FTSE 100 on course to see out Q1 of 2021 with mild session

Liam Roche
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FTSE 100 on course to see out Q1 of 2021 with mild session

The FTSE 100 is on course to close out a turbulent first quarter of 2021 with a disappointing session. At early morning trading the index is down by 0.3% to 6,747 points.

Yields on US 10-year government bonds rose to a 14-month high in a sign of optimism that vaccines are getting the pandemic under control.

“The bogeyman which has haunted investors since late January – rising bond yields and what they say about inflation and interest rate risks – is rearing its head once again,” says AJ Bell investment director Russ Mould.

“This put US and Asian stocks under some modest pressure and the weak sentiment has extended to Europe on Wednesday,” Mould added.

“The other message to take from the increase in bond yields is a more positive one, namely that people are feeling more confident on a vaccine-led recovery again after a period when doubt had started to creep in amid apparent signs of vaccine nationalism.”

Barring dramatic news emerging, the FTSE 100, along with stock markets across the world, are set to see out the first quarter of the year having made reasonable gains.

FTSE 100 Top Movers

Hikma Pharmaceuticals (3.68%), BT (1.79%) and Admiral Group (1.12%) were the top three risers during the morning session.

The top fallers on the FTSE 100 were Just Eat (-2.32%), Standard Chartered (-2.18%) and Shell (-1.48%).

Deliveroo

Deliveroo (LON:ROO) plunged by 30% as the food delivery company made its debut on the London stock exchange on Wednesday, marking a disappointing start to one of the biggest IPOs in the city in the last ten years.

According to data from Refinitiv, Deliveroo was trading as low as 271p within the first 20 minutes of trading, way lower than the offering price of 390p. The UK-headquartered company priced 384.6m shares at 390p each, the bottom of its target range, meaning Deliveroo was valued at £7.6bn, which is the highest in London since Glencore in 2011.

Deliveroo down 30% on stock market debut

Liam Roche
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Deliveroo down 30% on stock market debut

Deliveroo trading as low as 271p within first 20 minutes of trading

Deliveroo (LON:ROO) plunged by 30% as the food delivery company made its debut on the London stock exchange on Wednesday, marking a disappointing start to one of the biggest IPOs in the city in the last ten years.

According to data from Refinitiv, Deliveroo was trading as low as 271p within the first 20 minutes of trading, way lower than the offering price of 390p.

The UK-headquartered company priced 384.6m shares at 390p each, the bottom of its target range, meaning Deliveroo was valued at £7.6bn, which is the highest in London since Glencore in 2011.

The company, which has been backed by Amazon, raised £1.5bn from investors.

Deliveroo opted to list at the lower end of its range despite the fact it could have raised £1.77bn. The decision was made as companies with similar business models saw their share prices fall recently.

Only institutional investors are able to participate in Deliveroo’s market debut on march 31, while private investors will be able to buy stock as unconditional trading commences on April 7.

Deliveroo, founded in 2013, posted losses of £224m last year however its revenue rose by 54%, as takeaway orders surged due to pandemic lockdowns across Europe.

The food delivery company, which operates internationally, but committed to making London its “long-term home”, had its sights set on a $10bn valuation ahead of its initial public offering.

Will Shu, who founded Deliveroo in London eight years ago, said the city was “a great place to live, work, do business and eat. I’m so proud and excited about a potential listing here”.

“Deliveroo has gone from hero to zero as the much-hyped stock market debut falls flat on its face. It had better get used to the nickname ‘Flopperoo’,” says AJ Bell investment director Russ Mould.

“Initially there was a lot of fanfare about the Amazon-backed company making its shares available to the public, including the ability for customers to buy stock in the IPO offer,” Mould added.

“Sadly, the narrative took a turn for the worst when multiple fund managers came out and said they wouldn’t back the business due to concerns about working practices.”

Lloyd’s of London confirms £0.9bn loss after paying out for Covid-related claims

Liam Roche
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Lloyd’s of London confirms £0.9bn loss after paying out for Covid-related claims

Lloyd’s of London to pay out £6.2bn

Lloyd’s of London confirmed a £0.9bn loss for 2020, which includes net incurred coronavirus losses amounting to £3.4bn after reinsurance recoveries.

Pay outs for Covid-19 will total £6.2bn on a gross basis according to a forecast by the insurance market, as claims due to Covid-19 will add 13.3% to the market’s combined ratio of 110.3%.

Over the last three years, Lloyd’s sustained performance improvement measures contributed to an improved underwriting result of £1.9bn and a 7.5% improvement in the combined ratio, excluding COVID-19, to 97.0%, compared to 104.5% in 2018.

Lloyd’s maintains strong capital and solvency positions, with net resources increasing to £33.9bn in 2020 and a central and market wide solvency ratios of 209% and 147% respectively.

John Neal, chief executive of Lloyd’s, commented on the impact of both the pandemic and Brexit on the insurance industry:

“Following an extremely challenging year marked by a global health crisis of a scale never seen before, Lloyd’s continued to support its customers with pay outs expected to total £6.2bn in COVID19 claims. The year was also marked by a high frequency of natural catastrophe claims and the UK’s formal exit from the EU, driving further losses and uncertainty.”

“Against this unprecedented backdrop we have made good progress across our performance, digitalisation, and culture transformation plans. Our disciplined underwriting approach and determination to become the world’s most advanced insurance marketplace have set us up for real success this year alongside the continued positive rate momentum that will see the market supporting growth for the first time in four years.”

Aside from losses due to the pandemic, the market delivered an underwriting profit of £0.8bn. The insurance marketplace recorded gross written premiums for the year of £35.5bn, down just slightly from £35.9bn in 2019.

Net resources increased by nearly 11 per cent to £33.9bn, demonstrating the strength of its balance sheet according to Lloyd’s, with a central solvency ratio of 209%.

Aquis Exchange posts first full-year profit amid challenging year

Liam Roche
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Aquis Exchange posts first full-year profit amid challenging year

Aquis Exchange revenue up by 67%

Aquis Exchange (LON:AQX), the exchange services group, confirmed a strong performance for 2020 as the company released its financial results to 31 December 2020.

The AIM-listed company’s revenue climbed by 67% to £11.5m, up from £6.9m in 2019.

Aquis Exchange‘s EBITDA rose to £1.5m from £0.0m the year before, while its maiden full-year pre-tax profit swung to £0.5m from a £0.9m loss.

The firm’s cash and cash equivalents held steady, increasing by £1.3m to £12.3m at the year ending in December 2020.

Membership of Aquis Exchange grew to 33 in 2020, from 30 in 2019, and there was a 50% increase in the average monthly usage, in terms of chargeable orders from Q4 2019 to Q4 2020.

Aquis Technologies was chosen to deliver a world-leading proof of concept project, undertaken in collaboration with Singapore Exchange and Amazon Web Services, to create a cloud native exchange

The company’s share price is up by 4.56% to 596p in early morning trading on the release of the results.

Alasdair Haynes, chief executive of Aquis, commented on the reasons for the company’s success over the past financial year:

“For any founder it is a very proud day when you are able to announce your company’s first full year profit. The fact that Aquis has delivered this against the backdrop of COVID-19 and Brexit is even more remarkable and demonstrates the ongoing value of our offering,” Haynes said.

“We have again achieved growth in all our KPIs, and delivered financial progress across all the Group’s divisions, as our management team determinedly executes on strategy. Operationally we have achieved much this year, including the milestone acquisition of what is now Aquis Stock Exchange, our listing venue, and a world-leading proof of concept project in the technologies division. We strive to stay at the forefront of innovation in our industry and can see the reward this brings.”

“Momentum has carried into current trading, with strong performances across the Group and particularly notable progress in AQSE, which is now truly fit for purpose for modern-minded SMEs looking to float. We have a clear vision, excellent team and an exceptional drive to succeed. So, whilst the road ahead remains uncertain at a macro-economic level, we have confidence we have an exciting year in front of us.”

Bitcoin stabilises at $55,000 as PayPal launches crypto checkout service

Liam Roche
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Bitcoin stabilises at $55,000 as PayPal launches crypto checkout service

Bitcoin reached all-time high of $61,701 in March

After a volatile month so far, bitcoin has somewhat stabilised as April nears. Having climbed above $61,000, before falling back down to $51,000, the cryptocurrency appears to have now consolidated at the $55,000 mark.

Repeated attempts to surpass $60,000 have failed to materialise since bitcoin set its all-time high of $61,701, and a spell of sideways movement could put traders at ease.

PayPal

PayPal set out plans this week to launch its own crypto service, giving consumers the opportunity to use a selection of cryptocurrencies when making purchases on goods and services around the world.

The company said all 29m of its users will have access to the service in the near future.

“This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet,” PayPal head Dan Schulman told Reuters.

The service is the next evolution for Paypal customers who are presently able to buy and sell cryptocurrencies, launched by the company in October.

Electric potential for S&U

Andrew Hore
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2
Electric potential for S&U

Second-hand car finance provider S&U (LON: SUS) is set to enter the electric vehicle market. This should give it a head start over most of its competitors.
The Advantage Finance subsidiary is currently reviewing the electric vehicle market and is likely to at least dip its toe in the market in the near future. Management is aware that this will eventually become a major component of the second-hand car market. The prices of electric cars have reduced over the years and that means they have come down to the normal level of Advantage loans.
The resilience of electric batteries is one of the ...

88 Energy Share Price: up 542% since the turn of the year

Liam Roche
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88 Energy Share Price: up 542% since the turn of the year

88 Energy Share Price

The 88 Energy share price (LON:88E) has accelerated throughout March, and is up a further 16% today to 2.61p per share. The surge over the past couple of days follows the company providing an operations update which this article will examine in further detail. Year-to-date the company’s share price is up by 542% and is catching the attention of UK Investors.

Operations

As mentioned, investors pushed the company’s value up recently after the company divulged news about its operations in Alaska.

Firstly, the AIM-listed company confirmed it had found potential hydrocarbon-bearing zones during a drilling program at the Merlin-1 well site, located at the company’s Project Peregrine in the northern area of the National Petroleum Reserve, Alaska (NPR-A). 88 Energy will now run a wireline programme to ascertain whether mobile hydrocarbons are present at the site.

Managing director Dave Wall managed expectations saying that “there is still work to do to confirm a discovery”. However, he did say that “the results to date are encouraging”. An additional update on the wireline programme is anticipated in the next seven to 10 days.

88 Energy also said that the Nanushuk Formation was found to be approximately 600ft low to prognosis. The Nanushuk formation is the main target for the company’s Merlin-1 well. The formation is also believed to be 500 metres thicker than the Analogue Wells formation to the north.

88 Energy said that “the gamma log indicates the presence of more sand packages than those in the Analogue Wells”.

These the highlights from an operational update which provides a broadly positive outlook for the oil and gas company. This has been reflected in the company’s share price in the last few days and since the turn of the year. Its ability to sustain an impressive performance could come down to further announcements about drillings, creating an element of uncertainty and risk for investors.

MediaZest share price jumps as company confirms new business wins

Liam Roche
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0
MediaZest share price jumps as company confirms new business wins

MediaZest reveals £250,000 of additional written orders

MediaZest (LON:MDZ) shares soared this morning, by over 80% to 0.16p in early morning trading, before settling at 20% up in the afternoon, following the auto-visual creative company providing an updated on “an encouraging rate” of new project work.

The AIM-listed company, which held its annual general meeting on Tuesday, confirmed that £250,000 of additional written orders had been received, while similar number of additional orders are currently at the later stage of negotiations.

While a small proportion of these projects have already been completed, the MediaZest board expects the majority to be delivered in the second half of the current financial year, ending 31 September 2021.

Geoff Robertson, chief executive of MediaZest, commented on the increase in orders in addition to the outlook for the coming year.

“We have seen a marked increase in new business opportunities since the beginning of the calendar year and the Board is pleased with the rate at which these opportunities are being converted into orders. Although some uncertainty remains, primarily due to the ongoing impact of Covid-19, the outlook for the second half of the financial year is promising and we look forward to updating our shareholders further in due course.”

“The information contained within this announcement is deemed to constitute inside information as stipulated under the UK Market Abuse Regulation. Upon the publication of this announcement, this inside information is now considered to be in the public domain.”

Echo Energy share price soars after completion of debt restructuring

Liam Roche
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0
Echo Energy share price soars after completion of debt restructuring

Echo Energy CEO hails ‘landmark’ moment

The Echo Energy (LON:ECHO) share price spiked on Tuesday as the company confirmed it had completed the restructuring of its debt obligations.

The oil and gas firm announced that at a meeting between holders of its Luxembourg-listed €20 million 8.0% secured notes, an 84% majority approved proposals for restructuring.

At afternoon trading the Echo Energy share price is up by 30.3% to 0.99p per share following the trading update by the AIM-listed company.

The note’s maturity will be extended by three years to 15 May 2025 as part of the restructuring, with all cash interest payments on the notes rolled to the maturity date.

The previously announced conditional restructuring of its €5 million 8.0% secured convertible debt facility will now become effective.

No further cash interest payments will be required before final maturity, as the Debt Facility restructuring will see its final maturity extended to April 2025.

Martin Hull, Echo’s Chief Executive Officer, commented on the restructuring as well as the implications for shareholder returns.

“I am delighted that Echo has now successfully completed the restructuring of its debt obligations. The new arrangements result in no cash payments to Noteholders until maturity in 2025. This enables the Board to focus on rapidly delivering on its strategy to improve shareholder returns,” Hull said.

“Commodity price strength, including the very material increases in gas price recently announced, combined with the more than doubling of oil production following the ongoing infrastructure upgrades, provide a markedly improved and positive outlook for shareholders.”

“This is a landmark moment for Echo and I am confident that we can now drive forward and reward shareholders in the future.”

Imperial Brands makes a positive start to 2021

Liam Roche
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0
Imperial Brands makes a positive start to 2021

Imperial Brands to increase its tobacco market share in its main five markets

Imperial Brands (LON:IMB) confirmed on Tuesday that the company made a “good start” to 2021 as the manufacturer of Gauloises and Winston cigarettes is planning to benefit from an increase in tobacco prices and reduced losses in vaping.

The FTSE 100 company also said it has begun to increase its tobacco market share in its main five markets with gains in America, the UK and Spain outweighing declines in Australia and Germany.

Imperial Brand’s new CEO Stefan Bomhard outlined a five-year plan that directs investment onto the key five markets that provide 72% of its profits.

The cigarette maker will also focus on tobacco-heating products in Europe and e-cigarettes in America, aiming to rebalance losses from its previously more focused approach.

Imperial reaffirmed its forecasted low-to-mid single digit growth in organic adjusted operating profit growth for the year, saying that its tobacco sales matched its expectations.

In the first half of the coming financial year, the FTSE 100 company is predicting its revenue will grow by 1% on an organic, constant currency basis, on account of increased tobacco prices and raised next-generation product (NGP) revenue growth. It is also expecting increased profits from its logistics operations in Europe, Logista.

Rival brand British American Tobacco has said it will channel more resources to NGP-type products after seeing 3m more people use its e-cigarette, tobacco heating and oral nicotine products during the pandemic in 2020.

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