ITV under investigation by CMA for competition infringement

Natasha Doris
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ITV under investigation by CMA for competition infringement

ITV has confirmed it is under investigation by the Competition and Markets Authority (CMA) for its purchase of freelance services which support the production and broadcasting of sports content in the UK.

ITV has been identified in the investigation, along with BT Group, IMG Media and Sky UK.

The investigation was launched under section 25 of the Competition Act 1998 into suspected infringements of the Chapter One prohibition of the Act by companies involved in the production and broadcasting of sports content.

The CMA announced it had “reasonable grounds to suspect one or more breaches of competition law.”

However, the organisation highlighted it was too early to confirm if any breaches had been committed, and that no assumptions should be made of any infringement of the Act.

ITV said it was complying with the probe, and was committed to working with the CMA while the investigation took place.

“ITV is committed to complying with competition law and is cooperating with the CMA’s inquiries. ITV does not propose to comment on this investigation further at this stage,” said the company in a statement.

UK economy grows 0.5% in May on GP appointments, retail sector shrinks

Natasha Doris
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0
UK economy grows 0.5% in May on GP appointments, retail sector shrinks

The UK economy grew 0.5% in May after two consecutive months of contraction, according to figures released by the Office of National Statistics (ONS).

The ONS confirmed GDP was estimated to currently be 1.7% above its pre-Covid-19 levels.

“After all the doom and gloom about the state of the British economy May’s growth figures might have some people wondering what all the fuss has been about,” said AJ Bell financial analyst Danni Hewson.

“A slight uptick had been anticipated, but at 0.5% the pace of growth has caught many by surprise.” 

“Put simply, people have been living their lives, playing catch up, and doing all that housekeeping they hadn’t yet been able to get round to.”

The growth was attributed to a 0.4% climb in services output linked to human health and social activities, which rose by 2.1% on the back of a significant increase in GP appointments and served to offset the decline of track and trace.

“Anyone who has tried to book an appointment with their doctor over the last few weeks won’t be surprised to learn that GP visits have played a big part in boosting May’s numbers, something which has offset the drag from a real tapering off of test and trace operations and booster vaccine programmes,” said Hewson.

Meanwhile, output in consumer-facing services declined by 0.1% over May due to a 0.5% fall in retail trade.

However, non-consumer facing services grew by 0.5% after a drop of 0.8% in April.

The ONS reported a 0.9% rise in production, boosted by a 1.4% growth in manufacturing and a 0.3% increase in electricity, gas, steam and air conditioning supply.

“Manufacturers have really turbo charged operations despite all the price hikes they’ve experienced,” said Hewson.

“It suggests that supply blockages may finally have worked their way through the system and that many have been able to pass on extra costs to their customers.”

The figures also mentioned a 1.5% climb in construction over the month, after a 0.3% uptick in April, marking the seventh consecutive month of growth for the sector.

“Construction has had another great month, bolstered by housebuilding in a market that’s only slightly coming off the boil, and by the changing requirements of business that need to reconfigure workspaces after Covid restrictions or embrace new ways of working,” said Hewson.

Cautious Optimism

The figures painted an optimistic picture of the UK economy over May after the dire news of the previous two months. However, experts stressed the importance of cautious optimism despite the GDP growth.

The risk of recession alarms remain heavy on the horizon, and customers have been spending less on retail and non-essential expenses as the cost of living crisis bites, with inflation currently at 9.1% and on-track to hit 11% by October this year.

“These figures represent just one month – albeit a crucial one because it means the quarter as a whole doesn’t meet the criteria for negative growth – but one month can never tell the whole story,” said Hewson.

“There are headwinds that are impossible to ignore. Retailers, hospitality venues, gyms, museums and children’s play centres are all feeling the weight of high inflation.”

“Households are strategically cutting back on their spending, which is a particular blow to the consumer services which still haven’t been able to get anywhere near their pre-pandemic glory days.”

Pagegroup profits climb 25.5% to £280.9m, on track to meet FY 2022 expectations

Natasha Doris
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4
Pagegroup profits climb 25.5% to £280.9m, on track to meet FY 2022 expectations

PageGroup shares dipped 0.2% to 428.8p in early morning trading on Wednesday, following a 25.5% climb in gross profit to £280.9m year-on-year in its Q2 2022 trading update.

The recruitment company hit a record performance in June and reported its second month with a gross profit above £100 million.

PageGroup mentioned a 29.4% increase in European, Middle-Eastern and African profits, alongside a 21% rise in France and a 32% growth in Germany.

The firm highlighted a 34.1% uptick in the Americans, a 30% climb in the US and a 40% rise in Latin America.

Meanwhile, its Asia-Pacific sector grew 11.7% with an 11% increase in China, a South-East Asia climb of 33%, a 15% uptick in Japan and a 47% rise in Indian.

PageGroup also confirmed a 22.6% growth in the UK, with a 13% climb in its Michael Page segment and a 56% rise in its Page Personnel business.

The company noted an increase of 307 in fee earner headcount in the financial period to 6,734 from 6,427 in Q1 2022.

“We delivered increased levels of productivity, with the Group continuing to benefit from favourable trading conditions, including wage inflation and increased fee rates resulting from the high demand and short supply of candidates, as well as a shorter time to hire facilitated by video interviewing, and investments in new systems,” said PageGroup CEO Steve Ingham.

“We continued to invest in headcount to enable us to capitalise on future growth opportunities. We added 307 fee earners in Q2, broadly in line with recent quarters, with the most significant increases in the markets where we saw the strongest performances and highest potential for future growth.”

PageGroup announced a net cash position of £135 million, against £122 million in Q1 2022 and £164 million in Q2 2021.

The group added it expected its FY 2022 operating profit to hit market expectations at £205 million.

“Looking forward, we are clearly aware of the heightened degree of macro-economic and political uncertainty that exists globally, particularly with regards to increasing inflation in the majority of the markets in which we operate,” said Ingham.

“We are monitoring all KPIs in the business regularly, but to date we have seen no significant changes apart from the usual seasonal movements.” 

Totally revenues increase to £127.4m on higher demand

Natasha Doris
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0
Totally revenues increase to £127.4m on higher demand

Totally shares fell 3.5% to 43.9p in late afternoon trading on Tuesday following a reported 12% growth in revenue to £127.4 million in FY 2022 compared to £113.7 million in FY 2021.

The company announced a 24% climb in underlying EBITDA to £6.2 million against £5 million, alongside a rise in pre-tax profit to £1.3 million from £100,000 in the previous year as a result of higher demand for its services.

Totally confirmed an 18% gross margin from an 18.3% gross margin year-on-year, and cash of £15.3 million at 31 March 2022 against £14.8 million.

The firm highlighted an Urgent Care revenue increase of 3.6% to £109.2 million, a Planned Care revenue climb of 43.7% to 7.5 million and an Insourcing Revenue growth to £10.3 million across the financial term.

Totally mentioned a slate of operational high points, including services delivered to 2.5 million patients, £59 million in new contracts including a three-year deal with King’s College NHS Foundation Trust for a new urgent treatment centre, and £72 million in contract extensions.

“During the year, we continued to help manage increasing demand whilst progressing our buy and build strategy to ensure we are positioned strongly to support the NHS and other healthcare providers over the next five to ten years,” said Totally chairman Bob Holt OBE.

“We significantly grew our insourcing capability in response to growing demand, mobilised new services within urgent care, and contributed to strategic projects to improve the delivery of existing service models, such as NHS 111, to ensure that every patient can access the support they need.”

“Everything we do is made possible by the experience and commitment of our teams, whether they are leading the integration of our new businesses or supporting patients on the front line. We thank all of those who work for us, and those we work with, for their continued engagement and commitment to patient care.”

Totally announced an EPS of 0.5p compared to 1p the last year, alongside a total dividend of 1p per share against 0.5p per share for FY 2022.

Sosandar narrows loss as revenue spikes 148% on order growth

Natasha Doris
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0
Sosandar narrows loss as revenue spikes 148% on order growth

Sosandar shares were up 4% to 19.2p in late afternoon trading on Tuesday after the firm’s FY 2022 results exceeded market expectations, including a revenue spike of 142% to £29.5 million against £12.2 million the last year.

The fashion group mentioned an EBITDA improvement to a loss of £200,000 compared to a loss of £2.9 million in FY 2021, with every month in HY2 2022 recording profitability.

Sosandar highlighted an increase in gross margin to 56% from 48% year-on-year, reflecting a return to normal trading conditions after the impact of Covid-19.

The company confirmed net cash of £7 million on 31 March 2022 against £3.9 million the year before, on the back of its equity fundraise in May 2021, investment in stock and the fashion brand’s profits in HY2 2022.

Sosandar noted a total order rise of 84% to 508,000, along with a climb in active customers of 65% to 223,000 and a 10% uptick in average order frequency to 2.2 times per year.

The group reported a strong start to business in FY 2023 and highlighted momentum from demand for spring and summer fashion as a driver for its sales in Q1 this year.

“We are incredibly proud to be reporting another period of sustained growth for Sosandar. It is thanks to our well-planned approach, together with our entrepreneurial, agile culture that we have delivered a significant increase in revenue, as well as moving into month-on-month profitability,” said Sosandar co-CEOs Ali Hall and Julie Lavington.

“This is an important milestone for us, and having achieved it we are now better positioned than ever for further success. Notwithstanding the current macro-economic environment, trading in the new financial year has started very well, with a record quarter for sales and three further consecutive months of profitability.”

“With the arrival of spring and summer, we have seen our customers seek out a wide variety of product, in particular smart clothes for work, bright colours for holidays and investment pieces such as leather.”

AdEPT Technology Group loss widens to £3m on restructuring costs

Natasha Doris
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1
AdEPT Technology Group loss widens to £3m on restructuring costs

AdEPT Technology Group shares were up 2.6% to 148.8p in late afternoon trading on Tuesday after the company announced a revenue increase of 18% to £68.1 million in FY 2022 against £57.9 million in FY 2021.

However, Adept Technology Group highlighted a pre-tax loss of £3 million from £500,000 in the previous year linked to restructuring costs, consisting of redundancy, settlement and salary expenses.

The company said the restructuring was set out to create a lower rate of operating costs which would benefit the group in future years.

The firm reported an underlying EBITDA rise of 21% to £11.9 million compared to £9.8 million the last year, alongside an adjusted fully-diluted EPS climb of 23% to 27.5p from 22.3p.

AdEPT Technology Group confirmed a gross profit increase of 17% to £32.4 million against £27.6 million year-on-year and an underlying EBITDA margin of 17%, which remained flat compared to the year before.

The company mentioned a series of operational highlights, including its acquisition of Datrix in April 2021, and the completion of Project Fusion creation of ONE AdEPT, providing a single set of financial and operational systems along with a scalable platform for growth.

The group also noted over 100 new customer wins, such as Multi-Academy Trust, the Co-op and TUC.

“The acquisition of Datrix, in April 2021, significantly extended the Group’s capabilities and enabled AdEPT to increase its potential ‘wallet share’ in the ever-expanding ICT space,” said AdEPT CEO Phil Race.

“The introduction of new partnerships and services that allow AdEPT to tap into the fast-growing markets of Software Defined Wide Area Networking (SD-WAN) and Secure Access Service Edge (SASE) is leading to significant sales successes.” 

Heading into FY 2023, AdEPT Technology Group reported continued momentum from Q4 2022 with strong recurring order intake, alongside an expected growth in demand as a result of client long-term ICT requirements.

The firm added its board was optimistic for the future of the technology market and for the prospects of its AdEPT project.

“The Board is pleased with the progress achieved during the year under review and the Group’s performance in the face of the many, well-documented macro challenges. Given our focus on this aspect of our business the pro-forma organic growth in Cloud Centric Strategic Services is a particular highlight of the period,” said Race.

“During the Period this team secured significant projects with organisations, including Nottinghamshire County Council, the Royal Surrey County Hospital, Public Health England and Trident IP.”

“Our newly developed ONE AdEPT platform enabled the rapid integration of the Datrix business, ahead of plan, and has created a efficient business with a strong infrastructure for growth.”

AdEPT Technology Group reinstated its dividend with 1p per share for FY 2022.

FTSE 100 subdued on falling retail sales and inflation fears

Natasha Doris
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0
FTSE 100 subdued on falling retail sales and inflation fears

The FTSE 100 dipped on Tuesday after a slate of poor trading in the US and Asia rippled across the UK markets as a result of recession fears, inflationary concerns and the knock-on effect of Chinese lockdowns on the global economy.

The market was also subdued by recent retail sales figures, which reported falling sales at a level not seen since the peak of the Covid-19 pandemic.

Rising inflation has put a dampener on consumer spending as 9.1% CPI remains on track to spike as high as 11% in October this year, crippling families and slamming the brakes on non-essential retail purchases.

“The FTSE 100 dipped at the open after weak trading in the US and Asia as investors continue to weigh the risks associated with war in Ukraine, stubborn inflationary pressures and Chinese lockdowns,” said AJ Bell investment director Russ Mould.

“This cocktail of worries is preventing the markets from making any tangible progress. Dire retail sales data for June raises the spectre of recession in the UK as cost of living pressures continue to bear down on household finances.”

Commodities Fall

Meanwhile, the lowered price of copper continued to drag down miners after the metal hit a 20-month low on Monday on recession fears, sinking to $3.41 per pound on the New York Comex market.

Anglo American shares slid 1.7% to 2,676.2p, Antofagasta fell 1.4% to 1,052p, Croda dropped 0.3% to 6,781p, Endeavor dipped 0.8% to 1,641.5p, Glencore sank 1.8% to 418.3p, Fresnillo declined 0.3% to 661.7p and Rio Tinto decreased 1.6% to 4,730.5p.

US Inflation Figures

Investors are set to lock their sights across the Atlantic in advance of the US inflation figures release on Wednesday, which is expected to see inflation reach a new 40-year record above its current high of 8.6% as a result of higher food and energy prices.

The NASDAQ was flat in pre-open trading at 11,878.7, with the Dow Jones down 0.7% to 30,922 and the S&P 500 down 0.4% to 3,839.7.

AIM movers: Great Western Mining JV and eve Sleep recovers

Andrew Hore
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AIM movers: Great Western Mining JV and eve Sleep recovers

Great Western Mining (LON: GWMO) is planning to set up a joint venture with an experienced Nevada mining contractor to process gold and silver from mining waste material. This will come from the company’s Mineral Jackpot and Olympic Gold properties, plus some sourced from the partner and third parties. An operating agreement is being negotiated. A site has been found for the proposed mill and there is an initial design. There has been $100,000 set aside for planning and obtaining permits. The share price has rise 15.7% to 0.1475p.

Mattress retailer eve Sleep (LON: EVE) has jumped 24.1% to 0.9p, although there is no news about the strategic review and formal sale process. The share price 0.65p at the end of June and it is still well below the 1.65p when the strategic review was announced. A lack of cash is hampering growth and eve Sleep needs more funding.  

There were no new disappointments from legal services provider Knights Group Holdings (LON: KGH) in its full year results. The share price had been hit by a profit warning earlier in the year, but organic growth was still 2%. Revenues were 22% higher at £125.6m, thanks to acquisitions, and although profit increased, earnings per share fell nearly 6% to 17.23p due to more shares being in issue. The share price recovered 16.3% to 110.5p.

Kefi Gold and Copper (LON: KEFI) has been awarded two additional exploration licences in Saudi Arabia for a five-year term. They are Jibal Hillit and Qunnah, which have historically yielded grades of 15.3g/t and 46g/t respectively. The licences are 30km apart. The share price is 15% higher at 0.629p.

Market research services provider System1 (LON: SYS1) released full year results and a trading statement for the first quarter to June 2022. The latter reported a one-fifth decline in revenues. This reflects inflationary pressure and tighter marketing budgets. Management is cautious about the rest of the year. System1 is still planning to return £1.5m to shareholders through share buy backs and a tender offer. The shares have fallen 13.6% to 268p.

Investors have had more time to react to the second quarter production update from BlueRock Diamonds (LON: BRD) released yesterday afternoon. The share price fell 2.9% to 8.25p. Lower grades meant that there was a one-third decline in diamond production to 3,570 carats compared to the second quarter of 2021. Bad weather is blamed for the lower grade material being processed. Fewer carats were sold, but this was partly offset by a 35% increase in the average price obtained.

United Utilities to sell renewable energy business for £100m

Natasha Doris
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0
United Utilities to sell renewable energy business for £100m

United Utilities shares were up 1.2% to 1,046.5p in late morning trading on Tuesday following the group’s reported agreement to sell its non-appointed United Utilities Renewable Energy Limited business.

The business will be sold to SDCL Energy Efficient Income Trust for approximately £100 million at enterprise value.

United Utilities confirmed its portfolio consisted of solar, wind and hydro renewable assets, which have been developed since 2014 and comprises 69 MW of renewable green energy generation across 70 sites.

The energy company mentioned the assets would continue to provide long-term green energy to its regulated United Utilities Water and Wastewater business following its portfolio divestment.

United Utilities commented the sale would allow it to recycle its capital employed in the green energy portfolio into the next phase of its net zero progression while continuing to source green energy from its collection of assets.

The transaction is scheduled to close in the coming months, with the Royal Bank of Canada Capital Markets acting as financial advisor to United Utilities and Norton Rose Fulbright acting as legal advisor.

“We are committed to our ambitious carbon pledges and target of achieving net zero carbon emissions by 2030,” said United Utilities CEO Steve Mogford.

“A key part of setting the foundations for that goal has been our renewable energy portfolio that, in recent years, we have built across our UU sites. With the portfolio now fully built-out and operating well, we are excited about the opportunity to recycle our investment in these assets to support the next steps in our plans to achieve net zero.”

“We are confident that SEEIT will be an excellent long-term partner for the UU group, as the UURE asset portfolio moves into the next phase of its life cycle.”

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