House price growth falls to lowest level in five years

Miranda Wadham
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House price growth falls to lowest level in five years
House price growth in the UK has fallen to its lowest level since 2013, with London prices leading the drop. Nationwide reported their house price figures on Wednesday, with the annual rate of growth falling by 2 percent this month. London was again the region reporting the weakest growth, with prices across the rest of the UK generally witnessing a rise. The East Midlands was the fastest growing region, up 4.4 per cent on an annual basis to an average of £181,549 in the second quarter. This was followed by the West Midlands, which rose 4.3 per cent to an average £188,516. Robert Gardner, Nationwide’s chief economist, said:
“Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.
“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.
“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low.”

Fastjet in danger of collapse without new funding

Miranda Wadham
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2
Fastjet in danger of collapse without new funding

Shares in African budget airline Fastjet (LON:FJET) are down over 60 percent, after warning that it may fall into administration without an injection of cash.

The African airline is in talks with major shareholders about receiving extra funding, adding that without it, “it may not be able to continue trading”.

The airline has received backing from easyJet founder Sir Stelios Haji-Ioannou, and flies in African countries including South Africa, Tanzania and Zimbabwe. “Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome,” the company said. “It is expected that any equity fundraise will be concluded in conjunction with the announcement of the company’s annual results for the year ended 31 December 2017.” The company’s share price collapsed by a third on Wednesday, falling 67.74 percent at 5.00 (1039GMT).

Fresnillo dips and becomes the FTSE’s biggest casualty in June

Jamie Gordon
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Fresnillo dips and becomes the FTSE’s biggest casualty in June
Fresnillo plc (LON:FRES) moves toward volatility as share price dips, following a euphoric start to the month. After silver prices reached a five-month high at over 17.20 USD an ounce in mid June, they have since dipped by over a dollar in the wake of trade tensions and the subsequent sell-off of silver. As such, all of Fresnillo’s gains since the start of the month have been cancelled out, their share price is down 0.7 percent within the first two hours of trading and 3.03 percent since Monday morning. In other words, a dip of 8 USD in the first two hours of trading and 34 USD since Monday morning. On the whole, the firm’s value has dipped 13 percent since the start of the month, and analysts are predicting a 4 percent fall in profits in 2018. Despite a drop of 1,146-1,138 GBX in the first 20 minutes of trading, brokers are bullish in their forecasts of long-term success for the mining firm. Their faith is built upon the fairly reliable demand for silver which is illustrated by the incremental rally of precious metal prices in recent years. Further, the company has seen its productivity boom with a yield of 15.4 million ounces of silver in the first quarter, which is a 14 percent increase on the same period the year before. It is fair to say that Fresnillo’s stock has wobbled and borders on volatility, but the firm has suffered in the same way as most, in the midst of the Sino-US tensions that have had implications for most of the global market. Their drastic fall can perhaps be credited to their esteemed position amongst the elite of the FTSE 100 at the start of the month, which only gave them a greater pedestal to fall from. Going forwards, their share price remains relatively high, but at a level where one could expect to see a return on their investment in future months.

Bunzl post 11pc revenue rise after significant acquisitions

Miranda Wadham
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0
Bunzl post 11pc revenue rise after significant acquisitions
Distribution and outsourcing group Bunzl (LON:BNZL) reported an 11pc rise in first half revenue on Wednesday, after a period of expansion and acquisitions. The group benefitted from a boost to revenue over the period, but added that underlying revenue growth had returned to more normal levels during the second quarter of 2018 as the group absorbed its new North American grocery business. Going forward, Bunzl said it expected exchange rate movements to decrease constant exchange revenue growth for the first half by 6 percent, but said that so far trading was in line with expectations. The group confirmed that its spend on acquisitions so far this year totalled £105 million, with acquisitions remaining a key part of business strategy. “The pipeline for acquisitions remains active and, with ongoing discussions taking place, the company expects to complete further transactions during the remainder of the year,” the company said. Bunzl also sold its marketing services business in the UK during the period, which had generated annual revenue of £46 million for the firm. “The business was considered to be non-core as the opportunities to expand overseas in the short to medium term were limited and the company therefore decided that it was an appropriate time to sell the business,” Bunzl said. Shares in Bunzl (LON:BNZL) are currently trading down 2.53 percent at 2,234.00 (1012GMT).

John Lewis warns on profit as high street continues to bite

Miranda Wadham
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1
John Lewis warns on profit as high street continues to bite
High street giant John Lewis became the latest victim of the high street crisis on Wednesday, warning that first half profits will likely to be substantially lower than a year ago. The department store chain, which also owns upmarket supermarket Waitrose, admitted in a statement that profits could be close to zero. Sales at the group fell 0.8 per cent year-on-year to £226.77 million for the week ending June 23. Waitrose recorded a 0.2 per cent year-on-year sales growth, however, but John Lewis reported a drop of 2.2 per cent year-on-year. Waitrose had a far better performance than John Lewis for the period, proving the relative strength of the grocery market in comparison to high street stores. “Despite the mixed bag of weather, horticulture performed strongly, seeing sales rise by eight per cent. Houseplants were popular up 28 per cent and outdoor plant sales boosted 15 per cent,” Waitrose commercial director Rupert Thomas said. “Beers, wines, spirits and tobacco had a good week with sales up 2.4 per cent. Wine performed particularly well up seven per cent with sparkling wine saw an uplift of 28 per cent. However, home sales were down 3.7 per cent, fashion sales were down 0.1 per cent and electrical and home technology sales fell by 3.4 per cent. The group said it was also planning to close several small Waitrose stores, including one in Camden, two Little Waitrose outlets in Manchester and one in Birmingham.

FCA to halt investigation into Mitie Group

Miranda Wadham
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0
FCA to halt investigation into Mitie Group
Mitie Group (LON:MTO) shares had a volatile start to the day on Wednesday, after the UK authorities said they were ceasing their investigation into the group. Shares rose at market open, before sinking right down below their opening level in the news that the Financial Conduct Authority would no longer be investigating the company’s disclosure practices. The investigation began last August, when it announced it would be looking into the company’s manner of preparation and content of their financial results. This was alongside the ‘timeliness’ of a profit warning announced in September, 2016. However, in a statement on Wednesday Mitie said: “On 26 June 2018, the FCA advised the company that it was discontinuing its investigation into the company”., Shares are currently trading down 0.28 percent at 158.56 (0936GMT).

AssetCo shares down 4pc as profit tumbles

Miranda Wadham
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0
AssetCo shares down 4pc as profit tumbles
Shares in Middle East fire and emergency services provider AssetCo (LON:ASTO) dropped nearly 4 percent in early morning trading on Wednesday, after operating profit tumbled in the six months to March. Operating profit fell 70.5 percent to £0.5 million, from £1.7 million in the correlating period last year, with adverse currency movements having a £0.7 million adverse effect on figures. The group also took a £0.5 million hit from a fall in training and logistics revenues. The company also commented on the progress of its lawsuit against Grant Thornton, which with interest amounts to approximately £40 million. It said it was in the process of being heard in the High Court with a decision expected later in this year. The claim was filed in December 2015 after AssetCo claimed the group had missed a series of “risk factors” and “trigger factors”, including potentially fraudulent payments and statements made by former directors John Shannon and Raymond Flynn. Shares in AssetCo are currently trading down 3.80 percent at 380.00 (0916GMT).

IWG profit likely to fall short after rapid expansion

Miranda Wadham
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0
IWG profit likely to fall short after rapid expansion
Office space provider IWG said its profit was likely to fall short for the full year 2018, after rapid expansion threatened to affect annual figures. The group said its UK business was performing below expectations, and that expansion plans had increased costs throughout the period. The push to accelerate its growth is now expected to lead to short-term opening losses, and increased costs. “Group operating profit for 2018 is now expected to be below management’s previous expectations by approximately £15 million to £20 million”, IWG warned. “We now expect to add approximately 6.7m sq. ft. of new space, which represents an annual organic increase of approximately 45 percent and is over 17 percent higher than our previous guidance”. The company said it anticipated adding 275 new locations to its network with an associated net growth investment of approximately £230 million, higher than previously expected. The weaker-than-expected forecasts may have an impact on potential bids for the group. IWG has been at the centre of several takeover bids, the most recent from private equity firm Terra Firma.

Whitbread shares up on strong quarterly sales

Miranda Wadham
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0
Whitbread shares up on strong quarterly sales
Whitbread (LON:WTB) shares rose in early morning trading, after reporting a 3.2 percent rise in quarterly sales. The group, which owns both the Premier Inn hotel and Costa coffee chains, said expanded hotel capacity and Costa store openings led to a boost in sales. However, on a like-for-like basis the picture was less rosy, with company sales in the UK falling by 1.3 percent. This was driven by a 2 percent fall at Costa and a 0.9 percent fall at Premier Inn. However, chief executive Alison Brittain remained positive. “We expect to deliver in-line with expectations for the full year and we continue to make strong progress on our efficiency programme,” chief executive Alison Brittain said. “Our new capacity has a short-term impact on like-for-likes but delivers good long-term sales growth,” she said. Whitbread also confirmed that early steps had been taken to demerge Costa from the group, a move which had been announced in April. Shares in Whitbread (LON:WTB) are currently up 1.31 percent at 3,944/00 (0850GMT).

Intel shares dip amidst leadership and software scrutiny

Jamie Gordon
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0
Intel shares dip amidst leadership and software scrutiny
Intel (INTC) shares have fallen in the wake of a leadership reshuffle and mounting pressure from rivals and consumers. The company’s shares fell 3.5 percent from 54.43-49.81 USD between the end of last week and Monday’s opening, a seven-week low which followed status downgrades by bearish analysts from Nomura and Bernstein. Much of the turbulence surrounding the firm has been attributed to the resignation of CEO Brian Kzanich, and his alleged infraction of the company’s non-fraternization policy. While the company has appointed CFO Robert Swan as their interim leader, analysts forecast under-performance, with Knzanich’s short four years in office putting their structural issues in the spotlight. Another issue that has been brought to light in recent days is Intel’s failure to quell pressure from rivals. In particular, the firm are in a race to develop a 10 nanometre chip for the next generation of WIndows laptops. The DOW Jones member is already at risk of missing the opportunity to provide the chip for Asus’ next model, which will be built to accommodate the Snapdragon 1000 from Qualcomm. The Snapdragon not only runs on a lower wattage but offers a 7nm fabrication – while Intel are struggling with 10nm. Further, nothing has been done to address the elephant in the room – the TLBleed vulnerability and Intel’s seeming unwillingness to patch the issue. Put simply, a TLBleed is a security phenomenon that occurs when two programs are running at the same time, and one program is able to extrapolate data from the other – this can include the ability to detect when a sensitive operation is taking place. Going forwards, Intel is seeking to mitigate some of these uncertainties with the appointment of Window Snyder as security executive. However, analysts remain bearish while predicting the success of Intel shares. Recent trade tensions in the global market have adversely affected technological firms – the curtailment of Chinese investment has hit US firms Micron Technology (MU) and Skyworks Solutions (SKWS) hard – which does not bode well for Intel shares in the coming weeks.
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