FTSE 100 slow out of the blocks on Monday

Liam Roche
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FTSE 100 slow out of the blocks on Monday

Despite a strong close from the US last Friday, European investors hesitated after the bell on Monday. The FTSE 100 failed to celebrate the first step of the UK’s spring awakening, trickling lower and dropping to 6,715.62, while the pound was equally unenthused, flat against dollar and euro alike.

“An easing of restrictions in England failed to act as a catalyst for the FTSE 100 on Monday with the index trading modestly lower,” says AJ Bell investment director Russ Mould.

That same timidity had a green tinge to it in the Eurozone, where the CAC and DAX were both up 0.2%, leaving the latter short of its 14,800-plus all-time highs.

“A third wave of Covid-19 in Europe and the emergence of new strains of the disease is threatening to deflate the optimistic mood which had built up off the back of vaccine success,” Mould added.

This early reticence may be tied to the Archegos Capital situation. Friday saw significant losses for ViacomCBS, Discovery, and a selection of Chinese tech stocks, without immediate explanation.

Over the weekend it was then revealed that a margin call-hit Archegos was behind the selling, leading to warnings of ‘significant’ losses from Credit Suisse and Nomura on Monday morning.

“With both Credit Suisse and Nomura warning of a hit in the fallout from the saga, investors have been reminded of the interconnectedness of the global financial system and how this creates a risk of contagion when something goes wrong,” said Mould.

FTSE 100 Top Movers

Renishaw (2.63%), BT Group (1.54%) and Severn Trent (1.44%) led up the FTSE 100 on early Monday morning trading.

The biggest fallers on the UK index so far are Glencore (-2.68%), Smiths Group (-2.47%) and Flutter Entertainment (-2.37%).

Entain

Entain, owner of Ladbrokes and Party Poker, made a profit in 2020 as online gambling rose during the pandemic. The group confirmed an operating profit of £530m, up by 2% from 2019, with 89% of EBITDA coming from online business. The revenue generated from online gaming came in at £2.7bn, as 75% of the FTSE 100 company’s revenue is now online.

UK online car retailer Cazoo to float in New York for $7bn

Liam Roche
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UK online car retailer Cazoo to float in New York for $7bn

Cazoo SPAC to be headed up by Dan Och

UK online car seller Cazoo is set to debut on the New York stock market via a special-purpose acquisition company (SPAC), having agreed a merger deal that values the firm at $7bn (£5bn).

In the latest of string of SPAC deals, Cazoo will be merge with Ajax I, headed up by billionaire investor Dan Och.

The news represents a loss for the City and the London Stock Exchange, which was hoping to secure the car seller’s listing, having updated its rules in order to make the capital an attractive proposition to high-growth companies.

The deal will give Cazoo up to $1.6bn of funds to aid its growth and expand its operations. The car retailer employs over 1,800 people across Europe and expects to earn revenue up $1bn in 2021, which would be a 300% increase from the year before.

Och will join the board of the company which was founded in 2018 by its current chief executive Alex Chesterman.

Cazoo buys and inspects cars before they are put up for sale online, while aiming to deliver or collect vehicles in as little as 72 hours.

Alex Chesterman OBE, Founder & CEO of Cazoo, commented: “This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe. We have created the most comprehensive and fully integrated offering in the largest retail sector which currently has very low digital penetration.”

Dan Och, Founder of AJAX, struck a similarly optimistic tone:

“We are incredibly excited to have the opportunity to partner with Alex and the exceptional team at Cazoo. Alex has proven to be one of Europe’s most successful serial entrepreneurs and we are proud to be supporting the growth of this world-class team, brand and platform. With their constant focus on innovation, data and customer satisfaction, I have no doubt that Cazoo is going to continue to lead the way in this massive, untapped market opportunity and am looking forward to joining the Board of Cazoo and working with Alex and his team.”

AJ Bell expecting to surpass revenue expectations

Liam Roche
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AJ Bell expecting to surpass revenue expectations

AJ Bell says revenue for H2 will be £136m

AJ Bell (LON:AJB), the investment platform, said on Monday that it expects its revenue for the current year to be at least £6m ahead of current market expectations.

The FTSE 250 company confirmed the increase in a trading update for H1 of the current financial year, concluding 30 September 2021.

Market consensus at present states that AJ Bell’s revenue for the period will be £136m.

The company released a statment with its trading update which went into further detail:

“In its 2020 annual results announced on 3 December 2020, the company highlighted the high levels of new customers and record levels of dealing activity by D2C customers in the year ended 30 September 2020.”

“The company has continued to see strong customer acquisition in the first half of the current financial year and dealing activity by D2C customers has remained at elevated levels throughout.”

“Although dealing activity is expected to moderate from current levels in the second half, management currently expects revenue for the year ending 30 September 2021 to be at least £6m above current market consensus.”

On early morning trading AJ Bell shares are up by 1.47% 414.5p per share.

Gfinity looks ahead after sharply reducing losses

Liam Roche
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Gfinity looks ahead after sharply reducing losses

Gfinity Digital Media continues momentum into 2021

Gfinity (LON:GFIN) confirmed it narrowed its losses in H1 as the esports media company reported the conclusion of its strategic review.

The AIM-listed firm announced an adjusted operating loss of £0.9m for the six months to 31 December 2020, down from £2.4m compared to the year before. Gfinity posted revenues of £3m, down from £3.5m.

The company drew attention to its continued momentum into the current year, specifically the continued growth of Gfinity Digital Media (GDM).

Gfinity chief executive John Clarke outlined in a statement the company’s areas of focus for the coming year.

“Our relentless focus on delivering against our new strategy has continued to bring positive results. We have ended the period with an impressive set of numbers, including a reduction in operating loss, a significantly reduced cost base and an improved cash position.”

“Throughout the first half, we have continued to leverage the significant demand for our expertise and capability in creating unique solutions for our partners, whilst also expanding and investing in our community of gamers through our GDM platform. Despite the uncertainty caused by the COVID-19 pandemic, our business model has proved resilient. Our leading tournament platform, virtual production capabilities and proprietary technology IP means that we are uniquely placed to help brands engage with the rapidly growing gaming community.”

“We have also announced today the conclusion of the strategic review and Formal Sale Process that commenced in October last year. We have been encouraged by the discussions held with a range of parties, one of which resulted in signing a significant multiyear commercial contract with the new sports fan engagement site IQONIQ and further deals are expected throughout 2021. Now it is time to accelerate the growth of the business by being focused on the growth areas identified under each of our strategic pillars.”

Earlier this month Gfinity Digital Media (GDM) unveiled a new partnership with Magic Lamp Technologies, the owner of interactive video game map creator MapGenie.

Entain records profit as online gaming jumps during pandemic

Liam Roche
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Entain records profit as online gaming jumps during pandemic

Entain committed to paying out dividend once uncertainty clears

Entain (LON:ENT), owner of Ladbrokes and Party Poker, made a profit in 2020 as online gambling rose during the pandemic.

The group confirmed an operating profit of £530m, up by 2% from 2019, with 89% of EBITDA coming from online business.

The revenue generated from online gaming came in at £2.7bn, as 75% of the company’s revenue is now online.

Entain’s EBITDA increased by 11% during 2020 to £843.1m, while the company stated its commitment to paying out dividends once there is more clarity over the future impact of the pandemic.

The company’s share price is down by 1.77% on early morning trading.

Entain non-executive chairman Barry Gibson commented on the company’s results for the year-gone:

“It is a great testament to the quality of our people and the strength of our business model that the group’s growth continued during 2020, despite the Covid-19-related sporting cancellations and retail closures that were necessary at times during the year.”

“We have long talked about the importance of having a truly diversified business model and of not being overly reliant on any one product, brand, territory, or channel, and it was this approach that mitigated the impacts of the pandemic on our business so effectively.”

Earlier this month, Arena Racing Company and Entain confirmed a new long-term horseracing media rights deal as well as the creation of a greyhound racing joint venture.

The horseracing media rights element of the deal covers races from Arc’s 16 UK racecourses, which include Doncaster, Newcastle, Chepstow and Lingfield, along with content from South Africa and Australia and is based on turnover for both online and retail.

Look out for XF-73 Destiny

Andrew Hore
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Look out for XF-73 Destiny

Destiny Pharma (LON: DEST) expects to report on the study results of the phase 2b clinical study on the use of XF-73 nasal gel for the prevention of post-surgical infections by the end of March. finnCap believes that positive news would increase the broker’s valuation of Destiny by 80p a share.
Destiny is a developer of antimicrobial drugs. The main focus has been on XF-73, which is used to treat post-surgical infections, such as MRSA. There are also other potential uses of the XF platform, including a collaboration with SporeGen for the prevention of Covid-19 and other respiratory viral infec...

New Aquis admission: Samarkand

Andrew Hore
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New Aquis admission: Samarkand

New Apex segment entry Samarkand helps companies sell their products in China, as well as selling its own brands in the market. The company has developed e-commerce software technology known as Nomad.
Samarkand moved into profit in the eight months to November 2020, helped by a protective equipment contract from the NHS. Even so, underlying revenues have been growing and the cash raised will help to increase the scale of the business.
Adding further brands to the company’s own portfolio could be highly lucrative. The experience of providing services to other companies has enabled Samarkand to ...

GameStop saga continues on day of volatile trading

Liam Roche
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0
GameStop saga continues on day of volatile trading

GameStop up 815% since the turn of year

The GameStop (NYSE:GME) story continues as the stock rose by 13% in morning trading before swinging to a 7.6% loss before the end of the day.

The video-game seller, that saw its share price rise to $348 as retails investors went head-to-head with Wall Street, before diving to around $40 in mid-February, has surged again in recent weeks against expectations.

“It’s fascinating because it seems that the Reddit army is doubling down and believing that the company is going to be able to shift their business and pivot to e-commerce,” said Edward Moya, senior market analyst at OANDA.

The day of volatility comes soon after analysts at Jeffries increased their price target to $175.

“Our thesis is that rebalancing sales away from video game software/hardware will deliver superior gross margins,” Jefferies said, suggesting that GameStop’s valuation could rival that of other online businesses “if the company successfully sheds its retail heritage and morphs into a digital commerce.”

GameStop, based in Texas, with 5,000 stores in ten countries, has seen an 815% rise in its share price since the turn of the year retail investors pushed the stock on the Reddit forum WallStreetBets.

China could destroy UK equity returns

UK Investor Magazine
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China could destroy UK equity returns

Alan Green joins the Podcast as news filters through Burberry has been the first British luxury brand to feel the wrath of China over pressure on their human rights abuses. This follows similar action against Nike which sent the sports brand share price spiralling.

In a Podcast packed full of commodities companies we look at the potential for China to damage the business model’s of FTSE 100 miners who export commodities from Australia to China. China has recently put restrictions on Australian exports and has managed to find alternatives from other neighbours.

If they decide to ramp up restrictions as part of a backlash against the West, the impact for the FTSE 100 could be devastating.

We discuss Echo Energy (LON:ECHO), Union Jack Oil (LON:UJO) and Caerus Mineral Resources (LON:CMRS)

Biden confirms new vaccine goal of 200m shots in first 100 days

Liam Roche
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0
Biden confirms new vaccine goal of 200m shots in first 100 days

Biden also confirmed intention to run again in 2024

Joe Biden announced in his first press conference as president that he had doubled his administration’s vaccination target to 200m during his first 100 days in office.

“I know it’s ambitious, twice our original goal, but no other country in the world has even come close to what we are doing,” Biden said.

In December Biden announced a goal of 100m jabs which he surpassed earlier in March prior to his 60th day in the Oval Office.

The new target equates to a continuation of America’s current rate – 2.5m per day – of vaccinations up until the end of next month.

Biden also confirmed that $10bn (£7.2bn) would be allocated to expanding access to vaccinations for higher-risk communities.

Over 545,000 Americans have died since the beginning of the pandemic with more than 30m Americans catching the disease at some point.

The federal government has struck a deal with Johnson & Johnson for the delivery of 200m doses, with the first 100m expected before the end of June.

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