (LON:CLNR) said on Wednesday that it would raise 2 million GBP via placement and subscription of 95.2 million shares.
The company said 80.5 million of the shares will be issued via placing and the remaining 14.7 million shares will be issued through the subscription.
According to Cluff, the additional funds raised will fund the process of evaluating and developing its new enlarged portfolio of 10 new blocks in the Southern and Central North Sea. This in the wake of a “highly successful outcome” at the UK’s 30th offshore licensing round.
“Due to the significant expansion of the size and nature of the company’s portfolio of prospects, the board now has the opportunity to accelerate investment in the technical and commercial evaluation of both oil and gas prospects to create a significant pipeline of future drilling opportunities, while continuing its current process of securing partners for its existing licences to implement its planned drilling programme in 2019.” said Chairman, Algy Cluff.
The company have said they expect the new shares to start trading on the Alternative Investmentnt Market on the 4th of July, at a price of 2.1p. With the addition of the new shares, the company’s new share capital will stand at 538.2 million GBP. Following yesterday’s announcement, the price per share rallied to 2.11p, but has dipped 0.36 percent to 2.09p as markets opened this morning.
In addition to the new ALLISS, the firm are committed to seeking out new strategic investors and partners to fund drilling on its existing licenses P2248 and P2252, as well as planning for a multi-well drilling programme in 2019.
Sports Direct ranked above Apple for innovation
Sports Direct (LON:SPD) have been ranked above Apple for its innovation in retail, according to the latest Internationalisation Retail Index.
The Index produced by Loqate along with Planet Retail RNG and Retail Week Connect, put the sportswear company fourth in the world. This is one spot higher than Apple, with Amazon coming in at the top spot and John Lewis at number 11.
Sports Direct issued a statement in a stock exchange announcement on Thursday, sending shares up modestly in early morning trading.
Michael Murray, the group’s Head of Elevation, said: “I’m pleased that Sports Direct is starting to be mentioned in the same breath as other great companies like Apple and John Lewis. It’s a huge accolade for all our people, whom I’d like to thank for their loyalty and hard work.
“This index shows that our elevation strategy, along with our approach to innovative initiatives such as our strategic investments and partnerships, is continuing to gain traction.”
Shares in Sports Direct are currently trading up 0.09 percent at 404.80 (1009GMT).
Gordon Dadds shares up on strong full year results
Legal and professional services firm Gordon Dadds (LON:GOR) reported a 25 percent rise in revenue in the year to the end of March, sending shares up over 7 percent.
Annualised revenues at the year totalled more than £42 million, with operating profits up 19.1 percent to £8.80 million. Adjusted profit before tax rose 23.3 percent to £2.96 million, with the group having a cash balance of £8.9 million at the year’s end.
Over the course of the year the firm raise over £20 million in new funds, opening an office in Hong Kong as well as having several acquisitions in the pipeline.
Adrian Biles, Chief Executive of Gordon Dadds, commented:
“This has been a year of great progress for the Group. We have exceeded the expectations that we set for ourselves and for our shareholders.
“We have rapidly built a highly profitable and fast growing international legal and professional services group with annualised revenues of well over £40 million.
“We expect to achieve significant further growth during the year from additional acquisitions, together with organic growth arising principally from the increasing cross-referral of clients between the Group’s businesses and as the more specialised businesses take advantage of the Group’s full service capabilities.”
Shares in Gordon Dadds plc are currently trading up 7.02 percent at 173.9 (0938GMT).
Greene King annual figures hit by poor weather
Greene King (FRA:3GK) shares sunk over 5 percent on Thursday, after the group reported an 11 percent fall in annual pre-tax profits on the back of poor weather.
Annual adjusted pre-tax profits fell 11.2 percent and revenue slipped 1.8 percent throughout the 12 month period. Earnings (EBITDA) fell 7.2 percent to £489.6 million.
The company, one of Britain’s oldest brewers, has warned in the past on the effect that the government’s minimum living wage increase will have on figures, alongside higher property prices and unfavourable currency exchange rates.
Like-for-like sales growth in Pub Company fell 1.2 percent, Pub partners revenue fell 2.5 percent to £193.9 million and Brewing & Brands revenue was up 7.2 percent to £215.1 million.
However, since the start of the new financial year things have begun to look up, with sales over the first eight weeks up by 2.2 percent. The group said it has benefitted from better weather and strong sporting fixtures as well as the investments made in the second half of the year on value and service.
Shares in Greene King are currently trading down 5.24 percent at 6.89 (0901GMT).
“The current trading environment is still characterised by subdued consumer confidence, intense competition and rising costs,” the company said.
Stagecoach slash dividend after taking hit from failed East Coast venture
Travel operator Stagecoach (LON:SGC) slashed its dividend for the full year to April, sending shares down over 7 percent at market open on Thursday.
The full year dividend fell to 7.7 pence per share, down from 11.9 pence the year previously. The group cited the £86 million hit it had taken from the disastrous East Coast rail franchise, which was a joint venture held with Virgin Trains. The government announced it would be stripping the companies of the franchise earlier this year after the operators “got their bid wrong”.
For the full year adjusted pre-tax profit fell 4.1 percent to £144.8 million, down from from £151 million a year ago, with revenue dropping 18.1 percent to £2.23 billion.
Stagecoach CEO Martin Griffiths commented on the costs of the East Coast venture:
“I am disappointed to be reporting significant exceptional costs in respect of Virgin Trains East Coast but I am pleased that there is now clarity for both customers and shareholders.
“We have made significant progress elsewhere in our rail portfolio and continue to see value and opportunities.”
Shares in Stagecoach (LON:SGC) are currently trading down 7.08 percent at 124.60 (0846GMT).
Businesses should plan for a no-deal Brexit
In the midst of jolted Brexit negotiations, the EU Bill has been given royal assent. While the government have made their desires clear – a trade deal for goods and services in exchange for answers to questions over EU citizens, border arrangements and customs – it is likely that members of the European Parliament will lobby to have it rejected.
As such, nothing can be guaranteed. If businesses are looking for a shred of certainty, they can probably do no better than to examine trends of diplomatic discord to date. From that, a ‘no-deal’ discourse can probably be detected.
An appropriate course of action then, would be to prepare for a no-deal and a British crash out of the EU, and take any diplomatic progress from now as an added bonus.
This is an issue that companies, especially manufacturers, have had a hard time contending with over the last two years. For instance, while BMW (GR:BMW) have confirmed they have no plans to move their production outside of the UK, they have joined Airbus SE (LON:AIR) in publicly voicing their concerns over the uncertainty of a Brexit deal, and what a deal might look like.
While Airbus are considering a switch to more economical production in China, analysts have suggested that BMW should follow the example of Boeing’s (LON:BA) 40 million GBP investment in production in Sheffield or Jaguar Land Rover’s commitment to upgrading its Halewood and Solihull plants.
There is a recurring uncertainty which creates a confidence deficit, which makes affirmative action less likely, and symbiotically, uncertainty is perpetuated. Such trends are easy to encourage, especially when the face of the British political establishment, Theresa May, has her parliamentary weakness exploited by her opposite numbers both in Westminster and in Europe. Sentiments of uncertainty are then compounded when figures, such as the Paul Dreschler of the CBI, prophesize the absence of a customs union as potentially making the British car industry ‘extinct’.
Logistical concerns are valid, Honda’s woes for sourcing parts post-Brexit have been public knowledge this week, and Nissan are making efforts to double their British share of components. Over time, companies who don’t want to move their production should attempt to switch to UK suppliers where possible, or make their sourcing more advanced.
Going forwards, change to a post-Brexit climate is manageable if the will-power is there. Many companies will find no difference to tariffs, and their governing regulations are international, not controlled by a single country. While Brexit may not intimate the degree of certainty that business needs for market liquidity, it is prudent that companies familiarise themselves with the possibility of a no-deal, post-Brexit Britain.
Premier African Minerals shares spike on Cadence investment
Premier African Minerals Ltd (LON:PREM) saw their share price boom following 5.1 million USD investment from Cadence Minerals Ltd (LON:KDNC).
As markets opened this morning, their share price rallied from 14-27p, and then leveled out again at 24p – signifying a growth of 74.07 percent.
The news came after a conditional heads of terms deal was struck with their counterparts, Cadence Minerals, who have acquired a 30 percent stake in Premier African Minerals’ wholly owned subsidiary, the Zulu lithium and tantalum project.
“This conditional HoT with Cadence underlines the value and potential of the Zulu project, with a post-investment value of $17-million, reaffirming Premier’s belief that the project is potentially one of the leading hard-rock lithium exploration projects on the London market”, said PAM CEO, George Roach.
The 5.1 million USD from Cadence will be used to fund the definitive feasibility study on the Zulu project – this following a scoping study last November, which reported an estimate of 20 million tonnes of mineral resource.
In addition to the recent investment from Cadence, PAM have secured a 300,000 USD loan from a trust related to their CEO George Roach. The company have said they will repay the loan and fees in full, within five days of the loan’s maturity. The loan has been secured against the company’s shareholding of just over six million shares in ARC Minerals Limited (LON:ARCM).
Going forwards, PAM will carry out the Zulu project in Zimbabwe and take advantage of the recently changed political conditions in the country. Projections look promising, at least in comparison to other commodities and resource extraction firms in the market.The end goal is to turn the conditional heads of term into a binding trade agreement with Cadence Minerals.
GlaxoSmithKline shares rally and buck the FTSE trend
GlaxoSmithKline (LON:GSK) continues to rally and avoid the more bleak fate being faced by some of its FTSE 100 counterparts.
GSK’s share price has progressed in its usual manner, with an incremental rise of 0.16 percent since trading opened this morning; the price going from 1505.2-1513.6 GBX in the first five minutes of trading.
This is impressive, not only because of the current climate of the global market, but because the company is suffering from a series of patent expirations, which have prompted analysts to label the stock as overvalued in fundamental terms.
However, what makes this stock so appealing are its standardised dividends and projected profits. Over the last five years, the only fluctuation in GSK’s dividends was 2 GBX in 2013, with a trend of 80 GSX per share – a yield of 5 percent per annum – over the last four years.
Further, estimates from analysts are bullish. GSK are predicted to see an earnings growth of 15.9 percent per year, with an earnings increase of 0.212-0.959 GBP over the next three years. In the short-term, at least, such projections don’t seem outlandish. With recent success in the phase three trial of its two-drug HIV treatment and spiked demand in the US market for Shingrix, GSK’s shingles vaccine, profits in the near future look promising. It is quite possible that such profits will be bolstered, should GSK choose to sell off GSK Consumer Healthcare, with an estimated valuation of over 4 billion USD and Coke, Nestle and Danone all in the running.
It would be foolhardy to label GSK a safe stock, but it is currently one of the FTSE 100’s success stories. Only time will tell whether selling off GSKCH will inhibit their ability to reach their targets, or whether their dividends are sustainable.