Morrisons shareholders will vote on Fortress offer in August

Liam Roche
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Morrisons shareholders will vote on Fortress offer in August

The offer on the table by Fortress stands at 254p per share

Morrisons (LON:MRW) confirmed on Thursday that its shareholders will be able to vote on the proposed £6.3bn takeover from a consortium led by Fortress Investment Group on August 16.

A court meeting and a general meeting will be held on August 16, it was revealed by a scheme document outlining Fortress’ offer.

While the supermarket group’s directors are recommending acceptance, the offer remains subject to approval by shareholders.

The offer on the table by Fortress stands at 254p per share. 252p is in cash plus a 2p share dividend.

The special dividend would be paid two weeks after the takeover is completed.

“Discussions are continuing with the trustees to agree appropriate mitigation and the trustees have stated their intention to issue their opinion on the Fortress Offer in due course,” Morrisons said.

Back in June, Morrisons rejected an offer of £5.5bn from a different consortium, adding that it was an undervaluation of the company.

The business consists of just under 500 stores and over 110,000 employees across the UK.

In addition to Fortress’ offer, which has been deemed acceptable, the investor promised to support the supermarket’s exit strategy, keep its head office in Bradford and protect employees’ pension rights.

Morrisons first existed as a market stall in Bradford in 1899 owned by William Morrison. His son then took over the company and opened the first supermarket in the 1960s.

During the morning session on Monday, the Morrisons share price is pretty much unchanged.

New AIM admission: Microlise Group

Andrew Hore
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New AIM admission: Microlise Group

Microlise Group is a SaaS-based transport management technology company that has more than 400 customers with over 500,000 vehicles using its software. Although hardware is supplied, it is the software that provides the long-term cash generative ability of the company.
One of the most impressive things is that the churn rate is around 1%. The software focus probably helps but it is an indication that the software is well thought of by the end customers and it is useful to them. Signing customers up on multiyear deals also helps.
Cash generation outstrips revenues because many of the customers ...

Hurricane Energy share price rises as Crystal Amber increases holding above 25%

Liam Roche
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0
Hurricane Energy share price rises as Crystal Amber increases holding above 25%

Hurricane Energy Share Price

The Hurricane Energy share price (LON:HUR) jumped by 16.01% on Wednesday following news that Crystal Amber, the activist fund, raised its holding in the oil company above 25%. At the beginning of July, UK Investor Magazine reported that Crystal Amber had raised its stake by nearly 9% to 23.09%. At that point the Hurricane Energy share price climbed as high as 4.09p per share. However, it has somewhat retreated before today’s surge, which brought the company’s stock value to 3.26p per share. With high levels of debt and a failed financial restructuring, the Hurricane Energy share price appeared to be in a precarious position, however investors will be hoping today’s news provides a sustained boost.

Crystal Amber

It appears that investors are happy about Crystal Amber’s latest signal of intent as the investor increased its control over Hurricane Energy. Some key changes have already been made to the business by Crystal Amber, which could serve to influence the performance of the Hurricane Energy share price over the coming months. Firstly, it successfully ousted two non-executive directors, replacing them with Crystal Amber’s nominees, John Wright and David Craik. They also stopped Hurricane Energy in its efforts to implement a financial restructuring that could have wiped out its shareholders.

Ongoing Issues

Hurricane Energy’s troubles stem from the downgrade of the company’s reserves at its Lancaster oil field, which poses a significant threat to the company’s future as its output estimates plummeted dramatically. The AIM-listed company is weighing up proposals to drill new wells to boost output at the Lancaster oil field. However, its hands are tied somewhat due to its obligation to pay back a £163m convertible bond in a year’s time.

Crystal Amber’s job, now that it has a 25% holding, is to overcome these obstacles to secure the oil company’s future. Investors with an interest in the Hurricane Energy share price will be keeping a close eye on Crystal Amber’s strategy going forward.

European stocks performing well despite China’s efforts to undermine commodity prices

Liam Roche
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0
European stocks performing well despite China’s efforts to undermine commodity prices

Stoxx Europe 600 up by more than 1% on Wednesday

A strong start to the week for American companies fed through to European stocks on Tuesday, as the FTSE 100 is up by 1.64%, closing in on the 7,000 marker.

The Stoxx Europe 600, an index of European stocks, also rose by more than 1%.

“That comes despite Chinese efforts to undermine prices in key commodities, with the government laying out plans to auction reserves of zinc, aluminium, and copper,” Joshua Mahony, Senior Market Analyst at IG.

Following a delayed reaction from investors, reopening stocks seem to be back in favour, including travel companies and airlines.

98% of all Covid-19 cases in the UK are the Delta variant and the future economic outlook could depend on its effect on people going forward.

“There are concerns that those countries without high vaccination levels will be unable to cope without heavy restrictions, while the UK provides the blueprint for reopening efforts in the face of huge numbers of Covid cases,” said Mahony.

Commodity prices are under pressure, according to Mahony, in the wake of a Chinese announcement that they will auction reserves of copper, aluminium, and zinc in a bid to quell price pressures.

China intends to sell 170,000 tonnes of non-ferrous metals in another round of auctions, according to an announcement by state media, Xinhua, on Wednesday.

China will auction 30,000 tonnes of copper, 90,000 tonnes of aluminium, and 50,000 tonnes of zinc from state reserves in late July, Xinhua reported.

“The rise in Chinese PPI highlights how input costs are driving up inflation, and bulls will hope that this alleviates some of the underlying reasons behind the recent rise in headline CPI,” commented Mahony.

“Recent months have been dominated by the Chinese efforts to calm the price of key commodities, and today’s announcement represents an intensification of those efforts.”

“Nonetheless, with market in risk-on mode, there is a clear willingness to overlook short-term volatility in commodity prices to instead focus on the prospect of economic outperformance in the second half of 2021.”

Bitcoin price climbs above £23,000 ahead of ₿ Word Conference

Liam Roche
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1
Bitcoin price climbs above £23,000 ahead of ₿ Word Conference

Bitcoin Price

The price of bitcoin is up by 6.17% over the past 24 hours, moving above £23,000.

The jump comes ahead of Elon Musk’s appearance at the “The ₿ Word” event, alongside Jack Dorsey of Square and Twitter, and Cathie Wood of ARK Invest.

A week ago the bitcoin price was approaching £26,000, and spent most of the week above £24,000, before crashing to below £22,000 by early Tuesday morning.

EU Regulation

The slide came as regulators across the world began to call for tighter checks on the crypto industry.

Other cryptocurrencies, including ether, saw similar dips as European regulators put forward plans to ensure crypto becomes more traceable due to concerns it has over money-laundering.

The law set out by the European Commission would apply a ‘travel rule’ to transactions in order to make them more traceable.

The rule already applies to wire transfers and has been recommended by the Financial Action Task Force (FATF).

“Today’s amendments will ensure full traceability of crypto-asset transfers, such as bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing,” the Commission said in a statement.

₿ Word Conference

Following a Twitter exchange between Jack Dorsey and Elon Musk, a sit-down conversation between the pair, with the addition of Cathie Wood, the superstar investor, will take place on Wednesday 21 July.

It is drawing a lot of attention due to Elon Musk’s previous outspoken comments about bitcoin and his apparent ability to influence its price.

The live discussion event is scheduled to take place at 5pm GMT.

UBS launches ‘Carmen’ portfolio to invest in women-run hedge funds

Liam Roche
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0
UBS launches ‘Carmen’ portfolio to invest in women-run hedge funds

Figures show that women make up 10.9% of senior employees at hedge funds

UBS has launched a portfolio that only invests in hedge funds headed up by women.

The move is a part of the Swiss investment bank’s wider efforts to focus on diversity and identify untapped potential within the industry.

UBS’s launch of the ‘Carmen’ portfolio came after an initial trial phase, the Financial Times reported.

The funds will select 10-15 funds across the world where a woman has sole or joint discretion over the investment decision making.

However, UBS is not the first to make such a move. Last year Aberdeen Standard Investments launched a fun that monitors the performance of an index of hedge funds run by women.

Carmen will be actively managed, making use of quantitative and other analysis to find funds to invest in.

Women in Hedge Funds

Interest in women-led hedge funds is growing, as large investment companies seek to ensure their investments meet the criteria of environmental, social and governance (ESG) credentials.

Hedge funds are one of the worst performing asset classes for female representation, at 18.6%. This is according to data revealed by Preqin, as reported in the Financial Times.

Figures show that women make up 10.9% of senior employees at hedge funds, up slightly from the year before.

Claire Tucker, senior investment officer at UBS’s hedge funds unit, told the Financial Times that women were “under-represented, particularly on the investment side, despite a lack of evidence justifying that by skill or performance differences”.

UK government borrowing falls in June on reopening of UK economy

Liam Roche
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0
UK government borrowing falls in June on reopening of UK economy

UK public sector net borrowing was recorded at £22.8bn in June

UK public borrowing fell in June when compared to the same month a year ago, as the economic recovery allowed for reductions in spending and increased tax revenues.

The figure for public sector net borrowing was recorded at £22.8bn in June, down from £28.3bn for the same month in 2020, according to data from the Office for National statistics.

Despite the fall, the figure is the second-highest level recorded for June since records began.

As measures have been taken to support the economy during the pandemic, such as furlough payments, borrowing reached record highs.

However, the overall picture is less than pretty for the UK’s finances as rising inflation made an impact and interest payments on government debt rose by more than 200% to £8.7bn.

After the UK chancellor Rishi Sunak dealt with pandemic-induced issues by borrowing more money, his attention in the aftermath of the pandemic could now turn to the soaring levels of government debt.

On the whole, the amount the UK borrowed was below the expected £25.5bn predicted by the Office for Budget Responsibility (OBR) back in March.

Danni Hewson, AJ Bell financial analyst, comments on today’s public spending figures. Hewson argued that while the figures are proof that the lifting restrictions is powering the economy forward, it is not all good news.

“Government spending actually increased by £2.5bn in June compared to the June 2020 with falling furlough costs offset by spending on vaccines and the test and trace programme as well as interest payments on the debt pile. That figure of £8.7bn, up by a whopping £6bn from the same month last year, is the highest since records began in April 1997. It’s a timely reminder of the impact inflation can have with the hikes in interest down to gilts pegged to RPI increases,” said Hewson.

“It’s something that will certainly have the Chancellor taking a long look at his ledger as will the simple fact that though tax take has gone up, the country is still living considerably beyond its means. Going forward he’ll be under pressure to shake that magic money tree to find extra cash to help fuel the recovery particularly in areas like health and education. And if inflation runs hotter for longer than economists are predicting the money tree’s magic potion may have an unpalatable aftertaste.”

Next share price surges as retailer lifts profit forecast on summer sales boom

Liam Roche
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5
Next share price surges as retailer lifts profit forecast on summer sales boom

Next’s sales jumped by 18% over the past 11 weeks to July 17

Next raised its profit guidance on Wednesday as pent-up demand for its clothes combined with periods of warm weather saw it easily surpass its sales forecast over the previous 11 weeks.

The UK fashion retailer’s sales jumped by 18% over the past 11 weeks to July 17 when compared to the same time period two years ago, before the pandemic.

“Consumers have had the need and means by which to go on a spending spree, and that’s created a tailwind for Next. The retailer has a habit of beating expectations and its latest update is true to form,” says Russ Mould, investment director at AJ Bell.

The FTSE 100 company’s profit before tax for the year to January 2022 could come to £750m according to its central guidance. This represents an increase of £30m.

Total full price sales, including interest income from Next’s credit business, increased by 7.8% in H1, and 18.6% in Q2 to 17 July.

It is a reflection of strong growth in homeware, third party brands and overseas online, which offset deadlines in the store estate.

The Next share price (LON:NXT) rose by 7.82% during the morning session on Wednesday.

Sophie Lund-Yates, Senior Equity Analyst at Hargreaves Lansdown said:

“Customers have clearly missed having reasons to shop, so with restrictions easing, plus unseasonably warm weather, means a spark’s been lit under Next’s sales, and it knocked its targets for six in the second quarter.”

“Don’t forget, consumer wallets are heavier with spare cash than usual too, with a lack of foreign holidays and increased savings during the pandemic, giving them the confidence to go out and splash the cash on new outfits and homeware. This has a positive read across for the rest of the discretionary consumer sector – rather than hoard the spare pennies, it looks like people are happy to spend them,” Lund-Yates added.

“Next has done particularly well, not least because of its great online operation, which has helped offset declines in the physical estate. Next also has a strong presence in out-of-town retail parks which are proving more resilient than town centre locations. That helps keep Next’s popular click and collect proposition thriving too. A stronger digital business should hold Next in better stead should the so-called ping-demic get much worse.”

Positive company news lifts FTSE 100

Liam Roche
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0
Positive company news lifts FTSE 100

The FTSE 100 is up by 1.48% on Wednesday as the index sustained positive momentum for a second day in a row. At 6,986.27 points, the FTSE 100 is closing in on the 7,000 marker again.

“Yesterday’s market rebound was welcome, but also raised questions as to whether it was a dead cat bounce,” said Russ Mould, investment director at AJ Bell.

“Helping to focus investors’ minds on stock opportunities and divert attention away from general worries about the economy and inflation is a step-up in companies reporting their latest earnings.”

Across the board, there was a sense that investors were regaining their appetite for higher risk stocks, with notable gains among airlines, transport operators and leisure companies. Cineworld rose by nearly 8%, while Trainline advanced by 5.7% and EasyJet is up 3.6%.

“Across the FTSE 350, Next surprised the market with better than expected figures, so did media group Future which anticipates its full year profitability to be materially ahead of current market forecasts,” Mould said.

The question now is whether another day of positive news can serve to lift sentiment for a sustained period.

FTSE 100 Top Movers

Next (9.02%), Rolls-Royce (6.59%) and IAG (5.98%) led the way atop the FTSE 100 on Wednesday, each making outstanding gains.

At the other end, Avast (-1.63%), Royal Mail (-1.51%) and National Grid (-0.58%) were the biggest fallers out of only five companies in the red during the morning session on Wednesday.

Royal Mail

Royal Mail (LON:RMG) revealed its parcel deliveries slowed during the previous quarter as the pandemic-induced boom in online sales lost some momentum. 

However, the parcel delivery company also suggests that the trend established during the pandemic is here to stay. 

The FTSE 100 company’s revenue during the quarter ending in June 2021 is up by 12.5% from the year before. When compared to the same period in 2019, before the pandemic, it has increased by 20.2%.

Next

Next raised its profit guidance on Wednesday as pent-up demand for its clothes combined with periods of warm weather saw it easily surpass its sales forecast over the previous 11 weeks. 

The UK fashion retailer’s sales jumped by 18% over the past 11 weeks to July 17 when compared to the same time period two years ago, before the pandemic. 

“Consumers have had the need and means by which to go on a spending spree, and that’s created a tailwind for Next. The retailer has a habit of beating expectations and its latest update is true to form,” says Russ Mould, investment director at AJ Bell.

Netflix falls short of growth forecast as doubts loom over near-term outlook

Liam Roche
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0
Netflix falls short of growth forecast as doubts loom over near-term outlook

Netflix set to move into gaming

Netflix fell short of its growth forecast during the previous quarter. The streaming company put the news down to a fall in interest following the lockdown, as well as pandemic-induced delays in production.

The American company increased its overall number of subscribers by 1.54m, 0.21m short of what analysts were forecasting. It is also well below the 10m added during Q2 12 months ago, as viewers across the world were confined to their homes.

In the US and Canada Netflix lost 430,000 subscribers during Q2. It also revised down its forecasts for the remainder of the year.

The news has created a sense of doubt from investors over the streaming company’s outlook as the world economy is reopening more by the day.

The streaming sector has become more saturated over the last year, with Apple and Disney, among others, stepping up their efforts.

While the pandemic caused delays over the past 12 months, Netflix said a body of new content will build through the remainder of the year.

Netflix also confirmed its plan to venture into gaming. “We’re excited as ever about our movies and TV series offering and we expect a long runway of increasing investment and growth across all of our existing content categories, but since we are nearly a decade into our push into original programming, we think the time is right to learn more about how our members value games,” the company said.

Investor’s curiosity into these plans supported the Netflix share price (NASDAQ:NFLX) on Tuesday as it closed 0.23% down.

With 209m subscribers, Netflix is above and beyond its competitors, with its closest rival being Disney Plus, at 104m subscribers.

However, as viewer habits could noticeably change post-lockdown, and competition intensifies, Tuesday’s results mark a defining moment for Netflix.

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