Heathrow passenger numbers on the rise as airport says more must be done

Liam Roche
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Heathrow passenger numbers on the rise as airport says more must be done

Heathrow is pressing for UK travellers to go to America without restrictions

Heathrow airport reported an increase in passenger numbers in July, while urging America to ease its restrictions on passengers travelling from the UK.

During July, Heathrow dealt with 1.5m travellers, a 74% increase on the same month a year before, although the number is still down by 80% from levels seen before the pandemic.

It said the improved numbers were down to the government’s easing of restrictions, although it added that Heathrow is yet to see the impact of the decision to allow vaccinated people from the USA and the EU to come into the UK without having to quarantine.

However, travellers heading to America have not yet been allowed to make the journey without restrictions.

Having reaped the benefits from North American travellers coming into the country, Heathrow is now pressing for the UK travellers to be able to do the same going the other way.

“With fully vaccinated US visitors now able to travel to the UK without the need to quarantine, the joint UK/US travel taskforce must capitalise on the UK’s world-leading vaccine rollout and reach a reciprocal agreement for fully vaccinated UK travellers,” the airport said.

Heathrow’s chief operating officer, Emma Gilthorpe, was optimistic over the outlook for the travel industry in a statement, but reaffirmed the need for the government to act.

“The job though is far from complete. Government must now capitalise on the vaccine dividend and seize the opportunity to replace expensive PCR tests with more affordable lateral flow tests.”

“This will ensure travel remains attainable for hardworking Brits, desperate for well-earned getaways and keen to reunite with loved ones before the summer travel window closes.”

BlackRock retains confidence in China despite recent clampdowns

Liam Roche
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BlackRock retains confidence in China despite recent clampdowns

China will keep its hawkish stance over the medium-term in order to protect the quality of growth

China is set to release key economic data, including its GDP figures and inflation, which will give investors a better idea of where the world’s second largest economy stands.

Analysts have suggested that the its growth could reach 8% during Q2 year-on-year, as it kept the spread of Covid mostly under control, while demand from elsewhere held steady.

The CCP has also made efforts to support businesses, in addition to its strong policies aimed at keeping the virus under wraps.

As a result, China’s economy has weathered the pandemic and come out the other side ahead of its peers.

“China is already a distinct pole of global growth,” said BlackRock in its mid-year outlook. The world’s largest asset manager added that now is the right time to treat country as an investment destination separate from emerging markets and developed markets.

BlackRock also believes that Chinese authorities will begin to loosen their policies as growth begins to slow, adding that the country will keep its hawkish stance over the medium-term in order to protect the quality of growth.

China’s clampdown on a number of private industries remains an issue, especially for those investing in Chinese stocks. Tencent was the latest stock to fall as the gaming sector recently came under pressure from the authorities in China.

“We believe the clampdown on some private industries could go on for years, but its intensity would likely fluctuate,” said BlackRock. “We have yet to see the peak of the regulatory campaign, but could see its pace and intensity moderate amid slower growth.”

BlackRock advised investors to be aware of ongoing tensions, but added that its neutral allocation to Chinese assets is multiples larger than typical benchmark weights.

The MSCI China 10/40 Index, designed to measure the performance of large and mid cap representation across China, added 4.55% over the past year. This follows the recent sell-off of Chinese stocks, causing the index’s value to lose 13.50%.

The top constituents of the MSCI China 10/40 Index are Alibaba (8.83%), Tencent Holdings (8.21%) and Meituan (4.6%).

Deliveroo share price bounces again after Delivery Hero buys minor stake

Liam Roche
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Deliveroo share price bounces again after Delivery Hero buys minor stake

Deliver Share Price

The Deliveroo share price (LON:ROO) jumped up by nearly 10% on Monday morning, after it was reported that German rival Delivery Hero acquired a 5.09% stake in the company. It was up by another 7% on Tuesday as news emerged that the London-listed food delivery company poached a leading technology executive from Amazon, one of its own investors.

At 366.28p per share art the time of writing, the Deliveroo share price is down from its launch price of 390p back in March. Following its disastrous IPO, the food delivery company has managed to gain some momentum, adding 27.03% over the past six months.

Delivery Hero

Delivery Hero, based in Berlin, now owns 87.4m Deliveroo shares valued at £284.1bn. This figure is based on the closing Deliveroo share price last Friday.

The German company also owns minority stakes in other food delivery companies, one being Just Eat, the largest platform in Europe.

Jefferies analyst Giles Thorne told The Financial Times: “it is hard to say with conviction at this point what Delivery Hero’s intention is” behind this latest minor stake take-up.

Both companies, two of the largest food delivery companies in Europe, have been competing for market share across the content for nearly ten years now.

Despite competing in Europe, and via other companies in other regions, Delivery Hero doesn’t operate in the UK, which is Deliveroo’s main market. Back in 2016, Delivery Hero sold its UK business, Hungryhouse to Just Eat for £200m.

How well do Brits understand cryptocurrencies?

Liam Roche
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How well do Brits understand cryptocurrencies?

Family and friends are the first port of call for information on investing in crypto

The number of people in the UK investing in cryptocurrencies has surged to 2m.

Research has revealed that over a third of those British investors do not have a full understanding of how cryptocurrencies function.

A survey put together by Appinio, the global market research platform, and FINTECH Circle, a leading fintech community, found that 36% of people who have invested into crypto only have a rough understanding of the concept. While 25% feel they can easily explain crypto to others.

With 26% of those surveyed now investing in cryptocurrencies, it is the third most popular investment choice behind ISAs and individual equity/shares.

Sustainability doesn’t appear to be a priority for crypto investors, compared to other investment industries, with only 40% saying that it is a priority. Over 40% of investors in the space admitted that they are not aware of how sustainable or socially responsible their portfolio is.

When asked what the main source of information is for researching what to invest, family and friends are the first port of call with 54% of 16-24 year-olds stating this followed by 41% of 55-65 year-olds.

Social media has notably become an important source of information when it comes to investing as 31% of 18-24 year-olds admit they use social platforms with 31% referring specifically to YouTube.

Susanne Chishti, CEO at FINTECH Circle, said: “We have worked with Appinio in tracking the growing popularity of cryptocurrencies and wanted to see both the knowledge in this sector and the effect of online communities that have democratised investing, be that in cryptocurrencies or stocks/ETFs and bonds.”

“The findings clearly show that despite investments into and speculation with cryptocurrencies, there is still a gap in knowledge as to what they are and how they work. This shows there is a greater opportunity for crypto marketplaces to grow closer to investors and potential investors by offering more education about risks and learning in this space.”

July consumer spending up 11.6% as Brits enjoy newfound freedoms

Liam Roche
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July consumer spending up 11.6% as Brits enjoy newfound freedoms

Barclaycard noted that pent-up demand from lockdown appears to be cooling off

Consumer spending rose by 11.6% in July, compared to the same period in 2019, as improved weather and the easing of restrictions led Brits to get their wallets out, according to the Barclaycard report.

More specifically, the entertainment sector saw growth for the first time since the onset of the pandemic, as Brits ventured to the cinema and sporting events.

Spending on fuel rose by 4.1%, the highest level since before the pandemic came into effect, on increased prices at the pump. More people drove to their UK-based holiday destinations or began travelling to work by car.

On the other hand, the travel industry is continuing to struggle. Despite overseas bookings rising, spending on airlines and travel agents is down by 56.2% and 66.6% respectively. This compares to a decline of 70.9% and 75.3% in June.

Barclaycard noted that pent-up demand from lockdown appears to be cooling off in some sectors, such as restaurants and face-to-face retail.

Raheel Ahmed, Head of Consumer Products, said: “July’s major sports fixtures and the heatwave kept the nation in good spirits, providing more reasons to celebrate together, and giving the entertainment industry its long-awaited boost back into growth.”

“While some sectors took a small step back as the post-lockdown ‘honeymoon’ period cooled, July was a positive month overall. However, with inflation expected to rise, it will be interesting to see how this impacts consumer spending behaviour over the coming months.”

Rockpool generates ‘exceptional’ returns following sale of Outright Games

Liam Roche
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Rockpool generates ‘exceptional’ returns following sale of Outright Games

EMK Capital, a UK-based private equity fund, will now take a majority stake in Outright

Rockpool, the UK private equity firm, has confirmed the sale of Outright Games Limited from its portfolio, generating an ‘exceptional’ 12.7x net return to equity investors.

In 2016, Rockpool took a majority stake in Outright, the video game publisher, provided growth capital in the process.

“Since then, the business has grown substantially by following a clearly defined organic growth strategy, with offices in Los Angeles, London and Madrid, and a distribution network covering over 25 countries,” said Rockpool in a statement.

Ben Hutchinson, Investment Manager at Rockpool Investments, said the “the superb management team at Outright have managed to create a break-out, market leading success story.”

“We are very proud to have been part of the first chapter of the Outright Games success story and wish both the Company and EMK every success in the future.”

Terry Malham, Chief Executive of Outright Games added: “When founding Outright Games we looked to bring high quality, licensed family-friendly entertainment which we felt the video game sector was lacking. Rockpool’s initial investment was a key part of our success over the past four years, and we are thankful for their support so far.”

The company’s core focus is on creating high-quality games based on well-known brands or characters, including Paw Patrol, Jumanji, PJ Masks and Peppa Pig, from global entertainment companies such as Cartoon Network and Nickelodeon.

Since inception, Outright has sold over 18 million units and has secured a pipeline of strong intellectual property for launch over the coming years.

Following Rockpool’s exit, EMK Capital, a UK-based private equity fund, will now take a majority stake in the company.

FTSE 100 looks upon summer lull

Liam Roche
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FTSE 100 looks upon summer lull

The FTSE 100 was up, then down, early on Tuesday morning as the index struggled for direction. Having lost 0.12% at the time of writing, “investors weighed a weak session on Wall Street overnight and slowing growth in UK consumer spending,” says AJ Bell financial analyst Danni Hewson.

“With the flood of big companies reporting on both sides of the Atlantic slowing to a trickle and with trading volumes seeing their usual summer lull there is a sleepy feel to the markets at present,” Hewson added.

“However, previous experience suggests it might not take much to jolt investors awake, six years ago an August sell-off in China prompted a sharp correction around the globe.”

Mounting concern that the spread of the Delta variant might set back the Chinese recovery, after it became the first major economy to emerge from the pandemic, is a risk the world will be watching.

FTSE 100 Top Movers

Flutter Entertainment (7.65%), Hargreaves Lansdown (2.23%) and Entain (1.28%) are leading the way on the FTSE 100 during the morning session.

At the bottom end, InterContinental Hotels Group (-2.33%), M&G (-1.93%) and Rolls-Royce (-1.51%) lost the most ground out of the UK’s top 100 companies.

Flutter Entertainment

Flutter Entertainment, the parent company of Paddy Power, Sky Bet and others, announced it had increased its profits for H1 as the company exceeded its expectations.

The FTSE 100 group’s pre-tax profit rose by as much as 221% to £77m. 

Flutter Entertainment’s group revenue nearly doubled to £3.05bn, as the number of monthly users grew by 40%.

Used car sales surge over second quarter

Liam Roche
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Used car sales surge over second quarter

Supply of new models remains low on shortage of semiconductor chips

The UK’s used car market boomed during Q2 of this year, according to numbers released on Tuesday by the Society of Motor Manufacturers and Traders (SMMT).

In its second best quarter ever, the market grew by 108.6%.

Over the past three months 2,167.504 used vehicles were sold, an increase of 6.6% compared to the same period in 2019, which came before the pandemic.

There was substantial growth in all three months during the last quarter, with April, May and June up 307.4%, 9.9% and 4.6% respectively.

Car makers from all over the world have been forced to reduce their production levels as a result of the global shortage of semiconductor chips.

At the same time, as restrictions eased, but people remained cautious over using public transport, demand for private vehicles saw a resurgence.

Demand for used electric and hybrid vehicles grew between April and June, however, transactions were still made up mostly by petrol cars.

SMMT chief executive Mike Hawes said: “This is welcome news for the used car market as transactions rebounded following nationwide lockdowns which closed retailers.”

“More motorists are turning to used cars as supply shortages continue to affect the new car market, and the increased need for personal mobility with people remaining wary of public transport as they return to work.”

“A buoyant used car market is necessary to maintain strong residual values which, in turn, supports new car transactions. We now need to see a similar rebound in new car sales to accelerate the fleet renewal necessary to deliver immediate and continuous improvements in air quality and carbon emissions.”

Flutter Entertainment share price surges as firm continues US expansion

Liam Roche
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0
Flutter Entertainment share price surges as firm continues US expansion

Flutter Entertainment’s pre-tax profit rose by as much as 221% to £77m

Flutter Entertainment (LON:FLTR), the parent company of Paddy Power, Sky Bet and others, announced it had increased its profits for H1 as the company exceeded its expectations.

The FTSE 100 group’s pre-tax profit rose by as much as 221% to £77m.

Flutter Entertainment’s group revenue nearly doubled to £3.05bn, as the number of monthly users grew by 40%.

Reported revenue and earnings (adjusted EBITDA), rose by 99% and 75%, helped by the company’s acquisition of The Stars Group, the Canadian sports betting and online casino firm.

The Flutter Entertainment share price surged by 7.03% early on Tuesday morning.

“The first half of 2021 exceeded our expectations,” said chief executive Peter Jackson. “Our global sports businesses benefitted from further enhancements to our products and the return to more normalised sporting calendars while we sustained our strong performance in gaming despite the challenging comparatives set last year.”

“The company has continued its expansion in the US at pace,” said Neil Shah, director of research at Edison Group, “with its FanDuel product capturing 45% of the online sportsbook market share”.

“This has led to a revenue growth in the market of 159% to £652m ($906m), with over 2.2 million customers having been acquired since sports betting launched at an average CPA of $291. As a result, Flutter US expects to generate positive EBITDA in 2023, however, this is mainly driven by anticipated future state openings, with Arizona and Connecticut next in line to open up.”

However, Flutter Entertainment’s debt level of £2.682bn, making it more difficult for the company too payout any dividends.

“The company has also continued its commitment to safer gambling during this period as it boosted investment in resources and technology to optimise its controls,” Shah says “In addition, the company has pushed campaigns to promote safer gambling and awareness campaigns to the forefront of its strategy as it remains committed to promoting positive customer engagement. The company has already reported a solid start to the second half of the year. With further expansion across critical markets expected, the next six months look positive for the business and its stakeholders.”

Castillo Copper to test-drill 130m-thick target at Arya Prospect

Liam Roche
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Castillo Copper to test-drill 130m-thick target at Arya Prospect

Castillo Copper (LON:CCZ), the copper-focused metal explorer across Australia and Zambia, confirmed on Tuesday that all logistics are ready for drilling to commence at the prime Arya Prospect in September.

In addition, Castillo’s geophysicist consultant has re-interpreted historical aero-electromagnetic and electromagnetic data, which shows the 130m-thick EGO1 anomaly is shallower than initially estimated and verifies the Arya Prospect is a major target in Mt Isa’s copper-belt of Queensland, Australia.

The Castillo Copper share price is up by 3.14% on Tuesday morning.

Highlights

All key logistics have been finalised to enable work to commence at the prime Arya Prospect during September 2021

  • A re-interpretation of legacy data by Castillo’s geophysicist consultant – which enabled better targeting at the Big One Deposit – provides new insights and re-emphasises Arya Prospect’s merits as a major exploration target in Mt Isa’s copper-belt:
  • Re-processing data from AusAEM Survey, commissioned by Geoscience Australia, shows the EG01 anomaly – interpreted to be 130m thick, 1,500m long & 450m wide – is only around 100-200m deep
  • This is a significant finding, as it highlights EG01 is much shallower than the initial ~430m depth estimate based on analysing data from BHP, which discovered the Arya Prospect in the mid-1990s and recommended it be drill-tested
  • Castillo’s geophysicist had previously re-processed aero-magnetic data generated by Mt Isa Mines in the mid-1990s, which highlighted a significant electro-magnetic anomaly proximal to the Arya Prospect in an otherwise quiet magnetic terrain
  • Reconciling known geochemical surface results (up to 1.84% Cu in rock-chips) with newly interpreted magnetic and AEM results, makes the case for test-drilling the Arya Prospect even more compelling ahead of the campaign kicking-off

Simon Paull, Managing Director of Castillo Copper, commented on his excitement for the company to commence drilling the prime Arya Prospect in September. “This campaign is particularly timely as recent work by our geophysicist consultant has interpreted the sizeable 130m-thick EG01 anomaly to be materially shallower than previously estimated.”

“At less than 200m in depth, as opposed to ~430m originally interpreted, this new insight enhances the exploration potential of the Arya Prospect and makes the case for drilling even more compelling.”

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