Topps Tiles share prices rises despite fall in sales and profit
Investors appear to be undeterred by weaker-than-expected full-year figures from Topps Tiles (LON:TPT), with shares rising over 7 percent in morning trading on Tuesday.
The group revealed sales of £211.8 million in 2017, a fall from the £215 million figure recorded last year. Like-for-like sales also declined by 2.9 percent, with the gross margin falling to 61.1 percent. The company cited the pressure of weaker sterling as the main reason for the fall, but said it was slightly offset by underlying sourcing gains and a “focus on a differentiated product offer”.
Adjusted profit before tax also fell by 15.5 percent to £18.6 million, but chief executive Matthew Williams said trading had picked up in the last eight weeks of the year.
“Trading in the first eight weeks of the new financial year has improved, with like-for-like sales increasing by 3.2 per cent.
“We are confident that the combination of the significant further potential in our strategy of ‘Out-specialising the Specialists’ with our accelerated plan to grow in the commercial tile market will underpin our future success”, Williams concluded.
Despite the figures the company’s share price rose on Tuesday morning, and is currently trading up 7 percent at 65.00 (1105GMT).
Three of the world’s biggest asset bubbles – will Bitcoin be next?
By James Trescothick, Senior Global Strategist at easyMarketsAs anyone who is in the industry will tell you, when it comes to online trading it is always a battle between two groups of people, the bulls and the bears. Bitcoin is no different, but both groups are so vocal in their opinions on whether it’s a bubble waiting to bust or an asset waiting to explode even higher. Many of the naysayers compare the 2017 Bitcoin rise to the 1619 Tulip mania, whereas the true believers keep saying “forget the blasted tulips already!” With that in mind, I thought it would be interesting to look at some of the past asset bubbles and see if there is a comparison.
US stocks (1923-1932)
Whenever anyone thinks of the 1929 Wall Street crash they usually only think of Black Tuesday and the devastation it caused and with it bring the 12-year Great Depression. They tend to overlook the build up to it and the massive bull run that the stock market went on until October 1929. Like many things that are traded on the markets, the rise of US stocks at the time had nothing to do with their actual intrinsic value but with optimism. The Roaring twenties brought with it a huge excess and decadence and a renewed belief in the American dream. Many rural Americans moved to the cities looking for fortune in the rapidly growing industrial sector and for the first time ordinary people could invest in the New York Stock Exchange. Hundreds of thousands of Americans invested massively into stocks by borrowing money. By the time the crash occurred the total amount out on loan had reached $8.5bn an amount greater than the entire sum of physical cash in the country. For obvious reasons the stock market went on bull run with the DOW Jones gaining more than 20% in just a 4-month period. Then on October 29th 1929 as many investors started to face margin calls, panic selling took hold and markets crashed losing $14 billion in a single day. Following that day, the market did experience a few days of recovery but the bull market was over. By July 8th 1932 the Dow Jones had fallen to 41.22 reaching its peak back in September 1929 before the crash at 381.7. This huge market collapse had such a huge impact that the stock market never recovered to the same levels again till 1954.Similarities to Bitcoin Rally?
Personally I can see a couple of similarities here. When Bitcoin was first introduced it was the tech savvy who were buying it as they understood it. The 2017 bull rally has been driven in many ways by the sudden growth of interest in Bitcoin by joe public. Before the 1920’s, market speculation had only been for professional traders. With increased optimism most Americans joined the trading band wagon to make their fortune. We are seeing it again, those who don’t really understand Bitcoin are buying in on the back of hearing stories of people who have made millions by buying Bitcoin early on. One of the differences of course, is though the Bitcoin CFD market is growing, the bulk of Bitcoin’s rise has been due to people buying it physically, so margin calls will inevitably affect the relatively small CFD market. However, like everything Bitcoin can still be subject to panic selling which could occur at any time.South Sea Bubble (1719 – 1722)
“The Sun never sets on the British Empire” as the famous saying goes and during the 1700’S the British were living in a time of prosperity. Many Brits found themselves with money to invest and looking for the ideal opportunity. The South Sea Company which had purchased the “rights” to trade in the South Seas was one such opportunity. At the time there were very few companies offering stocks and with well-known success stories of other trading companies like the East India Company, public appetite for buying stocks in the SSC skyrocketed. The belief that trading with South America would bring riches galore pushed the SCC’s stock price to a high of 1000 pounds a share. However, there was a big problem. Spain controlled the majority of South America which meant trading was nearly impossible. Along with bad management the South Sea Company share prices eventually crashed. Thousands of individuals were in financial ruin; it is also said that Isaac Newton who had shares in SCC lost 20,000 pounds or about $3 million in today’s value.Similarities to the Bitcoin Rally?
First, the success of Bitcoin has lead other cryptocurrencies to also rise, with new ICO’s being launched on the weekly basis. The hugely successful East India Company making massive profits on a yearly basis, you can see how some would have thought the South Sea Company would do the same. The South Sea company’s undoing was the fact that its basic function of trading with South America was never actually going to happen due to Spain’s dominance in the region. Bitcoins main function is to make payments for anything all over the world and be the currency that everyone can use without any interference from the banking community. But like Spain preventing the SCC, do you really think that all the central banks will let Bitcoin take over without their control? The major difference of course is that Bitcoin has already survived tough restrictions implemented by Russian and Chinese governments, but only time will tell whether it could take on global restrictions.Tulip Bubble (1634-1637)
Ok, Bitcoin bulls are going to hate me for bring this story up but hey, forgive me. Tulips was first introduced to Holland from Turkey at the end of the 1500s and soon became a must have, which resulted in prices rising for this exclusive bulb. Soon the price of tulips was rising so fast, people were selling their land and assets just to get their hands on more bulbs, thinking they could sell it on for huge profits. Mania gripped the country, then came the speculators and tulip contracts that traded on the futures market. Then there was a bout of profit taking which was quickly followed by panic selling. And as the prices fell lower and lower real fear gripped the market as people realised that they had given up almost everything just to buy a bulb. Future contracts were not honored and many people went bankrupt. The Government tried to step in but it was too late, it was over. At the height of its price, tulip bulbs were selling for the value of a large piece of land and was 10 times more of an annual income of a skilled worker, after its collapse it cost as little as an onion.Similarities to the Bitcoin Rally?
Bitcoin bulls hold your breath. Though I do see some parallels in what happened in Holland in 1637 to Bitcoins amazing bull run in 2017, I also see many differences. First, you could say what we are seeing is a bit of a Bitcoin mania at the moment and of course we have seen a dramatic crash with another cryptocurrency this year: Ethereum fell from $319 to 10 cents before bouncing back up in June, which is of course similar to the collapse in the value of tulips back in 1637. In my opinion when the Bitcoin bubble does finally bust and it will like everything else eventually does, I for one cannot see it falling so low that it becomes worthless. Like the Tulip mania, the real question many analysts are asking is what is Bitcoin’s intrinsic value? Fundamentally speaking, Bitcoin is not really affected by economic events or company performance but on how much someone is willing to pay and for how long the demand will continue to rise. Now like the tulip mania first started, when bulbs were being sold physically it was one of the leading exports for Holland. As prices rose speculators jumped in and prices continued to skyrocket and then…. bust. Now as I mentioned already, Bitcoin is designed to be used as a form of payment. Recent highs have been caused by investors not looking to use it for its intended purpose but for making a profit by speculating. Now here is where I see the problem. When those speculators go to cash in they may find that their banks will not accept the transfer back. If that does happen, then like the tulip bubble you could see a massive rush for the exits and Bitcoin will fall like a stone. However, as I have said I don’t believe for a second it will become worthless and it is here to stay. Furthermore it does have a purpose which I feel more people will eventually use it for what it was designed to do, which should help hold its value. Alright, Bitcoin bulls? Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).Cranswick shares rise 7pc as investment pays off
Food producer Cranswick (LON:CWK) saw shares soar over 7 percent on Tuesday morning, after heavy investment in infrastructure appeared to pay off in the latest set of results.
Group revenue rose 23 percent to £714.6 million, with adjusted profit before tax coming in 17.2 percent higher at £44.4 million.
The group’s dividend per share rose 15.3 percent to 15.1 pence, with the operating margin increasing by 6.2 percent.
During the six month period Cranswick approved a new £54 million primary poultry facility in Eye, Suffolk, which is scheduled for completion in late 2019 and will double the group’s existing capacity with further room for expansion. Cranswick also invested a further £13 million in its existing milling and hatchery facilities.
Adam Couch, Cranswick’s Chief Executive Officer commented:
“During the period we have strengthened our asset base, enhanced market positions and developed new customer relationships. We continue to make good progress against each of our strategic objectives and we are well placed to continue our successful development in the current financial year and going forward.”
Shares in Cranswick are currently trading up 7.72 percent at 3,250.00 (0933GMT).
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FCA warns on danger of binary options trading
The Financial Conduct Authority has issued a warning about the risks of investing in binary options, after highlighting the potential for fraudulent companies to take advantage of inexperienced investors.
Currently binary options are not a financial instrument regulated by the FCA, however from 3rd January 2018 this will change. Up until then companies offering the trade of binary options have been monitored by the UK’s Gambling Commission – meaning their trade is more of a bet than a legitimate investment.
Trading in binary options involves making a bet on the change of value or price of a stock, commodity, currency, index over a very short space of time, often between 30 seconds and 5 minutes. According to the FCA data, the majority of consumers lost money when making bets and ‘consumers find it difficult to make sustained profits over a series of bets’. The FCA highlighted concerns earlier in November, including the risk of addictive behaviour, conflicts of interest and the potential difficulty on undue pressure from companies on the phone.
UK Investor Magazine published an article on this scam back in 2016, after receiving several complaints from readers who had been impacted by it. The full article can be found here.
Centrica shares plunge as customers leave in droves
British gas owner Centrica saw shares plunge over 17 percent on Thursday, after the company lost almost a million customer in just four months.
Its share price sunk to its lowest level in 14 years, after losing 6 percent of its customer base in the period from July to October. The company also warned that full-year trading may come in below forecasts, despite raising its prices for millions of customers in September.
A one-off charge at the company’s North American units will send their profits down by £140 million for the full year, with stronger competition in the UK meaning the company are likely to just break even for the full year.
Centrica’s chief executive Iain Conn said: “Although some aspects of our delivery in the second half of 2017 have been disappointing, I remain encouraged by our progress in implementing our strategy.”
Investors were less encouraged by the performance however, with shares currently trading down 16.90 percent at 135.79 (1056GMT).
Mothercare share price sinks after “challenging” backdrop leads to loss
Mothercare’s share price tanked on Thursday, tumbling over 15 percent after posting a loss of £16.8 million.
Whilst some of the figures for the six months to September looking promising, investors were spooked by a recent “softening in the market” and “a challenging consumer backdrop”.
Online sales growth grew 57 percent in constant currency, with half-year like-for-like UK sales up 2.5 per cent to £229 million.
However, Mothercare’s adjusted loss before tax came to £0.7 million, a significant drop from the £5.9 million profit made in the same period last year.
International like-for-like sales fell eight per cent, despite the group vowing to move its focus to more international sales, and overall six-month losses stood at £16.8 million.
Mothercare’s problems with its defined benefit pension scheme continued to weigh, and the group were forced to pay out £7.1 million to the scheme to keep it in the black. By September, the shortfall was still stood at £68.9 million shortfall. The firm went to the bank to draw down £24.5 million on its lending facility over the period.
Mothercare shares are currently trading down 15.87 percent at 70.25 (1025GMT).
Philip Hammond’s budget: LIVE
Chancellor Philip Hammond laid out his budget on Wednesday, focusing heavily on Brexit and aiming to alleviate the effect of a possible fall in economic growth as the UK prepares to leave the European Union.
Brexit
Hammond said the government “are determined to to ensure that the country is prepared for every possible outcome”. Because of this, Britain is to set aside £3 billion for Brexit preparations over the next two years, on top of £700 million already invested.Tech
Turning to investment in the technology sector, Hammond said that “Britain must be at the forefront of technological revolution”. “Britain must invest and in this budget that is what we choose to do,” unlock over £20 billion British business bank seeded withStart-up businesses
Ensuring that EIS is not used as a shelter for low risk capital preservation schemes. National Productivity Investment Fund to be extended for a further year and expanded to more than £31 billion.OBR figures
British productivity growth revised down by OBR. The OBR forecasts the deficit to be 1.3% of GDP in 2020-21, giving £14.8bn of headroom against the 2% target.Maths
Commitment to maths, 40 million to train maths teachers and extra money for schools who get pupils to take A Level maths.Environment
Focusing on the eni extra funds and tax incentives for electric car drivers. That includes a new £400m charging infrastructure fund, an extra £100m in Plug-In-Car Grant, and £40m for research into charging.Wages
Increase targeted affordability funding, benefitting 400,000 people. National wage living raising 4.3 percent to 7.83, with the largest increase in youth rates in 10 years. Pay rise for over 2 million low wage workers across the country. New rail card for people under 30.Duties
Duties on most ciders, wines, beers and spirits to be frozen. Fuel duty rise for April cancelled. Tobacco tax will continue to rise at inflation plus 2%. That could see the cost of cigarettes rise by about 6%.Tax
Higher rate of income tax free allowance rise to £46,350Universal Credit
Commitment to fix Universal Credit Now onto the Universal Credit fix, or attempt to fix the worst problems – govt removing the 7 day waiting period, extending repayment period for advances, any claimant will get housing benefit for another 2 weeks – package to ease concerns is 1.5 billionSmall businesses
Further business rate relief. Annual uprating of business rates in April next year, bringing forward planned switch from RPI to CPI. Worth £2.6 billion to businesses in the next 2 years.Housing market
Providing Kensington and Chelsea Council with a further £28 million for community space and local residence counselling. 100pc council tax premium on empty properties. “House prices are too high. Rents absorb too much of monthly income”, says Hammond. “Governments have failed to build enough homes to meet needs”. Increased supply of homes by more than 1.1 million since 2010. Housebuilding stands are highest level since the crash. £44 billion of capital funding to support housing market. Additional £34 million to develop construction skills. Announcement that stamp duty will be abolished for all first-time buyers on properties up to £300,000 and for the first £300,000 on purchases up to £500,000Thomas Cook share price plunges after hit to UK profits
Shares in travel company Thomas Cook plunged on Wednesday morning, after UK profits dropped significantly in the year to 30th September.
The group was hit by a combination of rising holiday prices and a fall in the value of the pound, as well as a price war in the Spanish market.
Earnings in its UK division dropped by 40 percent over the year to £52 million, sending shares down over 10 percent at market open. However, outside of the UK, underlying earnings rose across the group as a whole to £330 million, despite being hit by a surge in costs from fraudulent illness claims.
Thomas Cook said: “In response, our UK tour operator has implemented a set of actions to improve profitability.
“We have taken a robust approach towards illness claims including improving our handling and assessment processes, and taking legal action against fraudsters – as a result, the claim rate has declined dramatically.”
However, looking ahead, the company confirmed that current trading remained in line with expectations after a renewed interest in winter breaks in Egypt and the Canaries.
Peter Fankhauser, chief executive of Thomas Cook, said: “2017 was a milestone year in the strategic development of Thomas Cook.
“Looking to the year ahead, we can see real momentum in our Group Airline, and expect our Continental Europe and Northern Europe tour operator businesses to continue their good performance.”