Berkeley Group records pre-tax profit of £518.1m

Liam Roche
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0
Berkeley Group records pre-tax profit of £518.1m

Berkeley Group delivered in line with its guidance set before the pandemic

The Berkeley Group (LON:BKG) confirmed it made a pre-tax profit of over £518.1m during the past financial year.

It is an increase of £14.4m compared to the year before.

A specific driver of its profits was sales of properties worth in excess of £700,000.

The FTSE 100 homebuilder saw its revenue jump by £0.3bn to £2.2bn, as it sold 2,825 homes across London and the South East.

Andy Murphy, director at Edison Group, commented on Berkeley Group’s results and outlook: “The UK’s leading place-maker, Berkeley Group Holdings PLC, announced a strong set of financial results today. The company delivered in line with its guidance set before the pandemic, maintaining its annual £281 million shareholder return as well as adding ten new sites, with the capacity to deliver 6,650 new homes to its landholdings.

“The company ended the year with net cash of £1.1 billion, cash due on forward sales of £1.7 billion, and the estimated future gross margin in its land holdings having increased to £6.9 billion. This also resulted in a profit before tax increase from the previous year, up 2.9% to £518.1m. As of this past year, Berkeley now has 23 of its 29 long-term regeneration developments in production, supporting its anticipated 50% increase in housing delivery by 2024/25 from 2018/19 levels.”

The Berkeley Group share price is down by 1.34% during the morning session on Wednesday 4,578p per share.

Laura Hoy, Equity Analyst at Hargreaves Lansdown said: “It’s been a bumper year for housebuilders like Berkeley as pent-up demand following lockdowns flooded the market with eager buyers. It was no surprise to see that both the number of houses and the average selling price both ticked higher over the past 12 months.”

“But shares wobbled following the announcement as investors started to question whether the housebuilders’ run would slow to a walk now that the market is cooling. Data from the HRMC this week showed the pace of purchases has decreased, with the number of homes sold in May roughly 40% lower than March levels.”

The FTSE 100 firm has made firm commitments to reducing its carbon footprint across the business.

“The company announced its Vision 2030 this year, which sets out its ten strategic priorities for the next ten years, including its continued investment in modular housing to reduce its carbon footprint. As a result, Berkeley became one of the first 350 companies in the world to commit to limiting global warming to 1.5°C. This commits the company to reduce emissions from its sites, offices and sales venues by a further 50% between 2019 and 2030,” Murphy said.

Dollar retraces as Fed confirms it will not yet raise interest rates

Liam Roche
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0
Dollar retraces as Fed confirms it will not yet raise interest rates

The dollar index was trading at 91.775 during the morning session in Asia

The dollar retreated on Tuesday against other major currencies as Chair of the Federal Reserve Jerome Powell confirmed that a tighter monetary policy was not on the cards anytime soon.

The dollar index was trading at 91.775 during the morning session in Asia, some way off its two-month high of 92.408 at the end of last week.

The dollar has retraced since a week ago when the Fed said that the first interest rate rise could come in 2023.

Both Powell and New York Fed President John Williams have said that the recovery needs time before a tapering of stimulus and higher interest rates are suitable.

“We will not raise interest rates pre-emptively because we fear the possible onset of inflation,” Powell said on Tuesday in a hearing before a U.S. House of Representatives panel. “We will wait for evidence of actual inflation or other imbalances.”

Attention will now turn to the producer price inflation data in the US, expected on Friday.

Vodafone European network to be powered by renewables

Liam Roche
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Vodafone European network to be powered by renewables

Vodafone’s wider goal is to cut emissions to net-zero by 2030

Vodafone (LON:VOD) confirmed on Wednesday that its operations across Europe will be fully powered by renewable energy sources as of July.

It is part of the FTSE 100 company’s wider goal of cutting its emissions to net-zero by 2030, including mobile networks, offices and data centres.

Just over a year ago, Vodafone set out its goal of being 100% reliable on renewable energy in Europe. Its previous target was 2025. The firm is now set on achieving the same target in Africa by 2025.

Last year Vodafone invested €65m to make its energy more efficient, allowing the company to save 135 GWh.

Key energy efficiency initiatives have also included sourcing and deploying more efficient network equipment, gradually switching off the relatively less energy efficient 3G network and decommissioning legacy equipment in our core network.

Vodafone Group CEO Nick Read said: “From 1 July 2021, Vodafone’s customers across Europe can be reassured that the connectivity they use is entirely powered by electricity from renewable sources. This is a major milestone towards our goal of reducing our own global carbon emissions to net zero by 2030, helping our customers reduce their own environmental footprint and continuing to build an inclusive and sustainable digital society in all of our markets.”

Vodafone’s plans are in-keeping with the Paris Climate Accord, which aims to limit global warming to 1.5°C.

New AIM admission: Victorian Plumbing

Andrew Hore
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New AIM admission: Victorian Plumbing

Victorian Plumbing has become one of the largest retailers of bathroom products in the UK. Online retailers are picking up a greater share of the market and this is being led by Victorian Plumbing, which is growing much faster than the market as a whole.  
Existing shareholders sold just over one-third of the shares in issue and raised £285.9m in the flotation.  
The money raised by the company mainly went on paying the expenses of the flotation. There is plenty of cash in the bank and the business is cash generative. The dividend policy is to pay shareholders up to one-fifth of earn...

New AIM admission: Spectral MD

Andrew Hore
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0
New AIM admission: Spectral MD

Spectral MD has developed technology that will enable clinicians to make faster decisions about burns and diabetic foot ulcers. It has the backing of the Biomedical Advanced Research and Development Authority (BARDA) in the US, and this should ensure a US market for the technology.
There was already cash in the bank and the money raised in the flotation will help to complete clinical trials for the application for diabetic foot ulcers. Spectral also wants cash to build up a US distribution network as well as a sales infrastructure in Europe.
The share price ended the day at 62p. More than 326,...

New AIM admission: Thor Explorations Ltd

Andrew Hore
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0
New AIM admission: Thor Explorations Ltd

Thor Explorations Ltd is about to commence gold production at the Segilola mine in Nigeria. The costs of production are less than half the current gold price. That means that cash can be generated in the second half. The mine life appears limited at six years, but there is scope to increase the resource.
The business has not generated revenues previously. The cash can be used to self-fund the development of Senegal assets and expand interests in Nigeria.
There was no money raised in the AIM flotation. Thor Explorations is already quoted on the Toronto Venture Exchange and has previously raised...

The Delta variant is holding back the Rolls-Royce share price

Liam Roche
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0
The Delta variant is holding back the Rolls-Royce share price

Rolls-Royce Share Price

Despite some peaks and troughs along the way, the Rolls-Royce share price has remained pretty much at the same level over the past 12 months. This trend has continued throughout 2021, as the FTSE 100 company sits at 109.14p per share. However, there has been some pretty sharp dips and rises along the way, as investors appear interested, while uncertainty remains over the extent of the recovery. With current lockdown measures at home standing still, investors seem to have given up on the likelihood of foreign travel opening up in the short-term, knocking back the Rolls-Royce share price today.

Outlook

As one of the largest aircraft manufacturers in the world, the Rolls-Royce share price has been significantly impacted by the ongoing pandemic. Not only did many airlines rescind their orders but fewer planes are currently being serviced due to a lack of flights. The company does not expect orders to recover to pre-Covid levels until 2025. In the meantime, much will depend on the success of the continued vaccine roll-outs, and the resumption of international flights. The Rolls-Royce share price continues to react to updates, or lack thereof, regarding travel restrictions.

The news on this front is not great. The Delta variant of Covid-19 is spreading across the continent and threatening to derail plans of a summer reopening. In Portugal, which was initially opened to UK travellers, the variant has seen cases rise to their highest level in 12 weeks.

“If measures are relaxed too soon also for non-vaccinated people, then we may see a rapid rise in cases again,” the European Centre for Disease Prevention and Control director Andrea Ammon said a week ago.

There, its seems plausible that the Delta variant will result in further lockdowns, which will have a damaging impact in the airline industry.

Return to Positive Cash Flow

In better news, following its AGM last month, Rolls-Royce said it is expecting its cash flow to turn positive during H2 of 2021 “as engine activity recovers and cost savings are delivered”.

This announcement is especially important as Rolls-Royce ended last year with debt at £3.6bn as the group took measures to refinance. This came about partly because Rolls-Royce made 1,400 people redundant, saving the company up to £1.3bn a year.

This could give hope to investors who are willing to be patient. Ultimately, the Delta variant may only be a delay, providing further value for those who believe in the Rolls-Royce share price over the long-term. The FTSE 100 company has managed to restructure during the pandemic which could be enticing for investors.

FCA outlines new proposals on climate-related disclosure rules

Liam Roche
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0
FCA outlines new proposals on climate-related disclosure rules

Banks and asset managers emitted more carbon in 2019 than the whole of the UK

The FCA is seeking to implement financial disclosure rules for asset managers, pension providers and insurance companies, as it seeks to make forward progress in the area of carbon emissions.

On Tuesday the UK regulator revealed two of its consultations looking at introducing new rules, which are in-keeping with the recommendations from the Taskforce on Climate-related Financial Disclosures (TCFD).

This applies to listed companies and FCA-regulated pension providers.

“The climate change challenge affects the whole of society. It is vital that the financial services sector plays a leading role in addressing this challenge,” FCA executive director of consumer and competition, Sheldon Mills, said.

“Managing the risks of climate change and transitioning to a cleaner and less carbon-intensive economy will require high quality information on how climate-related risks and opportunities are being managed throughout the investment chain.

According to research by Greenpeace UK and WFF, the UK financial services industry is one of the largest contributors of carbon emissions in the country.

Banks and asset managers emitted more carbon in 2019 than the whole of the UK.

The proposed rules aim to ensure that the correct information on climate risks is available along the investment chain.

Rosanna Bryant, co-head of financial services, Addleshaw Goddard, commented: “Going green is fast becoming business critical, and when it comes to tackling climate change the whole is most certainly greater than the sum of its parts.

“Our latest research* shows that the majority of asset managers are already prioritising green investments. But this announcement from the FCA makes clear that firms will be held to account on how the investments they make today will impact all of our tomorrow. 

“While this proposal by the FCA is an vital step forward, it’s important that the regulator makes clear how this will interact or align with existing EU regulation for asset managers, such as the EU Sustainable Finance Disclosure Regulation.”

Research conducted by Addleshaw Goddard of 500 business leaders and 500 financial services leaders across the UK and Europe found that 92% of business leaders say that banks have been significant in influencing their business to act more sustainably.

While 84% of finance providers say they won’t offer services to companies that lack a clear net-zero strategy.

UK property transactions cool down in May as stamp duty holiday comes to an end

Liam Roche
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0
UK property transactions cool down in May as stamp duty holiday comes to an end

There were 114,940 residential property transactions in total in May

UK property transactions are down in May, as the end of the stamp duty holiday appears likely to bring about a cooling of the housing market.

Last month there were 114,940 residential property transactions in total, as confirmed by the Office for National Statistics (ONS), 3.9% down compared to April 2021, a month before.

House prices have soared over the past 12 months as the stamp duty holiday was introduced by Rishi Sunak.

However, as the end of the policy draws near, the evidence is suggesting that sales are beginning to slow down.

Sam Mitchell, CEO of online estate agent Strike commented: “Despite property transactions easing in May for the second month in a row, numbers remain well above pre-pandemic levels with buyers and sellers scrambling to complete before the stamp duty holiday deadline at the end of this month,” said Mitchell.

“Now with only days left until the stamp duty holiday deadline, we expect property transactions to skyrocket, similar to the frenzy we witnessed in March before the original deadline. Some may be expecting a drop after the stamp duty holiday has come to an end, but with the tapering off period until October and the Government’s lending scheme combined with low interest rates, there are still plenty of factors to keep the market bubbling into the Autumn.”

“Plus, with the extension of lockdown restrictions announced last week, buyers will no doubt still be considering a home that matches their new lifestyle, whether that’s somewhere with more green space or perhaps closer to family.”

John Eastgate, managing director of Property Finance at Shawbrook Bank, added that “re-mortgaging levels are therefore also likely to receive a boost as homeowners and investors choose to fix and secure another few years of low rates.”

Brent crude oil price goes past $74 as US/Iran talks stall

Liam Roche
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0
Brent crude oil price goes past $74 as US/Iran talks stall

Ebrahim Raisi elected as leader of Iran

The price of Brent crude oil is creeping higher again on Tuesday, as demand keeps picking up, while talks between the US and Iran over the lifting of sanctions appear to be stalling.

Early this morning Brent crude oil went past the $74 mark, before retreating somewhat heading into the afternoon in the UK.

https://twitter.com/OilPriceHourly/status/1407231913501286405?s=20

Further to the US talks, Ebrahim Raisi has been elected as leader of Iran, which could add further complications, thereby delaying a final outcome.

“We support the negotiations that guarantee our national interests. … America should immediately return to the deal and fulfill its obligations under the deal,” Raisi said according to a Reuters translation.

As the US and Europe continue their recoveries from the pandemic, energy demand appears to making a strong recovery.

“Oil prices are on the march once more on supply concerns, helping to lift index heavyweights BP and Royal Dutch Shell and fuelling the FTSE 100’s rise,” said Russ Mould, investment director at AJ Bell.

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