Rightmove has released its end of year results and is celebrating record profits of £304 million, a 48% rise compared to 2020.
The property and real-estate company enjoyed a share price increase of 3% to 634.4p in early morning trade on Friday, joining the FTSE 100 rally after the shock of the Ukraine invasion caused it to rapidly drop on Thursday.
Rightmove also announced an operating profit of £226.1 million, representing an increase of 67% on 2020 operating profits of £135.1 million.
The firm recorded basic earnings per share of 21.3p, which marked an increase of 69% from 12.6p against 2020 results.
Rightmove added that its underlying earnings per share came to 21.8p, equating to an underlying earnings per share increase of 70% against 12.8p in 2020.
The final dividend was reported as 4.8p per ordinary share, taking the total dividend for 2021 to 7.8p against a 2020 dividend of 4.5p.
“Our position at the heart of Britain’s home-moving journeys strengthened even further in 2021, with people spending an incredible 18 billion minutes searching and researching for their new home,” said Peter Brooks-Johnson, CEO at Rightmove.
“I’m proud of our role in helping more people than ever before find a home that meets their needs and helping our customers help sellers and landlords achieve the best price by having their properties marketed to by far the biggest home-moving audience in the UK.”
“Our ambition to make home moving easier in the UK is undiminished and drives our everyday business and longer-term strategy, and I’m excited about our plans to use our industry leading platform to digitise more of the home-moving journey.”
The company reported that its losses had fallen from its record £7.8 billion in 2020 to £3.5 billion, alongside an increase in revenue of 8.3% to £8.5 billion.
IGA further reported operating losses before exceptional items of €2.97 billion for the end of 2021 against losses of €4.39 billion in 2020.
IGA’s full-year capacity was reported at 36% of 2019, with the Covid-19 pandemic and the introduction of the Omicron variant denting the company’s revenue.
“We are confident that a strong recovery is underway. Our teams across the Group are taking every opportunity to develop our business while capitalising on the surge in bookings when travel restrictions are lifted,” said Luis Gallego, CEO at IAG.
“Our people’s extraordinary work and dedication has been key to weather this crisis. We are also monitoring recent geopolitical events closely to manage any potential impact.”
“Demand slowed down for very near-term trips following the emergence of Omicron in late November.”
“However, bookings have remained strong for Easter and summer 2022 having picked up in the New Year. We expect a robust summer with IAG returning to around 85% of its 2019 capacity for the full year.”
“As we ramp up operations our customers remain at the heart of everything we do.”
“We know that after the worst crisis in aviation’s history we must do things differently. Our model enables us to capture revenue and cost synergies while maximising efficiencies which means we are set up to return to profitability in 2022.”
AJ Bell investment director Russ Mould added: “Covid’s multiple variants have weighed on sentiment towards wanting or being permitted to fly, which has put a lot of financial pressure on airlines. Now we have the war between Russia and Ukraine making some people nervous about wanting to get on a plane again.
“All of this adds up to a big headache for International Consolidated Airlines which continues to lose money.
“While its loss after tax narrowed considerably in 2021, net debt has ballooned and capital expenditure is set to increase more than five-fold in 2022 to €3.9 billion as it must rebuild capacity, take delivery of aircraft delayed from last year and meet delivery payments deferred from previous years.”
“International Consolidated Airlines will have to become more creative to try and win back the business customer or reconfigure its strategy to encourage more leisure travellers to fly further on its planes.”
Evraz shares soared 19% to 205p after the release of their full year earnings on Friday.
Evraz has announced a rise of 45% to $14.1bn in revenues across all business segments in a solid report which will be overshadowed by the Russian focused steelmaker’s source of income.
Higher sales prices for semi-finished and construction items, as well as increased volumes for vanadium products, contributed to the increase. Third-party sales of coal with higher average realised prices also made a contribution to the rise of total segment revenues.
Revenues in the coal segment climbed by 55.8% over a year to $2.3bn helped by a 68.8% increase in coal product sales prices.
Net profit saw a 262% rise from $858m to $3.1bn in one year, along with EBITDA increasing by 126% to $5bn, due to growth in sales prices of vanadium, coal products and higher steel.
An increase of 0.8% in selling and distribution expenses in 2021, were recorded due to rise in freight transportation cost because of larger volumes and higher freight rates.
“In 2021, the steel industry was mostly driven by demand-side fluctuations. Steelmakers increased output in anticipation of more robust demand from the construction and manufacturing sectors. Unable to keep up with the accelerated pace of recovery, steel prices rose to their highest in years,” said Aleksey Ivanov, Chief Executive Officer, EVRAZ.
“Amid the upswing on global markets, EVRAZ delivered outstanding financial results in the year, with total segment EBITDA amounting to US$5,015 million and the EBITDA margin reaching 35%. In addition, the Group continued to implement its efficiency improvement programme, which resulted in an EBITDA effect of US$590 million.”
The Company announced an interim dividend of 50 cents.
Evraz has been heavily hit by the events in Ukraine but the company avoided any major acknowledgement in today’s release.
“Results from Russian steel producer Evraz provided an indication of the tricky spot firms with links to Russia are in – with the company just barely acknowledging the conflict, or ‘geo-political situation’ as it euphemistically dubs it, in a statement so thinly worded as to be meaningless,” said AJ Bell investment director Russ Mould.
The Victorian Plumbing (LON: VIC) share price continues to decline as sales remain lower than the year before. An AGM statement revealed that like-for-like revenues are 3% lower, in the first four months of the current financial year.
On the plus side, the second half comparisons are less tough and there could even be some growth in revenues in that period. Some higher costs are being absorbed by the business and this has reduced margins. Management remains optimistic about the longer-term prospects.
Victorian Plumbing joined AIM in early June 2021 at a placing price of 262p a share. The Radcl...
Crypto enthusiasts had previously purported that Bitcoin could provide safe haven characteristics similar to gold. However, today’s move confirms that Bitcoin is more closely tied to the volatility of risk assets such as equities, than it is to safe havens like Gold and Bonds.
Indeed, today’s Bitcoin move tracked equities sharply lower suggesting the market views the asset as one that cannot relied upon for safety during times of volatility.
“The crypto world’s hopes for assets like Bitcoin to achieve digital gold status have evaporated as speculators have headed for the exit as the crisis in Ukraine has deepened,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
“Because of its fixed supply Bitcoin had been hyped as a potential safe haven in times of higher inflation and market volatility, but instead has swung wildly down as equity market sell offs have intensified.”
Today’s move added to evidence Bitcoin was trading as a risk asset following the close correlation with technology shares in 2022. Technology shares have performed terribly in 2022 as the prospect of the higher interest rates made their high valuations look vulnerable.
This was also the case for Bitcoin.
“Crypto assets have been shown to be highly sensitive to the fortunes of the stock market and were propelled higher in an era of ultra cheap money,” said Streeter.
“As conflict in Ukraine looks set to be yet another inflationary driver with oil spiking again, up 8% at $104 a barrel there is fresh speculation that central banks could be forced into more unexpected monetary policy moves, with an acceleration of rate hikes potentially on the cards. With huge uncertainty around how deep the Ukraine conflict could go and what ripple effects there could be in financial markets, crypto assets are likely to continue to be highly volatile.”
The company spent 6 years exploring for graphite in their Malawian licenses and during their metallurgy tests on the graphite, found tailings of titanium. On studies of 125 drill holes in prospect, Sovereign found the presence of high grade titanium rutile.
Post lab work, the rutile found in Kasiya was established commercially viable. The rutile was of premium quality with low impurities and no critical impurities.
Why is Rutile important?
Rutile is the purest form of titanium dioxide (TiO2) also known as titania. Titania is used in the manufacturing of titanium, pigmenting, welding and metal work across various industries such as aerospace, medical, paint are major consumers of titanium.
The titanium market is worth $30b where pigment contributes $25b and metal work contributes $5b.
Natural rutile constitutes 95% of titania, whereas, ilmenite has only 50%. Natural rutile has a value of $1350 per tonne where as ilmenite only attracts $200 per tonne.
Due to the scarce nature of rutile, in 2020, 6m tonnes of ilmenite supplied the titanium dioxide market and natural rutile only supplied 0.5m tonnes.
Highlighting the importance of the Kasiya rutile project, the supply of natural rutile is expected to drop 70% from 2017 to 2030.
Over the same period, demand for TiO2 is forecast to increase by 2.8m tonnes.
Carbon Footprint
With increased demand for titanium, alternatives were created by carbon and energy intensive processes for upgrading ilmenite.
However, this process still doesn’t match the TiO2 grade of natural rutile further strengthening the value of Sovereign’s asset in Malawi.
Indeed, 2.8 tonnes of carbon dioxide emissions per tonne is saved when extracting natural rutile instead of upgrading ilmenite.
Kasiya Project
Kasaya is one of the top 2 rutile depositories found in the world, second only to Sierra Rutile. The scale and grade of the Kasiya project makes it the most significant discoveries of natural rutile in 50 years.
Kasiya has an inferred resources of 605m, and there is a strong chance of this being increased as the result of further scoping studies, due to be released in 2022.
If 605m tonnes of ground is mined at 0.98% rutile conversion, the rutile extracted will amount to 6m tonnes and graphite will be 7.5m tonnes.
Scoping Study
Expected mining life of the project is 25 years. Over that duration 12m tonnes of material is expected to extracted annually. Out of which 120k will be rutile and 80k graphite.
The NPV on this project is expected to be $861m with an IRR of 36%, both post tax. The capital cost of the project sums to $332m which is expected to be paid back in 2.5 years.
The revenue generated from this project is expected to be $251m with EBITDA at $161m.
The project is expected to give back to Malawi economy and also generate 480 direct jobs and various indirect jobs.
Geology and Mining
The rutile mineralisation are found 0.5 metres from the surface and extend to the premium material lies in the top 5 metres resulting in easy extraction. The extraction will be conducted by tried and tested, hybrid hydro/ dozer mining as the material is soft and homogenous.
The mining process is quite simple with the machine irrigating the land and creating a slurry. The slurry then goes into the plant where it goes through conventional flow. The results are 95% TiO2 and 96% TGC.
Post the mining process, the slurry minus the minerals are poured back into the ground. This means that disruption to the local environment reduces from decades to months. The land can later be used for farming and other uses.
The material processed can be moved by the Nacala corridor which passes by the Kasiya region all the way to the ports in Mozambique. The port has the facilities to export the expansive material.
Timeline
In the year ahead, the carbon emission assessment will be reassessed to understand the realities of the rutile extraction. The updated study will give us a clearer understanding of the JORC resources and any upgrades to the NPV.
Currently, the Kasiya project is still in the scoping stage and moving forward, they plan to test a larger area of the land.
Presenting at the UK Investor Magazine Metals & Mining Conference, Cadence Minerals detailed their strategy of investing in assets that are under-priced but have strategic advantages, which CEO Kiran Morzaria calls “de-risked” assets.
The AIM-listed company added that it invested in long-term partners which boast strong financial returns, and that the investee producer has based itself the correct commodity space, such as iron ore and lithium with demand estimated to keep rising in the coming years.
Cadence Minerals investments are currently in unlisted assets including a 20% stake in the Amapa Iron Ore project, scheduled to hit 27%, 30% stake in the Sonora Lithium project, Synergy Prospecting 31%, and 30% of the Yangibana Rare Earths project.
Cadence has a 8.2% equity stake in listed European Metals Holdings.
Amapa Iron Ore
Cadence Mineral’s flagship project is the Amapa Iron Ore which is expected hit 5.3 million tonnes of iron ore per year at full capacity. The asset was previously owned by Anglo-American and generated $171 million of profit during the period they operated the mine from 2007-2012.
Cadence has a 20% stake in Amapa which is set to rise to 27% for a total investment of $6 million. Cadence has a first right of refusal to increase their stake to 40%.
Feasibility studies are ongoing and the market will learn of updates in 2022.
Cadence Minerals added that maintenance and repair is currently ongoing for the Amapa mine, and they will continue post-finance talk to reconstruction and recommissioning until an estimated date of 2024.
The company said in terms of its creditors that it is looking for shipment of stockpiles to pay secure bank creditors, and hoping to lock-in long-term shipping contracts.
Cadence Minerals estimated that the GDP impact at state level for Ampara Iron Ore will hit approximately 4%.
Lithium and Rare Earths
Cadence has a portfolio of Lithium assets which are targeting the demand from electric and hybrid vehicles.
Cadence holds a 8.2% in UK-listed European Metals Holdings which owns the Cinovec Lithium mine in the Czech Republic and is well placed to serve the demands of European EV manufacturing.
Following an ‘outstanding’ PFS, Cinovec now has a NPV of $1.94 billion and a Total JORC resource of 7.39 Mt LCE.
Cadence is a 30% joint partner on the Sonora Lithium Project that has an NPV of $802 million. Cadence Minerals’ joint-venture Partner Ganfeng Lithium is ranked as the third-largest lithium compound producer globally.
Synergy Prospecting in Lithium Exploration is a speculative asset for the company, with some initial surface sampling complete. The company will announce its further steps following the results of its initial exploration.
Cadence Minerals has exposure to Rare Earth through the Yangibana Rare Earths project in Western Australia. The Yangibana Project holds a net value of $1.01 billion, and Cadence Minerals said the mine is expected to produce 1.7 million tonnes of ore in the latter end of the mine cycle.
By Viktor Szabo, Investment Manager, abrdn Latin American Income Fund Limited
There are two elements in the region’s favour: exciting companies and economic recovery
The region has been hit disproportionately hard by global inflationary pressures, but this is likely to have peaked
Economies are starting to recover, helped by high vaccination rates.
Investing in Latin America is seldom straightforward – and proved particularly tricky in 2021. Looking into 2022, however, there are two elements in its favour: exciting companies and economic recovery. These two elements could suggest better returns for investors across the region in the year ahead.
At a time when the rest of the world has seen significant economic recovery, Latin America has had some headwinds. While the region would normally be a significant beneficiary of global recovery, supply chain disruption in the wake of the pandemic has held back countries such as Mexico, which are strong in car making. There has been plenty of demand, but distribution has been difficult.
The region has also been hit disproportionately by global inflationary pressures. In Brazil, inflation surpassed 10% last September, necessitating the continuation of an aggressive interest rate hiking cycle. This was a blow to stock markets, which had started to anticipate better times ahead. While Brazil saw the greatest inflationary pressures, there were difficulties across the region and many central banks raised rates.
A turning tide
This has been a tough backdrop for the abrdn Latin American Income Fund to navigate. However, these rate rises are now reflected in the price of Latin American equities and bonds. Equally, the Brazilian central bank believes inflation may have peaked in the region*. Higher rates are already starting to have the desired effect of calming price rises. Latin America may prove to be ahead of the rest of the world in its rate cycle.
Economies are starting to recover. This recovery has been helped by high vaccination rates. Brazil has around two-thirds of its population double-vaccinated, with Chile and Uruguay even higher. Mexico is a relative laggard, but still has over half of its population immunised against the virus. The recovery was more robust than expected last year with IMF revising its outlook for the broad region in October and adding 1.7% points to its previous forecast; Brazil’s economy is forecast to have grown by 5.2% in 2021 and Mexico by 6.2% last year.
The global inventory cycle and high inventory prices should be supportive for the region. The world needs to build back all its stockpiles, having run them down during the pandemic and the region is a treasure trove of natural resources. The theme of reshoring could also be interesting for Latin America, particularly for Mexico. The pandemic has exposed the difficulties of long supply chains that reach across continents and US companies are moving production closer to home.
Stock markets
Stock markets in Latin America had a tough 2021, hit by rising interest rates. Assets have repriced to reflect a higher cost of capital. As inflationary pressures have risen, those companies without much pricing power have been hit particularly hard. Their cost base has risen, but they haven’t been able to pass those costs onto their customers. This has also weighed on certain equities.
For example, we have seen technology adoption accelerate across the region, creating opportunities within ecommerce, fintech and education. We hold Mercado Libre, for example, Latin America’s Amazon equivalent. We have XP Inc, an innovative brokerage firm in Brazil.
Infrastructure is also likely to be a priority for governments across the region, creating real opportunities for investors. With that in mind, the trust holds OMA, an airport operator in Mexico, plus a railway operator in Brazil. At the same time, environmental awareness is creating opportunities in sustainable agriculture.
In line with its long-term investment strategy, the trust remains overweight those companies that are highest quality at decent valuations. The largest overweight positions are in the consumer discretionary sector, followed by industrials, real estate, information technology. The trust is geared, meaning that it has borrowed money for investment purposes, endeavouring to capture the domestic consumption story across the region.
Strength in income
It is also worth highlighting the recovery in dividends in Latin American countries. Many companies were prudent during the pandemic, choosing to keep liquidity to hand at a time of uncertainty. However, many have resumed payouts as the outlook has improved. There is still potential for future improvement as recovery comes through.
The shifting interest rate environment has also created opportunities within fixed income. Yields have risen and that has created some flows into fixed income over equities. That said, the trust retains a slight overweight to equities over fixed income, based on continued economic recovery and higher inflation. Where we are invested in fixed income, we are moving into shorter-dated bonds, and have an overweight position in Uruguay, where the quality of the institutions is very high and political risk is low.
The future
The pandemic has exposed some of the long-standing inequalities across Latin America – particularly in healthcare and education. It has also raised concerns about the distribution of profits from natural resources. The state’s role can hardly go back to pre-Covid levels, but the question is how far the state should reach. That will be decided in the next months and years. To our mind, this could be a catalyst for positive change across Latin America, including more equality and better public services. We are seeing early signs of this already.
Some risks remain. There is a busy year of elections coming up and this creates the potential for volatility. In Brazil, there is a danger that President Jair Bolsonaro takes significant fiscal risks in an attempt to shore up his popularity. However, these risks are known and understood by markets.
Overall, 2022 has a brighter outlook than 2021. The country’s stock markets could benefit from falling inflation, global economic recovery and the blossoming of a number of longer term structural trends, even if the elections create some short-term instability.
Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.
Important information
Risk factors you should consider prior to investing:
The value of investments and the income from them can fall and investors may get back less than the amount invested.
Past performance is not a guide to future results.
Investment in the Company may not be appropriate for investors who plan to withdraw their money within 5 years.
The Company may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that any movement in the value of the company’s assets will result in a magnified movement in the NAV.
The Company may accumulate investment positions which represent more than normal trading volumes which may make it difficult to realise investments and may lead to volatility in the market price of the Company’s shares.
The Company may charge expenses to capital which may erode the capital value of the investment.
Derivatives may be used, subject to restrictions set out for the Company, in order to manage risk and generate income. The market in derivatives can be volatile and there is a higher than average risk of loss.
Movements in exchange rates will impact on both the level of income received and the capital value of your investment.
There is no guarantee that the market price of the Company’s shares will fully reflect their underlying Net Asset Value.
As with all stock exchange investments the value of the Company’s shares purchased will immediately fall by the difference between the buying and selling prices, the bid-offer spread. If trading volumes fall, the bid-offer spread can widen.
The Company invests in emerging markets which tend to be more volatile than mature markets and the value of your investment could move sharply up or down.
Certain trusts may seek to invest in higher yielding securities such as bonds, which are subject to credit risk, market price risk and interest rate risk. Unlike income from a single bond, the level of income from an investment trust is not fixed and may fluctuate.
With funds investing in bonds there is a risk that interest rate fluctuations could affect the capital value of investments. Where long term interest rates rise, the capital value of shares is likely to fall, and vice versa. In addition to the interest rate risk, bond investments are also exposed to credit risk reflecting the ability of the borrower (i.e. bond issuer) to meet its obligations (i.e. pay the interest on a bond and return the capital on the redemption date). The risk of this happening is usually higher with bonds classified as ‘sub-investment grade’. These may produce a higher level of income but at a higher risk than investments in ‘investment grade’ bonds. In turn, this may have an adverse impact on funds that invest in such bonds.
Yields are estimated figures and may fluctuate, there are no guarantees that future dividends with match or exceed historic dividends and certain investors may be subject to further tax on dividends.
Centrica saw group statutory revenue from continuing operations growth of 20% from £12.2bn to £14.7bn in the full year.
Revenues from the sale of products and services between segments climbed by 30% to £20.5 billion (2020: £15.7 billion) in the gross segment revenue from continuing operations. Higher wholesale commodity prices impacted Energy Marketing & Trading and Upstream, as well retail pricing in British Gas Energy, Bord Gáis Energy, and Centrica Business Solutions.
The group recorded and adjusted operating profit increase of 112% from £447m to £948m.
A 38% rise in EBITDA from continuing operations from £541m to £1.8bn due to higher achieved prices and restating of operating profits.
Customer retention grew to 82% in 2021, despite a drop of 135,000 customers at British Gas Services.
“Centrica’s posted strong full year results, with profits almost doubling despite ongoing volatility. The group’s restructuring is all but complete, and the cost savings went a long way in offsetting volatility and weakness in some parts of the business,” said Laura Hoy, Equity Analyst at Hargreaves Lansdown.
“Profits at British Gas Service & Solutions were hurt as customers swapped to lower-priced products to temper the impact of inflation and covid-related costs offset hard-earned efficiency improvements. The latter is likely to dissipate, but the former could be an ongoing trend.”
Recovery in the energy demand due to reduced impact of Covid restrictions and growth in volume resulted in an increase of 14% from 2020 in the amount of energy provided.
Non-Core Divestments
On January 5, 2021, Centrica competed the sale of Direct Energy to NRG Energy for £2.7bn. The sale was part of Centrica’s business strategy to be more focused on their core markets, UK and Ireland.
“Our strong balance sheet and responsible business model has allowed us to ensure continued supply for customers whose suppliers have ceased trading and offer additional help to those most vulnerable through the ongoing energy crisis. 2021 financial performance was resilient, and we continue to make good progress towards the turnaround of Centrica, having materially completed our portfolio simplification. Our focus for 2022 is on building on the progress we have already made to drive improvements in colleague engagement and in particular customer service, while continuing to build our capabilities to help our customers on their path to net zero,” said Chris O’Shea, Group Chief Executive.
Despite a recovery in Centrica’s revenues and profit, the board held off declaring a dividend for the period.
“The dividend isn’t back on the table yet, though management said it’s in the pipeline. With the balance sheet looking much improved and free cash flow on the up, the group looks on track to stage a fully fledged recovery,” said Laura Hoy.
“However with uncertainty looming over future price volatility it could take some time before management is confident enough to loosen the purse strings.”
The UK mining company’s share price also climbed 2.87% to 3,634p, one of few FTSE 100 gainers in a crumbling market in light of Russia invading Ukraine.
The company reported a $6.2 billion shareholder return with a $2.1 billion proposed final dividend.
Anglo-American also reported improved operational performances at PGMs, De Beers and Kumba (Iron Ore), attributed to the easing of Covid-19 restrictions and improved mining performance and processing stability at its PGMs.
Further factors of company growth included planned higher rough diamond production at De Beers as a response in line with strong consumer demand, and improved plant availability at Kumba.
“In a year of two distinct halves, we recorded strong demand and prices for many products as economies recouped lost ground, spurred by government stimulus,” said Anglo-American CEO Mark Cutifani.
“Copper and PGMs – essential to the global decarbonisation imperative – and premium quality iron ore for greener steelmaking, supported by an improving market for diamonds, all contributed to a record financial performance, generating underlying EBITDA of $20.6 billion.”
“The proposed final dividend of $1.18 per share, in line with our 40% payout policy, in addition to a special dividend of $0.50 per share, will bring our total return to shareholders in respect of 2021 to $6.2 billion (including our share buyback), equal to $4.99 per share.”
