Plus 500 sees growth slow following bumper 2020

Liam Roche
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Plus 500 sees growth slow following bumper 2020

Plus 500 revenue for H2 to June 2021 recorded at $346m

Plus 500 (LON:PLUS) said its trading levels had fallen back since the early period of the pandemic, while the company reported ‘positive momentum’.

The fintech company’s revenue for H2 to June 2021 came in at $346m, compared to $564m over the same period of time in 2020, as Plus 500 reaped the benefits from surging demand during the pandemic. For the first six months of 2019, the company’s revenue was recorded at $148m.

Despite the fall in revenue, Plus 500 drew attention to a “very strong period of customer acquisition” during the first half of the year.

The firm said that 136,980 new customers came aboard, down from 198,176 people in 2020. This figure stood at 47,540 in 2019.

Overall, Plus 500 said its financial position remains robust, and cash balances remain healthy, driven by the strong EBITDA performance and continued high cash generation during the period.

David Zruia, Chief Executive Officer, commented: “Plus500’s excellent performance so far in 2021 was driven by the strength and agility of our technology and its ability to respond rapidly to market developments, news events and customer requirements.”

“We have multiple opportunities from which to access future growth through both continued organic investment and targeted acquisitions, by expanding our CFD offering, launching new trading products, introducing new financial products and deepening engagement with our customers,” Zruia said.

“Our long-term ambition is to enable simplified, universal access to financial markets as we continue to transition into a global multi-asset Fintech Group . We are thrilled to be already making significant progress in delivering this vision, with the recent launch of Plus500 Invest and the acquisition of Cunningham and CTS, both of which ensure that Plus500 can offer customers a diversified portfolio of products.”

ASOS and Nordstrom confirm Topshop joint venture

Liam Roche
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0
ASOS and Nordstrom confirm Topshop joint venture

ASOS will retain operational and creative control

ASOS (LON:ASC) confirmed on Monday that it has agreed to a joint-venture with Nordstrom, the American retailer, which will invest for a minority position in Topshop, Topman, Miss Selfridge and HIIT.

The partnership is aimed at driving growth between the two brands, and generating new ideas in an effort to improve awareness and engagement in the North American market.

Nordstrom has a strong physical and digital presence in North America, operating more than 350 physical stores alongside online platforms that attract almost two billion annual visits. It already has an established relationship with Topshop, having been the first US retailer to offer the brand to the US market as far back as 2012.

ASOS will retain operational and creative control, but work with Nordstrom to leverage its US market expertise and extensive customer reach to “build an exciting future for these brands in their second biggest market”.

Nick Beighton, ASOS CEO, commented: “With its long-established connection to Topshop, extensive US consumer insight and unparalleled reach right across North America, Nordstrom is the right partner to help ASOS accelerate the growth of our Topshop and ASOS brands in this key market.”

“ASOS is all about giving customers the confidence to be who they want to be. Partnering with Nordstrom will support our US strategy, allowing us to offer that to even more 20-somethings in North America.  We’re excited about the opportunities ahead, collaborating to deliver the best product through engaging, friction-free multi-touch experiences and we can’t wait to see our ASOS edit in Nordstrom stores.”

Pete Nordstrom, President and Chief Brand Officer of Nordstrom, added:

“We could not have found a better partner in ASOS, the world leader in fashion for the 20-something customer,” said Nordstrom.

“We’re excited about offering the ASOS brands to our customers and we know we can help further amplify the recognition of the already popular Topshop and Topman brands. We are thrilled to have the opportunity to work with ASOS to reimagine the wholesale/retail partnership and are excited about our potential as we expand our product offering to a broader audience and deliver on our commitment to helping our customers feel good and look their best.” 

The ASOS share price is down by 0.41% pre-lunchtime on Monday.

Economic uncertainty continues to hold back UK stocks

Liam Roche
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Economic uncertainty continues to hold back UK stocks

The FTSE 100 is down by 0.46% to 7,089 on Monday. It could have been a lot worse given how investors’ nerves were tested last week with a big sell-off linked to concerns over the strength of the global economic recovery.

“There is a repeat of the same stocks driving down the market – banks, miners and oil producers, all of whom are bellwethers for the state of the economy,” said Russ Mould, investment director at AJ Bell.

“Utilities and real estate were the only sectors in the FTSE 100 pushing ahead on Monday, whereas the FTSE 250 fared a bit better.”

The UK mid cap index avoided any sell-off and traded flat at 22,890, with real estate, consumer non-cyclicals, technology and financials as the strongest performing sectors.

“The UK is now only a week away from the so-called ‘Freedom Day’ where most of the remaining Covid restrictions will be dropped. However, there are growing fears that removal of these restrictions could lead to a resurgence in infections and put the country in a dangerous situation.”

FTSE 100 Top Movers

Admiral Group (4.2%), Ocado Group (1.44%) and Segro (1.37%) are the top performers on the FTSE 100 during the morning session on Monday.

At the other end, Rolls-Royce (-2.81%), IAG (-2.55%) and Whitbread (-2.39%) make up the bottom three of the UK index.

EQTEC confirms stance on North Fork Community Power project

Liam Roche
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EQTEC confirms stance on North Fork Community Power project

NFCDC is a volunteer-led, not-for-profit, local, community initiative

EQTEC (AIM:EQT), a gasification technology company, felt ‘obliged’ to clarify certain issues in relation to North Fork Community Power (NFCP) project based in California.

Following a board meeting at the end of June, minutes from the meeting published onto the EQTEC website made claims with respect to NFCP and its project to build a 2MWe plant based on EQTEC technology.

The project is being designed with the purpose of locally sourcing forestry waste into power and biochar for the local community whilst reducing the risk of forest fires in the area.

The AIM-listed company said that some of the comments in the minutes gave the impression of a lack of understanding of ‘project accountabilities and contractual relationships’, and it has communicated directly to NFCDC to express its concerns.

EQTEC said it “would like to clarify that it is the technology provider to the Project and has no role or scope in relation to project management. In its role as a Managing Member and equity owner in NFCP with a vested interest in the success of the Project, the Company has consistently driven NFCP to appoint dedicated, professional Owners Representatives and Project Managers to improve discipline, focus and risk management on the Project”.

NFCDC is a volunteer-led, not-for-profit, local, community initiative formed to promote in particular the old mill site on which the project is located.

David Palumbo, CEO of EQTEC, commented:

“We remain fully committed to the North Fork community and value our relationship with North Fork Community Development Council, our fellow Managing Member for NFCP. The plant at North Fork, enabled by EQTEC’s Advanced Gasification Technology, is the beginning of our efforts to generate cleaner energy for California and reduce the risk of forest fires, through clearing out forestry waste and putting it to constructive use. It is our hope that the North Fork plant becomes another Market Development Centre (“MDC”) for us that allows us to bring our capabilities to more communities across the state.”

Tip: Prosperous niche drugs strategy

Andrew Hore
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Tip: Prosperous niche drugs strategy

In the past five years this pharma company has gone from reversing into an AIM-quoted shell to the brink of being one of the top 100 AIM companies by market capitalisation when its latest acquisition is approved by shareholders at the end of July.
There is still plenty of growth in revenues to come from the company’s two niche drugs, because they are still at an early stage of commercialisation and there are more markets where they can be launched. The latest purchase brings a third drug into the portfolio. There are more specialist treatments in development.
Management has already identified ...

Tip update: AdEPT Technology

Andrew Hore
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0
Tip update: AdEPT Technology

Managed IT and networking services provider AdEPT Technology (LON: ADT) limited the downside to last year’s Covid hit figures and the stronger momentum in the fourth quarter has continued into this year.  
The purchase of cloud-based networking and cyber security services supplier Datrix for an initial £9m, will supplement organic growth this year. There is potential deferred consideration of up to £7m based on the growth of Datrix.
Datrix will be transitioned to the One AdEPT platform by September. In the year to March 2021, Datrix is estimated to have made a pre-tax profit of £600,000 a...

Lloyds share price takes a breather as investors review optimism over UK recovery

Liam Roche
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0
Lloyds share price takes a breather as investors review optimism over UK recovery

Lloyds Share Price

The Lloyds share price is up by 2.07%, as the FTSE 100 recovered from a wave of negative sentiment that knocked it over on Thursday. It is been a difficult period for the major bank over the past month, amid creeping uncertainty over the strength of the UK’s economic recovery, as the Lloyds share price fell by 3.56% over the past 30 days. However, some investors may see at an opportunity to secure shares in the bank for a reasonable price, especially as it looks to resume its impressive dividend.

UK Recovery

While investors are taking a pause to examine the outlook of the UK economy further, in recent months they have been optimistic about its prospects. There of course is the possibility that this level of optimism could return. Boris Johnson and Savid Javid have both hinted at the final removal of restrictions, which would bode well for the Lloyds share price. Having said that, the Lloyds share price remains subdued for a reason. Risks remain over the continued spread of the Delta variant, as infections are spiking at present despite the ‘success’ of the vaccine roll-out.

Analysts’ View

Analysts at Barclays are behind the Lloyds share price, suggesting that UK investors should keep faith with the bank. The analysts have suggested that owners of Lloyds shares who are thinking of selling could potentially lose out, even if they have already made gains from their investments. This is according to a note sent to clients earlier this week.

Barclays’ view comes as rumours swirl around whether or not the Bank of England’s Prudential Regulation Authority will allow banks to resume dividend payments. However, while there is an expectation among investors that the dividend payments will be allowed again, Barclays suggests that “the sustainable yield is more relevant”.

A flurry of good news has put the Deliveroo share price on a better path

Liam Roche
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0
A flurry of good news has put the Deliveroo share price on a better path

Deliveroo Share Price

The Deliveroo (LON:ROO) IPO turned out to be a huge disappointment as shares plunged 26% on the company’s debut back in March. Investors at the time were concerned about what the food delivery company’s dismal stock market debut meant for its longer-term prospects. However, following a long period of sideways movement, the Deliveroo share price has been on the ascendency over the last couple of weeks, now standing at 308.7p. With a recent spout of good news, the outlook looks brighter for the food delivery company, which is drawing the attention of UK investors.

Court Ruling

While it may not be welcomed news for its couriers, the Deliveroo share price surged towards the end of June as a UK court ruled that the people who deliver the food on bikes are self-employed. The ruling was passed by three judges who came to a unanimous agreement.

“Concern about the company’s reliance on the gig economy model was one of the factors which contributed to its disastrous IPO in March,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

However, Deliveroo may not be in the clear just yet, as a European Commission review of how the gig economy operates is now underway.

“Although the gig economy stronghold is for now staying largely firm, over time there may be fresh capitulations as companies tweak their models to satisfy ongoing concerns under the spotlight being increasingly trained on firms by institutional investors,” said Streeter.

Investment

Deliveroo announced this week that it would hire 400 software engineers, data scientists and designers during the next year in an effort to improve its ability to innovate.

The London-listed firm said the growth of its workforce would allow it to improve its logistics, benefitting restaurants, delivery workers and customers.

Sales Forecast

Deliveroo revised its sales forecast up this year after it saw strong sales growth during H1 2021.

The food delivery service believes its sales will increase by 50-60% compared to 2020. This would mean the total value of its transaction would exceed £6bn this year.

While there has been a recent flurry of good news, challenges lie ahead for Deliveroo. As people eat out more as restrictions are increasingly being eased, Deliveroo will need to make sure it retains customers.

While it is expecting demand to fall back to a more normal level, it has been difficult to know how much of its recent growth is down to exceptional circumstances of lockdowns. Perhaps the Deliveroo share price will offer some clarity over the coming months.

America to add more Chinese companies to blacklist over human rights abuses

Liam Roche
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0
America to add more Chinese companies to blacklist over human rights abuses

The Biden administration is making an effort to hold China to account says Reuters

The US has again moved against China as it looks set to add additional companies to its economic blacklist because it believes the Chinese government is implicated in human rights abuses.

Up to 10 business could be added to the list by the Biden administration with immediate effect, according to Reuters.

Among the accusations are the use of forced labour camps by the Chinese government in Xinjiang.

The decision by America represents efforts by Biden and his staff to hold China to account, Reuters reported.

China continues to distance itself from such allegations, saying its policies are needed in order to eliminate religious extremism.

“The Chinese side will take all necessary measures to safeguard the legitimate rights and interests of Chinese companies and rejects U.S. attempts to interfere in China’s internal affairs,” said foreign ministry spokesman Wang Wenbin on Friday.

The names of the companies on the list have not been revealed, while additional firms from other countries could yet be added.

Earlier this week it was reported that major companies from China were coming under pressure as the country pledged to come down on Chinese companies on US exchanges.

Among the countries being scrutinised are Didi, Alibaba and Tencent.

“U.S. investors will have to weigh the risks of owning ADRs at a time when tensions between Beijing and Washington remain elevated while all global investors will have to balance the allure of China’s vast addressable market with the possibility that officials may reshape company prospects at the stroke of a pen via the imposition of regulatory strictures,” BCA Research chief global strategist Peter Berezin said in a note Wednesday.

Didi, the Chinese ride-hailing app, was removed from US app stores soon after it raised $4.4bn following its listing in America, one of the largest by a Chinese company since e-commerce giant Alibaba in 2014.

FTSE rebuilds after taking hit from Covid and inflation fears

Liam Roche
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0
FTSE rebuilds after taking hit from Covid and inflation fears

The FTSE 100 added 0.75% on Friday, taking the UK index to 7,083, as it recovered from a wave of negative sentiment that knocked it over on Thursday.

“What may spook investors is that usually the concerns have centred around either inflation or the risk of Covid-19 tilting the recovery off course,” said Russ Mould, investment director at AJ Bell.

“This time it appeared both fears were rearing their head at the same time – raising the spectre of stagflation or slowing economic growth accompanied by rapidly rising prices.”

Latest UK GDP figures for May in the UK suggest the speed of recovery is starting to slow down, despite the fourth consecutive month of growth.

“We may get more insight into how central banks are weighing these issues later today with Bank of England chief Andrew Bailey and European Central Bank head Christine Lagarde set to participate in a panel discussion at a big finance summit in Venice,” Mould added.

“The question is whether central bankers feel they can navigate these risks as serenely as a gondola traversing a sleepy Venice canal or if they are worried about a torrent of rising inflation and infections overtaking them.”

FTSE 100 Top Movers

Evraz (4.17%), Land Securities (2.83%) and Burberry (2.72%) headed up the FTSE 100 on Friday on a positive day for the index.

While at the other end, not faring so well, is B&M (-1.97%), Sainsbury’s (-0.8%) and Just Eat (-0.79%).

Land Securities

Land Securities gave an update on its rent collection for the quarter ending in June, confirming that the property development company has collected 81% of £103m it is owed.

Most of the rent collected was from offices, with 95% collected, while regional retail spaces came in at 73%, and the rest of London had a collection rate of 71%.

Flight Bookings

Flight bookings departing the UK surged as the government announced fully vaccinated adults and their children will be able return from ‘amber’ countries without needing to quarantine from 19 July, airlines reported on Thursday.

Passengers, however, will be required to take a Covid-19 test three days before their arrival back in the UK, in addition to a PCR swab a day after they return to home soil.

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