Aviva Share Price: plenty to absorb for investors after strong Q1 results

Liam Roche
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Aviva Share Price: plenty to absorb for investors after strong Q1 results

Aviva Share Price

The Aviva share price (LON:AV), at 410.90p per share, has now reached its pre-pandemic level. This is despite moving sideways for the last two months. Since the beginning of the year, the Aviva share price is up by 26.4%. As the FTSE 100 insurance company released its Q1 results today, this article will analyse Aviva’s ability to maintain its bullish run moving forward.

Results

Aviva announced solid sales figures from its life insurance business, at £8.3bn, as well as a 4% increase in general insurance on Thursday.

Aviva also sold eight businesses, amounting to £7.5bn over the past year, in order to focus on its priority markets, the UK, Ireland and Canada. The British insurance company reaffirmed its pledge to give cash to shareholders. However, this could happen as late as 2022, according to chief financial officer Jason Windsor.

“Combined operating ratios in the General Insurance business, which illustrates the proportion of premiums that are paid out either as claims or in operating costs, improved dramatically – falling 28.1 percentage points to 90.6%,” said Nicholas Hyett, equity analyst at Hargreaves and Lansdown.

“The group expects conditions to get tougher as the year goes on, especially as motor claims increase when lockdown ends, but expects the combined operating ratio to remain below 95% this year,” Hyett added.

Analysts at JP Morgan described the Q1 update as “strong”, and restated an “overweight” rating for the company.

“Aviva put on a good show following its strong Q1 results that contained plenty of meaty headlines for investors to absorb,” Chris Beauchamp, chief market analyst at IG.

Focus on Sustainability

Aviva has also refocused towards strategies around sustainability. This was one of the reasons for their decision to sell some of their assets across the world.

Amanda Blanc, chief executive of Aviva, recently outlined the group’s efforts to clean up their investments, saying Aviva will only invest “where [they] are sure it delivers sufficient returns’ for stakeholders. Blanc added that ‘where [they] see a valuable opportunity to invest in growth, [they] will take it”.

This follows Aviva’s commitment to becoming the first major insurance company in the world to slash its emissions to net-zero by 2040.

With strong results and a clear strategy on environmental issues, the Aviva share price looks like a solid proposition for investors.

Uber to allow drivers to join union in historic deal

Liam Roche
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Uber to allow drivers to join union in historic deal

Uber (NYSE:UBER) confirmed on Thursday that it will officially recognise a trade union in a landmark deal that could benefit gig economy employees.

The GMB union has been given the power to represent UK drivers in discussions on a number of issues, including earnings and wellbeing.

Mick Rix, national officer at GMB, commented on the ruling:

Rix said it could be “the first step to a fairer working life for millions of people”.

“When tech private hire companies and unions work together like this, everyone benefits – bringing dignified, secure employment back to the world of work.

“We now call on all other operators to follow suit.”

The deal arrived three months after a Supreme Court ruling stated that Uber should not be allowed to classify its drivers as independent contractors, who would forego employee rights.

Subsequently, Uber confirmed in March that it would consider its UK drivers as “workers”. This would entitle them to a minimum wage, enrolment into a pension plan and holiday pay.

GMB and Uber will now gather once every three months to talk about driver related issues.

Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, acknowledged the company’s increasing reliance on unions.

“Whilst Uber and GMB may not seem like obvious allies, we’ve always agreed that drivers must come first, and today we have struck this important deal to improve workers’ protections,” Mr Heywood said.

“This historic agreement means that Uber will be the first in the industry to ensure that its drivers also have full union representation.”

Earlier this month, Arrival, the British electric vehicle manufacturer, recently listed on the New York Stock Exchange, entered a partnership with Uber to develop electric taxis.

The deal will involve Uber drivers having an input into the design of the cars which are scheduled to move into production next year. 

It is part of a wider plan by Uber to transition its 45,000 London-based drivers to electric vehicles by 2025, while the remainder of UK drivers will do the same by 2030.

Nissan asking for taxpayer funding to build gigafactory in Sunderland

Liam Roche
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Nissan asking for taxpayer funding to build gigafactory in Sunderland

Nissan says the plant could produce batteries for up to 200,000 cars per year

Nissan (TYO:7201) is hoping to secure support from the UK government to build a “gigafactory” in Sunderland in order to manufacture batteries for electric vehicles.

The Japanese company is in the later stages of talks to construct a plant that could produce batteries for up to 200,000 cars per annum, creating thousands of jobs in the process.

Nissan’s plan comes ahead of the government’s oncoming ban of petrol and diesel cars in the UK, which is expected to create a dramatic rise in the sale of electric vehicles.

The Faraday Institution, a research organisation with a focus on batteries for cars, estimates that the UK will need eight gigafactories by 2040 in order to meet demand, The Times reported.

Nissan said: “Having established [electric vehicle and] battery production in the UK in 2013 for the Nissan Leaf, our Sunderland plant has played a pioneering role in developing the electric vehicle market.”

“As previously announced, we will continue to electrify our line-up as part of our global journey towards carbon neutrality. However, we have no further plans to announce at this time.”

A spokesman for the Department for Business, Energy & Industrial Strategy, commented: “We are dedicated to securing gigafactories and continue to work closely with investors and vehicle manufacturers to progress plans to mass produce batteries in the UK.”

Ofgem, the UK energy market regulator, outlined on Monday its plan to invest £300m in over 200m infrastructure projects to ready the UK for the future of electric transport.

The plans will come into action over the next two years and is part of a wider £40bn project to move the UK to a system that uses low-carbon transport and heating. 

Boris Johnson has previously confirmed plans to forbid the sale of petrol and diesel cars from 2030 in order to reduce its emissions to net-zero by 2050. However, the country may well need to upgrade its infrastructure significantly to support the future influx of electric vehicles.

Trident Royalties Presentation at the UK Investor Magazine Virtual Conference 25th May

UK Investor Magazine
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Trident Royalties Presentation at the UK Investor Magazine Virtual Conference 25th May

Trident Royalties are mining royalties and streaming company with a diverse range of royalties covering precious, base and battery metals.

Having presented at the December UK Investor Magazine Virtual Investor Conference, Trident Royalties returned to update investors of recent progress at the company.

Trident Royalties are on a path achieving critical mass with robust pipeline of deals having already acquired 12 mining royalties.

CEO Adam Davidson provides a detailed comparison of investing in mining royalties versus investing directly in mining companies.

There is also discussion around a commodities super cycle and how Trident Royalties can benefit from higher metals prices.

Challenger Energy Group Presentation at the UK Investor Magazine Virtual Conference 25th May

UK Investor Magazine
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Challenger Energy Group Presentation at the UK Investor Magazine Virtual Conference 25th May

Challenger Energy Group presents at the May UK Investor Magazine Virtual Conference.

Challenger Energy Group are a Caribbean and South American focused oil producer and explorer with a range of assets across the region.

Incoming CEO Eytan Uliel outlines key progress at their flagship projects and updates investors on corporate changes.

Challenger Energy Group in the midst of a drilling campaign at their Saffron project and Mr Uliel highlighted the nature of their development programme and what investors can expect in terms of news flow in the future.

There is also discussion around funding options and a number of specific questions from the audience.

FTSE 100 lacking direction with US GDP figures on the horizon

Liam Roche
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0
FTSE 100 lacking direction with US GDP figures on the horizon

Another day with more lethargy on the FTSE 100, as the index is up by 6.93 points to 7,033.86 just over an hour into the day.

“The FTSE 100 seems to be on a road to nowhere at the moment,” says AJ Bell investment director Russ Mould. “Fears about inflation have subsided for the time being and even some volatility in Asian markets wasn’t enough to wake the index from its slumber.”

“There is a relative dearth of economic data which could push markets in any particular direction in the coming days, although a second estimate of first quarter US GDP later on Thursday could renew focus on inflationary pressures, particularly if the already elevated number is revised upwards.”

Metal prices are also creeping higher again. “This could put yet more focus on the risks of the global economy overheating but has at least given the UK mining sector a bit of a lift this morning,” says Mould

FTSE 100 Top Movers

Melrose Industries (3.2%), Rolls-Royce (3.16%) and Aviva (2.73%) are the biggest risers on the FTSE 100 early on Thursday.

While making up the bottom three are Severn Trent (-3.07%), Johnson Matthey (-2.84%) and Taylor Wimpey (-2.24%).

Johnson Matthey

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.

Pets at Home sets £1bn sales record as lockdown caused surge in demand for pets

Liam Roche
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0
Pets at Home sets £1bn sales record as lockdown caused surge in demand for pets

Pets at Home expects to continue growing market share

Pets at Home (LON:PETS) recorded sales in excess of £1bn for the first time as demand for pets soared while people were locked in their homes.

The FTSE 250 company estimates that the number of pets in the UK has grown by 8% over the past year.

The animal retailer even said the boom caused a shortage in pet food.

Peter Pritchard, chief executive of Pets at Home, commented:

“Covid-19 has structurally changed the dynamics of the pet care market. We estimate that the rising level of pet ownership, combined with structural demand drivers such as premiumisation and humanisation, has increased the outlook for growth across our addressable market, and in conjunction with our expectations of continuing to take market share, provides a tailwind to the £600m customer revenue opportunity we see across our business over the medium term.”

Pets at Home saw its revenue levels grow by 7.9% to £1.1bn during the year ending in March, a record in the company’s history which spans over three decades.

Profits rose to £116m despite £30m coronavirus-induced costs, while underlying profits remained steady having accounted for the £30m sale of five pet hospitals.

Pets at Home is expecting a continuation of this trend, and suggests it can further increase its sales, due to raised ownership as well as owners splashing out more on their animals.

Susannah Streeter, senior investment and markets analyst at Hargreaves and Lansdown, commented:

“The tail is wagging happily at Pets At Home with retail sales reaching £1 billion for the first time.”

“The company has clawed opportunity from the soaring popularity for pets during the pandemic, with ownership estimated to be up 8% over the year. Lockdowns proved an ideal opportunity for people to settle in a new member of the household. It’s the demand for array of goods and services to keep them fed, watered and entertained which have returned a big stick of revenue to the group,” Streeter added.

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...

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