Portugal welcomes back Brits from midnight on Monday
Portuguese government make assurances that testing capacity will meet demand
Portugal is set to reopen to UK investors who test negative for coronavirus on Monday, despite the country extending a national emergency until the end of May as it continues its recovery from the third wave of the pandemic.
The confirmation comes just a week after the British government added Portugal to its “green list” of countries to which UK citizens are able to travel to from 17 May without needing to isolate upon their return.
The Portuguese government confirmed in a statement on Friday that Brits will be allowed to enter the country from midnight on Monday.
The statement read: “This decision will revoke the essential travel restrictions, that [are] in place until 16 May. Any person entering Portugal will have, in any case, to have an RT-PCR test done 72 hours before departure.”
The statement also made reassurances that there will be adequate capacity for testing to match the demands of tourists, while thousands of people have been trained as part of an initiative to keep the country safe.
João Fernandes, the president of the Algarve Tourism Board, told The Guardian that he welcomed the decision. “It’s really important because the UK is our main market and there isn’t the concern about the [health] risk because they have the best pandemic indicators,” he said.
“We have hotel groups that have seen more bookings in this past week than in a whole month in a normal year,” said the association’s president, Elidérico Viegas.
“The UK is not just any market for us; it’s our most important supplier of tourists and so having a aerial corridor between the UK and Portugal – and the Algarve specifically, which is the preferred destination for British visitors – brightens the outlook for hotel and tourist business owners.”
Airlines, and companies such as Rolls-Royce, that depend on the industry will be keeping a close eye on how things unfold in Portugal in the hopes that more major holiday destinations will open.
Scottish Mortgage Investment Trust share price: could crypto play a major role as tech stocks lose favour?
Scottish Mortgage Investment Trust Share Price
As the graph below demonstrates, it has been an interesting year so far for the Scottish Mortgage Investment Trust share price. After being relatively untroubled during the pandemic, and even seeing its growth soar through 2020, it finally faced some bumps in the road in 2021. With the tech sell-off, James Anderson stepping down and the company dipping its toes into the world of cryptocurrencies, now could well be a pivotal moment in the outlook of the fund.
US Tech Stocks
A cause of Scottish Mortgage’s dips through 2021 has been the downturn of a number of its US tech stocks. Ironically, it was by selecting such stocks that has seen the company make outstanding gains in the past.
The Nasdaq, which features a number of major US tech stocks, has seen a sharp fall over the past month, now down to 13,254. In repose, Scottish mortgage confirmed yesterday that it that it sold 80% of its Tesla holding over the past 12 months. The trust also sold its shares in Facebook and Google’s parent company Alphabet, as well as cutting its stake in Amazon.
The question now is where its growth will come from, as markets appear to be concluding that valuations are out of touch with earnings. One are of focus for the trust could be cryptocurrencies.
Crypto
Investors seeking to gain exposure will be intrigued by Scottish Mortgage’s foray into the world of crypto. In its first investment into the industry, the FTSE 100 company invested £72m into Blockchain.com, the largest cryptocurrency company in the UK.
It is worth noting that Scottish Mortgage Investment Trust’s assets under management are valued at £18bn, and so its exposure is limited at this point.
However, it still highlights the emergence of the crypto space, as well as Sottish Mortgage’s willingness to invest.
Guru Capital to acquire UK Fintech Oval Money
Oval Money will be acquired by and integrated into the UK based online CFD Broker ETX Capital
Guru Capital, the private equity firm based in Switzerland, confirmed on Friday that it has acquired substantially all the assets of UK based Fintech company Oval Money.
Oval Money will be acquired by and integrated into the UK based online CFD Broker ETX Capital, a Guru Capital portfolio company.
Guru Capital is also in the process of negotiating the purchase by an associated fund of 100% of the shares of Oval Money’s Spanish regulated investment firm subsidiary, Oval Marketplace A.V., S.L.
The company said via a statement that its acquisitions support ETX’s and Oval’s shared mission of bringing a wide range of financial services and products to the market in an affordable way.
“The combination will help accelerate business growth and client engagement by supporting clients in setting smart rules for defining their savings habits and investment goals, making payments, and tracking spending as well as trading in the financial markets through a single mobile app,” Guru Capital said.
Oval operates a mobile app that has over 100,000 active users, helping them to save and invest through their marketplace of financial products, while ETX is an online CFD and Financial Spread Betting brokers providing online trading services primarily to UK and European clients.
Rolls-Royce share price: positive news emerges from AGM amid air travel uncertainty
Rolls-Royce Share Price
The Rolls-Royce share price has struggled so far in 2021 as the outlook for the aviation industry has remained cloudy. Since the beginning of the year it has lost 6.94% in value. While over the past 12 months it is up by 22%, but is still more than 50% below its pre-pandemic high. With the company’s annual general meeting taking place yesterday, and vaccine roll-outs across the world moving further along, now is a pivotal moment for investors curious about the FTSE 100 engineering giant’s stock.
Return to Positive Cash Flow
Following its AGM yesterday, 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.
Air Travel
However, for the Rolls-Royce share price to sustain its recovery and go further, it will need to show its ability to perform over a longer period of time. The question comes back to air travel. It is clear that there is pent-up demand.
However, whether or not that can turn into flights, and soon, is a different question. Leaders at the major UK and US airlines are frustrated and have called on their governments to do more to restart transatlantic travel.
“The airline industry needs adequate lead time to establish a plan for restarting air services, including scheduling aircraft and crews for these routes as well as for marketing and selling tickets,” said a letter to the transport chiefs of both countries.
There is also frustration over the UK’s “green list” which many consider to be underwhelming, containing only one mass-market destination in Portugal. “It is very disappointing and frankly not worth commenting on,” said IATA director general Willie Walsh in response to the list’s publication.
If the company does not see a return to flying in time to rescue is earnings for the 2021 holiday period, then it could be another year of losses, and the Rolls-Royce share price could be in trouble.
Electric Aeroplane
Rolls-Royce also confirmed that its all-electric aeroplane will fly within the next few weeks.
The ‘Spirit of Innovation’ will be the fastest electric plane on earth, aiming for a top speed in excess of 300mph. The aircraft will also be able to fly the distance between London to Paris, or 200 miles, on only one charge.
The company’s plan is to eventually apply the technology to products that can be brought to the market. “We are bringing a portfolio of motors, power electronics and batteries into the general aerospace, urban air mobility and small commuter aircraft sectors as part of our electrification strategy,” Rolls-Royce said in a statement following its AGM.
Sage to reach top end of guidance despite profits falling by 31%
Sage CEO believes SME companies will lead the recovery
Sage Group (LON:SGE), the British software company, saw its profits before tax drop by 31% to £190m during the first half of its financial year.
The FTSE 100 firm also confirmed to investors that its revenue fell by 4% to £937m, during the period of six months ending in March.
Sage’s organic growth in H1 was 4.4%, while the company said it will reach the top end of its previous 3-5% guidance over the course of the whole year.
The company outlined its strategy of moving customers over to Sage Business Cloud, which it believes will hasten its growth as companies become more digitally savvy.
The Sage share price is up by 3.56% at the time of writing to 645.80p.
AJ Bell investment director Russ Mould, commented on Sage’s results:
“The latest results from accounting software firm Sage may be a little hard to pick through but the conclusion seems to be that the company is heading in roughly the right direction.”
“Critically there was evidence of at least some of the organic growth in recurring revenue which is front and centre in the company’s strategy.”
“Historically Sage was a ‘steady-eddy’ business built on a license sales model, where most of the contracted cash came up front with high margin servicing and maintenance income rolling in over the term of the contract.”
Commenting on the results, Sage CEO Steve Hare said:
“Sage performed strongly in the first half against tough comparators, with continued recurring revenue growth and increasing levels of new customer acquisition, principally in cloud native solutions. Our deep sense of purpose and experience of supporting small and medium-sized businesses through change has equipped us well to play a vital role throughout the pandemic, and I am proud of the way our colleagues around the world have shown dedication to our customers and partners.”
“We believe that small and medium-sized businesses will lead the recovery, and I am confident that our strategic investment in Sage Business Cloud will continue to accelerate growth, as customers become stronger and more digitally-enabled.”
Last night’s Wall Street rally provides ‘port in the storm’ for FTSE 100
“It has been a turbulent week as the sceptre of inflation once again spooked investors however it looks like last night’s Wall Street rally is providing a port in a storm for the FTSE 100 as it enjoyed a solid bounce on Friday morning,” says AJ Bell investment director Russ Mould.
The FTSE 100, two hours into Friday’s session, finds itself up 0.72% to 7,013.20.
The big economic update coming later today is the US retail sales release.
“We’re operating in a through the looking glass world where seemingly bad news is taken positively by the markets on the basis it means central banks won’t pull back on the stimulus front or put up rates,” Mould said.
“If retail sales have surged across the Atlantic then that would likely be a headwind for equities as it would stoke the concern about rising prices and what the US Federal Reserve might need to do to keep them under control.”
Keeping cases of the Indian variant of Covid-19 under control is the something the UK is facing up to and it is prompting some concern that the next phase of reopening might be delayed. “This uncertainty could hit the hospitality and travel sectors,” Mould reckons.
FTSE 100 Top Movers
Sage (3.11%), SSE (2.44%) and BT Group (2.44%) are the biggest risers on the FTSE 100 midway through the morning session on Friday.
At the other end, thanks to a drop-off in the price of copper, miners Antofagasta (-2.13%) and Rio Tinto (-1.84%), as well as Rolls-Royce (-1.45%) are the biggest fallers.
Argo Blockchain signs crypto climate accord
Argo Blockchain share price jumps up on announcement
Argo Blockchain (LON:ARB), confirmed on Friday that it has signed a crypto climate accord (CCA), alongside DMG Blockchain, in an effort to push forward decarbonisation of the crypto industry.
The bitcoin mining firm announced that, in partnership with DMG Blockchain, it will develop a group set on outlining the goals of the accord, while implementing new technologies aimed at fostering transparency over the renewable energy sourcing of mining procedures.
The CCA, a private sector-led initiative with 40 signatories including 20 prominent cryptocurrency companies, has outlined its objectives as part of its effort to decarbonise the global cryptocurrency industry and transition the sector to net-zero greenhouse gas emissions by 2040.
Firstly, to achieve net-zero emissions from electricity consumption for CCA Signatories by 2030.
And also to “develop standards, tools, and technologies with CCA Supporters to accelerate the adoption of and verification of progress towards 100% renewably powered blockchains by the 2025 UNFCCC COP30 conference”.
Peter Wall, CEO of Argo Blockchain, commented on the announcement: “As more data continues to surface regarding Bitcoin and Bitcoin mining’s impact on the environment, it’s imperative that the industry takes real, tangible action. The Crypto Climate Accord helps lay the groundwork for that action and we are both eager and determined to ensure that Supporters and Signatories remain committed to the group’s goals.”
Argo Blockchain’s share price is up by over 15% during the morning session to 155.40p.
The news comes a day after Elon Musk’s announcement that Tesla will not be taking payments via bitcoin over environmental concerns. Following the announcement by Musk, the price of bitcoin, along with Argo Blockchain shares, plummeted.
Sheldon Bennett, CEO of DMG Blockchain Solutions, said: “Since our inception, DMG has been committed to transparency and good governance. Partnering with the Crypto Climate Accord alongside Argo allows us to apply those values to put us on a path to become a more sustainable industry. Together, we can finally put the wheels in motion to transition the cryptocurrency industry into one that focuses on renewable energy.”
Bushveld Minerals completes essential maintenance work at Vametco asset
Vanadium expected to remain stable for the remainder of Q2 2021
Bushveld Minerals (AIM:BMN), the integrated primary vanadium producer and energy storage solutions provider, announced on Friday that is has successfully completed its essential maintenance work at its Vametco asset in South Africa.
The AIM-listed company said that its group sales during Q1 of 788 tonnes were down compared to 1,080 tonnes in Q1 of 2020 due to lower production volumes as a result of the planned maintenance shutdown.
The group confirmed said its guidance for the full-year is towards the lower end of 4,100 tonnes and 4,350 tonnes, while risks to this forecast exist as a result of Vametco’s challenges in achieving consistent plant performance. This is in addition to Vametco’s slower-than expected ramp-up following the maintenance shutdown, the recent industrial action, as well as risks associated with the ramp-up of Vanchem’s first phase refurbishment.
Vanadium prices have continued to rise during the first quarter of 2021 after a strong start to the year.
Prices had risen in China in the midst of the Spring Festival while in Europe, prices increased due to strong demand and tight inventories, the company said. Vanadium demand remains robust, and prices are expected to remain stable for the remainder of Q2 2021.
Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:
“We recognise that Vametco has underperformed at times and work such as the 35-day maintenance shutdown is expected to improve on the reliability and performance issues experienced in the past. Since the industrial action and ramp-up we have seen a stable period of normalised production levels.”
“Various workstreams remain underway to maintain this stability, including maximizing safety and house-keeping initiatives, better managing process system constraints and optimizing preventative maintenance programmes. In light of Vametco’s challenges in achieving consistent plant performance during Q1 2021 as well as risks associated with the ramp-up of Vanchem’s first phase refurbishment, Group guidance is expected towards the lower end of 4,100mtV to 4,350mtV, albeit there are risks to achieving this target.”
It was reported back in April that workers at the AIM-listed company’s Vametco mine in South Africa went on a strike to protest an employee participation plan (EPP).
The strike came despite employees already signing an EPP with the Association of Mineworkers and Construction Union (AMCU).