UK manufacturing growth slows
The UK’s manufacturing sector slowed again in January, in contrast to the Eurozone figure which remained bouyant.
The IHS Markit/CIPS PMI figure stood at 55.3 in January, the seasonally adjusted IHS Markit/CIPS Purchasing Managers’ Index (PMI ), its lowest level since June last year.
New order intakes rose leading to higher production levels, which increased through robust demand from both domestic and export clients.
Output and new orders increased across the consumer, intermediate and investment goods sectors, with January also seeing new export order inflows strengthen.
UK manufacturers said they maintained a positive outlook going forward.
Eurozone manufacturing figures hover around record highs
The Eurozone’s manufacturing figures were strong in January, continuing to hover around the near-record highs seen at the end of 2017.
The final IHS Markit Eurozone Manufacturing PMI recorded a three-month low of 59.6 in January, down marginally from December’s record high of 60.6. It matched the flash estimate released beforehand, with the figure recording expansion in each of the past 55 months.
The data demonstrated growth across the consumer, intermediate and investment goods categories, despite consumer goods being the only category to record growth during the latest survey month.
“The euro zone’s manufacturing boom continued in full swing in January,” said Chris Williamson, chief business economist at IHS Markit.
Facebook video changes lead to drop in user time
Facebook shares fell sharply in after hours trading, after its fourth quarter results revealed a drop in daily user growth.
Facebook now has 1.4 billion daily users, up 2.18 percent. This compares to the 3.8 percent growth to 1.37 billion users in the previous quarter.
The site did record a growth in monthly active users, however, which increased by 14 percent to hit 2.13 billion.
Facebook recorded a record profit for the quarter, hitting $4.26 billion, and its income from mobile advertising increased to 89 percent from 84 percent in the fourth quarter of 2016.
CEO Mark Zuckerberg said user growth fell due to changes made to how Facebook shows viral videos, which “reduced time spent on Facebook by roughly 50 million hours every day.”
“2017 was a strong year for Facebook, but it was also a hard one,” Zuckerberg said.
“In 2018, we’re focused on making sure Facebook isn’t just fun to use, but also good for people’s well-being and for society. We’re doing this by encouraging meaningful connections between people rather than passive consumption of content.
“Already last quarter, we made changes to show fewer viral videos to make sure people’s time is well spent. In total, we made changes that reduced time spent on Facebook by roughly 50 million hours every day. By focusing on meaningful connections, our community and business will be stronger over the long term.”
Capita share price plunges by a third after profit warning
Capita (LON:CPI) shares fell nearly 40 percent on Wednesday, after announcing plans for a rights issue to raise £700 million to negate a fall in profits.
The outsourcing company warned that 2018 underlying pretax profit was expected to be between £270 million and £300 million, after saying that it did “not expect to offset the above headwinds through the full year benefit of last year’s cost actions and new business”.
It said that the divisional plans indicate that there is “likely to be a significant negative impact upon profits’ from contract and volume attrition, the dropping out of one-off items including contract and supplier-related profits.”
Jonathan Lewis, Chief Executive Officer of Capita, said:
“Firstly, we are pursuing “self-help” options, including the aforementioned cost actions and non-core disposals.
“Secondly, the Board is not recommending the payment of a final dividend. Finally, the Board is planning to raise equity by way of a rights issue during this year.’
“The precise quantum has yet to be determined and the Company has entered into a standby underwriting agreement for up to £700 million with Citi Global Markets Limited and Goldman Sachs International.”
This comes just after the collapse of competitor Carillion, which has endangered the jobs of thousands of workers.
Capita shares are currently trading down 38.27 percent at 214.70 (0855GMT).
Venture Life shares tumble 5pc after trading update
Shares in healthcare group Venture Life (LON:VLG) tanked over 5 percent at market open on Wednesday, despite saying that expected to report a full-year revenue rise of 12 percent.
Revenue is likely to rise to £16 million, with Ebitda up to over £1.7 million.
However, the company’s earnings figure will reflected the new accounting standard related to long-term rental agreements, which is set to increase Ebitda but have a minimal effort on the group’s reported profit.
This could be one of the reasons that shares were trading down in the wake of the announcement, currently down 5.48 percent at 44.71 (0844GMT).
Dairy Crest group figures strong on Cathedral City sales
Dairy product manufacturer Dairy Crest (LON:DCG) reported a revenue rise of 7 percent in the first nine months of year, sending shares up over 2 percent at market open on Wednesday.
Revenue rose 16 percent over the period to £220.1 million, with adjusted profit before tax up 8 percent to £20.6 million.
Its cheddar cheese brand Cathedral City was one of its best sellers, seeing volume growth of 10 percent, whilst both Clover and Frylight also grew their market share, both of which drove the group’s performance over the period. Mark Allen, Chief Executive of Dairy Crest, said: “We have seen strong growth across our key brands, with Cathedral City, Clover and Frylight performing well and all of our spreads brands increasing market share. “I am delighted that Cathedral City Spreadable, one of our more recent innovations, was voted ‘Product of the Year 2018’ in the cheese category by consumers. “We continue to build the customer base for our functional ingredients business and we will talk in greater detail about this in May.”
Shares in Dairy Crest are currently up 2.59 percent at 574.50 (0831GMT).
Wizz Air shares sink despite 3pc profit boost in Q3
Wizz Air shares sunk over 2 percent on Wednesday, despite a 3.6 percent rise in profits in the third quarter.
Profits were boosted by a large jump in revenue, that was only partially offset by higher fuel costs. Total revenue increased 24 percent to €422.9 million, with ticket revenues up 26.1 percent to €241.7 million.
The airline, which operates flights largely from Eastern Europe, confirmed its full-year profit guidance of between €265 and €280 million.
Ancillary revenues grew 21.3 percent to €181.1 million and profit for the period was a record €14.0 million in Q3, a year on year increase of 3.6 percent.
József Váradi, Wizz Air Chief Executive said:
“Our strong performance over the first nine months of the financial year and an encouraging upcoming Easter has enabled us to increase fourth quarter growth and deliver 25 percent more passengers to nearly 30 million passengers for the full financial year.”
Despite this, Wizz Air shares are currently trading down 2.38 percent at 3,491.00 (0822GMT).
Philips’ move to healthcare tech pays off in fourth quarter
Technology company Philips reported a strong increase in both sales and profits during the fourth quarter, as the company moves its focus to healthcare technology products.
The group reported fourth quarter sales of 5.3 billion euros with a 5 percent comparable sales growth. Net income from continuing operations hit 476 million euros and its comparable order intake increased 6 percent on 2016.
Annual profits at the group rose by a quarter to 1.87 billion euros, with the group’s new focus on healthcare products including electric toothbrushes and razors proving to be a success.
Chief executive Frans van Houten said the integration of acquisitions from across the “health continuum” is on track, adding that its “revolutionary hybrid styler” OneBlade has generated over 100 million euros in the last 18 months.
Domino’s pizza shares up as X Factor Saturdays boost sales
Pizza delivery chain Domino’s (LON:DOM) reported strong trading in its fourth quarter, with the X Factor final marking their biggest sales day of the year.
Group system sales rose 18.2 percent, with strong growth reported in both “established and newer markets”. UK system sales up 9.8 percent, with sales up 25 percent over the average Saturday across the year.
The start of the X Factor Final on 2 December 2017 was the the group’s biggest day of sales for the year, “demonstrating the growing trend for combining ordering in with family entertainment”.
David Wild, Chief Executive Officer, said 2017 was “another year of significant progress and growth for Domino’s.”
“The UK business has demonstrated its resilience in a challenging economic and competitive environment. Our international operations are growing in scale and benefiting from our expertise in supply chain and digital.”
Fourth quarter performance was ahead of the group’s expectations, and as a result it now expects full year underlying profit before tax to be “slightly above the current range of market expectation”.
Shares in Domino’s are currently trading up 3.08 percent at 361.30 (0836GMT).
Greencore shares up on solid UK and US performance
Convenience food manufacturer Greencore (LON:GNC) issued a positive trading update on Tuesday morning, with revenue for the final quarter of 2017 expected to rise over 50 percent.
The group recorded revenue of £640.5 million in the 13 weeks to 29 December 2017, a rise of 53.6 percent on a reported basis.
Its convenience foods business in the UK & Ireland reported first quarter revenue growth of 9.2 percent to £385.4 million, up 8.7 percent on a pro forma basis.
In the US the group’s convenience foods division reported Q1 revenue growth of 297.0 percent to £255.1 million, with the extraordinary rise largely reflecting the acquisition of Peacock Foods at the end of December 2016.
Looking forward, the group said it “anticipates delivering a year of strong growth in FY18 and is well positioned to drive improved profitability, cash flow and returns over the medium term.”
“Recent GBP/USD foreign exchange movements, if sustained, would have an adverse impact on translated US profits”, it added.
Shares in Greencore are currently trading up 2.27 percent at 206.80 (0823GMT).