Asos share price tumbles as online fashion retailer loses momentum

Liam Roche
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Asos share price tumbles as online fashion retailer loses momentum

Asos Share Price

The Asos share price (LON:ASC) dived by 16.7% (at the time of writing) on Thursday as the online fashion giant warned of uncertainty over its sales as the pandemic continues. Prior to today, the Asos share price moved sideways for the past few months, as it was unphased by the company’s H2 results. Taking into account today’s fall, it is now down by 18.92% over the last six months. However, with today’s reaction to its Q3 results, investors will be curious about what the implications are for the fast fashion retailer’s future.

Q3 Results

Asos confirmed a 27% increase in its revenue, up to £1.29bn during the quarter ending in June. The company described the figures as “strong” considering the effect of lockdowns and travel restrictions on demand for clothes, in addition to supply chain issues.

Asos said it saw a dip in sales over recent weeks as young people, who make up a significant amount of its customer base, found it difficult to socialise in big groups or go on holiday. “Many young people will spend as much on their holiday wardrobe as they do on the holiday itself,” said chief executive Nick Beighton.

While the lives of young people continue to be disrupted, so will Asos’ sales, as it will be more difficult for young people to make plans.

For the final quarter of the year, Asos is expecting to grow at a similar rate, of 15%, to the same period in 2020.

“The retail sector seems to be following one of two paths. Trading has either remained strong following the initial consumer spending splurge post-lockdown, as witnessed by Dixons and Dunelm; or it has started to lose momentum. Sadly, ASOS falls into the latter camp,” says Danni Hewson, financial analyst at AJ Bell.

Hewson also said that the weather was not to blame for the company’s recent downturn: “Plenty of people were still able to get out and enjoy the Euro football championships, so ASOS is clutching at straws with its excuses. In fact, if it was digging around for excuses, it missed a trick by not blaming the Euros for distracting shoppers.”

“People’s social lives continue to be disrupted; for example, music festivals scheduled for after Boris Johnson’s Freedom Day continue to be cancelled as organisers feel there is too much uncertainty to hold a big event. If plans to meet up with friends and family are suddenly scrapped, is there any point in splashing out on new outfits?”

Hewson suggests that perhaps Asos has lost its touch a bit in terms of catering to the demands of its target market.

“Well, that didn’t stop people during the height of the pandemic, eager to show off their new looks on social media, so perhaps ASOS has temporarily lost its magic touch in terms of selling the clothes people want,” Hewson said.

Lockdowns, travel restrictions and weather conditions are all, hopefully, temporary constraints on the economy. However, if Asos has lost its touch, then investors may become concerned over the future prospects of the Asos share price.

Bower Collective raises £2.1m in seed stage funding

Liam Roche
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Bower Collective raises £2.1m in seed stage funding

Oxford Capital and Doehler Ventures led round

Bower Collective, the sustainable consumer goods business, confirmed on Thursday that it has raised £2.1m in seed stage fundraising.

The round led by Oxford Capital and Doehler Ventures is aimed at accelerating the growth of the business, the company said in a statement, allowing packaging innovation and new product development to increase market share.

Bower offers a range of sustainable home and personal care products as part of its mission to eliminate plastics.

The company has developed a new approach to ecommerce by providing a closed loop, plastic waste-free solution.

Users of the service subscribe to a range of products that are supplied in refill packages. Customers return the empty packages in pre-paid envelopes to Bower for reuse and recycling, ensuring zero plastic waste in their supply chain.

Since its launch in January 2020, Bower has seen rapid growth, building a community of over 60,000 consumers and delivering 30% month-on-month growth in revenues.

Backed by funding from Innovate UK, Bower is currently working on a next generation reusable packaging system, which will allow the business to reuse and refill at significant scale. It aims to launch this new packaging in Autumn 2021.

While Oxford Capital and Doehler Ventures are the first institutional investors into the business, a number of prominent angel investors also participated in the round including Dharmash Mistry.

Nick Torday, Co-Founder and CEO, Bower Collective commented: “At Bower we are passionate about creating a transformative sustainable solution within the home and personal care market and are really proud of the exceptional talent that we’ve attracted to build the brand going forwards.”

“This fundraising round will enable us to accelerate the growth of the business, continue driving innovation across product and packaging while taking advantage of the rapid growth of subscription services.”

UK unemployment falls to 4.8% ahead of final stages of reopening the economy

Liam Roche
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UK unemployment falls to 4.8% ahead of final stages of reopening the economy

According to the ONS there were 862,000 job vacancies between April-June

The UK unemployment rate fell in the past quarter as the continued easing of lockdown restrictions is helping to bring on an economic recovery.

The unemployment rate fell by 0.2% between March and May to 4.8%, while the rate of employment increased over the same time period to 74.8%.

Additionally, there has been an increase in the number of job vacancies, as companies in the UK seek to manage the increased demand brought about by the economy reopening.

Vacancies are now back to levels last seen before the pandemic. According to the ONS, there were 862,000 job vacancies between April-June.

It is just under a 10% increase fro myths previous quarter.

“As we approach the final stages of reopening the economy, I look forward to seeing more people back at work and the economy continuing to rebound,” said chancellor Rishi Sunak.

“We are bouncing back – the number of employees on payrolls is at its highest level since last April and the number of people on furlough halved in the three months to May.”

“Vacancies exceeding pre-COVID levels is a further sign of demand returning and employers creating jobs,” Matthew Percival, director for people and skills at CBI, told Sky News.

“Yet businesses’ ability to meet this demand, and support the recovery, is being challenged by staff shortages. As COVID cases rise, firms are facing the double difficulty of hiring workers and more employees self-isolating,” Percival added.

While the figures show a positive reflection of how the UK economy has recovered so far, eyes will now be on the continued progress or lack thereof.

What is buy-and-hold investing? Is it the right strategy for you?

UK Investor Magazine
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What is buy-and-hold investing? Is it the right strategy for you?

In life, there is typically an easy or a hard way to do something.

When it comes to investing in stocks and assets, that sentiment is definitely true. Some traders spend hours and invest their hard-earned money trying to uncover the secrets of the market, hoping to find that ‘silver bullet’ that guarantees profits.

As seasoned investors could tell those naïve but well-intentioned individuals, no such thing exists.

Utilizing trading strategies that need volatility, such as swing and day trading, is fraught with risk and complications. So it’s easy to see why – in the end – so many choose a more relaxed, passive form of investment.

A buy-and-hold strategy may not sound that exciting to some, but it can eliminate many of the complications that can trip up even more experienced traders. The premise could not be simpler, and in the fullness of time, the results can be just as effective as for those who take a more hands-on approach.

You can probably guess what buy-and-hold investing is, but is it the right strategy for you?

What is buy-and-hold investing?

Yes, you guessed it, buy-and-hold investing is where you purchase a stock or other form of asset and simply sit on your hands for the medium or long term, riding out the market fluctuations until a pre-determined price is reached.

There’s not much more to it than that – buy-and-hold is a passive form of investment that allows you to profit from an open position without the rigmarole of daily interaction with the market. Buy-and-hold requires no technical expertise in reading charts or signals either. 

It is no wonder the likes of Warren Buffett have opted for this approach in their investment portfolios.

Advantages and downsides of buy-and-hold investing

If you chart the long-term progress of the stock market, you will note that – despite many bumps in the road – the overall trajectory is one of growth and sustainability.

Indeed, with the emergence of new technologies and some rather large companies facilitating those, new highs are being reached all the time.

And so, in theory, buy-and-hold investments feel like a no-brainer.

Of course, it’s not as simple as that, and investing in the right brands from the get-go is essential for success with this particular strategy.

The advantages of buying and holding a position speak for themselves. You invest minimal time and effort, and that should – all being well – ensure that your returns are, pound for pound, more valuable than those who spend countless hours of the day scalping for small profits or taking their chances with swing trading.

There are tax perks to long-term investing too, and again these can yield benefits that active investors can’t take advantage of.

Naturally, there are some downsides to passive investing. Are you getting the most out of the market? Is your capital working as hard for you as it could be?

The phenomenon of ‘FOMO’ – the Fear of Missing Out – can be real for buy-and-hold investors, and so you will need to be disciplined and patient in securing the profit margin you seek.

Note also that some brokers charge overnight and weekend fees for holding open positions, and these will – over time – eat into your margin. Do your homework to find the brokers that offer the most agreeable conditions for long-term investments – Plus500 was reviewed at Ask Traders, and that’s a helpful starting point. 

Is buy-and-hold investing for you?

The type of investing that is right for you will ultimately depend on your personality type.

Some people simply aren’t cut out for passive, buy-and-hold investing – it simply goes against the grain of their psyche.

Alternatively, some investors simply don’t have the time or inclination to study the charts and patterns, perform technical analysis, and dip in and out of the market on an hourly basis when the opportunity arises.

Passive investing *should* yield returns if the stocks and assets you buy grow in line with the overall market, and of course, they can far outperform the market baseline. If you had purchased stock in Apple ten years ago, you are probably reading this article somewhere exotic and hot, with outstanding air conditioning.

When you invest for the long term, you kiss goodbye to that money for months or even years, so as ever, you should only invest a) what you can afford to lose and b) what you can afford not to have for a prolonged period.

But when the moment is right, you should hopefully be able to sell at a handy profit without any of the blood, sweat, and tears that go into more active forms of investment.

FTSE 100 stalls again as companies enter Q2 earnings season

Liam Roche
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FTSE 100 stalls again as companies enter Q2 earnings season

The FTSE 100 is up by 0.13% on Thursday to 7,100.2, as the UK index failed to push on over the last month.

“If the FTSE 100 was a swimmer asked to tread water for as long as possible, it would score a gold medal. The market is stubbornly refusing to make waves and has gone nowhere since May,” says Danni Hewson, financial analyst at AJ Bell.

We are now into Q2 earnings season, while as of yet, positive news has not been transferred over to the FTSE 100 in the form of investor confidence.

“China’s second quarter GDP figures were slightly better than expected, but there is still a sense of unease about the country’s economic outlook. A similar feeling is spreading to other countries and suggesting that the post-Covid rebound may find it harder to keep going at a strong pace,” Hewson added.

“This might warrant ongoing support from central banks and governments, which in theory is positive for markets, but investor sentiment seems to be waning. Expectations have been so high for this massive economic surge, but a more lacklustre outlook could impact investors’ willingness to keep putting money into riskier assets.”

FTSE 100 Top Movers

Avast (13.3%), Experian (4.87%) and Prudential (3.83%) are leading the pack on Thursday with some pretty sizeable gain.

At the other end of the FTSE 100, oil giants and house builders are proving to be a drag, with BP (-2.23%), Taylor Wimpey (-1.6%) and Shell (-1.56%) making up the bottom three.

Avast

Avast, the cybersecurity firm, confirmed it is in “advanced discussions” with NortonLifeLock over the possibility of a merger between the two companies.

The acquisition of its rival signals the FTSE 100 comopany’s intent of consolidating its position in the competitive cybersecurity market.

While Avast said that there is no guarantee that the deal will go through, it has been reported elsewhere that the companies could come to an agreement at some point this month.

Experian

Experian revealed its upbeat quarterly trading update on Thursday, putting its results down to a stronger than anticipated recovery.

For the three months ending on 30 June, the FTSE 100 company saw its total revenue grow by 31% at actual exchange rates, while at constant exchange rates this figure was 27%.

Experian to guide upwards on strong Q1 results

Liam Roche
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Experian to guide upwards on strong Q1 results

Experian is now expecting its revenue growth to fall between 13% to 15%

Experian (LON:EXPN) revealed its upbeat quarterly trading update on Thursday, putting its results down to a stronger than anticipated recovery.

For the three months ending on 30 June, the FTSE 100 company saw its total revenue grow by 31% at actual exchange rates, while at constant exchange rates this figure was 27%.

Organic revenue growth during Q1 2021 was 22%, as each region and segment grew. During the same period last year, organic revenue growth was down by 2%.

“We delivered a strong performance in Q1 through a combination of successful delivery of our innovation-led strategy and faster than expected recovery as economies emerge from the COVID-19 pandemic,” said chief executive Brian Cassin.

Subsequently, Experian raised its full year outlook and is now expecting its revenue growth for the year to fall between 13% to 15% with organic revenue growth between 9% to 11%.

Commenting on the statement, Steve Clayton, fund manager at Hargreaves Lansdown Select said:

“Experian has outperformed its own and the market’s expectations in the quarter to end June. Last year, growth was held back by the pandemic and Experian trod water. But with economies reopening stronger than the company had expected, revenue in the quarter has leaped forward by 31%. Even after we strip out some currency gains and a bit of M&A, underlying growth was 22%, driven by the core Credit Bureaux data and increasingly, their Consumer Services offering.”

“The company are upping their guidance for the rest of the year and now see organic growth coming in at 9-11%, with total revenue growth potentially hitting 15% for the full year to 31 Mar 2022. The business performed strongly in all regions, with underlying growth of 22% in North America, 25% in Latin America and 20% back home in the UK,” Clayton added.

“Crucially, Experian are also talking profit margins higher, suggesting profit growth for the year could be very strong indeed.”

The Experian share price is up by 5.11% during the morning session on Thursday.

Avast confirms takeover talks with NortonLifeLock

Liam Roche
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Avast confirms takeover talks with NortonLifeLock

Avast share price soaring on Thursday following announcement

Avast (LON:AVST), the UK-listed cybersecurity firm, confirmed it is in “advanced discussions” with NortonLifeLock over the possibility of a merger between the two companies.

The acquisition of its rival signals Avast’s intent of consolidating its position in the competitive cybersecurity market.

While Avast said that there is no guarantee that the deal will go through, it has been reported elsewhere that the companies could come to an agreement at some point this month.

“A further announcement will be made if and when appropriate,” the company said via a statement last night.

The £5.2bn firm added that any deal would be structured as a cash and shares offer.

Avast was founded over forty years ago, and has since become one of the largest cybersecurity companies in the world, selling software products to consumers. Its most known competitors historically are Norton and McAfee.

The industry has grown rapidly recently due to an increase in hacking attacks on both companies and individuals.

The Avast share price is up by 13.07% during the morning session on Thursday following the news, now sitting at 571p.

Castillo Copper provides update on ‘outstanding’ drilling results at Big One Deposit

Liam Roche
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Castillo Copper provides update on ‘outstanding’ drilling results at Big One Deposit

All seven drill-holes completed in the campaign so far have appeared to intersect copper mineralisation

Castillo Copper (LON:CCZ), the metal explorer focused on copper across Australia and Zambia, on Thursday reported significant copper mineralisation from drilling at its Big One Deposit in the Mt Isa copper-belt district of north-west Queensland.

The company said its latest drill holes (BO_318-21RC) complement the results announced on 29 June 2021 (BO_315-317RC).

Highlights

  • Drill-hole BO_318RC intersected significant visible copper mineralisation in two distinctive zones – 11m from 89-100m and 34m from 153-187m (apparent thickness) 
    • Massive copper sulphide mineralisation clearly observed (chalcopyrite and chalcocite)  
  • All seven drill-holes completed in the campaign so far have appeared, through visual inspection, to intersect copper mineralisation – the best intercepts are shown in Figure 1 below:

Figure 1: Best Intercepted Mineralisation

Borehole From (m)To (m)Apparent Thickness (m)
BO_318RC89.0 100.0 11.0
BO_318RC 153.0 187.0 34.0
BO_319RC55.0 64.0 9.0
BO_321RC63.0 72.0 9.0
BO_315RC1 61.0 69.0 8.0
BO_316RC1 113.0 120.0 7.0
BO_316RC1 129.0 146.5 17.5
BO_317RC1 90.5 103.0 12.5

By reconciling these new data points with the geological modelling completed to date, Castillo Copper has clearly verified material extensions to known mineralisation and potentially a larger underlying system then initially envisaged.

A key feature behind the success of the current campaign, according to the copper miner, has been the significantly improved targeting, resulting from the effective utilisation of geophysical insights to refine and reshape the drilling programme to boost the collective exploration potential.

All samples from drill-holes BO_318-21RC are currently with the laboratory for analysis, while results
from BO_315-317RC are expected to be received imminently.

Simon Paull, Managing Director of Castillo Copper, said: “Hitting copper mineralisation seven times from
seven starts is an outstanding way to progress the drilling campaign at the Big One Deposit. In particular, the result from drill-hole 318RC is excellent, throwing off two zones of visible mineralisation totalling 45m, and confirms massive copper sulphides are apparent.”

“These intercepts provide clear evidence that known copper mineralisation has been materially extended and that the underlying system could potentially be larger than initially envisaged. With a further 19 drill holes still to come, the Board is delighted with progress to date and looks forward to releasing interpreted insights from upcoming assays results.”

Good Energy reiterates indicative bid rejection

Andrew Hore
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Good Energy reiterates indicative bid rejection

Good Energy (LON: GOOD) has reiterated its rejection of the bid from rival renewable energy supplier Ecotricity. Management has also outlined its reasoning behind the decision.
They believe that the indicative offer of 340p a share in cash is too low even though it is a premium to the previous market price. The argument is that the company is worth an even greater premium than being offered.
Management also believes that it has a strategic plan that provides a clear direction for the company. The focus is energy as a service and mobility as a service, particularly through Zap Map.
The potentia...

Healthcare M&A prospects

Andrew Hore
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Healthcare M&A prospects

There have been four major healthcare-related bids so far this year and there are likely to be more.
The largest bid this year is for healthcare distributor UDG Healthcare (LON: UDG) which is valued at £2.7bn. Both inhaled drug delivery technology and drugs developer Vectura (LON: VEC) and hospital operator Spire Healthcare (LON: SPI) are valued at around £1bn. The value of the bid for Immunodiagnostic Systems Holdings was much lower and it has just been completed. The total value of the bids is £4.6bn, which is nearly one-fifth of the value of the major bids in the first half of 2021.
The fou...

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