Samsung predicts 52% profit jump

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Samsung has said that profits are expected to jump 52% for the last three months of 2021.

Despite the chip shortage storm, the group said that it is likely to have made 13.8tn won (£8.5bn) during that period thanks to the high demand.

“Samsung is well placed to profit from the record-breaking demand for PCs and electronics,”  said analyst Sam Reynolds.

The group is also likely to benefit from currency fluctuations.

“The Korean won continues to depreciate, making Korea’s exports more attractive on the global market,” he added.

Shares in the group rose 2%.

Aston Martin sales surge

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Aston Martin sales jumped 80% last year as they sold just over 6,180 vehicles.

By the year 2024, the luxury carmaker has said it expects to hit revenues of £2bn.

Lawrence Stroll, the executive chairman, said: “I am extremely pleased that our core business has delivered to plan with over 6,000 core wholesales in the year whilst driving inventory to levels that are appropriate for an ultra-luxury business.”

“It is a very long time since the core business was in such good health as it is today.”

Also commenting was CEO Tobias Moers, who said: “There is also tremendous demand for our limited editions including the two times oversubscribed Aston Martin Valkyrie Spider, launched in August, and the plug-in hybrid super car Valhalla.”

“In addition, we have taken aggressive action on improving the efficiency and profitability of the business, through Project Horizon.”

2022 graduate jobs will jump 20%

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The Institute of Student Employers (ISE) has found that this year, vacancies for graduates will be 20% higher.

Firms particularly in energy and the environment are offering more graduate jobs than in 2021. Jobs in the public sector offered will be lower than 2021 but will remain high than pre-pandemic levels.

“The number of graduate jobs has slowly increased but this is the first time we’ve seen hiring back to pre-pandemic levels,” said Stephen Isherwood, chief executive of ISE.

“It demonstrates business confidence and how much employers continue to value a degree. However, with a significant number of employers noting a drop in the quality of applicants, students should be aware of resting on their laurels.”

British Honey revenue surges in 2021

British Honey – the AQUIS-listed producer of spirits, honey and jams – have released a trading update that points to a significant increase in revenue during 2021.

The company said they expected revenue to be no less than £8.4m in 2021, surging from the £1.6m they recorded in 2020.

The group said they were also encouraged the consolidation of their operations and saw cost savings through the next year.

“Our sales fared well in the final quarter of the year, providing good momentum into 2022 and giving us every confidence as we start the new financial year. Demand for our products remains strong and we are making rapid progress in ensuring our operations are more efficient,” said Richard Day, Chairman of BHC.

“It is essential that we have the right cost base in order to remain competitive as a business and can take advantage of the significant opportunities we are seeing in the market. Therefore, the Board considered now was the right time to consolidate our production, distribution and business operations into our Market Harborough distillery site. We will work with the teams that are affected in the coming weeks to ensure they have the support needed during this transition.” 

FTSE 100 spooked by prospect of rate hikes as US stocks dip

The FTSE 100 tracked US equities lowered on Thursday after the Federal Reserve released minutes suggesting markets should prepared for a number of rate hikes in 2022.

US technology shares were particularly heavily hit by the announcement driving notable downside in the S&P 500 and DOW due to their significant weighting in US indices.

“The Federal Reserve continues to wield considerable power over global markets and its latest comments are not what investors want to hear,” says Russ Mould, investment director at AJ Bell.

“Minutes from its latest monthly meeting implied that a tight jobs market and ongoing inflation could result in a more aggressive change in monetary policy with interest rates going up sooner than expected.”

“As a result, tech stocks have been heavily sold down, including a 3.3% decline in the tech-heavy Nasdaq index last night on Wall Street. A lot of tech companies trade on high valuations with the hope of large profit growth in the future rather than today, and these types of stocks are very sensitive to rising rates.”

The decline in the FTSE 100 masked a number of positive updates from UK corporates including retailer Next. Next raised their outlook for the year ahead after a strong festive trading period. Indeed, they felt sufficiently confident to return cash to investors in the form of a special dividend, despite concerns over rising costs.

“For all the tales of woe on the high street, there is one shining jewel to be found in the form of Next. There aren’t many bricks and mortar retailers dishing out special dividends or upgrading guidance multiple times over,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

Greggs also released a bumper trading update and reported £1,230m sales in 2021, up from £811m in 2020 and £1,168m in 2019. However, Greggs results were overshadowed by the departure of their CEO.

“The big news and overshadowing another solid earnings performance is long-time CEO Roger Whiteside is retiring, to be replaced by retail and property head Roisin Currie,” explained Joshua Raymond, Director at financial brokerage XTB.

“Given the fantastic growth of the Greggs brand under Whiteside’s leadership, its no surprise to see some instability in the share price this morning, which trades lower by 2%.”

Next, the FTSE 100 and Power Metal Resources spin-out with Alan Green

Alan Green joins the first UK Investor Magazine Podcast of 2022 to discuss the key themes in markets this week and a number of UK equities.

The FTSE 100 posted a 4.6% gain in December and started the new year with a bang as it traded above 7,500 to hit pre-pandemic highs.

However, today saw markets hit by fears over the hawkishness of the Federal Reserve sending the FTSE 100 below 7,500.

We discuss Next after they posted an encouraging trading update in which they raised their forecasts for the year ahead and announced a 160p special dividend. 

Alan outlines a recent interview he had with ECR Minerals and their recent developments. 

Power Metal Resources is planning a number of spin-outs including Golden Metal Resources and we take a look at their plans for an IPO in April. 

B&M revenues lift

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B&M revenues have increased and the group increased its full-year expectations.

For the 13 weeks from 26 September 2021 to 25 December 2021, the retailer said that revenues increased 14%.

“Our decision to take receipt of imported Christmas stock early in the season meant we were able to provide customers with great products at great prices,” said Simon Arora, B&M chief executive.

“The consistency of performance in the core B&M UK business reflects the growing appeal of our stores as a destination visit for seasonal products, as well as the strength of our supply chain,” he added.

The boss said he expects difficulties in the year ahead including “ongoing supply chain disruption, inflationary pressures and uncertainty surrounding possible Covid-related restrictions.”

Next increases full-year profit expectations

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Next has increased its full-year profit outlook after a strong Christmas period.

In the eight weeks to boxing day, full-price sales jumped 20% compared to the two years previously. Full-year profit before tax guidance has increased from £22m to £822m.

“In the run up to Christmas our stock levels were materially lower than planned. We also experienced some degradation in delivery service levels as a result of labour shortfalls in warehousing and distribution networks,” said the group in a trading update.

“The fact that our sales remained so robust in these circumstances is, we believe, testament to the strength of underlying consumer demand in the period.”

Despite the strong performance at Next, the group has warned of disruption in the year ahead and will not be immune to rising inflation.

“For all the tales of woe on the high street, there is one shining jewel to be found in the form of Next. There aren’t many bricks and mortar retailers dishing out special dividends or upgrading guidance multiple times over,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

“Next’s impressive performance has partly been down to returning demand for formal and occasionwear, as customers got ready for a festive season with a bit more cheer compared to last year. But Next has also managed the business very well – stock levels have reduced, and labour shortages didn’t derail performance. The group’s stellar online business is to thank for propping things up, with another run of double digit growth meaning reducing physical shop sales aren’t causing a headache.

Greggs posts strong Christmas sales

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Greggs has said that its full-year trading will be ahead of expectations.

Like-for-like sales are 0.8% higher than the same period two years ago.

The group, which has over 2,000 stores across the UK, saw strong sales of its Christmas products including 6.7m mince pies.

The group saw “a strong performance in October being followed by more challenging conditions as consumers responded to precautionary messages relating to the new coronavirus variant.”

“Our range continues to evolve in line with changing consumer tastes and dietary choices so the launch of our new Vegan Festive Bake was a natural next step,” the company said in a statement.

“The fourth quarter results were achieved against a backdrop of continued disruption to staffing and supply chains.”

“Our teams across the business have done a magnificent job coping under difficult circumstances and in recognition of this we brought forward the planned 2022 pay awards for our operational teams by five months.”

The group has also announced a new CEO. Roger Whiteside will be stepping down and be replaced by retail and property director Roisin Curry.

“The big news and overshadowing another solid earnings performance is long-time CEO Roger Whiteside is retiring, to be replaced by retail and property head Roisin Currie,” said Joshua Raymond, Director at financial brokerage XTB.

“Given the fantastic growth of the Greggs brand under Whiteside’s leadership, its no surprise to see some instability in the share price this morning, which trades lower by 2%.”

“However, Currie is also a longstanding member of the leadership team and so the expectation is the transition should be relatively smooth. What she faces is significant inflationary headwinds and what shareholders will want to see is stability in profit margins over the coming year. This will be no easy task for the new CEO.” 

New AIM admission: Facilities by ADF in demand

Facilities by ADF is the first AIM new admission of 2022. It provides vehicles and services to the film and TV industry, predominantly in the UK but also in Europe. There was a tough period during lockdown, but demand has returned. Strong relationships with production companies help the company to win business.
The £13m net that Facilities by ADF has raised will be invested in much needed additional capacity. The company is already nearly fully booked for this year.
The share price opened at 52p and ended the day at 54.5p. There were 775,000 shares traded during the day. That includes a sale o...