Johnson Matthey expects growth in 2021 despite annual profits falling

Liam Roche
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Johnson Matthey expects growth in 2021 despite annual profits falling

Johnson and Matthey recorded an underlying profit of £504m

Johnson Matthey (LON:JMAT), the chemicals manufacturer, forecast low-to-mid teens growth for this year on strong demand for its autocatalytic converters and stricter pollution rules in Asia.

The FTSE 100 company also posted a fall in its yearly profit.

Johnson and Matthey recorded an underlying profit of £504m for the year up to the end of March, down from £539m a year before.

The company’s revenue rose by 8% on higher average precious metal prices.

The firm said its balance sheet is in a strong position, with net debt of £775m, and a net debt to EBITDA of 1.2 times.

The Johnson Matthey share price is down by 2.73% on Wednesday to 3,064p per share.

Ben Nuttall, senior analyst at Third Bridge commented on the company’s results:

“Johnson Matthey’s full year results show sales excluding precious metals 5% lower than last year primarily driven by people buying few cars, but slightly beating street expectations. CAPEX for the group is expected to ramp up to as much as GBP 600m, as investments in battery material capacity continue,” Nuttall said.

“Johnson Matthey’s key challenge is managing the transition from internal combustion engines to battery-powered and hydrogen-powered vehicles. Compared to its competitors Johnson Matthey’s strength in diesel catalytic converters is likely to be first to decline, and their strengths in eLNO and hydrogen are likely to take longer to materialise.”

While chief executive of the chemicals manufacturer Robert MacLeod said:

“Following a challenging first half, we recovered strongly in the second half helped by a strong recovery in our end markets and higher precious metal prices. We are delivering our efficiency programme, tightly managing working capital and generating cash from our more established businesses which we are continuing to invest for growth, particularly in battery materials and hydrogen.”

“In the year we made good strategic progress. We began entering into partnerships to advance the commercialisation of eLNO and secured new customer wins in Fuel Cells. Our investment in sustainable technologies builds on our existing expertise and will enable the transformations in transport, energy, decarbonisation of industry and a circular economy that the world needs to reach net zero – transformations that are at the heart of achieving our vision of a cleaner, healthier world for today and future generations,” MacLeod added.

New Aquis admission: Pharma C Investments

Andrew Hore
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New Aquis admission: Pharma C Investments

Pharma C Investments is a shell seeking to invest in medicinal cannabis sector-focused companies, particularly those that provide ancillary products and services to the sector. The initial intention is not to invest directly in medicinal cannabis, CBD and wellness businesses.
The indication is that plant genetics, product testing, marketing, procurement services and cannabis consumption devices are areas that might be considered. The geographical focus is the UK, Europe and Israel, because they have better developed cannabis regulations.
In contrast to the other investment company flotations o...

New premium listing: Taylor Maritime Investments

Andrew Hore
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New premium listing: Taylor Maritime Investments

Taylor Maritime Investments Ltd (LON: TMI) will invest in a portfolio of mainly second-hand vessels and it is targeting a dividend yield of 7%. The investment company raised $253.7m through a placing and offer at $1 (70.57p) a share.
This was $10m more than targeted, and the issue helps to fund the initial acquisition of ship assets and provides cash to build up the portfolio. Trading in the shares commences on 27 May.
Guernsey-registered Taylor Maritime Investments is managed by Hong Kong-based Taylor Maritime (HK) Ltd, which was formed in 2014. The management team has more than three decades...

Court orders Shell to cut carbon emissions by 45% by 2030

Liam Roche
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Court orders Shell to cut carbon emissions by 45% by 2030

Shell must comply with the ruling immediately

A court in the Hague ordered Shell (LON:RDSB) to reduce its worldwide carbon emissions by 45% by the end of 2030.

The landmark ruling aimed at bringing the FTSE 100 company in line with the Paris Agreement, is the first of its kind in history.

“The court orders Royal Dutch Shell … to reduce its CO2 output and those of its suppliers and buyers by the end of 2030 by a net of 45% based on 2019 levels,” the court said. “Royal Dutch Shell has to implement this decision at once.”

Shell, the ninth biggest polluter in the world from 1988-2015, will have the right to appeal the judgement.

Donald Pols, director of Friends of the Earth Netherlands (FOE NL), the group that organised the case, described the ruling as a “monumental victory”.

“The judge has left no room for doubt: Shell is causing dangerous climate change and must stop its destructive behaviour now,” Pols said in a statement.

Shell said that it was disappointed and would appeal the decision, although it must comply with the ruling immediately.

The Shell share price has been moving sideways for the past two months now and appears unsure of its next move.

CyanConnode: Model Roll-Out

Jon Levinson
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CyanConnode: Model Roll-Out

Today, CyanConnode (LSE: CYN) announced an MOU (Memorandum of Understanding) with Intellismart in India, a smart meter asset provider to Indian utilities with asset under management of around £4.3billion. That should be enough to finance the meter-as-a service financing package for the Indian utilities and others who will then be able to repay the capital costs out of the savings generated by installing these smart meters with its users. This RNS follows a JV that was recently announced with a US company Strategic Alliance Agreement with SEW (Smart Energy Water) provider se...

EasyJet boss not expecting ‘Indian strain’ of Covid-19 to ‘ruin’ summer travel

Liam Roche
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EasyJet boss not expecting ‘Indian strain’ of Covid-19 to ‘ruin’ summer travel

Lundgren warned against the impact of the UK government’s actions on the airline industry

The chief executive of EasyJet (LON:EZJ) said on Wednesday that he does not anticipate the ‘Indian strain’ of coronavirus to be the most significant obstacle for the coming European travel season.

Johan Lundgren added that another summer without travel would be disastrous for the UK’s airline industry.

The UK has until now placed strict restrictions on travel for most holiday destinations to the detriment of both airline and travel industries. This is in light of the discovery of the new variant, first found in India, and now spreading across the United Kingdom.

Across the continent, Germany has banned non-essential travel, while France has hinted at a similar policy.

Lundgren said the industry’s future could be on the line if a return to more normal modes of travel are not permitted in time for this summer.

“I don’t think that UK aviation as an industry can go through another lost summer without grave consequences,” he said at an online industry event on Wednesday.

Lundgren argues that the new variant would not be a major concern as vaccines would protect against it.

“I don’t think that the outlook…is that because of the Indian variant the summer is ruined,” he added.

Lundgren’s major worry is that the UK sticks to its current policy of having Portugal as the only major travel destination open to Brits.

The EasyJet share price is down by 0.3% to 982.40p as the end of the day approaches.

British Land and UK property with Alan Green

UK Investor Magazine
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British Land and UK property with Alan Green

Alan Green joins the podcast for our weekly Podcast to discuss a number of equities including British Land (LON:BLND) following the release of their results.

The UK residential property market has defied calls for a collapse during the pandemic helped by government schemes such as reduction to Stamp Duty and a general reduction in supply. With the world now moving past the worst of the economic disruption, the UK property market is now entering a new chapter which could see housing activity rise to levels not seen since the financial crisis.

We discuss the key drivers behind the boom such as a ‘race to space’ and whether this can be sustained beyond the end of the year.

Naturally, we then move onto the commercial property sector and how cities such as London can realign their economies given the exodus of foreign born people, crucial to the hospitality sector associated with people working in offices.

There is detailed discussion of British Land (LON:BLND), Corcel (LON:CRCL) and Lexington Gold (LON:LEX).

Barratt Developments Share Price: strong run looks set to continue in 2021

Liam Roche
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Barratt Developments Share Price: strong run looks set to continue in 2021

Barratt Developments Share Price

The Barratt Developments share price is up by 13.7% since the turn of the year to 761.5p per share. It remains some way off its pre-pandemic level of over 860p, however, if the housing market continues on its current trajectory, then it may do so by the end of 2021.

Housing Market

As house prices hit new highs, and look set to continue doing so, Barratt Developments seems a good bet. The total value of homes sold across the UK is forecast to reach £461bn in 2021, a rise of 46% from the year before.

This is according to analysis by Zoopla, the property platform, that expects the housing boom to continue. Zoopla also confirmed it believes home sales will reach 1.52m in 2021, an increase of 45% from the year before. Therefore the value of the homes sold this year would amount to £461bn.

However, it is important to consider that the performance of the Barratt Developments share price was on the back of highly supportive UK government housing policies. These measures will surely not remain in place forever.

Performance

Earlier this month Barratt Developments said it was in a “strong financial position” and could therefore afford to pay back £3.5m of business rates relief.

The payment is in addition to the £26m it paid back after the FTSE 100 company received the money through the furlough scheme.

Barrat also revealed that its construction activity is “progressing well”. The company built 321 homes on average per week between January and May. It forward sales book now stands at £3.69bn.

David Thomas, chief executive of Barratt, said: “We have seen strong demand for our high-quality, energy-efficient homes on well-designed developments, which means we now expect to increase wholly owned completions to between 16,000 and 16,250 homes this year, up from 15,700 in 2020, along with 650 joint venture home completions.”

The company’s current financial position and productivity, in addition to the positive outlook for the wider market, bode well for the Barratt Developments share price moving forward.

Gold reaches four-month high amid fears of inflation

Liam Roche
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0
Gold reaches four-month high amid fears of inflation

Gold composite has risen by 0.47% to $1907.25

Gold reached its highest point in four months on Wednesday, as the Fed continued to dismiss fears of inflation.

The gold composite has risen by 0.47% to $1907.25 at lunchtime in the UK, and is up by 7.3% over the past month.

Vice Chair of the Fed Richard Clarida said yesterday that pricing pressure will be shown to be “largely transitory”, as the central bank restated its dovish monetary policy stance.

Gold’s price surge also came in the aftermath of the crypto market crash, as the commodity is seen by many as a competing store of value with bitcoin.

Other precious metals, including silver, platinum and palladium, have advanced this month.

The Australian Government’s Department of Industry, Science, Energy and Resources (DISER) believes that gold production will increase by 5.5% in 2021 and by 3% in 2022. This is following a 3.9% decline during 2020.

DISER added that the vaccine roll-out across the world would minimise the disruption to gold mining after 2022.

The agency also expects Australia to overtake China as the largest producer of gold in the world in 2021, as miners adapt to increasing prices of the precious metal.

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