New car sales in UK up 3000% from lockdown low one year ago

Liam Roche
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New car sales in UK up 3000% from lockdown low one year ago

New registrations at 141,583 vehicles

New car sales in Britain surged by 3,000% in April as car showrooms were reopened to the public, boosting the numbers from the year before when lockdowns decimated car sales.

According to the Society of Motor Manufacturers and Traders (SMMT), new registrations came in at 141,583 vehicles, up from only 4,321 in April 2020, which was the lowest level of any single month since February 1946.

Dealerships were open to the public from April 12 in England, in addition to purchases being made by delivery and other online methods.

But last month’s performance was still 13% below the 2010-2019 average, the SMMT said.

“After one of the darkest years in automotive history, there is light at the end of the tunnel,” said SMMT boss Mike Hawes.

“A full recovery for the sector is still some way off, but with showrooms open and consumers able to test drive the latest, cleanest models, the industry can begin to rebuild.”

Excess cash set to bolster UK economy says Sunak

Liam Roche
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Excess cash set to bolster UK economy says Sunak

People have set aside £140bn over past year with £100bn on corporate balance sheets

Cash-heavy households and businesses are set to boost the UK’s economic recovery over the coming year as the spend money accumulated during lockdown, the chancellor has said.

People have set aside around £140bn over the past year, with £100bn on corporate balance sheets, as confidence is getting back to levels seen before the pandemic and economic activity is rising at a fast rate, Sunak told The Wall Street Journal’s CEO Council Summit.

“As we look forward to reopening over the coming weeks and months, there are signs to be cautiously optimistic and we can see that in the data. I’m hopeful that will be sustained through the rest of the year,” he said.

Sunak’s comments were timely, coming soon after a UK PMI survey revealed that UK manufacturing grew at the fastest rate in nearly 27 years in April.

Mortgage lending has also spiked, up by £11.8bn in March, as households sought to take advantage of the stamp duty holiday on the first £500,000 of a purchase before the policy is withdrawn in June.

In recent weeks, economists have upgraded projections for GDP growth for the UK this year from 5% cent to 7%, a pace last seen in 1941, with the Bank of England expected to confirm the rapid recovery in its latest forecasts tomorrow.

“We are seeing consumer confidence back to pre-pandemic levels. Chief financial officers are very positive. Various manufacturing and services indices are trading above [trend] and we know that there is an enormous amount of excess savings both in the household sector, approaching £140 billion, and £100 billion sitting on corporate balance sheets,” Sunak said.

“We have tried to put things in place to unlock some of that cash, particularly the [corporation tax] super deduction. The signs are promising. Our policy a year ago was to help people and protect businesses so that when we got to this point we could bounce back strongly.”

Britain suffered its biggest recession in three hundred years last year, as the economy shrank by 9.8%. However, this time around, households and companies have built up an excess of cash which could go some way to supporting the UK’s recovery.

Boohoo profits leap as company focuses on loungewear during the pandemic

Liam Roche
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Boohoo profits leap as company focuses on loungewear during the pandemic

Boohoo sales rose to £1.75bn last year

Boohoo (LON:BOO), the online fashion brand, has confirmed its sales and profits jumped up last year after the company concentrated on its loungewear and activewear ranges while the coronavirus pandemic was going on.

The FTSE 250 company revealed on Wednesday morning that its revenue rose by 41% during the year ending on 28 February, as sales rose by just over £0.5bn to £1.75bn.

Pre-tax profit soared too, up 35% £124.7m over the same time period.

Earnings per share increased 36 per cent from 5.35p to 7.25p.

“Boohoo has strutted ahead of flailing high street rivals showing that its bang on trend when it comes to the way fashion followers want to shop and the styles they want to buy,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown. “Looser stay at home styles like sports and loungewear added extra comfort as the fit was easier to get right, so people sent fewer items back. With the returns bugbear retreating, that helped push up gross margins to 54.2%.”

Superstar sales have meant Boohoo has piled up the cash, with its operating cash flow hitting more than £200 million, compared to £127 million in 2020.

Boohoo’s deep pockets already sent the company on a spending spree rifling through Arcadia’s bargain bins to grab a clutch of brands including Dorothy Perkins. It’s also grabbed the Debenhams online store, with the aim of turning a company, which began as a market stall, into an international apparel marketplace. “This plan is on track with revenue growth for international up 44% over the year, now accounting for a bigger slice of the overall sales pie,” said Streeter.

“Boohoo is now a fashion powerhouse, and investment in scaling the platform is expected to keep paying off, with even higher margins expected in the second half of the year. But the catwalk isn’t completely clear, with hurdles of uncertainty ahead.”

Tech sell-off sees worst day in weeks for Nasdaq

Liam Roche
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Tech sell-off sees worst day in weeks for Nasdaq

Ark Innovation struggling as investors turn away from growth and tech stocks

It was one of the worst days in weeks for the Nasdaq as investors sold off their tech stocks in droves last night.

Apple shares fell by 3.5%, while Amazon and Alphabet, owner of Google, were down by 2.2% and 1.7% respectively in a show of concern over the companies’ high valuations.

The Nasdaq more broadly was down by 1.9% to 13,633.50, its weakest day since late March. The S&P 500 lost 0.7%, down to 4,164.66.

A recent dip in the Tesla share price, in addition to a move out of growth and technology stocks, has caused downward pressure on ARK Innovation, the star performing exchange-traded fund of 2020, managed y Cathie Wood.

According to Morningstar data, the $23.1bn fund confirmed gains of less then 1% last month, nearly 3% below the average fund in its category.

Since the beginning of the year the ArkInnovation ETF is down by 9%, while the S&P 500 is up by 10.9% over the same period.

Shares in Tesla, the fund’s biggest holding at 10.5%, are down 4.5% since the beginning of the year, playing a significant role in the fund’s fall.

“The market has rotated away from the fund’s favored growth stocks toward more economically sensitive segments of the market,” said Todd Rosenbluth, head of ETF and mutual fund research at CFRA. “We think if underperformance continues longer, some investors will become frustrated and seek an alternative.”

CyanConnode expected to be profitable next year

Andrew Hore
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CyanConnode expected to be profitable next year

Hardman & Co has initiated research on narrowband radio frequency communications networks developer CyanConnode (LON: CYAN) and it believes that the company could be profitable within two years.
Smart meter roll outs have been gathering pace in India and the company’s RFMesh smart meter communications technology is an important component in several of the contracts. There are also potential contract wins in other countries, such as Thailand, the UAE and Egypt.
There are orders for more than 513,000 modules and potential to gain more in India and other parts of the world.
Uncertainty
The sh...

Lloyds Share Price: low interest rates are a cause for concern

Liam Roche
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Lloyds Share Price: low interest rates are a cause for concern

Lloyds Share Price

Despite a fall today, the Lloyds share price (LON:LLOY) has broadly continued its momentum from the beginning of 2021 in recent weeks, now standing at 45p per share. The FTSE 100 company has added 23.6% since the turn of the year, as the UK economy continues its seemingly stable path out of lockdown.

The bank finished off strong last week following the release of its solid results in a show that it could be set for a sustained recovery going forward.

Outlook

Can Lloyds continue this recovery for the remainder of this year and into 2022? Its Q1 results make good reading as the bank reversed some of the provisions it had made for loan losses following the spread of coronavirus. As a result Lloyds saw its pre-tax profit soar to £1.9bn for the quarter ending in March, well up from below £100m for the same period a year ago. It is certainly a positive start and can help to explain why the bank’s share price moved up over the last week.

However, Lloyds is not out of the clear just yet. Low interest rates provide difficulty as the bank relies on lending deposits in the form of mortgages, loans to small companies and credit cards.

“Banks make money by lending money out at higher rates than they pay on deposits – the difference is known as the net interest margin. With interest rates on savings accounts already on the floor (and zero in many cases) they simply can’t push the cost of funding much lower – whereas competition and regulatory action means lower interest rates get passed on to borrowers relatively quickly,” says Nicholas Hyett, equity analyst at Hargreaves and Lansdown.

That being said, Lloyds is expecting net interest margins to exceed 2.45% this year, which wouldn’t be too damaging for the bank, even if it doesn’t record massive profits.

“Given that low interest rates look like they’re here to stay, it’s perhaps no surprise Lloyds is looking elsewhere for growth,” Hyett said.

Microsaic Systems: A New Dawn

Jon Levinson
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Microsaic Systems: A New Dawn

Microsaic Systems (LSE:  MSYS) 0.24p, Mkt Cap: £15m
Microsaic have just reported very historic Finals to December 2020. These did not contain the recent significant events, such as the ‘rescue fund raising and new management. Msys already marked the potential change in fortunes by signing a global sales supply agreement for regulatory approved, CE mark, miniaturised mass spectrometry equipment and service on a non-exclusive basis with DeepVerge. Aim listed DeepVerge has a £60 mkt cap and will market and will distribute Msys’s portable solutions for healthcare diagnostic evaluati...

BP share price jumps as oil giant commits to buybacks

Liam Roche
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BP share price jumps as oil giant commits to buybacks

BP Share Price

The BP share price (LON:BP) jumped over the last couple of weeks, from 292p per share on 20 April to 312p today. The sharp rise came about as the FTSE 100 oil giant promised to buy back shares after it cut its debt faster than expected. Year-to-date the BP share price has added 21.7%.

BP Commits to Share Buybacks

In an effort to impress investors, BP stated its commitment to buying back shares this year as the company reduced its debt levels quicker than anticipated. The news came as BP announced on Tuesday that it expects to reach its $35bn net debt target in Q1 of 2021. The estimate is a result of earlier-than-expected proceeds from disposals and a “very strong quarter”, the oil company said last week. At the end of 2020, BP had a debt pile of $39bn. The company previously expected to reduce its debt to $35bn by as late as 2022.

“With the acceleration of divestment proceeds, together with strong business performance and the recovery in the price environment, we generated strong cash flow and delivered on our net debt target around a year early,” said Bernard Looney, chief executive.

The company plans to begin buying back shares once it reaches its debt target, and will provide an additional update upon releasing its Q1 results on 27 April.

Clean Energy Transition

BP suffered over the past 12 months as the pandemic squeezed demand, while investors didn’t fully buy into its transition into a clean energy company. While its recent results were impressive, this still remains an issue for the company.

Mr Looney has said he is “encouraged” by the major’s direction and that he is “focused on the job at hand”.

“The last thing investors would want us to do is start changing our mind,” Mr Looney said, adding: “We’re a transitioning company. Our ambition is to become a net zero company but it won’t happen overnight.”

It could be years before we know whether or not BP is able to reinvent itself in a way which convinces shareholders.

Argo Blockchain Share Price: signs of a recovery after sharp dip

Liam Roche
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0
Argo Blockchain Share Price: signs of a recovery after sharp dip

ArgoBlockchain Share Price

The Argo Blockchain share price (LON:ARB) is moving upwards again. Having fallen from a record high of 284p in mid-February to 135p by 19 April, Argo appears to be at the early stages of a recovery. Now at 179.9p per share, still well down from its all-time-high, investors will be curious as to whether or not the company represents good value moving froward.

Bitcoin

The performance of the Argo Blockchain share price is closely correlated to the performance of bitcoin, the cryptocurrency which it focuses most of its attention on as a mining company. As UK Investor Magazine has previously outlined, if the price of bitcoin falls, then Argo’s share price is likely to do the same.

From the middle of April, when bitcoin was priced at just under $65,000, through to the end of the month, bitcoin’s price fell dramatically, getting below $48,000. It amounted to a slump of more than 25%, similar to the fall seen in the value of Argo Blockchain’s shares.

At the time of writing, and similar to the value of Argo Blockchain stock, bitcoin is showing signs of a recovery.

Argo Blockchain’s Mining Revenue’s Continue Rise

Argo Blockchain has reported higher revenues in April as the company continues its bitcoin mining, in addition to seeing raised margins. In a monthly update, Argo has disclosed revenues of £6.7m, an increase from £6.57m in March, while its average monthly margins are around 85%.

The company also said it has mined 163 bitcoin during April, compared to 165 bitcoin in March, bringing its holdings to 935 bitcoin.

“I’m thrilled that Argo has generated a fourth consecutive month of record mining revenue and profits. I’m also pleased to have engaged Navier in the development of our Texas facility, a partnership that will enable us to expand our mining infrastructure significantly and efficiently,” Argo chief executive Peter Wall said in a statement.

“I am also delighted to have announced the second year of triple digit growth in our 2020 full year results. Our team has laid an excellent foundation for 2021 and our strong performance in [the first quarter] of this year highlights we are executing it in line with expectations,” he added.

TheCarCrowd: a disruptive Passion Asset Investment Platform

UK Investor Magazine
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1
TheCarCrowd: a disruptive Passion Asset Investment Platform

TheCarCrowd – A Passion Asset Investment Platform set to disrupt the investment market and address the lack of options for UK Millennial’s has launched on Seedrs.

TheCarCrowd are building a new way for people to invest in the assets they love. Starting with Classic Cars they are offering people everywhere the chance to take a real equity stake in a classic car and benefit from the potential appreciation.  Having smashed through the original funding target on the Seedrs platform they are extending their campaign to allow more investors a chance to support their journey.  

Using data sourced from the FCA financial lives survey, TheCarCrowd estimates that around 8 million UK millennials have no form of investments. A lack of choice and high minimum investments often cause barriers to entry.  

TheCarCrowd are on a mission to unlock some strong returns for this large underserved market.  Classic Cars have appreciated in value 194% over 10 years up to Q4 2019 (Source: Compiled by Knight Frank Research using data from Historic Automobile Group International. Please note that figures refer to the past and past performance is not a reliable indicator of future results).  

However, these assets were largely reserved for those who can afford to buy, store and insure the car. TheCarCrowd is changing that with a real equity stake in a car starting at just £20 making is accessible to petrol heads everywhere.  

Investors also gain piece of mind knowing that TheCarCrowd are an appointed representative of Kession Capital Limited who are regulated by the FCA. 

Launched in Nov 2020, and now with over 620 registered investors demand has been strong. Their first vehicle; a Peugeot 205 GTI funded in just 67 days.  

The platform has been purpose built and has a fully automated know your customer, anti money laundering and buy shares journeys meaning they are set up for scale.  

The current raise on Seedrs has seen over 200 individuals invest in this exciting and innovative business.  TheCarCrowd are also offering some great investor rewards with tickets to UK car shows and even a private track day on offer for qualifying investors, all detailed on their Seedrs page. 

“With this fundraising round, we are looking to give people more options when it comes to investing.  Helping them to diversify their portfolio and invest in something they really care about. 

This Seedrs campaign is a great opportunity for us to supercharge our growth, and we want to bring some valued connections on board

It doesn’t matter how large or small your investment, we’d would love as many people to come on this journey as possible.” David Spickett – CEO

More information on TheCarCrowd can be found on the TheCarCrowd’s website and Seedrs Crowdfunding platform.

Please remember that when investing your capital is at risk

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