Hiring is tough and it is not getting any easier for firms

Liam Roche
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Hiring is tough and it is not getting any easier for firms

Hospitality mentioned by the ONS as the industry facing the biggest challenges

Labour shortages have been difficult for businesses seeking to regain momentum on the back of lockdowns and the trend could be set to continue.

According to the latest ONS vacancy survey, 41% of businesses struggled to recruit in late August.

A lack of EU workers was cited as an issue by 46% of Transport and Storage companies.

Hospitality was specifically mentioned as the industry facing the biggest challenges.

“It’s no surprise to see hospitality topping the list of those struggling to recruit. Restrictions meant they were late to the party and many people who used to work in bars and restaurants found other jobs to pay the bills, jobs that often have more sociable hours,” says Danni Hewson, AJ Bell financial analyst.

“There’s also a niggling uncertainty amongst the public that we’ve really seen an end to restrictions and most people believe that any spike in COVID cases would result in hospitality being forced to close once again.”

People shopping for groceries recently will have noticed more expensive food prices and the HGV driver shortage has been a key factor.

“Almost half of businesses in the transport and storage sector said that a lack of EU workers was to blame for the shortages and across the board one in four businesses said a fall in the number of EU applicants was an issue,” says Hewson.

It is difficult to assess the impact of Brexit on the issue due to the arrival of the pandemic.

“It’s also impossible to guess how the end of the furlough scheme will change the picture. Some jobs will be lost, and some workers will be brought back into the labour market where they will be received with open arms if the latest recruitment drive by John Lewis is anything to go by,” said Hewson.

Hedge funds are turning to private equity for higher returns

Liam Roche
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Hedge funds are turning to private equity for higher returns

Hedge funds have closed 770 deals so far in 2021

Hedge funds made $153bn worth of investments into private companies in the first six months of 2021, highlighting the extent to which they are now investing in private companies.

Goldman Sachs issued a report that showed that hedge funds have closed 770 deals so far in 2021, already surpassing the amount through the whole of 2020.

Lat year, 753 deals were done at a combined total of $96bn.

The data shows that hedge funds, which are more usually known for buying shares in public companies, are now being attracted by private markets as they seek higher returns.

It also highlights how private equity and venture capital have come into the public eye.

Andrew J Scott, Founding Partner at 7percent Ventures, commented on the trend: “In the UK firms like Forward Partners and Seraphim have recently followed in the earlier footsteps of Draper Esprit and gone public. Meanwhile, PE has woken up to the enormous returns which can be made by betting on the right tech startup. Technology being the future of literally everything, it’s unsurprising big money is targeting a sector which used to be the preserve of traditional tech VC, until a company IPO’d.”

“What’s unclear yet is whether hedge fund investors and others will stomach the ups and downs of the startup world. VC investing is a power law game. Just like VC funds themselves, a few companies create the vast majority of investment returns. Even investing at a later stage, startups are still riskier than your traditional PE bet. The winning investors will be those who pay close attention to their portfolio construction and internalise the other cultural differences of the tech startup investing world.”

FTSE 100 makes progress but some companies held back on China concerns

Liam Roche
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FTSE 100 makes progress but some companies held back on China concerns

The FTSE 100 added 0.54% on Thursday morning, bringing the index to 7,054.

“The FTSE 100 started on the front foot on Thursday as investors faced competing catalysts from East and West,” says AJ Bell investment director Russ Mould.

“Some decent corporate news and an upbeat report from the US manufacturing sector outweighed continuing worries about China which dragged down mining stocks and other firms with links to the Chinese economy including luxury brand Burberry.”

“Construction equipment hire business Ashtead topped the FTSE 100 leaderboard as it lifted full year expectations – the group is widely seen as a beneficiary of the anticipated infrastructure spending splurge in the US.”

The Chinese economy was dealt a blow in August due to strict measures on the coronavirus, which is raising concerns over the prospects of a global economic recovery.

Reports coming from America suggest that President Biden has been undertaking meetings to discuss putting forward domestic spending legislation.

FTSE 100 Top Movers

Rolls-Royce (3.93%), IAG (3.49%) and Flutter Entertainment (3.08%) are leading the way atop the FTSE 100 at the time of writing.

Burberry (-2.01%), Rio Tinto (-1.76%) and Anglo American (-1.37%) are trailing the pack thanks to concerns over the Chinese economy.

Artisanal Spirits sees sales grow upon suspension of US tariffs

Liam Roche
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Artisanal Spirits sees sales grow upon suspension of US tariffs

Artisanal Spirits listed on AIM market in June

The Artisanal Spirits Company (LON:ART), the owner of The Scotch Malt Whisky Society (“SMWS”) and other spirits for sale primarily online to a discerning global membership, confirmed its H1 results on Thursday.

The group’s revenue increased 20% to £7.9m, slightly ahead of management’s expectations.

Strong international sales growth, particularly in America, with performance boosted by the suspension of US tariffs on imports of single malt Scotch whisky in March 2021.

The AIM-listed firm saw a recovery in UK venue & events sales following phased reopening in Q2.

Gross profit increased 31% to £5.1m. This resulted from the revenue volume growth, as well as the gross margin improvement to 65%, which reflected the positive impact of the suspension of US tariffs.

The Artisan Spirits company share price is up by 3.58% on Thursday morning.

David Ridley, Managing Director of the Company, said:

“Momentum in key international markets continues to build on the back of growing demand for our products and we have seen a strong and sustained recovery in UK venue & events sales since their phased reopening from COVID from mid-May onwards, giving us confidence in meeting market expectations for the full year. While Brexit continues to present some logistical challenges for exports to certain EU markets, we continue to work through them.”

“From an operational perspective, we continue to make decisive progress against the strategic objectives outlined at the time of IPO, with ongoing material investment in spirit and cask wood and good progress with our new supply chain facility, standing us in excellent stead for the future.”

“We are still at the very beginning of our journey as a listed company, but we have made a bright start. Against a backdrop of favourable market trends, we are optimistic about our ability to realise our growth ambitions to double ASC sales between 2020 and 2024, and we look forward to keeping shareholders updated as we work to deliver long-term value.”

Greatland Gold confirms acquisition of exploration tenements

Liam Roche
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Greatland Gold confirms acquisition of exploration tenements

Greatland Gold to expand footprint in the Paterson province

Greatland Gold (LON:GGP) confirmed on Thursday that it has entered into an agreement with Province Resources Limited to acquire the 100% owned Pascalle tenement.

The 100% owned Taunton tenement and two tenement applications will be purchased for exploration licenses in the Paterson Province of Western Australia for a consideration of cash and shares.

The AIM-listed firm acquired the 100% owned Pascalle tenement covering 75km2. The new tenement is proximal to world class gold-copper deposits with Havieron 20km to the East and Newcrest’s Telfer Mine 14km to the West.

Greatland has acquired the 100% owned Taunton tenement in Paterson South, centred 240km
south-east of Havieron and covering 100km2.

The gold miner acquired two licence applications in Paterson South, located between 120km-
170km south east of Havieron and covering 840km2.

All areas contain multiple magnetic and other geophysical anomalies identified to
date and remain untested

Shaun Day, Chief Executive Officer of Greatland Gold, commented: “This is our first licence
acquisition since Havieron and adds over 1,000km2 of exploration ground in the Paterson region expanding Greatland’s strategic footprint in one of the most prospective exploration areas for gold-copper deposits in Australia.”

“The Pascalle tenement is optimally located directly between two world class discoveries of Havieron and Telfer and nearby existing infrastructure. We know this area well and our exploration team has the experience and intellectual property from Havieron to explore for prospective mineralisation systems.”

“Furthermore, the tenements in the Paterson South region give us exposure to some exciting
geophysical targets under around 400 meters of cover with one adjacent to our existing Canning licence application. This provides an opportunity to use the knowledge we have gained in the northern Paterson and apply this to the same host rock formations and structures we are seeing in the south.”

The Greatland Gold share price is down by 1.6% on Thursday morning.

Ryanair looking to fly 225m passengers per year by 2026

Liam Roche
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Ryanair looking to fly 225m passengers per year by 2026

Ryanair has increased its previous target by 25m

Ryanair confirmed on Thursday that it is expecting to fly 225m passengers each year by March 2026.

The announcement marks an increase of 25m on its previous target.

Ahead of the company’s AGM today, Ryanair is expecting to see traffic growth of 50%, compared to levels seen before the pandemic. This is an increase of 33% compared to previous estimates.

The Irish airline carried 149m passengers during the last full year before the pandemic came along.

For this year, while it has to deal with ongoing restrictions, it’s aiming to carry 100 passengers.

Chief executive Michael O’Leary said: “With these new deliveries, Ryanair will open 10 new bases across Europe this year as we work with airport partners to help them recover traffic & jobs post Covid, and take up slot opportunities that are being vacated by competitor airlines who have collapsed or significantly reduced their fleet sizes.”

“The Covid-19 pandemic has delivered an unprecedented blow to Europe’s aviation and tourism industries”, he added. 

“Only Ryanair has used this crisis to place significantly increased aircraft orders, to expand our airport partnerships, and to secure lower operating costs so that we can pass on even lower fares to our guests, so that together with our airport partners, we can recover strongly from the Covid pandemic and deliver higher than expected growth in both traffic and jobs over the next 5 years.”

The Ryanair share price is up by 4.95% during the morning session on Thursday.

Fire at UK-France subsea cable sees new price rise again

Liam Roche
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Fire at UK-France subsea cable sees new price rise again

UK electricity prices are now the most expensive in Europe

A fire at Britain’s main electricity subsea cable with France has impacted imports to the UK, causing an upwards surge in prices when supply issues have already brought about record highs.

National Grid, whose share price is down by 0.73% on Wednesday, confirmed that the fire broke out at a site near Ashford in Kent.

The recent highs in energy prices are expected to go even higher over the next year and could put the futures of a number of energy companies in doubt.

On Wednesday, the market price at a major UK electricity auction reached £2,500 per megawatt-hour, a record price. It compares to a typical baseload price of around £40 per megawatt-hour during 2019 and 2020.

Glenn Rickson, head of European power analysis at S&P Global Platts Analytics, says the disruption caused by the fire has the possibility to exist “for weeks, maybe months”.

“It couldn’t come at a worse time for the UK and I would expect [electricity prices] to spike strongly, even relative to the new records seen this week,” he added.

The UK has seen electricity prices rise to record highs over recent weeks, and are now the most expensive in Europe.

Britain has specifically come under pressure due to its reliance on renewable energy and gas to generate electricity.

Unideal weather conditions have reduced the energy that can be gathered using wind turbines.

Did the interims call represent a value inflection point for CloudCall ?

Jon Levinson
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Did the interims call represent a value inflection point for CloudCall ?

This company reported mixed Interims to June 2021 yesterday, while revenues improved a not stellar 13.4% to £6.4m its recurring and repeat revenues represent an impressive 93.9% of total revenues. The gross profit (GP) marginally increased to an attractive 81%. CloudCall (Aim:Call) is a leading cloud-based communications software integrator with a Customer Relationship Management (CRM) platform. It brings all types of messaging, conversations, and contract data bases together from any devices which enables its clients to leverage their customer data for more effective commu...

Market’s subdued response to iPhone 13 launch is no surprise

Liam Roche
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0
Market’s subdued response to iPhone 13 launch is no surprise

Investors often ‘buy the rumour sell the fact’ when it comes to Apple shares

The Apple share price was subdued in response to CEO Tim Cook‘s launch of the iPhone 13, as well as updated versions of its watch and iPad.

The Apple share price even closed down by 0.96% yesterday after Cook divulged some of the new exclusive features of its latest release.

One of the key features of the iPhone 13 is its ability to film “portrait mode” videos with a depth of field effect.

It is only the Apple smart phone which allows users to edit this effect after filming.

This seems to be a common theme for Apple when it releases new products and “as much the result of the old formula of ‘buy on the rumour sell on the fact’ as anything else,” says AJ Bell investment director Russ Mould.

AnnouncedProductLaunched6 Months Before3 Months Before 3 Months After 6 Months After 12 Months After
09-Jan-07iPhone 129-Jun-0743.8%30.2%25.8%63.7%39.4%
09-Jun-08iPhone 3G11-Jul-08(0.1%)(5.9%)(43.9%)(47.5%)(19.7%)
08-Jun-09iPhone3GS19-Jun-0955.0%37.3%32.7%40.1%96.5%
07-Jun-10iPhone 424-Jun-1028.7%17.3%8.7%20.3%21.3%
04-Oct-11iPhone 4S14-Oct-1123.7%18.1%(0.5%)43.4%49.2%
12-Sep-12iPhone 521-Sep-1216.2%69.9%(25.8%)(35.3%)(33.2%)
17-Sep-13iPhone5GS20-Sep-133.4%12.1%17.5%13.1%51.2%
09-Sep-14iPhone 619-Sep-1429.1%6.7%14.1%8.1%15.8%
09-Sep-15iPhone 6S25-Sep-15(7.0%)(10.0%)(5.8%)(7.9%)(0.1%)
07-Sep-16iPhone 716-Sep-169.1%18.5%(0.3%)(8.3%)51.3%
12-Sep-17iPhone 822-Sep-1718.1%7.1%7.9%12.7%38.5%
12-Sep-17iPhone 8-plus22-Sep-1718.1%7.1%7.9%12.7%38.5%
12-Sep-17iPhone X03-Nov-178.9%2.4%11.4%4.2%37.5%
13-Sep-18iPhoneXS, XSMax, XR26-Oct-1828.2%19.0%(22.6%)(11.0%)(3.4%)
10-Sep-19iPhone 1120-Sep-1925.0%14.8%21.1%31.7%109.5%
13-Oct-20iPhone 1223-Oct-2060.8%30.0%5.2%8.1% 
14-Sep-21iPhone 1324-Sep-2122.4%13.5%   
 AVERAGE 22.5%16.9%3.3%9.3%32.8%

However, a lot does ride on the latest iteration of the iPhone and shake-up of Apple’s product range.

“The firm continues to encounter anti-trust pressure from regulators regarding its App store – and its monster $2.4 trillion market capitalisation means that any slip or loss of earnings momentum could leave shareholders with a problem,” Mould said.

A forward price/earnings ratio of nearly 27 times prices in a lot of future growth – and analysts have pencilled in just 5% sales growth and 2% earnings per share growth for the year to September 2022.

“Hard to believe as it may be, this leaves Apple with something to prove, in terms of its ability to keep regulators sweet, persuade customers to upgrade to 5G mobile devices and shareholders that expected 70% surge in earnings per share in the year to September 2021 was not just a one-off, owing to the pandemic, lockdowns and a surge in working from home – sales growth in Mac computers and iPads showed marked signs of a slowdown in the last fiscal quarter, to June.”

Apple has already suffered four induced profit slides in the past decade

The first three were largely related to the iPhone’s product cycles and its functionality, price points and demand in China (the early stages of the pandemic contributed to the last one), according to Mould.

“The subsequent share price surge may mean that January 2020’s crunching profit warning is but a distant memory, but it does not mean it cannot happen again in the latest set of product features fail to capture consumers’ imaginations,” Mould said

UK sees business creation at record levels in Q2

Liam Roche
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0
UK sees business creation at record levels in Q2

Over 2,000 businesses created each day between April and June

More British businesses were set up between April and June than any Q2 in history, research has revealed.

From the beginning of April to the end of June this year, 190,639 firms were incorporated at Companies House, according to a study by tax app Ember.

This amounts to over 2,000 new businesses per day.

It is the first time ever that a Q2 has seen in excess of 190,000 companies created in the UK.

The previous high for Q2 was last year, when despite the damage caused by the pandemic, 176,115 businesses were formed in the period.

In total, 402,007 businesses have been created in the first six months of 2021, which is already close to surpassing the 440,638 new companies incorporated in the whole of 2011.

The calendar year of 2020 saw the number of new businesses totalling 768,777, an average of 192,194 per quarter, or 2,106 each day.

Commenting on the study, Ember co-founder Daniel Hogan said: “July of 2020 seems to have been the starting point for a new business boom in the UK – the third quarter of 2020 saw the highest number of business incorporations in British history. That has been followed by three more quarters of impressive growth, and it’s great to see so many new companies being created.”

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