Phoenix Group (LON:PHNX) reported a substantial increase in operating profit for 2020, and said it is in a strong position to leverage the key industry drivers of growth.
The FTSE 100 company confirmed an operating profit of £1.2bn, up from £810m the year before.
The insurance firm also recorded a rise in its assets under management from £248bn in 2019 to £338bn.
Phoenix Group’s board declared a final dividend of 24.1p per share, bringing the full-year dividend up to 47.5p per share. This is up from 46.8p per share in 2019.
After an hour of trading, the company’s share price was up by 2.34% to 744p per share.
Commenting on the results, Group CEO, Andy Briggs said:
“2020 was a landmark year for Phoenix during which we completed the acquisition of ReAssure and became the UK’s largest long-term savings and retirement business. We delivered record cash generation of £1.7 billion, our Solvency balance sheet remained resilient, we delivered our highest ever year of Open business growth, and we have recommended a 3% increase in our 2020 final dividend.”
“We are led by our purpose of ‘helping people secure a life of possibilities’ to deliver for all of our stakeholders and are putting sustainability at the heart of our business. During the year we have focused on delivering better outcomes for our customers, investing in our people, supporting our local communities, and have made a commitment to be net-zero carbon across our operations by 2025 and our investment portfolio by 2050. COVID-19 has challenged each and every one of us and I am very grateful for the outstanding dedication and professionalism of my colleagues which ensured we protected our customers throughout.”
“Looking ahead to 2021, we will continue to optimise our in-force Heritage business for cash and resilience, while the recent acquisition of the Standard Life brand will support us in accelerating our Open business growth strategy.”
Diversified Gas and Oil posts record production levels
Diversified Gas and Oil (LON:DGOC) released its full-year results for 2020 on Monday as chief executive Rusty Hutson revealed his delight at the group’s resilience.
Adjusted earnings increased by 1% to $301mn for the year, helped by hedge cash settlements of $145m, which offset lower gas prices during 2020.
Total revenue, including the hedge cash settlements, came to $533m, an 8% rise on 2019’s figure.
Diversified Gas and Oil confirmed a net loss of $23m, a swing from $99m in net income the year before.
The oil company posted record production levels, as its exit rate for 2020 came in at around 100,000 barrels per day. This is 18% above the volume recorded at the end of 2019.
Diversified Oil and Gas proposed a final quarterly dividend of $0.04 per share, bringing the full-year 2020 dividend to $0.1525 per share, 10% higher than 2019 ($0.1392 per share), supported by accretive growth of its low-decline, long-life assets.
Commenting on the results, CEO Rusty Hutson, Jr. said:
“I am exceptionally pleased with our results in 2020 as they reflect the resilience of our business model and its proven ability to consistently deliver shareholder value and returns, even in the most challenging of markets. Our commitment to value-accretive growth, operational excellence, cost discipline, and risk mitigation drove the Group’s solid performance through turbulent times. Our long-standing strategy of focusing on low-risk assets and reliable cash flows position DGO for further growth, and enables us to maintain our firm commitment to shareholder returns, evidenced by the increase in our per-share dividend, which we raised twice, or 14%, during the year.”
“With a business model grounded in asset and environmental stewardship, we made significant strides in developing plans and adopting disclosure frameworks aimed at improving our environmental footprint. Additionally, we strengthened our track record of accretive growth with the successful acquisitions of both upstream and midstream assets, contributing to a consistent, strong cash margin and enlarging our portfolio of Smarter Asset Management opportunities on a base of assets with an exceptionally low corporate decline rate of ~7%. Our commitment to acquire low-decline assets enables us to replace production declines with approximately 10% of our Adjusted EBITDA while meeting our operating and ESG commitments, reducing our debt and making consistent quarterly dividend payments to shareholders.”
Pearson (LON:PSON) confirmed on Monday that it will maintain its dividend for the year as the education company expects a recovery after its sales took a hit during the pandemic.
The FTSE 100 firm has proposed a final dividend of 13.5p per share. This brings the full-year figure to 19.5p, in line with 2019.
Pearson also confirmed that sales during 2020 fell by 12% to £3.4bn. Underlying profits dipped by 46% to £315m, while underlying revenue dropped by 10%.
The company’s results came about following widespread closures of schools and cancellations of exams.
Looking forward, Pearson will now look to focus on fast-growing areas: Online and digital learning; English language tuition; workforce skills and accreditation and certification.
Russ Mould, investment director at AJ Bell, drew attention to the company’s move towards home working.
“Another interesting feature of Pearson’s new strategy is a big reduction in its property footprint as it plans to adapt to more home working.”
“Pearson’s move follows in the footsteps of other major companies such as banking firms Lloyds and Barclays and could well send a chill through the office property space.”
Andy Bird, chief executive of Pearson, commented on the company’s results and outlook:
“Our purpose has never been so relevant: we exist to help everyone achieve their potential through learning. I have witnessed this first-hand every day since joining Pearson, having spent time with customers, employees and other key stakeholders. I have enormous optimism in the future and our ability to unlock our potential and drive sustainable growth.”
“Pearson’s strategy is now geared around three key demand-led global market opportunities which play to all our strengths: the rise in online and digital learning; addressing the workforce skills gap; and meeting the growing demand for dependable accreditation and certification. Our existing assets, strong balance sheet, new organisational structure and priorities will enable us to seize these opportunities. As the global leader in learning, nobody else has the breadth and depth of experience, scale, expertise and relationships across the entire lifelong learning spectrum.”
“Following significant investments in technology and comprehensive restructuring, Pearson is moving at pace and ready to enter a new era as a digital-first company, focused on delivering sustainable revenue and profit growth for the benefit of all company stakeholders.”
Scotland-based brewery and pub chain BrewDog is revelling in the news that the UK’s national lockdown is set to come to an end this summer.
The company reported it has had its busiest day for bookings on record after Prime Minister Boris Johnson announced the easing of restrictions in the coming months.
Beer gardens are set to open to the public from the 12th of April and all coronavirus restrictions are poised to wrap up in June, although the government has stressed that these dates are provisional and dependent on the rate of infection tailing off.
“Tens of thousands” of eager customers have already booked tables at BrewDog sites across the UK, according to a post published on LinkedIn by the brand’s CEO and co-founder, James Watt.
BrewDog have not been the only ones to see a surge in bookings following Johnson’s announcement, with the Inn Collection Group – which has 15 venues across the north – revealing it had seen a “300 per cent spike in bookings” over the last fortnight.
“There’s no doubt there’s a massive pent-up enthusiasm,” Christian Burns, owner of six pubs in Bishop Auckland, told The Independent over the weekend. “People have seen enough of their back gardens or kitchen tables and they want to get out. If the weather’s good, for those pubs with outdoor facilities it could be an astounding April”.
Last month, brewery bosses and landlords told the Evening Standard that they were ‘in a battle to save the Great British pub’. Bars and drinking establishments have been especially hard hit by the pandemic, with lockdown restrictions all but wiping out business, but the government’s promise of outdoor dining is not enough for some.
Chief Executive of the British Beer and Pub Association (BBPA), Emma McClarkin, has already warned that as many as 29,000 pubs will not be able to welcome customers because they simply do not have a beer garden or outdoor space to accommodate them.
“If pubs do open outdoors only in April – we believe just 17% of UK pub capacity will actually open. This would result in a loss of turnover to the sector of £1.5 billion when compared to trading in normal times. That is far from reopening and recovering”.
The BBPA acknowledged that 75% of UK pubs reportedly have a beer garden or outdoor space, but said that it found just 40% of those were likely to have outdoor space adequately large enough to operate a socially-distanced service.
It also added that even larger beer gardens could “struggle to break even, as they would still have vastly reduced capacity and significant practical challenges”.
BrewDog has excelled in popularity in recent years with its vast offering of craft ales and funky product designs. The brand’s famous Punk IPA is the #1 craft beer in the UK.
It was also the first company to join Crowdcube’s exclusive Unicorn Club, with a pre-money valuation sitting at£1.8bn, and is currently being touted for an IPO on the London Stock Exchange at some point this year.
Parsley Box Group is set to join AIM in the next few weeks, and it appears that its pre-money valuation may be more than £70m, if the most recent fundraising by the main subsidiary is anything to go by.
As usual, the intention to float announcement was all puff and no pastry. No valuation was put in the announcement. There was no stated profit or loss, but it appears that the company is currently losing money.
Scotland-based Parsley Box provides ambient ready meals to people 60 years old and over. It was founded by Adrienne and Gordon MacAulay in 2017 and there were 154,000 active customers at...
Although there has been criticism of buy now, pay later finance Australia-based provider Afterpay continues to go from strength to strength. That is good news for ThinkSmart (LON: TSL) which retains a residual stake in the UK-based Clearpay, which it sold to Afterpay. This is the main source of value for the shares and the stake has significantly increased in value.
There was a 10% stake retained in Clearpay, but employees will receive some of the shares, so the net stake is 6.5%. The stake is currently valued at £106.6m according to independent valuers.
The growth in active customer numbers a...
Gold prices dipped below $1,700 on Friday as US non-farm payroll figures surpassed expectations.
America added 379,000 jobs in February, significantly more than the 180,000 forecasted by economists.
The market for the precious metal fell under pressure ahead of the employment statistics and lost ground in the immediate aftermath. The last time gold traded below $1,700 was in June 2020, just under nine months ago.
Gold price
In addition to better than forecasted job growth in February, the unemployment rate fell to 6.2%, from 6.3%.
The precious metal’s price has also been dented recently by rises in US bond yields and increasing optimism around an economic recovery.
“We see the rising bond yields as a sign of economic optimism, which has also prompted investors to sell some of their positions,” said Carsten Menke of Julius Baer.
Nasdaq opened 1.04% up today at $12,856.12 following news of US non-farm payroll figures exceeding expectations. US employment figures outperformed economic forecasts for February, as 379,000 jobs were added to the economy.
Robert Alster, CIO at investment management firm Close Brothers Asset Management, praised the progress of the US economy since the current President’s inauguration.
“Nonetheless, Biden’s pledge for all US adults to have received the vaccine by the end of May, a drop off in coronavirus cases, and tentative relaxation of restrictions all bode well for a continued improvement in the employment numbers.”
“A further boost will be given once the $1.9tn Covid-19 stimulus bill reaches the Resolute desk. With the injection of the vaccine and cash, the President will be hoping he can get the US economy back on the front foot.”
It follows a week of downward movement following the sell-off of technology stocks which came about as a result of the news of rising bond yields. Stocks in Apple, Tesla and Amazon dropped by $1.6tn since the index’s closing high on 12 February 2021, according to an analyst from S&P Global Market Intelligence.
Nasdaq Top Movers
Cisco Systems (3.15%), Fiserv (2.10%) and Micron Technology (1.69%) were the top movers on the index at early morning trading.
At the bottom end of the New York exchange, Okta (-3.81%), Tesla (-2.99%) and Costco (-2.16), are the day’s biggest fallers so far, as Elon Musk’s company continues its recent slump.
Coinbase
Nearly a decade after its founding, Coinbase, a trading platform for crypto buyers, is set to go public as the company has has been valued around $100bn.
The company, which will be listed on the Nasdaq exchange, earned revenue of $1.3bn in 2020, up from $534m in 2019, while recording a profit of $322m in 2020, following a $30m loss the year before.
Ark Innovation ETF
Ark Invest’s famous Innovation ETF saw its gains for 2021 wiped out this week as rising US bond yields resulted in a sell-off of a number of Nasdaq companies. The fund’s top five holdings – Tesla, Square, Roku, Teladoc and Spotify – lost on average 17% over a one month period.
US non-farm payroll figures show unemployment at 6.2%
US non-farm payroll figures significantly outperformed expectations for February, as 379,000 jobs were added to the US economy.
The figure surpassed the expected amount of 180,000, as well as exceeding January’s increase of 160,000, which was revised up from the originally reported 49,000 figure reported a month ago.
The December number was also revised to 306,000 from 220,000.
Unemployment is now at 6.2%, down from 6.3% in January, and well below April’s peak high of 14.7%.
A majority of the jobs (355,000) came from the leisure and hospitality sector, as dining restrictions were eased in parts of the country.
While healthcare, manufacturing and retail saw 46,000, 21,000 and 41,000 jobs added respectively.
Year-on-year, 8.5m fewer Americans are in work compared to February 2020. Robert Alster, CIO at investment management firm Close Brothers Asset Management, praised the progress of the US economy, while drawing attention to underlying factors at play in the US labour market.
“The dramatic increase in nonfarm payroll figures is a sign of progress as Biden completes his sixth week in office. However, it comes after a relatively weak ADP reading for private payroll figures earlier in the week, painting a picture of a labour market of two halves.”
“Wage inflation remained steady – growth looks somewhat unlikely as lower-paid workers re-join the payrolls in the coming months as hospitality and retail sectors open up.”
Alster suggested the news is a continuation of a recent trend of economic optimism since Biden was inaugurated.
“Nonetheless, Biden’s pledge for all US adults to have received the vaccine by the end of May, a drop off in coronavirus cases, and tentative relaxation of restrictions all bode well for a continued improvement in the employment numbers.”
“A further boost will be given once the $1.9tn Covid-19 stimulus bill reaches the Resolute desk. With the injection of the vaccine and cash, the President will be hoping he can get the US economy back on the front foot.”
Sponsored by Vietnam Holding. Photo Credit: Michael Tatarski
Vietnam’s COVID-19 Vaccine Plans Come Into Focus
While the Vietnamese government’s response to the pandemic has been among the most effective in the world over the last year (see below), their strategy regarding an eventual vaccination campaign is now becoming clear. The Prime Minister has now requested vaccinations to commence.
As recently as mid-January, it wasn’t clear when the country would receive any vaccine doses.
Then, a huge outbreak hit the small northern province of Hai Duong, with cases eventually recorded in over a dozen cities and provinces, including Hanoi and Ho Chi Minh City.
Leadership has responded by dramatically speeding up the vaccine delivery timeline, and also the scale of their purchases. However, for now, there is no indication of how this vaccination drive will impact ongoing inbound flight restrictions.
On the morning February 24, 117,600 doses of the Oxford/AstraZeneca (AZ) vaccine arrived on a Korean Air flight from Seoul at Tan Son Nhat Airport in Ho Chi Minh City.
These doses are part of the government’s agreement to buy 30 million doses from AstraZeneca, an agreement announced weeks ago with what was then a vague timeline.
Now, the Ministry of Health is saying that 150 million doses of COVID-19 vaccines will reach Vietnam in seven batches either by the end of this year or early 2022.
Initial timelines estimate that another 1.5 million AZ doses will arrive by the second quarter; 1.2 million through the COVID-19 Vaccines Global Access (COVAX) program and 363,000 purchased directly from AZ. Remaining frontline workers (500,000 people) will receive these doses, along with diplomats (4,080 people), customs and immigration officers (9,200 people) and just over 1 million members of the military.
8.2 million more AZ doses will be purchased and delivered within Q2, covering remaining military personnel, public security police officers (304,000 people), teachers (550,000 people), and people over 80 years old.
In Q3, 10.9 million AZ doses are expected, 3.6 million from COVAX and 7.32 million directly from AZ. These will be for anyone else over 80, essential service providers, and people with chronic diseases.
Through early 2022, 14.4 million more AZ doses will be distributed for remaining people with chronic illnesses.
By the end of this year or early next year, COVAX will supply 25.2 million doses intended for the chronically sick who haven’t already been vaccinated and people aged 65-80.
The remaining 90.5 million vaccine doses will come from to-be-determined foreign and domestic vaccine producers through the first half of 2022 for the rest of the 65-80 population and people over the age of 18 not covered by previous batches.
That last batch is the most uncertain, as local media has simply said that the government is still in talks with Pfizer and other foreign vaccine companies, as well as Russia for the Sputnik vaccine – though we do know that two Vietnamese companies expect to have functioning vaccines sometime this year.
If all of this goes to plan, that would mean 75 million out of 97 million people in Vietnam would be vaccinated by the middle of 2022.
The big question for people outside of Vietnam is how all of this will impact international flight restrictions, and on that there is still no clarity. It’s clear at this point that the Vietnamese government will be exceedingly cautious in reopening the border, and even with this good vaccine news, hopeful foreign visitors shouldn’t expect major changes anytime soon.
There is increasing interest in Vietnam particularly with increased political risk in other parts of ASEAN (Thailand and Myanmar). Vietnam has shown its mettle during the pandemic year, which was also the year in which it successfully chaired ASEAN, hosted several foreign leaders and inked several key trade agreements. The short term risk in 2021 was the spread of new Covid variants, which Vietnam so far has evidenced a strong grip on. If Vietnam’s vaccine rollout can be successfully implemented, then 2021 could well be a breakthrough year for Vietnam.
In early 2020, the UK Government was quoted as saying the Coranavirus thrives on ambivalence, which unfortunately was in abundance in the more supposedly ‘developed’ markets. The leadership in the UK was distracted at the end of January by ‘getting Brexit done’, and according to UK media, even during the weeks that followed, its Prime Minister was unable to attend key Cobra meetings where the virus was being discussed.
Vietnam’s government, on the other hand, took quick and resolute action during the largest national holiday in the year – the Lunar New Year ‘Tet’ holiday – in late January. Vietnam has rightly won many new admirers for how its policymakers acted, and the country has emerged from the pandemic with a high level of credibility.
Two. Have a common enemy
Vietnam’s leaders at the national and provincial level, and the people in the urban and rural community, had a clear common sense of purpose: defeat the coronavirus. This meant being willing to sacrifice some liberties, and to adopt measures such as mask-wearing when there were (and bizarrely, remain today) detractors in the ‘western world’ to the use of face-coverings. The use of propaganda art, in conjunction with traditional media and social media (including TikTok) focused the communities on fighting the unseen enemy and defeating it fairly resolutely.
Three. Rally around a common cause
The UK had a few rallying points during its battle with the early phases of the Coronavirus. One was the indefatigable (and now deceased) Captain Sir Tom Moore who chose to mark his 100th birthday by walking round-and-round-the-garden to raise money for the National Health Service, raising 33 million pounds more than his target. The NHS also featured in a regular collective gathering of ‘clapping’, an idea – like quarantine itself – imported from Italy.
Vietnam’s rallying point was rather more unusual. A 43-year-old Motherwell supporter who flew a plane to Vietnam for Vietnam Airlines, and brought more than passengers with him. He inadvertently caused a cluster of infections in a popular bar in Ho Chi Minh City’s District 2. He became very sick, and his lungs became like sacks of cement, putting him at death’s door, and with a real chance of being Vietnam’s only Covid-19 fatality. He spent close to 100 days in an ICU, much of it in a coma, where he received excellent healthcare. Known as ‘Patient 91’ the Vietnamese population rallied to his support, with several people even offering to be lung-donors to save the life of the British pilot. Thankfully he made a full recovery and is now safely back in Scotland. He said that he would have died anywhere other than Vietnam.
Vietnam kept its track record of zero deaths for several months, with long periods without any community-spread cases. Even now, a year on, Vietnam has recorded less than 40 deaths from the Coronavirus. It has also managed to keep its economy open for most of the year, as a result enjoying the highest growth rate in the world for 2020.
Vietnam Holding held a webinar on 26th February hosted by its investment manager Dynam Capital, outlining its vision for the next five year trends in the growth market of Vietnam. The Webinar recording is at https://vimeo.com/518007876#t=9s
Hear more from Vietnam Holding at the UK Investor conference on 23rdMarch.
