Carillion shares suspended as it goes into liquidation
Carillion entered liquidation on Monday as it failed to secure a deal with lenders, putting thousands of jobs at risk.
Shares in the support services group have been suspended from trading until further notice.
Last ditch talks over the weekend failed to secure Carillion’s future as the banks said they were not prepared to lend them anymore money, effectively pulling the plug on the group who has issued six profit warnings over the past two years.
The government also decided not to bail Carillion out but instead ensured workers would be paid and the Pensions Protection Fund (PPF) said those with Carillion pensions would be protected.
“We want to reassure members of Carillion’s defined benefit pension schemes that their benefits are protected by the PPF,” said a spokesman for PPF.
Carillion employs thousands of worker’f working a broad range of projects from high speed railways to the provision of school dinners.
Chairman Philip Green said:
“This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years. Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future and the Board is very grateful for the huge efforts made by Keith Cochrane, our executive teamand many others who have worked tirelessly over this period. In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision. We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers.”
Government makes ‘contingency plans’ for Carillion collapse
The government is preparing for the collapse of the UK’s second largest construction firm, Carillion, after the company entered talks with creditors on Wednesday to save the troubled company from bankruptcy.
The contractor, which has seen its share price plunge over the last year after issuing three profit warnings in a five month period, is also under investigation from the Financial Conduct Authority for “timeliness and content of announcements” made in the summer of 2017.
It entered last-ditch talks with creditors on Wednesday, including HSBC and Royal Bank of Scotland, to encourage them to back restructuring plans. However, on Thursday it emerged that the UK government has drawn up contingency plans for the collapse of the company, which is one of the largest contractors in the government’s HS2 rail programme.
Carillion’s has faced financial difficulties over the last year, dealing with net debts of roughly £900 million and a pension deficit of £590 million. These massively outweigh its stock market valuation of less than £100 million.
Oliver Dowden, the Cabinet Office parliamentary secretary, said in Parliament that the government has made “contingency plans for all eventualities … Carillion is a major supplier to the government with a number of long-term contracts. We are committed to maintaining a healthy supply market and working closely with key suppliers.”
Carillion shares sunk another 15 percent on Thursday, currently trading down 15.18 percent at 19.17 (1208GMT).
Pandora shares plunge 15pc as full-year guidance is lowered
Jewellery company Pandora (CPH:PNDORA) saw shares fall over 15 percent on Thursday, after warning that results for the full year may lag behind previous guidance.
The company said its EBITDA margin for the four year period between 2018-2022 would be around 35 percent, a little below the 37.3 percent reported last year.
Whilst the Danish group, whose jewellery is popular across Europe and the US, reported a 15 percent rise in annual sales for 2017 in local currencies to 22.8 billion Danish crowns, this figure remained just below analysts expectations of 22.9 billion and well below the company’s own guidance of between 23 billion and 24 billion crowns.
Chief Executive Anders Colding Friis said the company is likely to be affected by economic uncertainty going forward, adding that “The 2017 results are close to the targets we set ourselves at the beginning of the year, but we are of course disappointed to not fully reach the targets.”
Pandora shares are currently trading down 15.27 percent at 563.00DKK (1135GMT).
Tesco shares fall despite Christmas boost to food sales
Tesco (LON:TSCO) shares fell nearly 5 percent on Thursday morning, after its strong set of Christmas results failed to match up to analysts’ expectations.
UK like-for-like sales at Britain’s biggest retailer rose 1.9 per cent in the six weeks to January 6, but analysts had been expecting a figure of 3.2 percent. Food sales rose 3.4 percent over the period and the results were the best set since 2010, despite the weight of weak sales of home and gifts.
“I am really pleased with the way we delivered in the months running up to Christmas and particularly in the run-up to Christmas Day,” chief executive Dave Lewis commented, but added that the group should be cautious going into the new year:
“There is definitely some caution in the way customers are talking about the year ahead,” he said.
Shares in Tesco fell over 4 percent at market open, and are currently trading down 3.63 percent at 204.20 (1047GMT).
Marks and Spencer Christmas results disappoint
Marks and Spencer released a disappointing set of Christmas results on Thursday, as consumers’ tighter budgets and ongoing trading pressures took a hit.
Like-for-like revenues fell 1.4 percent in the 13 weeks to 30 December, with its most successful division, food, falling by 0.4 percent. Clothing and homeware fell 2.8 percent, despite the group’s continued strategy of “restoring price integrity and improving everyday value.”
Steve Rowe, M&S chief executive, said of the results: “M&S had a mixed quarter with better Christmas trading in both businesses going some way to offset a weak clothing market in October and ongoing underperformance in our Food like-for-like sales.
Rowe added: “We continue with the accelerated transformation programme we outlined in November and have recently taken several important steps to reshape the business for the future. These include a new technology partnership and organisation, and the sale of our Hong Kong based business in line with the streamlined franchise-led model we are adopting for International.”
The group confirmed that full-year guidance remained the same, however, with full-year results being reported on the 23rd May.
M&S’s weak Christmas results were in contrast to that of several other big British supermarkets, including Tesco and Morrisons, who both saw sales rise over the period.
Positive trading statement pushes Marshalls’ shares upwards
Stone manufacturer Marshalls released a strong set of results on Wednesday, pushing shares up nearly 4 percent in morning trading.
The company, who specialise in paving and hard landscaping products, recorded an 8 percent increase in group revenue for the year ended 31 December 2017 at £430 million. Sales in the Domestic end market, which accounts for around 32 per cent of group sales, were up 12 per cent compared to the previous period.
The figures include results from CPM Limited, which was acquired by Marshalls in October of last year, which contributed £9 million to the group revenue.
The group confirmed it would meet its 2017 expectations, saying in the trading statement that the group “has continued to deliver on the core aspects of the 2020 Strategy” during the year.
“Good progress has been made on the self-help capital investment programme, the development of new products and the Group’s digital strategy. These organic projects have been complemented by the acquisition of CPM with its planned integration on track with our expectations”, it concluded.
Shares in Marshalls (LON:MSLH) are currently trading up 3.18 percent at 461.20 (1202GMT).
Kodak shares jump 110pc on cryptocurrency announcement
Photography firm Kodak (NYSE:KODK) has jumped on the cryptocurrency bandwagon, announcing the launch of its new ‘KodakCoin’ on Wednesday.
The currency will be “a photocentric cryptocurrency to empower photographers and agencies to take greater control in image rights management,” causing Kodak shares to almost double in price.
The move represents a move in a new direction for Kodak, who recovered from a bankruptcy in 2013 by selling off most of its patents to large American companies including Apple and Microsoft. It is now hoping to take a slice of the growing blockchain technology and cryptocurrency movement which, despite warnings from various senior figures in the finance industry, continues to gain traction.
KodakCoin will aim to help photographers find unlicensed use of their photographs online. Associated KodakOne software will trawl the web to find photographs used without permission, with the photographer then being paid in KodakCoin.
Kodak chief executive Jeff Clarke said:
“Kodak has always sought to democratise photography and make licensing fair to artists. These technologies give the photography community an innovative and easy way to do just that.”
Kodak shares rose over 110 percent on the news, and are currently trading up 117.6 percent at 6.80USD (1139GMT).
Ted Baker shares rise on strong Christmas performance
British clothing brand Ted Baker (LON:TED) saw shares rise over 8 percent on Wednesday, after a trading update confirmed the group’s “good performance over the Christmas period”.
Retail sales increased by 9 percent in the eight week period from 12th November 2017 to the 6th January 2018, compared to the same period last year, with e-commerce sales up by 35 percent. Online sales made up 30.1 percent of total retail sales, with gross margins finishing in line with expectations.
Commenting on trading, Ray Kelvin CBE, Founder and Chief Executive said:
“The Ted Baker brand has continued to perform in line with expectations over the Christmas period, delivering a good retail performance driven by particularly strong growth from e-commerce, which is an increasingly important part of our retail business. This pleasing result reflects the strength of the brand and the quality of our collections as well as the hard work, skill and commitment of our teams.
Whilst external trading conditions are expected to remain challenging in the year ahead, the strength of our brand and business model means that we remain well positioned to continue the long-term development of Ted Baker as a global lifestyle brand.”
Shares are currently trading up 7.83 percent at 3,058.00 (1045GMT).
Leading platform Crowd2Fund kicks off £30 million institutional fundraise
Crowdfunding platform Crowd2Fund have given its loyal platform investors the opportunity to get involved in its latest fundraising round, beginning with an exclusive offer to take part in an initial £1 million offering.
Demand from its platform investors was so high that the initial offering was overfunded to £1.5 million, and more shares were issued to avoid disappointment.The platform are aiming to raise another £30 million in total.
The equity offering was snapped up quickly and the firm believe it is a great way to stay true to their principles and build an investor team who will propagate the Crowd2Fund brand within their communities and networks.
The technology firm is now inviting investors to take part in a further £8.5 million equity tranche from a few carefully selected large investors who can bring skills and market knowledge. The aim is to close the next tranche before the end of this tax year, following the initial £1.5m which now takes the total investment to £4m since the business started in 2014.
The scale-up company believes there is little competition in the peer-to-business lending market, which is currently dominated by one major platform. There is also significant opportunity overseas which the company wants to harness. It is planned that the final £20 million of the £30 million raise will be completed in January 2019.
The UK peer-to-business market opportunity is tipped to be worth £8.3 billion per year by 2022. The current market size is approximately £1.8bn per year, or £150m per month in money lent. The platform believes it is achievable to seize at least 33% market share by offering a much stronger, more genuine customer proposition than anything currently available, thus targeting a minimum £1bn valuation within a short period of time.
Millions lent to hundreds of innovative growing businesses
Crowd2Fund was first launched in 2014, and quickly became one of the few crowdfunding platforms to be directly regulated by the FCA and to offer the new Innovative Finance ISA. Unlike a number of competitors within the peer-to-business lending space, Crowd2Fund allows investors to directly choose the businesses which they lend to, provides more information on investments, and investors can even get rewards from investing in interesting businesses. To date, the company has facilitated more than £15 million of investment to over 200 businesses, generating an average 8.7% APR return for investors before fees and bad debt. There have been no formal defaults after more than 3 years of trading. There are a handful of loans in arrears, however, the firm have 100% successfully recovered all funds so far from arrears. Crowd2Fund was the first provider in the UK to be approved by HMRC to roll out the Innovative Finance ISA (IFISA), and are still one of just a handful of platforms to be able to offer this highly efficient tax incentive to their investor base.Future Growth, internationalisation and exit plans
Crowd2Fund is now securing their next tranche of £8.5 million which will be used to grow the UK market. Furthermore, operations will also be set-up in the USA and South-East Asia, where the platform will be leveraging the new FinTech bridge which allows easy pass porting into these markets. Funds will also be used to continue to deliver a world class user experience and minimise operational cost by embracing automation and artificial intelligence. Founder and CEO Chris Hancock says: “The banking ecosystem is undergoing transformation and innovation like never before; what we have seen so far is only the beginning. We are planning to exit the company in 2022, with revenues of £34 million and a valuation of at least £1 billion. In order to reach this target Crowd2Fund would only need to capture 7.2% of the UK market, excluding international activity. “Theresa May, sterling and the FTSE 100
One would usually associate the strength of a nation’s government with the performance of the domestic stock market. A well organised government delivering on their promises and leading the country forward incites confidence in risk assets, such as equities.
Enter Theresa May. May did inherit one the most challenging leaderships of the past 100 years, but her leadership has been anything but ‘strong and stable’, and this has been reflected in the gyrations of sterling and UK equities.
After the sharp decline following the Brexit vote, the inverse relationship between sterling and the FTSE 100 has dominated the ebb and flow of the FTSE 100 as it trades in a tight sideways range.
Notwithstanding any external shocks, the outlook of the FTSE 100 is inextricably linked to sterling performance.
This in turn is more likely than not to be dictated by the markets perceptions of whether the UK is on course for a hard or soft Brexit.
May’s initial announcement of her intention to pursue hard Brexit, was greeted with a plunge in the value of the pound and a push higher in FTSE 100, providing her with some cover, as it seems the new US president deems it appropriate to gauge the success of one’s leadership by the performance of the stock market.
Not only did foreign exchange market’s turn their noses up at the prospect of May’s hard Brexit, so did her political peers. This culminated in an embarrassing defeat in the house of commons in late December.
The pound strengthened in the run up to the parliamentary vote, capping gains in the FTSE 100 and leading to its underperformance against other major equity markets.
It is therefore a sensible deduction that a soft Brexit is going to drive further underperformance in the FTSE 100 as sterling strengthens and fears of a hard Brexit induced economic downturn diminish, if of course, this inverse relationship continues.