Morrisons records impressive online sales as lockdown eases

Liam Roche
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Morrisons records impressive online sales as lockdown eases

Increased speculation over takeover of Morrisons by Amazon

Morrisons (LON:MRW) announced on Tuesday that customers are flocking back to supermarkets as they have become accustomed to making food at home.

The supermarket confirmed its sales rose by 2.7% for the 14-week period to 9 May, as it enjoyed busy holiday periods including Mother’s Day and Easter.

As the UK approaches normality following lockdown, Morrisons pointed to growth in sales of its snacks and takeaway food.

“The pandemic is not yet over, but it is in retreat across Britain and there is much to be positive about as something approaching normal life begins to take shape,” said Morrisons boss David Potts.

“Our forecourts are getting busier, we are seeing encouraging recent signs of a strong rebound of food-to-go, take-away counters and salad bars, and our popular cafés will soon fully reopen.”

Shoppers are now more adept and open to buying their groceries online, the supermarket said, as its online sales more than doubled compared to the year before.

“Morrisons is now at the point where it needs to think about the next stage of its career, and we’ll find out its refreshed spending plans in September. This will almost certainly involve boosting capacity to fulfil online orders and seeing how it can further expand as a supply partner,” says AJ Bell investment director Russ Mould.

Amazon Partnership

Ross Hindle, analyst at Third Bridge, noted the FTSE 250 company’s partnership with Amazon and its implications for the future.

“To avoid being stuck in an increasingly squeezed middle, Morrisons’ continues to foster its relationship with Amazon, triggering much speculation about a full-blown acquisition by Amazon in the near future.”

“Amazon Fresh helped boost online sales by 113% for the quarter. The Group has also recently expanded its offering into the brick-and-mortar channel , with three Amazon Fresh stores having opened in London already and all stocked by Morrisons. With consumers now well accustomed to online grocery shopping, Amazon has growing expectations for its Fresh concept.  Our experts believe this partnership will prove a key differential growth factor for Morrisons.”

“Despite currently coming off a low base, the experts we are speaking to expect Morrisons to continue to develop its wholesale business and to increase its margin accretive non-food and clothing offer. Like the rest of the big four, Morrisons is having to look well beyond food to find some margin protection.”

FTSE 100 back below 7,000 in reversal of fortunes for mining sector

Liam Roche
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FTSE 100 back below 7,000 in reversal of fortunes for mining sector

After touching a fresh 14-month high on Monday, the FTSE 100 found itself below 7,000 as it fell by 2.16% during the morning session.

“This was accompanied-slash-prompted by a stark reversal from its previously buoyant mining sector,” said Connor Campbell, financial analyst at Spreadex.

A late collapse from the Nasdaq led to a nasty session for the Nikkei led to a really rough start for Europe on Tuesday.

“The tech slide not only gave the Nasdaq its worst day since March but prevented the Dow Jones from closing above 35,000 for the first time in its history,” said Campbell.

Ahead of Wednesday’s US CPI reading, it appears that investors’ inflationary fears have been reignited by surging commodity prices, something that will not be reflected in tomorrow’s figures, Campbell suggests. “It’ll be interesting to see how much the markets are reassured if Wednesday’s number does fall from 0.6% to 0.2% month-on-month as forecast,”he added.

The DAX’s decline was similarly severe, with a 1.7% drop knocking it back under 15,200 for the first time in 5 days. And the CAC found itself slipping below 6,280 as it tumbled 1.6%.

FTSE 100 Top Movers

At 0930 GMT on Tuesday, no companies listed on the FTSE 100 have made positive gains. Those which have fallen by the least are RSA Insurance (-0.044%), Pearson (-0.21%) and Just Eat (-0.28%).

While at the bottom, the biggest fallers of the day so far are Reinshaw (-6.22%), IAG (-5%) and Melrose Industries (-4.65%).

Natwest

The government is aiming to secure a buyer for shares in Natwest worth up to £1.1bn, amounting to 5%, as it continues its sell-off of the bank rescued over ten years ago.

580m shares in the FTSE 100 bank were being offered to institutional investors as part of a placing that would bring the government’s holding down to 54.8%. At early morning trading the Natwest share price is down, as the news emerged yesterday via Sky News.

UK Government to sell £1bn stake in Natwest

Liam Roche
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0
UK Government to sell £1bn stake in Natwest

The government is aiming to secure a buyer for shares in Natwest worth up to £1.1bn, amounting to 5%, as it continues its sell-off of the bank rescued over ten years ago.

580m shares in the FTSE 100 bank were being offered to institutional investors as part of a placing that would bring the government’s holding down to 54.8%.

At early morning trading the Natwest share price is down, as the news emerged yesterday via Sky News.

From the perspective of taxpayers, the deal comes at a loss of around £670m, with the shares nearly 40% below the value paid by the government for the bank then known as the Royal Bank of Scotland.

The government’s stake initially stood at 83%, however it has been gradually reduced over time. Most recently in March when the UK Treasury has announced it has finalised the sale of £1.1bn worth of shares back to Natwest.

Depending on the state of the market, the Treasury will seek to divest the remainder of its shares in the bank by March 2026, The Times reported.

City Pub Group set to capitalise on UK staycations this summer

Liam Roche
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City Pub Group set to capitalise on UK staycations this summer

City Pub Group revenue down by 57% as company posts results

The City Pub Group (LON:CPC), owner of nearly 50 pubs across the UK, confirmed on Tuesday that its revenues plummeted by more than 50% during 2019 as lockdowns battered the industry.

For the financial year gone, the City Pub Group brought in £25.8m, down from £60m in 2019.

City Pub took measures during the pandemic to offset its impact such as maximising outdoor seating for when the option presented itself. Across its locations, the City Pub Group has added more than 600 outside covers to allow them to open under the current government-imposed restrictions.

In addition, it acquired a 49% stake in the Kensington Park Hotel and increased its shareholding in Mosaic Pub and Dining group to 24%.

The AIM-listed company reported “encouraging trading” since outdoor reopening, with its 24 pubs currently open trading at 77% of 2019 levels, outlining the extent of the pent-up demand.

The group is expecting to benefit from an increase in domestic holidays as a number of international holiday destinations remain off-limits to Brits.

Clive Watson, Executive Chairman of The City Pub Group, added:

“The business has been significantly improved over the past year placing us in an excellent position to take advantage of the pent-up demand as the country reopens.”

“The early signs since we have been allowed to trade outdoors have been very heartening and it has been great to bring back our immensely talented staff and to see our customers enjoying our pubs once again.”

“We are a streamlined, well-invested business with a first-rate customer offer. Our pub estate is unique in terms of quality and, with the step change in the business, we have an ideal platform to grow successfully in the future.”

As its sites were quiet during lockdowns, the company made improvements to its City Club app which now has over 100,000 active members.

AIM reverse takeover: Insig AI

Andrew Hore
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AIM reverse takeover: Insig AI

Investors are used to fintech companies that lose money and eat up cash. Insig AI continues to make a profit although it has fallen because of the significant increase in product development spending on its asset management software. The cash raised in the placing will enable the completion of the products in development and boost sales and marketing. This includes tapping the US market.
AI software spending is expected to be $23bn in 2020 and reach $126bn in 2025, while the asset management part of the market could exceed $8bn by 2026.
Insig AI has a pipeline of potential clients and it will ...

Hotel Chocolat’s online surge

Andrew Hore
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Hotel Chocolat’s online surge

Sales are booming at Hotel Chocolat (LON:HOTC) with much better sales than at the same time in 2019 and the full year outcome will be significantly better than expected. The chocolatier has added one million customers to its database over the past 12 months.
Online and subscription sales are offsetting the loss of sales on the high street and this has led to a profit forecast upgrade.
The rating continues to be sky high on a short-term outlook, but it should come down rapidly.
Sales
Sales in the eight weeks to 25 April were nearly one-fifth higher than in same weeks in 2019. The figure was thr...

Ethereum surges past $4,000 mark while Musk says SpaceX will accept Dogecoin

Liam Roche
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Ethereum surges past $4,000 mark while Musk says SpaceX will accept Dogecoin

Ethereum market cap nears 50% of bitcoin’s

Ethereum soared past the $4,000 mark on Monday, reaching an all-time-high in a continuation of a massive recent bull-run.

Over the past month, Ether, the digital token of the Ethereum blockchain, is up by over 90%, bringing its market cap to $476.3bn, while bitcoin’s stands at $1.1trn.

“(Crypto has) got a lot more institutional involvement than people who haven’t followed the market believe,” Chris Weston, head of research at brokerage Pepperston, told Reuters.

“And everyone’s been in ethereum. It’s not a meme joke coin, it actually has some application use,” he added.

The recent surge in Ethereum, comes as bitcoin has move sideways, and is raising questions over its ability to usurp bitcoin as the most popular cryptocurrency.

According to a recent survey, 68% of people would be most likely to invest in the second largest cryptocurrency, behind bitcoin.

The survey also said that 18% of people would opt to invest in bitcoin, while 14% remain undecided. In addition, there are other indicators that Ethereum is becoming the most popular cryptocurrency in the eyes of investors.

Dogecoin

In other crypto news, the value of Dogecoin bounced back after Elon Musk suggested that SpaceX will accept payments in the cryptocurrency.

Laith Khalaf, financial analyst at AJ Bell, called into question Dogecoin’s underlying value after it plummeted during Musk’s appearance on Saturday Night Live.

“The SpaceX Dogecoin moon mission isn’t a giant leap for cryptocurrencies, because back here on planet Earth, crypto’s long term adoption by consumers, businesses and investors remains highly uncertain, to say the least. If an asset can drop 30% on the back of one individual’s appearance on Saturday Night Live, this tells you there’s not a huge amount of fundamental value holding up its price,” said Khalaf.

“While SpaceX might accept Dogecoin as payment, those Dogecoins will have been bought by people earning money in dollars, euros and pounds, and then converting it. Until cryptocurrencies are used for things as mundane as paying your mortgage or your phone bill, or indeed receiving your wages, as a medium of exchange they simply add an extra layer to transactions, and most don’t actually perform a useful function in the real economy.”

EasyJet Share Price: uncertainty over “green list” could halt bull-run

Liam Roche
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0
EasyJet Share Price: uncertainty over “green list” could halt bull-run

EasyJet Share Price

The EasyJet share price had added 10.7% over the past month, now at 1,068p, as destinations across Europe are set to become accessible on May 17. While it has not recovered to its pre-pandemic high of 1,508p, its current level is the highest it has been since lockdowns first came into affect across the UK. However, today, after news came that 12 countries made the “green list”, the EasyJet share price is down by 2.5%, suggesting that investors would like further good news before they can get behind the airline.

Britain to allow foreign travel

Britain has allowed the resumption of international travel from May 17, after a ban which lasted for months. However, a majority of major destinations were left off the list. Much to the dismay of airlines, France, Italy, Spain and the US, failed to make the much anticipated list of destinations.

“Today marks the first step in our cautious return to international travel, with measures designed above all else to protect public health and ensure we don’t throw away the hard-fought gains we’ve all strived to earn this year,” transport minister Grant Shapps said.

It seems as though Brits will have to wait a while longer before they are able to travel to some of their preferred destinations as the list will be reviewed every few weeks.

“This excess of caution from the government is extremely disappointing for everyone who works in the travel sector,” Brian Strutton of the British Airline Pilots Association told Reuters. With the added uncertainty over when passengers will be able to travel to some of Europe’s major destinations, EasyJet’s recent bull-run could come under threat. However, the UK government’s cautious approach could also suggest the likelihood of positive news coming soon being high.

In April, Credit Suisse gave a price estimate for the EasyJet share price of 1,200p, which looks attainable following the company’s recent upward move.

Greggs says profits could return to pre-pandemic levels this year

Liam Roche
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0
Greggs says profits could return to pre-pandemic levels this year

Greggs’ trading statement will “put a smile on the retail sector”

Greggs (LON:GRG) came out on Monday and said its profit levels could reach its pre-pandemic levels as its sales have rebounded.

The UK baker said it has experienced a “strong recovery” as non-essential shops reopened in April.

“If Next’s recent trading statement didn’t put a smile on the retail sector, then Greggs’ certainly will,” said AJ Bell investment director Russ Mould.

The company’s trading statement conceded that while the present moment was an unusual period of trading, it could lead to the company outperforming its profit forecast.

“The reopening of non-essential retail has got people out of the house and Greggs has benefited from increased traffic and temporarily reduced competition from cafes and restaurants,” Mould added.

“A greater number of people returning to the office will also have helped, as workers nip out at lunchtime for a sandwich and a coffee.”

Back in March, Greggs revealed its first full year loss in nearly 40 years as its sales dived due to the Covid-19 outbreak. At that point the baker suggested it would not get back to its pre-pandemic levels until at least 2022.

According to its most recent update Greggs “saw a significant pick up in sales with the reopening of non-essential retail from 12 April, in part reflecting the pent-up demand for retail which has boosted High Street footfall”.

“Now it is betting on a big recovery in pre-pandemic activity once considered ‘normal’, namely going to work in an office, meeting friends and family for social activities, and more movement via personal and public transport around the country. Its stores are conveniently placed to attract people as they go about their day,” Mould argues.

“Many people think we’re going to see structural change in where work is done, however we are still creatures of habit and it wouldn’t be surprising to see queues return to Greggs’ stores for bacon baguettes, sausage rolls and steak bakes slowly build up as more Government restrictions are lifted and companies lay down their long-term working strategies. Even with some people working full time from home, the nation isn’t going to hide away like it did in 2020.”

Bushveld Minerals Share Price: global vanadium ore market set to grow in 2021

Liam Roche
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0
Bushveld Minerals Share Price: global vanadium ore market set to grow in 2021

Bushveld Minerals Share Price

Eight days into 2021 the Bushveld Minerals share price reached 22.9p, surpassing its pre-pandemic high of 21.5p. However, since then it has been a rocky few months for the primary vanadium producer, as its share price now stands at 16.92p per share. Following a strike by employees which was quickly resolved in April, investors are curious about what the remainder of 2021 holds for Bushveld. On a positive note, the outlook for the vanadium market over the next year and beyond could bode well for Bushveld.

Strike at Bushveld’s Vametco mine

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). Days later Bushveld Minerals confirmed that the strike had been resolved and that workers had safely returned to work. “The impact, if any, of these five days of industrial action on production will be provided in the upcoming quarterly production report,” the company said in a statement.

Vanadium

According to the Vanadium Ore Global Market Report 2021, the chemical element is expected to grow from $1.49bn in 2020 to $1.6bn in 2021 at a compound annual growth rate (CAGR) of 7.4%. The growth will come about as companies reorganise their operations and bounce back from the impact of the pandemic, which brought about a number of restrictive containment measures.

The report also identified the emergence of a trend of using vanadium redox flow batteries (VRFB’s) for energy storage. The trend will bring about a transition of how the vanadium market is presently dominated by steel producers.

It is predicted that the increased use of vanadium in the car industry will drive the market for years to come. It utility in reducing the weight and increasing the fuel efficiency of cars, means that 85% of all cars will use vanadium by 2025.

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