House prices fall for first time since June 2021

Natasha Doris
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House prices fall for first time since June 2021

House prices have fallen for the first time since June 2021, according the latest report from Halifax.

Prices dipped by 0.1% in July 2022, and the annual rate of growth eased to 11.8% from 12.5%.

Halifax noted a typical UK property currents costs £293,221, representing a £365 reduction against June 2022.

The tiny fall marks the first sign of the expected housing market slowdown, which has been on the cards for analysts over the last few months as interest rates and inflation spike.

“While we shouldn’t read too much into any single month, especially as the fall is only fractional, a slowdown in annual house price growth has been expected for some time,” said Halifax managing director Russell Galley.

“Leading indicators of recently shown a softening of activity, while rising borrowing costs are adding to the squeeze on household budgets against a backdrop of exceptionally high house price-to-income ratios.”

However, Halifax highlighted several factors that remained to keep house prices at the higher end of the range, such as pandemic savings and short property supply.


“That said, some of the drivers of the buoyant market we’ve seen over recent years – such as extra funds saved during the pandemic, fundamental changes in how people use their homes, and investment demand, still remain evident,” said Galley.

“The extremely short supply of homes for sale is also a significant long-term challenge but serves to underpin high property prices.”

The cost of living crisis has been encroaching on the market horizon for months now, however, and experts have been counting down the seconds until the gravity-defying housing market finally felt the looming UK recession bite.

Meanwhile, the recent 0.5% interest rates hike to 1.75% by the Bank of England is also expected to take some wind out of the market’s sails.


“Looking ahead, house prices are likely to come under more pressure as those market tailwinds fade further and the headwinds of rising interest rates and increased living costs take a firmer hold. Therefore a slowing of annual house price inflation still seems the most likely scenario,” said Galley.

WPP shares slide despite 10.2% revenue growth and strong profits

Natasha Doris
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0
WPP shares slide despite 10.2% revenue growth and strong profits

WPP shares slid 7.4% to 826.4p in late morning trading on Friday, despite a 10.2% revenue growth to £6.7 billion in HY1 2022 compared to £6.1 billion the year before.

WPP attributed its strong revenues to high client demand across most sectors and regions, with $3.4 billion in net new billings across the financial term.

The marketing company reported an 11.4% operating profit climb to £539 million against £484 million, along with a 6.1% pre-tax profit increase to £419 million from £394 million.

The group also noted a £1.6 billion net debt growth to £3.1 billion after £1.1 billion in share buybacks launched since June 2021.

The firm said £637 million in share buybacks had been completed in HY1, with a total of £800 million scheduled for completion in FY 2022.

WPP confirmed a 10.2% diluted EPS rise to 22.7p compared to 20.6p the last year.

“We have enjoyed a strong first half, with broad-based growth across our creative, media and public relations businesses. This reflects the improved competitive position of our creative businesses, with their growing capabilities in commerce, experience and technology, our continued strength in media and the resurgence in demand for strategic communications advice from our public relations agencies,” said WPP CEO Mark Read.

“Our services are business-critical – driving growth, building brands, innovating and helping clients navigate an increasingly complex marketing environment. As major advertisers increasingly look to integrate their marketing investments, we are well positioned to serve the world’s largest companies, demonstrated by our success with Coca-Cola, which we are now onboarding at pace.  The second quarter saw significant assignment wins from Audi, Audible, Danone and Nationwide.”

“Our clients are continuing to invest in WPP’s services, which reflects our attractive industry exposure in technology and healthcare, our broad global footprint, and the importance of what we do for their businesses.  The actions we have taken over the last four years leave WPP much better positioned with a more uncertain economic environment ahead.”

WPP recommended a 20% hike in dividends to 15p per share against 12.5p in HY1 2021.

Aim movers: Cornerstone fundraise and DeepVerge disappointment

Andrew Hore
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Aim movers: Cornerstone fundraise and DeepVerge disappointment

Cornerstone FS (LON: CSFS) announced a fundraising late on Thursday. This has been completed by the international payments business and it has raised £1.09m. A placing raised £860,000 at 6.5p a share and a further £225,000 through an unsecured convertible loan note. There is no interest charge on the two-year loan note, and it is convertible at 6.5p a share. Cornerstone is also issuing shares for previously announced incentive agreements. Robert O’Brien will initially receive 4.29 million shares – 9.9% of Cornerstone FS – and then a further 5.11 million at 10p when the FCA gives permission for him to own more than 10%. Robert O’Brien will also receive £2m in 6% loan notes repayable on 31 July 2025. Three other people will receive 2.1 million shares. The share price declined 11.8% to 7.5p.

Oracle Power (LON: ORCP) has raised £500,000 at 0.275p to finance the development of its green hydrogen project. Earlier this week, Oracle Power was told by the Sindh authorities that it will receive a letter of intent for establishing a 1,200MW hybrid solar/wind, green hydrogen/power project in Pakistan. Oracle Power is required to provide a $600,000 performance guarantee. Prior to that announcement the share price was 0.285p. Today, the share price has fallen 17.1% to 0.315p.

Light Science Technologies Holdings (LON: LST) increased its loss in the first half of 2022. Revenues were 4% ahead at £3.6m and investment has been increased. There was a small initial contribution from the controlled environment agriculture division. Since the end of June, the SensorGrow SaaS has been launched with a three-year subscription model. A new slimline low profile tuneable light has also been launched. Net cash is £145,000, after a £1.28m cash outflow from operations. The shares fell 6.1% to 7.75p. Last October’s placing was at 10p.

Deepverge (LON: DVRG) says interim revenues almost doubled to £6.47m and the environmental and life science company says that it is on course to achieve full year revenues of £18m. That is lower than previously expected because of uncertainty about the pace of new contract wins. There are £8.87m of orders due to be delivered in the second half, so more than four-fifths of the forecast is covered. The Skin Trust Club started earlier this year has already achieved sales of more than £1m. The share price fell 6.6% to 14.25p.

Lithium-ion battery cell technology developer AMTE Power (LON: AMTE) has secured a partnership with Cosworth for its Ultra High Power (UHP) rechargeable pouch battery cells. The share price rose 15.6% to 85p. AMTE Power raised £12.95m at 175p a share when it joined AIM in March 2021.

London Stock Exchange launches £750m share buyback as HY1 profits surge

Natasha Doris
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0
London Stock Exchange launches £750m share buyback as HY1 profits surge

London Stock Exchange shares climbed 4.2% to 8,496p in late morning trading on Friday, after the group announced a sweeping slate of strong profits in HY1 2022.

The company reported a gross profit growth to £3.2 billion compared to £2.6 billion year-on-year, alongside an EBITDA rise to £1.7 billion from £1.2 billion and an operating profit of £897 million against £550 million.

London Stock Exchange also confirmed a pre-tax profit of £803 million compared to £463 million the last year.

The company highlighted a total income rise of £717 million to £3.7 billion across the financial period.

London Stock Exchange reported a Data & Analytics revenue climb of £482 million to £2.3 billion, alongside a Capital Markets revenue rise of £181 million to £720 million and a Post Trade revenue increase of £37 million to £482 million.

The firm said it would be launching a £750 million share buyback over the coming 12 months on the strength of its profits and revenue, with the first tranche set to commence immediately.

The group noted a positive cash generation in HY1 and the completion of its GDC and MaryStreet acquisitions, with its acquisitions of TORA and Quantile expected to close in HY2.

The London Stock Exchange added it experienced good momentum going forward in HY2 2022, with effective cost management and strong progress in achieving synergies.

“LSEG has delivered a strong first half performance with continued revenue growth across our businesses. We are managing costs well and we continue to make progress on achievement of synergies,” said London Stock Exchange CEO David Schwimmer.

“We provide solutions solving critical issues for our customers, with a high proportion of recurring subscription revenues and structurally growing transactional revenues that benefit from volatility.”

“Our cash generation is allowing us to actively deploy capital across organic and inorganic investments, grow our dividend and commence a share buy-back programme, driving further value for our shareholders. We are successfully executing on our strategy, have good momentum going into the second half and our targets remain unchanged.”

London Stock Exchange recommended a 27% dividend hike to 31.7p per share for HY1.

Flutter Entertainment completes £1.62bn Sisal acquisition

Natasha Doris
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0
Flutter Entertainment completes £1.62bn Sisal acquisition

Flutter Entertainment announced its completed acquisition of Italian online gaming operator Sisal for £1.62 billion on Friday, after receiving all the necessary regulatory confirmations for the transaction.

Flutter Entertainment commented the acquisition was aligned with its strategy of investing to build leadership positions in regulated markets.

The Italian company has reportedly posted a strong performance since the agreement was announced.

Sisal grew its revenues 58% year-on-year to £402 million, with a 51% EBITDA climb to £120 million in HY1 2022.

Flutter Entertainment said the transaction had been completed using debt facilities agreed upon at the initial announcement on 23 December 2021.

The closed deal brought the group’s expected weighted average cost of debt to approximately 3.4% for HY2 2022.

Flutter Entertainment shares rose 0.7% to 8,762p in late morning trading on Friday.

AMTE Power signs Cosworth deal

Andrew Hore
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0
AMTE Power signs Cosworth deal

Lithium-ion battery cell technology developer AMTE Power (LON: AMTE) has secured a partnership with Cosworth for its Ultra High Power (UHP) rechargeable pouch battery cells.

This follows the announcement that AMTE Power has chosen a site in Dundee for a new 0.5GWh battery production facility. This could open in the third quarter of 2025. At full capacity, the facility could generate annual revenues of more than £200m.

UHP cells have consistent energy delivery at a very high rate. There are rapid charging and discharging times that are suitable for the automotive, aerospace and marine sectors.

Cosworth is a global technology business that used to be famous for making Formula One engines. It can design, develop and manufacture engines. Cosworth recently acquired electrification business Delta and this deal will add to the expertise.

AMTE Power has previously announced a memorandum of understanding with MAHLE Powertrain, which has a facility in Northampton. The partnership will help MAHLE to develop powertrain technology. There is also a deal with Viritech to help in developing hydrogen fuel cell electric vehicles.  

AMTE Power raised £12.95m at 175p a share when it joined AIM in March 2021. Following the latest news, the share price rose 10.9% to 81.5p. It was 65p prior to the Dundee factory announcement.

Pets at Home LFL revenue grows 6% to £404.7m in Q1 as pandemic pet boom drives demand

Natasha Doris
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0
Pets at Home LFL revenue grows 6% to £404.7m in Q1 as pandemic pet boom drives demand

Pets at Home shares gained 0.3% to 338.6p in early morning trading on Friday after the group reported a 6% like-for-like revenue increase to £404.7 million in Q1 2023.

The pets care company announced a 7.1% total revenue climb to £404.7 million.

Pet at Home highlighted strong customer acquisition, with 1.1 million new customers in the last year.

“First quarter performance was solid, with new customer growth continuing and crucially strong retention of the 1.1m customers added last year,” said Hargreaves Lansdown equity analyst Matt Britzman.

“The pandemic fuelled pet ownership craze was a blessing for Pets at Home and those cats and dogs will need looking after long into the future.”

“Attracting and retaining subscription-based revenue is a great strategy, the VIP and Puppy & Kitten Club continue to push on which gives attractive recurring revenue sources.”

Meanwhile, the group mentioned strong sales to profit conversion as it continued to proactively manage inflationary costs via a range of productivity and efficiency initiatives.

“Our performance has remained strong in the first quarter, underpinned by continued customer growth and high levels of retention,” said Pets at Home CEO Lyssa McGowan.

“We operate a unique omnichannel model, in a market in structural growth, where the passion and expertise of our colleagues and partners is a key competitive advantage.”

“I would like to thank them for their warm welcome, their continued efforts in helping our record number of customers care for their pets in these challenging times, and their ongoing commitment to building the best pet care business in the world.”

Pets at Home noted a good balance sheet with net cash of £40.2 million and decent liquidity through its recently renewed £300 million revolving credit facility until 2027.

The firm added the vast majority of its currency requirements were hedged over the coming year.

The animal supplies company confirmed it would also be progressing with its previously announced £50 million share buyback programme.

“What’s very interesting with Pets at Home is its hybrid approach, omnichannel revenue continues to grow and was the standout this quarter,” said Britzman.

“That’s testament to a lot of work that’s gone into boosting the online offering, with services like click and collect meaning customer journeys are a mix of online and in store.”

“That’s a gold mine for cross selling other services like the groups in store vet and grooming practices.”

Pets at Home said there were no changes to its sales and margin outlook, with a FY group underlying pre-tax profit to be in line with analyst expectations of £131 million, with a range between £127 million to £136 million.

Hargreaves Lansdown AUA and revenues fall as market volatility hits business

Natasha Doris
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0
Hargreaves Lansdown AUA and revenues fall as market volatility hits business

Hargreaves Lansdown shares rose 3% to 869.3p in early morning trading on Friday after the firm announced a 92,000 client growth to 92,000 in FY 2022.

The investment group confirmed the volatile market environment had also impacted its business, with an 8% revenue fall to £583 million against £631 million in FY 2021 as lower than expected share dealing volumes led to more atypical trading volumes experienced across the Covid pandemic last year.

Hargreaves Lansdown reported a drop in total assets under administration to £123.8 billion from £135.5 billion.

The company noted a 26% slide in pre-tax profits to £269.2 million against £366 million the last year, along with a 19% underlying pre-tax profit fall to £297.5 million from £366 million.

Net new business inflows also saw a sharp decrease of 37% to £5.5 billion compared to £8.7 billion in the previous year.

Hargreaves Lansdown reported a 19% diluted EPS decline to 50.4p compared to 62.5p.

“Against a macroeconomic and geopolitical climate not seen in a generation with subdued flows and lower activity across wealth management, we have delivered £5.5 billion of net new business through the year and the quality of our service attracted a further 92,000 net new clients, said Hargreaves Lansdown CEO Chris Hill.

“Our focus is firmly on servicing our clients, disciplined cost management and delivering our strategy because we remain confident that it will deliver outstanding client service, strong shareholder returns and market leadership for HL.”

The group also highlighted the progression of its Active Savings operations, with two new partner banks including Santander International bringing its number of partners to 15. The company added the rising interest rates environment had served to boost the sector’s performance.

“Our progress against our strategic goals has been strong since February with the launch of the first of our new funds and an acceleration in our Active Savings proposition, an essential service to help clients manage their cash savings at this critical time, leading to a record £4.6 bn assets, with over 114,000 client accounts, said Hill.

The investment advisor recommended a 3% ordinary dividend hike to 39.7p compared to 38.5p, alongside a 21% total dividend drop to 39.7p against 50.5p the last year.

Private fundraisings continue to boom

Andrew Hore
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0
Private fundraisings continue to boom

While stockmarket deals have been in short supply in recent months there has been plenty of investment activity in the private arena. Private UK companies raised £14.9bn in the first half of 2022, according to Beauhurst.

The number of deals was 10% higher at 1,456 with particularly strong activity in the first quarter. However, even more of the fundraisings were in London – 51.8% during the period. Sometimes companies have a head office address in London, but their main operations are outside of the capital.

The figures cover 1 January to 30 June 2022 and include all publicly announced fundraisings by non-quoted companies.  

Where the money is going

Venture and seed rounds dominate in terms of numbers, but growth fundraisings account for £7.32bn of the total. There were 29 cash calls of more than £100m in the first half of 2022, which is the highest number for a six-month period. The deals between £50m and £100m fell from 38 to 35.

The largest fundraising was by Britishvolt, which is developing lithium-ion battery cells for electric vehicles. The Northumberland-based company raised £1.7bn, which is nearly 12% of the total raised.

The majority of the larger fundraisings were by fintech companies, and they accounted for the largest number of deals. Artificial intelligence and clean technology were not far behind.

Business angels are becoming an increasingly important source of cash with 353 deals in the period. There were 281 crowdfunding deals, with Seedrs handling 137 and Crowdcube 101 – although £76.5m was raised through Crowdcube against £69.1m through Seedrs.

Instem revenue grows 39% in HY1 as previous acquisitions start contributing to profits

Natasha Doris
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Instem revenue grows 39% in HY1 as previous acquisitions start contributing to profits

Instem shares saw an uptick of 0.3% to 702.5p in late afternoon trading on Thursday after the group reported a strong trading update for HY1 2022, including a combined and inorganic revenue growth of approximately 39% to £27.6 million against £19.8 million year-on-year.

Instem confirmed its recurring software revenue rose over 60% over the financial term.

The company said its finalised acquisitions of The Edge Software Consultancy, d-Wise Technologies and PDS Pathology Data Systems over the last financial year started contributing fully for the first time over HY1.

The IT solutions firm added its operating profit climb in the period was anticipated to be at a lower rate than overall revenue growth as a result of inflationary pressures, which led to a higher level of remuneration for staff across the firm.

Instem commented the inflationary costs would be partially mitigated by the price increases announced in late April 2022.

The firm highlighted a strong balance sheet with closing cash at 30 June 2022 of £10.3 million, with available flexibility to execute acquisition opportunities as they arise.

Instem confirmed it was on track to meet FY 2022 market expectations on the back of a scalable platform and significant opportunities on the horizon.

“Consistent delivery is key and we are delighted with the continued successes of our organic and acquisitive growth strategies,” said Instem CEO Phil Reason.

“Visibility for H2 has improved through increased recurring revenue, the value of the order backlog for professional and outsourced services and reduced growth in staff numbers which in turn reflects a higher gross margin revenue mix.”

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