Tencent posts record profit in Q1 as user base continues to grow

Miranda Wadham
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Tencent posts record profit in Q1 as user base continues to grow

Chinese tech giant Tencent Holdings posted a record profit in the first quarter of the year, boosted by a 55 percent increase in advertising revenue.

The group behind the popular messaging app WeChat, similar to WhatsApp, saw shares rise over 5 percent on Thursday morning, after the group’s year-on-year profit rose 61 percent to 23.29bn yuan.

WeChat’s monthly users grew to one billion for the first time earlier this year, boosting advertising revenue by 55 percent to 10.69 billion yuan in the first quarter. Most of the group’s growth came from the gaming apps it owns and in-game purchases by players. The chat app offers other services for users, including the possibility of booking a taxi, ordering food or paying for goods online. Revenue from other businesses within Tencent, including its cloud services, grew by 111 percent year-on-year in the period. Shares in Tencent are currently up 3.74 percent at 411.00 (HKG:0700).

Ocado shares up 50pc on Kroger deal

Miranda Wadham
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Ocado shares up 50pc on Kroger deal
Ocado (LON:OCDO) shares jumped over 50 percent in early trading on Thursday, after the online grocery retailer confirmed a deal with US giant Kroger. Ocado’s technology will be used by Kroger in the US, where they have annual sales of $122 billion, with the US group taking a 5 percent stake in Ocado. Ocado has reached four similar agreements over the last six months, with Kroger being its first in the US. Ocado will build around 20 robotic warehouses in the US, and Kroger has also acquired use of its online shopping and logistics technology. Ocado chief executive Tim Steiner said: “As we work through the terms of the services agreement with Kroger in the coming months, we will be preparing the business for a transformative relationship which will reshape the food retailing industry in the US in the years to come.” Ocado has been at the forefront of technological development in the grocery industry, trialling robot deliveries and packing technology for warehouses. Shares in Ocado (LON:OCDO) are currently up 41 percent at 780.40 (0933GMT).

Countryside Properties boosted by increase in profits and completions

Miranda Wadham
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0
Countryside Properties boosted by increase in profits and completions
Countryside Properties (LON:CSP) posted a 24 percent increase in its dividend on Thursday, after an increase in both profits and completions. Adjusted profit rose 7 percent in the six months to the end of March, driven by a 15 percent jump in completions. Adjusted revenue rose 7 percent to £468.0 million, up from from £435.4 million the same period a year ago. Pretax profit hit £73.7 million, with adjusted operating margin up 0.9 percent to 17.2 percent. The home builder completed 1,655 homes, up 15 percent, despite the average selling price falling from £441,000 to £392,000. “We enter the second half in great shape and our acquisition of Westleigh will further increase our momentum by expanding our geographic reach and mixed tenure delivery’ said Ian Sutcliffe, the group chief executive of Countryside. “We remain confident of delivering on expectations for both the current year and the medium-term,” the firm said. Shares in Countryside Properties are currently trading up 1.14 percent at 374.20 (1024GMT).

Mothercare shares up 25pc on restructuring agreement

Miranda Wadham
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Mothercare shares up 25pc on restructuring agreement
Mothercare (LON:MTC) shares shot up 25 percent on Thursday morning, after setting out the measures it intended to take to restructure its UK store portfolio through company voluntary arrangements (CVAs) of certain subsidiaries. Mothercare will access £113.5 million in funding through a refinancing, which will comprise of a proposed equity capital raising of £28 million expected to be launched in July 2018, alongside revised committed debt facilities of £67.5 million and a new £8m shareholder loans. Clive Whiley, the company’s interim executive chairman, said the recent financial performance of the business, impacted in particular by a large number of legacy loss making stores within the UK estate, had resulted in an “unsustainable situation for the Mothercare brand”. “‎These comprehensive measures provide a renewed and stable financial structure for the business and will drive a step change in Mothercare’s transformation. The potential for the Mothercare brand in the UK, benefitting from a restructured store estate, and internationally remains significant” Mothercare shares lost a quarter of their value in January after the group issued a profit warning, after sales dropped 7.2 percent over Christmas. Shares in Mothercare are currently trading up 24.41 percent at 26.50 (LON:MTC).

Paddy Power Betfair unlikely to be materially affected by gaming machine changes

Miranda Wadham
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Paddy Power Betfair unlikely to be materially affected by gaming machine changes
Paddy Power Betfair (LON:PDYPY) shares rose over 6 percent in early trading on Thursday, after confirming that the decision by the Department of Digital, Culture, Media and Sport to implement a new stake limit for gaming machines of £2 will not materially affect business. The direct, pre-mitigation, impact of the new stake limit is likely to have a negatively affect total machine gaming revenue by between 33 percent and 43 percent. Based on last year’s figures this would have led to a £35 million to £46 million revenue impact, representing between 2.0 percent and 2.6 percent of group revenue. Peter Jackson, Paddy Power Betfair’s CEO, said: “We have previously highlighted our concern that the wider gambling industry has suffered reputational damage as a result of the widespread unease over stake limits on gaming machines. We welcome, therefore, the significant intervention by the government today, and believe this is a positive development for the long-term sustainability of the industry.” The announcement comes on the back of the company’s decision to move further into the US gambling industry, after America legalised the sports betting industry. The change in the US legislation is expected to encourage British firms to move further into the US, seeking takeovers or becoming targets themselves. Shares in Paddy Power are currently trading up 6.17 percent at 55.86 (0856GMT).

Thomas Cook shares down 3pc, despite 5pc revenue boost

Miranda Wadham
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0
Thomas Cook shares down 3pc, despite 5pc revenue boost
Thomas Cook (LON:TCG) saw revenues grow by 5 percent in the first half of the year, boosted by trips to Egypt and other long-haul destinations. The group improved underlying EBIT loss by £13 million in the six months to 31 March, after a strong performance from its Thomas Cook airline. Revenue growth was up 5 percent to £3,227 million, with a £16 million improvement on loss before tax Peter Fankhauser, chief executive of Thomas Cook, said the group airline recorded strong performance in the first half. “Condor delivered a strong turnaround, and has benefitted from our ability to provide a reliable and high-quality service during a period of disruption and consolidation in the German aviation sector. Our booking position for the summer is strong, and bookings are well in line with our capacity growth of 10 percent to an expanded range of destinations, including 70 new routes across the group,” he stated. Margins in the UK came under pressure due to adverse currency moves and cost inflation. Going forward the group plans to shift holidays from Spain where the margins are lower to Egypt, Greece and Turkey. Shares in Thomas Cook are currently down 3.42 percent to 141.10 (0841GMT).

East coast mainline is set to be renationalised

Nicole Jeary
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East coast mainline is set to be renationalised
East coast mainline is set to be back under public control instead of its current operators Virgin and Stagecoach, who had failed to meet its payments. According to a statement, Stagecoach said it has been told that an “operator of last resort” would be appointed to run its London to Edinburgh service. Stagecoach has been operating the East Coast line alongside Virgin Trains since 2015. The East Coast mainline franchise is a joint venture of Stagecoach, which owns 90%, and Virgin, which holds 10%. The temporary denationalisation of the service is contrary to much of the stances adopted by the conservatives, who are most associated with privatisation, since its mass occurrence under the Thatcher government. The government transport secretary Chris Grayling confirmed the news in comments to Parliament on Wednesday. Amid speculation of the decision last week, general secretary of Aslef, the train drivers’ union, Mick Whelan commented: “This is the third time in 10 years that a private company has mucked up the east coast main line. In contrast, when it was run in the public sector, it returned £1bn to the Treasury. “That shows what we have been saying all along – that Britain’s railways should be run, successfully, as a public service, not for private profit. Because they can’t do it. Virgin and Stagecoach have managed reverse alchemy – by turning gold into base metal, and profits into losses on the east coast.” This is a developing story.  

Crest Nicholson share price plunges 13 percent

Nicole Jeary
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0
Crest Nicholson share price plunges 13 percent
Crest Nicholson (LON:CRST) shares took a hit on Wednesday morning, after the company issued a profit warning. The housebuilder said that full-year profits would be at the lower end of its forecasts. This was attributed to a flat pricing environment alongside inflationary pressures. Specifically, operating margins for the year are expected to be at 18 percent, towards the latter end of the group’s previous forecasted range of 18 percent to 20 percent. The group added that whilst most of its sales locations had performed well, sales at higher price points had proved more subdued. Consequently, Crest Nicholson expects margins for the next financial year to be within a similar range. Nevertheless, forward sales for the year-to-date are currently 11 percent higher than the same period a year previously. This has meant has led to an anticipated growth in revenue of 15 percent growth for the year to October-end. For the six months to the end of April, forward sales came in at £441.7 million, an increase of 6.3 percent from £415.6 million, with 1,251 unit completions. “The group has delivered a good sales performance in the first half of the year. The business continues to increase the number of homes built and carries positive momentum into the second half of 2018, with steady outlet growth and higher forward sales,” said Chief Executive Patrick Bergin. “Flat pricing has had a negative impact on margins, but volumes in the new build housing market continue to be robust and Crest Nicholson remains well positioned to grow volumes and deliver the homes that the UK needs, while continuing to focus on delivering strong returns for shareholders,” Bergin added. Shares in the house builder are currently trading -14.22 percent as of 10.37AM (GMT).  

National Express boosted by strong performance in North America

Miranda Wadham
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1
National Express boosted by strong performance in North America
National Express (LON:NEX) shares rose over 2 percent on Wednesday morning, after the travel operator recorded a 6.2 percent revenue boost in the first quarter. The UK-based bus and train service operator was boosted by an impressive performance at its North American bus business, with revenue from the operations growing 9 percent on a constant currency basis. For the whole company, revenue grew by 1.7 percent. It was boosted by some recent acquisitions and ‘robust’ underlying trading, despite the impact of severe snow over the period, and a ‘sizeable proportion’ of the lost schools days were expected to be made up within the first half of the year. The UK bus and coach businesses grew sales by 0.7 percent and 2.3 percent. “Our diversified international portfolio continues to deliver broad-based growth and open additional opportunities for further expansion”, said chief executive Dean Finch said. “We continue to focus on operational excellence to drive growing shareholder value by both delivering high quality services for our customers and generating cash to invest in future expansion. “These opportunities will continue to be sought in a disciplined manner and we will only pursue them if they meet our strict financial criteria. We remain on track to meet our full year profit and cash flow expectations”. Shares in National Express (LON:NEX) are currently up 2.51 percent at 416.40 (0942GMT).

Speedy Hire boosted by strong UK construction market

Miranda Wadham
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0
Speedy Hire boosted by strong UK construction market
Speedy Hire (LON:SDY) reported an increase in both profit and revenue for the full year, after a strong performance in the UK construction markets. Pre-tax profit rose 25 percent to £18 million, as revenue rose 2.2 percent to £377.4 million. Adjusted pre-tax profit rose 60 percent to £25.9 million, with the company boosting its dividend for the year by 65 percent to 1.65p per share. The specialist equipment hire firm cautioned that the market remains “competitive”, but said the start was “encouraging”. “We are delighted with these results which reflect a strong operational performance, robust capital management, the benefits of the strategy which was launched in September 2015, the impact of our recovery initiatives and some earlier-than-expected acquisition synergies,” chief executive Russell Down said. Shares in Speedy Hire are currently up 0.72 percent at 59.42 (0934GMT).
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