Morrisons shares up after special dividend announcement

Miranda Wadham
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Morrisons shares up after special dividend announcement
Shares in Morrisons (LON:MRW) rose in early trading on Wednesday, after the company declared a special dividend as their turnaround strategy begins to take effect. The group declared a special dividend of 4p per share and a final dividend of 4.43 pence, a 12.2 percent rise in the total dividend for the year. Profits also rose during the period, with pre-tax profit up 16.9 percent to £380 million and revenue up 5.8 percent to £17.3 billion. Net debt continued to fall, offset by a 2.8 percent rise in like-for-like sales excluding fuel, and the group confirmed that it was on course for annualised wholesale-supply sales to all partners to exceed £700 million by the end of 2018, and to be more than £1bn ‘in due course’. “Morrisons is now entering its third consecutive year of growth, which is a credit to the whole team,” chairman Andrew Higginson said. “We will continue to prioritise consistent, meaningful and sustainable growth, which I am confident we are well placed to keep delivering.” Morrisons were forced to implement a turnaround plan after a spate of profit warnings back in 2014. The most recent sets of results seem to show a revival in the group’s business, as the supermarket sector overall starts to fare better.

Hammond’s Spring Budget met with suggestions of recession

Raymond Jones
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Hammond’s Spring Budget met with suggestions of recession
Chancellor Hammond delivered his spring budget today in what was a desperately gloomy outlook for the UK and miserable attempt to prop up the NHS and collect a greater proportion of taxes owed. The growth outlook for the UK was increased for 2018 but has been dramatically reduced in the following years with 2019 and 2020 growth expected to be at 1.3%. In fact, the OBR figures suggested a high chance of recession in the UK before 2023 due to a potential ‘cyclical shock’ while the OECD sees UK growth the worst in the G20 this year. The outlook for inflation was steady but economists at the Institute for Fiscal Studies were fairly pessimistic due to the lack of wage growth and the potential for a decline in wages in real terms.     There was also a prediction for the final Brexit settlement bill with the EU from the OBR of £37.1bn, which could include payments up until 2064. Brexit was also blamed for slowing economic growth due to the ‘huge Brexit-related uncertainties,’ said Aberdeen’s Lucy O’Carroll. Despite the budget being dominated by soggy economic revisions, the chancellor did keep to prior promises not to use the spring budget as a platform for further tax changes. Rather, Hammond outlined schemes for better tax collection particularly among digital businesses and tabled the idea of a tax for plastic used only once.   The Shadow Chancellor hit back at claims of ‘light at the end of the tunnel’ and highlighted the dismal outlook for jobs saying the government had become ‘complacent’.

Antofagasta earnings lifted by rising copper price and hikes dividend

Raymond Jones
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Antofagasta earnings lifted by rising copper price and hikes dividend
Copper miner Antofagasta (LON:ANTO) reported preliminary results on Tuesday which pointed to a year of recovery, helped by rising copper prices. The miner with operations predominantly in Chile enjoyed a 59% increase in EBITDA to $2,586. A 31% rise in copper prices helped boost earnings as production for the period was mildly down 0.7% on the previous year. The higher copper price also assisted stronger cashflow which allowed the group to reduce net debt to just $42 million. Copper prices have increased dramatically over the past year helped the mining sector to recoup much of the losses suffered during fears of a Chinese hard landing. Antofagasta CEO commented on the results: “We have continued to invest through the cycle while maintaining our focus on cost discipline and operating performance. As a result, as copper prices rose in 2017 Antofagasta had another successful year completing the development of Encuentro Oxides, meeting our safety target of zero fatalities and achieving both our production and cost guidance. “EBITDA increased by 59% to $2.6 billion with operating cash flow rising to $2.5 billion. Testament to the improved copper market and our continuing cost management programme, our EBITDA margin rose to 54% – the highest level since 2012 when the copper price was 30% higher. As a result of this performance the Board has recommended a final dividend of 40.6 cents per share which, combined with the interim dividend, brings the total dividend for the year to 50.9 cents per share, an increase of 177% on 2016, and represents a cash payout of 67% of earnings. “Our priorities for 2018 are continued capital discipline and the next phase of our growth – notably the review and expected approval of the Los Pelambres Incremental Expansion project and progressing expansion plans at Centinela.”

How to invest in IPOs

UK Investor Magazine
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How to invest in IPOs
Investing in IPOs enables investors to be the first to own publicly traded shares in a company before they are admitted for general trading. The process of floating on a stock exchange involves an initial round of funding where investors can secure shares at a specific price before they start trading, this is the IPO price. Depending on the demand for the shares, IPOs can sometimes be oversubscribed due to high demand which can be a good indication of potential performance of the shares in the early days of trading. This situation is of course highly desirable for investors and can provide significant returns in a short period of time as well as giving long term investors a head start on those that buy after the IPO. Snap, the owner of social app Snapchat, is good example of this having had an IPO price of $17, investors could have sold as high is $29.40 in the following days. Click here for more information on upcoming IPOs Of course, not all IPOs provide gains initially and some can fall heavily if the market feels the IPO price was too high and overvalued the company.

How to invest in IPOs

When IPOs are announced intermediaries are appointed to undertake certain roles such as promoting the IPO, underwriting the issue and acting as a broker. The larger the IPO the more intermediaries are involved and the higher the chance of private investors being able to get in on the action. However, private investors who only use larger share dealing platforms may miss the opportunity to invest in some IPOs as their platform does not provide access to them. Indeed, some smaller IPOs are exclusive to only a select number of brokers and if you do not have an account with them you will not easily be able to partake in the IPO. Click here to find out more about exclusive IPOs Some specialist brokers and intermediaries will also be able to provide access to other types of capital raisings such as placings. A placing is where a company who has already listed returns to the market for further cash. Just like IPOs, the cash from placings can be employed in a range of uses including improving the balance sheet, acquisitions or funding specific growth projects. However, placings are fundamentally different to IPOs because the company is already trading and knowledge of the placing is not public information. This is because in many cases shares are offered at a discount to attract interest and quickly fill the issue and could impact the share price in the short-term  

Casual Dining Group reports £60m loss

Nicole Jeary
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Casual Dining Group reports £60m loss
Cafe Rouge owner, Casual Dining Group, reported a steep loss in profits in the year to May 2017, in another blow to the British high street. The group said losses across the year at its dining locations such as Cafe Rouge and Bella Italia, increased 18 percent to £60 million. The restaurant group attributed the stark decline in profits “due to consumer confidence levels and the broader impact on discretionary spending”. Alongside Cage Rouge, Casual Dining Group (CDG) also operate La Tasca and Belgo chains. However, its not all bad news for the restaurant operator. Last month CDG announced the launch of a delivery brand. The delivery service will focus upon Cafe Rouge diner favourites such as croque monsieur sandwiches and burgers. It is set to go live in the next coming weeks, as the brand looks to compete with online delivery offerings such as Deliveroo and UberEats. However, amid rising costs and an uncertain economic climate, many restaurant chains across the UK have been suffering as of late, amid a persistently difficult trading environment. Jamie Oliver’s Italian restaurant chain has also come under pressure in recent months. Last month, Jamie’s Italian this month agreed creditors and landlords to shut 12 locations, alongside paying lower rent on others for a period of up to two years. This comes amid Italian restaurant chain, Prezzo, announced the closure of up to a third of branches across the U.K. Around 100 of its locations are set to close, alongside all of its Chimichango locations. Restaurant chains across the U.K aren’t alone in facing mounting challenges as consumer patterns adapt in recent years. Last month high-street retailers Toys R Us and Maplins both announced its fall into administration, after both stores failed to find a buyer. High-street stores have been suffering from the marked drop in footfall in recent years, as shoppers increasingly turn to the ease of online platforms to make their purchases.  

Stellar Diamonds shares rally amid Newfield Resources merger

Nicole Jeary
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Stellar Diamonds shares rally amid Newfield Resources merger
Shares in Stellar Diamonds (LON:STEL) rallied on Monday, after the company announced the board recommended a merger with Newfield Resources. The deal was proposed last month, and the two groups have since been negotiating terms. Last month chief Executive Karl Smithson said of the proposed deal: “The loan will also be used to pay legal and corporate financial advisor costs including those related to the possible offer for the company. “Working capital will therefore remain constrained as we continue discussions with Newfield Resources regarding the possible offer.” He continued. Australian firm Newfield will offer shares of 12.5p per Stellar share, valuing the diamond miner at £7.74 million. The company will also lend Stellar $3 million to cover any urgent short-term cash needs, while undertaking a right issue to raise $30 million to re-finance the enlarged group. Existing Stellar shareholders will own 8.14 percent of the group following the merger and financing. As of currently, Stellar holds a portfolio of diamond assets in both Sierra Leone and Guine, with a main emphasis upon Tongo with its Tonguma project. Earlier this month, CEO Mr Smithson commented on the “extremely difficult” market for capital raising. Last year, the company reported a $984,928mln loss for 2017, closing the year with just over $50,000 in cash and assets. As a result, the diamond miner was searching for fund raising alternatives to strengthen its position and facilitate the development of its Tongo-Tonguma project. “The interim reporting period has primarily been focused on sourcing the necessary funding to bring the Tongo-Tonguma project into production. The capital markets in the UK have proven extremely difficult to raise funds for junior mining companies in recent years,” Smithson said. As of currently, shares in Stellar Diamonds are up more than 50 percent, trading up 55.69 percent as of 12.50PM (GMT).  

Melrose increases GKN takeover bid to £8.1 billion

Nicole Jeary
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Melrose increases GKN takeover bid to £8.1 billion
Melrose has increased its offer for UK engineering firm GKN (LON:GKN) from £7.4 billion to £8.1 billion. The offer was announced by the company in a brief statement released on Monday morning. Melrose said this would be its “final offer” for the company, which would equal 467p per share. The bid would give GKN shareholders a 60pc stake in the merged company, an increase from 57pc offered previously. In response to the revised bid, GKN’s chairman, Mike Turner, told investors on Monday that Melrose “lacks experience in several critical areas and that its priorities are inappropriate for running a global technology-based business like GKN”. “Melrose is offering a premium lower than any relevant FTSE 100 takeover in the last 10 years, and substantially lower than any of its previous acquisitions,” Turner added. Back in January GKN rejected a £7.4 billion hostile takeover bid from Melrose, which specialises in acquisitions. GKN had rejected an initial bid of £7 billion, which the company declared as “opportunistic”. GKN became takeover target after issuing a series of profit warnings last year. In particular, its aerospace division encountered difficulties, in light of “operational challenges” and lower profit margins. Moreover, last November the company announced the departure of incoming chief executive, Kevin Cummings, a mere few weeks before he was supposed to assume the role. It was announced that non-director, Anne Stevens, a former senior Ford executive would instead assume the role as interim chief executive in January. GKN is headquartered in Worcestershire in the UK and has more than 59,000 employees across 30 countries. The British multi-national firm produces wing tips for Airbus, alongside various parts for car-makers. Shares in GKN are currently trading down marginally by 0.32 percent as of 10.57AM (GMT).  

Bumper Non-Farm Payrolls buoy dollar while stocks rise

Raymond Jones
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Bumper Non-Farm Payrolls buoy dollar while stocks rise
The monthly US jobs report smashed estimates on Friday as Non-Farm Payrolls for February came in at 313,000, well above the expected 200,000. A rise in the participation rate lead to sharp decline in those out of work and the unemployment rate fell to just 4%. Despite the strong jobs numbers, wage growth remained elusive fuelling the argument the quality of jobs was still lacklustre and could hold the Fed back from a violent tightening cycle. “The underlying economic growth is quite strong, but there’s no real pressures from a wages and inflation standpoint…it’s very good for risk assets.” said Greg Peters, senior investment officer at PGIM Fixed Income. In an initial reaction to the release the dollar strengthened against major currencies with USD/JPY hitting 107.62 before falling back. Stocks remained relatively unchanged as market participants grappled with an improving economic picture and the prospect of the Federal Reserve hiking rates. The FTSE 100 continued to rally on Friday, continuing a week of gains which has seen the index form a double bottom formation around 7070-7090. Technical analysts will be eyeing 7310 and three weeks high for the next level of potential resistance which could open up the way to 7500-7550 if broken significantly.

Financial advisory industry routinely deters women from angel investing

Miranda Wadham
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Financial advisory industry routinely deters women from angel investing
There is a substantial gender deficit in the world of business investment, according to a new report by the UKBAA, with women continually deterred from entering the traditionally ‘male’ world of angel investment. In the light of International Women’s Day, the ‘The Barriers and Opportunities for Women Angel Investing in Europe’ hopes to highlight the challenges women face when making a mark in the finance industry.
The report found that women were offered very little advice on how to get into angel investing by the financial advisory community or financial media, with many financial advisors assuming women prefer investments with a lower risk. Whilst the financial advisory community may be seen as a key means to enable women to identify the opportunity to back small businesses, the majority of women investor respondents to the survey said that the advisory community directed them towards conventional and deemed low risk areas of investment such as stocks and shares, followed by bonds and pension funds. A much smaller group of women were advised about the opportunity for investing in small businesses and the relevant tax breaks offered in the partner countries concerned. 136 of the women surveyed said they hadn’t tried angel investing because it seemed too risky compared to stocks and shares. One UK female investor said, “My financial advisor assumed, as a woman, I was risk averse and I should look at safe options. He never mentioned Angel investing or the EIS tax relief scheme.”
According to the report, a significant number of women respondents also felt there was an image presented in the media an press of – usually male – business angels being extremely rich and highly successful, meaning few women feel they have achieved sufficient success or wealth to participate.
136 of the women surveyed also admitted to having other financial commitments and family priorities, with 67 saying they have no control over the family finances. Getting more women interested in angel investing could be beneficial for female business owners too. Women investors have a strong track history of backing other female founders or co-founders with a majority (54%), of those who invested in women-founded businesses having invested in at least one company founded by women, with nearly 20 percent having invested in 3 to 10 women founders. This compares to only a small minority of male investors who choose to back businesses led by women. If nothing else, it is this highlights the importance of enlarging the pool of women engaged in angel investing in the coming year.

Aviva raises dividend by 18pc, but share price falls

Miranda Wadham
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Aviva raises dividend by 18pc, but share price falls
Insurance company Aviva (LON:AV) reported a 2 percent rise operating profit for the full year on Thursday, as expected by analysts, alongside an 18 percent dividend hike. Operating profit rose to £3.07 billion in 2017, up from from £3.01 billion the previous year, prompting the company to approve an 18 percent dividend hike. Assets under management at Aviva Investors increased by 9 percent to £490 billion, reporting a 14 percent increase in fund management revenue. “In 2017, Aviva delivered growth in profits, in dividends, in capital and in cash. Aviva grew operating earnings per share by 7 percent and our full year dividend by 18 percent, the fourth consecutive year of double-digit dividend growth,” said Mark Wilson, Aviva’s Chief Executive Officer. “Aviva has broad-based growth, with six of our eight major markets delivering double-digit profit improvement. We now have a collection of strong and growing businesses.” Shares in Aviva fell 2.11 percent on Thursday morning, despite the strong results, and are currently trading at 496.90 (0930GMT).
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