Amazon reports first loss since 2015, Apple supply fears surge

Natasha Doris
-
0
Amazon reports first loss since 2015, Apple supply fears surge

The latest results from Amazon and Apple shook up tech stocks in the US following Amazon’s first reported loss since 2015 of $3.8 billion.

Online retail sales declined 3% in light of sliding consumer interest in online shopping as inflation rates started to burn a hole in consumer wallets.

The e-commerce giant added that a significant portion of its loss was linked to its investment in electric car manufacturer Rivian.

Amazon commented that it estimated a sales growth as low as 3% in the next several months, representing a severe downhill slide from its booming pandemic heights.

Amazon Inflation Concerns

“Amazon’s update was worrying as it not only put the company into its first quarterly loss since 2015, but it also painted a gloomy picture for the retail market in general,” said AJ Bell investment director Russ Mould.

Analysts highlighted the knock-on effect of rising inflationary pressures on consumer spending habits, with customers likely to keep a tighter grip on their wallets going into the remainder of the year.

“A drop in online retail sales no doubt reflects a more cost-conscious consumer. Whereas during the pandemic people were happy to browse and click with little care about the cost, now purchases will be more considered,” said Mould.

“It’s far too early to say we’ve lost our love of online shopping. It’s merely that people are more hesitant when it comes to pressing the ‘buy’ button after filling up their virtual basket.”

The company mentioned a 6% decline in international business, alongside a growth in expenses, with $2 billion in costs from inflation delivering a blow to Amazon’s results.

The retail firm raised its prices for Amazon Prime shipping and video in a bid to offset its spiking costs, including a rise in staff pay and climbing fuel prices bringing an increase in delivery expenses.

“Amazon has put up the price of its Prime delivery and streaming service in the US to try and get additional income to offset rising costs across the group including staff and delivery. That’s likely to be replicated in other parts of the world,” said Mould.

Amazon Remains Optimistic

“We’ve also seen Amazon increase fees for merchants using its platform. Yet Amazon has never been one to worry too much about short-term profit or loss,” continued Mould.

“It has an eye on the longer-term prize and would always prioritise user experience and value for money over jacking up prices big time simply to give its earnings as big a boost as possible.”

The group also reported a 37% increase in its Amazon Web Services cloud computing division and a 23% uptick advertising, with overall sales rising 7% year-on-year to $116.4 billion resulting from the company’s strong Amazon Web Services development.

Apple Profits Rise

Apple highlighted some positive news, with a sales growth of 9% year-on-year to $97.3 billion, with a profits spike of over 10% to $25 billion.

“Apple appears to be surviving the cost-of-living crisis better than most,” said Mould.

“Its latest update shows strong sales and, importantly, more people hooked into its network of services such as streaming and digital storage.”

China supply concerns

However, the iPhone developer issued dire warnings that its sales could suffer an $8 billion hit from supply chain problems as a result of Chinese lockdowns. The country’s zero-Covid policy sent Chinese capital Beijing into lockdown, flinging the markets into turbulence as investor fears surged.

“We are not immune to these challenges but we have great confidence in our teams, in our products and service and in our strategy,” said Apple CEO Tim Cook.

The company said the majority of its chip operations were based in Shanghai, where cases have fallen and most of the group’s operations had kicked off again.

“Almost all of [the] affected final assembly factories have now restarted,” said Cook.

Covid-19 lockdown remained a concern for Apple, and Cook confirmed that he was more concerned about factory disruptions than a decrease in consumer spending over the coming months.

“In the earnings call with investors, chief executive Tim Cook said he was more focused on supply rather than demand,” said Mould.

“Covid-related disruption in China and industry-wide chip shortages present a risk that Apple cannot create enough products to meet demand.”

“That might not be such an issue if demand weakens in line with many other parts of the retail sector, particularly as big-ticket items like tablets are tough purchase decisions to make if you’re under financial pressure.”

Building the UK’s leading growth company exchange with AQUIS

UK Investor Magazine
-
0
Building the UK’s leading growth company exchange with AQUIS

The UK Investor Magazine Podcast was delighted to welcome Alasdair Haynes, CEO of the AQUIS Exchange, for a broad conversation around providing growth capital for UK companies and improving outcomes for investors.

The AQUIS Stock Exchange is setting about improving the listing experience for both companies and investors, while broadening the scope for high-quality UK growth companies to raise capital.

Alasdair outlines how AQUIS is providing both private and institutional investors with the opportunity to invest in exciting growth companies that may have previously only been accessible to a small pool of private equity investors.

We explore how AQUIS is making it easier for companies to list on their exchange, including heavily reduced costs compared to AIM, the removal of red tape and increasing liquidity.

For further information on the AQUIS Exchange and the companies listed on the exchange, please visit their website here.

Travis Perkins says outlook uncertain due to inflation

Anshula Kumar
-
0
Travis Perkins says outlook uncertain due to inflation

Travis Perkins announced its Q1 trading update on Friday where the group said its recorded an encouraging first quarter which reflects the group’s strategic progress and voiced its concerns regarding material inflation resulting in an uncertain outlook for 2022.

Travis Perkins reported total sales for the first quarter of 2022 were 13.6% higher than in 2021, indicating a solid start to the year for the group.

Total sales increased 17.9% in the Merchanting area, with all businesses functioning in line with expectations, owing almost two-thirds of the rise to pricing as manufacturers continued the raises which will be passed through promptly.

The queue of social and economic infrastructure development, as well as the continued need for additional homes, continue to support strong customer demand across all end markets for Travis Perkins.

SME customers’ order books are still solid, with a growing interest in energy efficiency projects says the group.

Travis Perkins’ Toolstation total sales fell 6.0% in the first quarter, with LFL sales falling 11.9%, reflecting a difficult prior-year comparator and the return of Toolstation’s customer mix to its core trade base, which continues to realise the importance and convenience of the customer proposition.

As the comparison period passes the elimination of pandemic limitations leaves management to be hopeful that business drivers will normalise in the second half of the year.

By the end of 2021, the construction supply chain had mostly normalised, and while the crisis in Ukraine and its influence on the global economy may threaten that relative stability, the group’s stock levels remain robust.

The group’s outlook for materials price inflation, which was previously projected to moderate towards the second half of the year, is now more uncertain, with pricing likely to account for a larger share of sales growth throughout the year than previously anticipated.

Overall, Travis Perkins’ cost inflation is expected to be moderate.

Despite the current uncertain financial and geopolitical environment, order books in the construction industry in the United Kingdom remain strong.

Management’s full-year projections remain unchanged, owing to Travis Perkins’ stable end markets and trade-focused business strategy.

Nick Roberts, Chief Executive Officer, Travis Perkins, commented, “The Group has had an encouraging first quarter and, although the wider economic backdrop remains uncertain, we are well placed to build on this positive start in the coming months.”

“The energy efficiency of the UK’s built environment remains a key focal point for households and politicians alike and the current cost of energy is likely to prompt further demand for improvement in both new and existing buildings. Allied to the significant pipeline of investment in the UK’s social and economic infrastructure, we remain confident in the structural drivers of demand in our end markets.”

“As the UK’s largest building materials supplier and a leading partner to the construction industry, we are uniquely placed to support the country in this drive and are working closely with all key stakeholders, including government, housebuilders, tradespeople and developers, to address these challenges.”

Travis Perkins shares dropped 1.4% to 1,249p on Friday despite the group stating that the start of 2022 was encouraging in its Q1 trading update.

Computacenter shares dip 4% despite top-line growth

Anshula Kumar
-
0
Computacenter shares dip 4% despite top-line growth

Computacenter shares dipped 4.2% to 2,623p despite the company announcing that its top-line grew strongly in the first quarter of 2022 on Friday.

Computacenter saw its top line grow strongly in the first quarter of 2022, as planned, but adjusted profit before tax grew more modestly, owing to one extremely large volume customer diluting our overall margin.

Furthermore, the significant elimination of lockdown measures in the areas where the group operates has resulted in a return to a more normal, and more sustainable, cost base post-COVID-19.

As Computacenter reported at the time of its final results, H1 2021 presented a more difficult comparison than the entire year, so being profitable ahead of 2021 after the first quarter is encouraging.

Computacenter Outlook

Although adjusted profit before tax at the end of H1 2022 will likely be lower than in 2021, Computacenter will still be operating in line with its business’s historical seasonality, giving the group confidence for the entire year even though much work remains to be done.

The group is optimistic that FY 2022 will be a year of continued improvement and Computacenter is currently on target for the entire year.

There are certainly numerous issues in the world, and the business, like most firms, is affected by wage inflation and supply chain limitations. However, these challenges provide Computacenter with the opportunity to differentiate itself from the competitors by providing superior execution.

The momentum that Computacenter has developed over many years, as well as the solidity of its balance sheet, invoked confidence in the group’s future and the group said its next scheduled trading update is its Interim Results, which will release on 9 September 2022.

Pearson reports underlying sales growth of 7%

Anshula Kumar
-
2
Pearson reports underlying sales growth of 7%

Pearson continued the momentum with underlying sales growth of 7% in the first quarter of 2022 and acquired Mondly in English Language Learning said the group on Friday.

Pearson reported an underlying sales growth of 7% in the first quarter of 2022 with Sales of Assessment & Qualifications contributing 22%.

The group’s Sales of Assessments & Qualifications increased by 22% across the board. The outstanding performance of the US Student Assessment can be attributed in part to the normalisation of exam schedules and Clinical Assessment performed admirably, thanks to the phasing of orders.

Pearson enjoyed a strong retention rate in Virtual Schools and growth in OPM helped boost Virtual Learning sales by 3%, where the OPM contract with ASU will expire in June 2023, as revealed on April 19th.

Borders re-opening and improved worldwide mobility boosted English Language Learning revenues by 18% in Q1, with growth in Pearson Test of English volumes weighted to Q1.

Higher Education revenues fell 5% due to predicted declines in US higher education, indicating a continuous decline in enrolments and courses per enrolment for the academic year 2021/22.

Pearson’s GED Testing Service was chosen as an education partner for Amazon’s Career Choice initiative, indicating that the company has made significant strategic development.

Sales of Workforce Skills increased by 9% excluding acquisitions, owing to continued growth in BTEC, GED, and TalentLens for Pearson, and as projected, sales in enterprises undergoing strategic review dropped 11%.

The group also reported a share buyback programme to return £350m to shareholders and stated that the first tranche commenced in April, of which over £75m had already been completed.

Pearson reaffirmed its guidance for adjusted operating profit in 2022.

Pearson acquires Mondly

Pearson announced the acquisition of Mondly, which was a strategic purchase for the English Language Learning division, today.

The acquisition is another step forward in the digital strategy, providing the group with access to the rapidly expanding direct to consumer English language learning sector.

Institutional, Pearson Test of English, and Workforce Skills are all strategic growth areas for Pearson, with synergies and cross-selling opportunities.

Pearson expects mid-teens margins for the division by 2025.

Andy Bird, Chief Executive Officer, Pearson said, “Pearson has continued to make strong strategic, operational and financial progress through the first quarter. Underlying sales grew by 7%, and we remain on track to deliver on our 2022 financial expectations and medium-term guidance.” 

“Our acquisition of Mondly, one of the world’s leading online language learning platforms, is another exciting strategic development. It strengthens Pearson’s direct to consumer strategy and supports our ambition to become the global leader in English language learning for committed learners.” 

“We remain sharply focused on the successful execution of our strategy and we are encouraged by the momentum we are seeing across the business.”

Pearson shares gained 2.6% to 791p on Friday after the group reported its Q1 trading update.

AstraZeneca revenues increase 60%, Covid-19 treatments decline

Natasha Doris
-
0
AstraZeneca revenues increase 60%, Covid-19 treatments decline

AstraZeneca shares fell 0.3% to 10,522p in early morning trading on Friday, following the group’s reported 60% increase in revenue to $11.3 billion in Q1 2022.

The pharmaceutical company attributed its growth to the contribution of the Alexion medicines and multiple Vaszevria contracts, which are set to complete delivery by HY1 2022.

“AstraZeneca’s product portfolio’s had a boost from its Alexion acquisition and that’s helped the group surpass revenue expectations,” said Hargreaves Lansdown equity analyst Laura Hoy.

The firm highlighted a 25% in total revenue from oncology, with department product sales gaining 18%, a total revenue from cardiovascular, renal and metabolism (CVRM) rise of 18%, respiratory and immunology (R&I) enjoying a 4% boost and rare disease rising 7% across Q1.

Astra announced a core earnings per share increase of 20% to $1.89, and noted that its operating margin benefitted from phasing of costs.

However, Astrazeneca mentioned its EBITDA fell 16% to $2.2 billion, reporting below analyst expectations as a result of a $1.2 billion charge linked to the revaluation of Alexion’s inventory, alongside a 36% increase in research and development costs.

The group mentioned that core operating expenses were likely to increase by the low-to-mid teens percentage across the coming term due to costs including the full-year integration of Alexion expenses.

The firm estimated revenue from Covid-19 medicines would also decline by approximately 20-25%, with the gross margin from coronavirus treatments projected to be lower than the company average.

Astrazeneca added that its expected decline in Vaxzevria sales would probably be slightly offset by growth in Evusheld sales.

“2022 has started strongly for AstraZeneca. Farxiga achieved $1bn revenue in the quarter and our Oncology medicines delivered Product Sales growth of 18%, despite COVID-19 continuing to impact cancer diagnosis and treatment,” said AstraZeneca CEO Pascal Soriot.

“High-level results from the DESTINY-Breast04 trial pointed to Enhertu’s potential to redefine treatment of HER2‑low metastatic breast cancer, and Ultomiris became the first and only long-acting C5 inhibitor approved for generalised myasthenia gravis in the US.”

“Our investments in pioneering science give us confidence of further advances in the years to come.”  

Reckitt Benckiser enjoys 5.6% LFL revenue boost

Natasha Doris
-
0
Reckitt Benckiser enjoys 5.6% LFL revenue boost

Reckitt Benckiser shares increase 1.4% to 6,300p in early morning trading on Friday, after the consumer goods firm reported a 5.6% boost in total net revenue to £3.4 billion in like-for-like sales in its Q1 2022.

The group said it attributed its growth to continued broad-based growth and market share momentum across all businesses and territories, with 76% of its core category market units either gaining or holding market share.

However, Reckitt Benckiser saw its reported total net revenue fall 2.3%, with hygiene falling 10.7% and nutrition dropping 14.8%.

The firm reported a 15.8% reported gain in health as a result of an increase in OTC, VMS and Intimate Wellness growth, with a 20.6% uptick to £1.4 billion on a like-for like basis.

The company also saw a 20.4% rise to £557 million for nutrition on a like-for-like basis linked to a 30% US IFCN growth with strong execution, despite the hurdle of temporary competitor supply problems.

However, the firm experienced a 9% drop in like-for-like sales across its hygiene department, despite noted gains in its Finish, Air Wick, Harpic and Vanish brands as a result of the company’s penetration building initiatives.

The company also confirmed the ongoing offloading of its Russian arm, which it said might include a transfer to a third party or to local employees, moving on from the firm’s decision earlier in the year to freeze all capital investments and marketing in the country after the Ukrainian invasion on 24 February.

Reckitt Benckiser said 70% of its portfolio less sensitive to Covid-19 dynamics grew in the high-single digits.

The group added that its outlook estimated a 1-4% like-for-like net revenue growth at the upper end of management expectations, with adjusted operating margins in line with the previous year and current executive projections, despite significant cost inflation across the board.

“We have made a strong start to the year across all our business units and geographies despite a challenging operating environment.  Investments we have made in brand building, innovation, and execution, have resulted in broad-based market share gains.  These, coupled with pricing and revenue management actions, stand us in good stead to maintain this positive momentum,” said Reckitt Benckiser CEO Laxman Narasimhan.    

“As we look to the balance of the year, the operating environment remains highly unpredictable.  We are well placed to address these market dynamics through the strength of our brands, our favourable product mix, our productivity program and the responsible pricing initiatives already undertaken, with scope to take further actions.”  

“Given our strong start, we expect to deliver LFL net revenue growth at the upper end of our guidance for the year. We expect adjusted operating margins to be in-line with both the prior year and current market expectations, whilst continuing to invest in the long-term growth of our brands.” 

Advanced Oncotherapy: Technical to Commercial by Summer

Jon Levinson
-
0
Advanced Oncotherapy: Technical to Commercial by Summer

Advanced Oncotherapy (AVO) 24p Mkt Cap £110m* Last Summer we reported the £40m fund raise at 40p needed to complete the technical development stage of its world leading Proton Beam Therapy LIGHT system. The recent trading update includes a video showing how the system will work.  After seven years of development, it is expected that the last technical milestone will be completed this summer. The delay from last year’s best expectations was primarily due to regulatory verification hurdles as it concurrently seeks FDA and CE Marking approval.
The technology behind it is from CERN,...

Novacyt shares fall on £181m revenues drop

Natasha Doris
-
0
Novacyt shares fall on £181m revenues drop

Novacyt shares were down 5.1% to 152p in late afternoon trading in light of the firm’s total revenue drop to £95.8 million in 2021 compared to £277.2 million in 2020, excluding £40.9 million of 2021 DHSC revenue under contractual dispute.

The company announced an 86% revenue allocation linked to Covid-19 products, compared to 95% in the year before.

Novacyt confirmed a shift away from large, centralised contracts towards independent testing, with a focus on private laboratories and non-governmental organisations (NGOs).

The group reported a 98% revenue increase to £55.9 million from £28.3 million year-on-year on private laboratory revenues, including £10.5 million from NGOs.

The company said private testing made up 58% of 2021 revenues at £55.9 million, against 10% in 2020 of £28.3 million.

The UK contributed to a reported 45% of total revenues with £42.7 million compared to 79% in 2020 at £219.4 million.

The company mentioned a gross profit of 68% at £65.4 million, representing a decline from its 76% result in 2020 due to a higher stock provision on an obsolescence of Covid-19 products as the pandemic eased, alongside margin dilution as a result of increased instrument sales as the firm built its installed base.

Novacyt confirmed a cash position of £101.7 million on 31 December 2021 against £91.8 million the previous year, with the company remaining debt free heading into 2022.

“In 2021, we delivered a financial performance in line with market expectations. The Company responded to a rapidly changing marketplace and diversified from predominately servicing government COVID-19 testing tenders, to the private market for COVID-19 testing in travel, sport, film, media, and workplace settings,” said Novacyt CEO David Allmond.

“Novacyt’s reputation for the innovation and high performance of its diagnostic technologies was reinforced throughout the pandemic and the Company has established a strong foundation of R&D, manufacturing, regulatory and commercial capabilities, supported by a strong financial position.”

“As a result, Novacyt is well positioned for future growth and value creation and there are exciting times ahead for the Company as we move past the current pandemic   and continue our journey to become a leading global clinical diagnostics company focused on unmet needs in infectious diseases.”

SAE shares soar 15% on Uskmouth site transition

Anshula Kumar
-
0
SAE shares soar 15% on Uskmouth site transition

Simec Atlantis Energy (SAE) announced on Thursday that its Uskmouth site is transitioning into a sustainable energy park, leading the group’s shares to soar 15% to 2.65p.

SAE said that the Uskmouth site’s transformation into a sustainable energy park includes plans to provide a Battery Energy Storage System as a first step (BESS).

The Uskmouth site has a 230MW grid connection, as well as extensive land and infrastructure, making it an ideal location for the construction of a large-scale, commercially appealing BESS project.

BESS integration into transmission and distribution networks is widely acknowledged as a significant enabler of increased and faster integration of intermittent renewable energy into the UK electricity supply.

SAE has progressed the BESS development process by submitting a Modification Application to National Grid, requesting that the Uskmouth site’s connection agreement be changed to accommodate a BESS plant.

SAE has also filed a screening report to Newport City Council for the development of a 230MW BESS facility on the former coal stockyard and is working with an industry-leading partner to expedite the battery storage facility’s delivery.

SAE is no longer pursuing the previously stated plans for the Uskmouth Conversion Project due to the establishment of a BESS at the Uskmouth site and has notified Welsh Government and relevant stakeholders that it would be withdrawing the permission variation application.

SAE has entered into a deal to sell some parts of the plant that are no longer needed for the site’s future ambitions as a result of this decision.

Wye Valley Demolition, a local company, has been given £1.2m contracts to remove the redundant plant and equipment.

This deal provides immediate funding to SAE’s business, assisting in the achievement of SAE’s broader goals and providing value to shareholders.

While SAE will not move through with the Uskmouth Conversion Project, the need to repurpose coal-fired power plants has never been greater to decrease emissions, improve energy security, and reduce waste shipped to landfills and polluting our oceans.

Governments throughout the world are looking for projects that can provide energy security and independence rapidly, and our coal plant conversions can provide a speedy and cost-effective solution.

SAE is committed to expediting the transition of existing coal-fired power plants to lower-emissions fuels and is working with its partners to transfer key lessons learned to other nations where they may have the most impact.

Graham Reid, CEO of SAE commented, “The team and I are tremendously excited about this next step for the Uskmouth site, which will help deliver the UK’s net zero targets, release important value for the business and allow the team to build on the lessons learnt to help countries around the world to achieve the targets of reducing reliance on coal, increasing energy security, and finding long term solutions to the growing waste problem.”

1...741742743...1,811Page 742 of 1,811