Decentralised finance (DeFi) focused investment company Dispersion Holdings (LON: DEFI) went ahead with its flotation at the end of April, but it was not as originally announced in its intention to float on AQSE Growth Market announcement.
The same team was behind the flotation of NFT Investments (LON: NFT) earlier in April. Dispersion Holdings bought a 2.99% stake in NFT after trading in those shares commenced. The current NFT share price is well below the price paid by Dispersion Holdings. There was also another investment made prior to flotation.
There were initial plans to raise £10...
Deliveroo suffered one of the worst debuts in London history as its shares fell by 26% when the food delivery company came to the market at the end of March. 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.
Since that day it has been more of the same. On 26 April Deliveroo shares were valued at 228p. However, over the past few days the company has regained some ground, moving up for four consecutive days. This follows Deliveroo entering a two-year partnership with Waitrose to deliver groceries. The question now is whether or not Deliveroo can sustain this investment and entice investors.
Waitrose
After a successful trial of the service, Waitrose and Deliveroo came to an agreement over a two-year partnership for rapid home deliveries. The British supermarket confirmed it would be growing Deliveroo’s service from 40 to 150 stores across the country before the end of summer.
The new partnership comes on the back of an overall increase in the number of home deliveries of groceries during the pandemic, as such orders now make up 14% of the market, up by double since the beginning of 2020. Waitrose customers will be able to order from an increased range of 750 to 1,000 products and have them delivered in 20 minutes to addresses from London to Scotland.
Outlook
In mid-April Deliveroo posted healthy Q1 results, including a fourth consecutive quarter of growth. While its orders were up by 114%, compared to the same period a year before, up to 71m. While the IPO wasn’t overly successful, the funds raised will go along way to securing its near-term future, as will its recent results and the Waitrose news.
However, the company is expecting a slowdown once lockdowns are gone, while it still expects customer spending on its food delivery app to grow by 30-40% in 2021. Other issues ongoing disputes between the company and its workers over labour rights. The company is facing increasing pressure over its employment practices, which could put investors off.
The Barclays share price (LON:BARC) dived by 6% on Friday as the FTSE 100 bank released its quarterly results. The dip follows what has been steady growth since the beginning of the year, which it began at 143.52p. Now, it is at 177.5p, around the same level it was at when the major bank’s share price crashed in February 2020. While there was good news within Barclays’ recently published results, the fall in its share price shows a level of distrust from investors.
Results
Barclays confirmed on Friday that its profit before tax reached £2.4bn during the first three months of the year, well up from £923m over the same quarter the year before. Barclays well exceeded average forecasts from analysts who predicted a pre-tax profit of £1.76bn. It was the bank’s highest quarterly profit in ten years, as well as being three times higher than they were during the same period a year before.
“Since the early days of the pandemic last year, our diversified business has demonstrated the resilience critical to ensuring Barclays’ financial integrity,” Jes Staley, chief executive of Barclays, said in a statement.
While other banks, including Natwest, received a lift by releasing cash from loss provisions, amassed during the pandemic, Barclays decided against doing the same thing. The bank added £55m to its credit provisions in the quarter, compared to expectations of a credit impairment of just over £500m.
“As we enter the next phase of this pandemic, we remain resolute in our commitment to support the economic recovery,” Staley said. “From our spend data, which captures UK economic activity across our cards and acquiring businesses, we are already seeing encouraging early signs of recovery in some sectors, including those hit hardest by the crisis.
“While evidence of recovery is encouraging, we have continued to take a cautious view of the impact of the pandemic on the business.”
The overriding message from the bank’s CEO is that the UK is on the verged of the largest economic boom since the post-World War Two era. However, it is possible that investors anticipated the optimism based on the generally positive outlooks coming from the UK’s major banks, and other factors. This could help to explain why the share price fell on today’s news.
The Rolls-Royce share price (LON:RR) is at the same level at which it began 2021, as it remains unclear what the immediate outlook is for the engineering company. Following a strong push from February through to March, shares in the FTSE 100 company have fallen back to 103.72p. As one of the largest aircraft manufacturers in the world, Rolls-Royce has been significantly impacted by the ongoing pandemic. While UK Investor Magazine reported two months ago that its outlook could depend on the airline industry, many questions remain unanswered, as despite a positive roll-out of vaccines in the UK, other parts of the world have not fared so well.
Finances
The Covid-19 pandemic had a severe impact on Rolls-Royce’s performance and near-term outlook. However, the company took solid measures to protect its balance sheet over the longer-term. The company strengthened its liquidity to £9bn and protected its financial position with £7.3bn of new debt and equity, while it launched a programme to raise at least £2bn from disposals.
Rolls-Royce has also made progress on its restructuring programme, removing 7,000 positions during 2020. Looking ahead, Rolls-Royce is aiming for its free cash flow to turn positive during H2 of 2021, and at least £750m during 2022, although these targets depend on the speed of the recovery, as well as the ongoing restructuring plan.
“The impact of the COVID-19 pandemic on the Group was felt most acutely by our Civil Aerospace business. In response, we took immediate actions to address our cost base, launching the largest restructuring in our recent history, consolidating our global manufacturing footprint and delivering significant cost reduction measures. We have taken decisive actions to enhance our financial resilience and permanently improve our operational efficiency, resulting in a regrettable, but unfortunately very necessary, reduction in the size of our workforce,” said chief executive Warren East.
Rolls-Royce has taken decisive action to tighten up its balance sheet to see the company through challenging market conditions, however, it could still do with some positive economic news.
Airline Industry
The slower pace of the vaccine rollout in the EU, a spike in infections in mainland Europe and the emergence of new variants has complicated the picture for Rolls-Royce. There is a real risk that the company will not get the summer it was hoping for, according to AJ Bell investment director Russ Mould.
“The risk, and one being increasingly acknowledged by Government ministers, is this summer is even worse than last for the travel space as the UK keeps restrictions in place to avoid undermining its hard-won success with the vaccine,” Mould said.
Nonetheless, governments across the world are doing their best to give hope into the airline industry. In Britan, proposals to permit travel to certain countries from May 17 received backlash for the caveat that travellers must undergo costly PCR Covid tests. The plans follow another week of uncertainty for a sector that lost $118.5bn in 2020, the worst year in aviation history, with downgraded passenger forecasts for a number of airlines.
The UK is on the verged of the largest economic boom since the post-World War Two era, according to the chief executive of Barclays Jes Staley.
Staley’s positive outlook came as the FTSE 100 bank confirmed its profits for the first quarter of the year had more than doubled compared to the year before to £2.4bn.
“We estimate the UK economy will grow at its fastest rate since 1948. That’s pretty spectacular,” he said.
The vaccination roll-out, as well as pent-up savings, will be the biggest drivers of the recovery.
Staley said that an additional £200bn is being held in customer and company bank accounts which means that the UK, along with America, is likely ti see some of its most rapid growth in decades.
The rise in Barclays’ profits was largely down to increased optimism over how its loans would be repaid.
Around this time in 2020 Barclays put aside around £2bn as an insurance in the event that borrowers would default on their debts, however, they are now setting aside £55m in a show of increased confidence.
“It may be boom time for the UK economy according to Barclays chief executive Jes Staley but not for the company itself judging by the reaction to its latest trading update,” says Russ Mould, investment director at AJ Bell.
“The decision not to adjust its previous bad debt estimates, unlike most of its peer group, appears to have spooked the market along with a patchy investment banking performance and a cautious view on costs as Barclays looks at reducing its physical footprint.”
“Less of us seem to be splurging with our credit cards in lockdown judging by the performance of Barclaycard, perhaps because of belt tightening on one side and on the other because some people have built up a cash buffer and therefore don’t need to use credit at a time when there’s less to spend on.”
Jangada Mines (LON:JAN) operates in Northern Brazil and is undergoing the development of a number of projects focused on Vanadium, Titanium and Iron Ore.
Brian McMaster, Executive Chairman of Jangada Mines, details the latest progress of the company and outlines what investors can expect from the company for the rest of the year.
Having conducted initial preliminary economic assessments, Jangada is now working towards further tests that could see expansion to their resources.
There is also consideration paid to the roadmap for production and comparisons made to other companies operating in the area.
With no data of its own to deal with, the FTSE 100 wasn’t up to much, rising 0.1% to 6,970, after failing to hold at 7,000 on Thursday. On the final day of the month the European markets erred on the positive, after stumbling at yesterday’s close.
“News that the German economy contracted faster than forecast – shrinking by 1.7% in Q1 against the expected 1.5% – failed to stop the DAX climbing 0.4%. Though that’s in large part due to the size of yesterday’s pullback,” said Connor Campbell, financial analyst at Spreadex.
“If estimates are accurate, the Eurozone as a whole is set to have contracted by 0.8% in Q1, quickening the pace of its problems when compared to the -0.7% seen in the fourth quarter of 2020,” he added.
“Potentially set to disrupt these fragile gains, the Dow Jones is heading for a 0.2% drop when trading starts Stateside. That’d knock the index back below 34,000 after it clawed its way above that key level last night,” Campbell says.
FTSE 100 Top Movers
Smurfitt Kappa (4.35%), AstraZeneca (4.14%) and British American Tobacco (2.4%) are the top risers on the FTSE 100 two hours into the day.
At the bottom on Friday, as the week draws to a close, is Barclays (-5.7%), Anglo American (-2.08%) and Flutter Entertainment (-1.87%).
AstraZeneca
AstraZeneca earned $275m in revenue in Q1 from its Covid-19 vaccine, which it is not making a profit from, as sales of its cancer drugs and growth in emerging markets allowed the pharmaceutical company to surpass its expectations.
The FTSE 100 drugmaker confirmed it revenue grew by 15% during the first quarter of 2021, as its post-tax profit climbed from £750m to £1.56bn.
UK House Prices
UK house prices grew in April at the quickest rate in over 15 years, research by Nationwide has revealed. Compared to the month before, the average house price was up by 2.1%, which is the biggest increase since early 2004.
Year-on-year house price growth rose to 7.1% in April compared to 5.7% in March, as property values reached a record high of £238,831.
AstraZeneca (LON:AZN) earned $275m in revenue in Q1 from its Covid-19 vaccine, which it is not making a profit from, as sales of its cancer drugs and growth in emerging markets allowed the pharmaceutical company to surpass its expectations.
The FTSE 100 drugmaker confirmed it revenue grew by 15% during the first quarter of 2021, as its post-tax profit climbed from £750m to £1.56bn.
AstraZeneca confirmed $275m of sales after it delivered nearly 70m doses across the world, as the vaccine roll-out picked up momentum. This figure is way up from $2m in Q4 of last year.
Pascal Soriot, AstraZeneca’s chief executive, said the strong performance came in the face of a number of challenges faced due to the pandemic. “We delivered solid progress in the first quarter of 2021 and continued to advance our portfolio of life-changing medicines,” he said. “We expect the impact of Covid to reduce and anticipate a performance acceleration in the second half of 2021.”
The AstraZeneca share price is up by 4.29% at mid-morning trading. Year-to-date the company’s stock is up to 7,713p, from 7,422p, an increase of just under 4%.
Nationwide chief economist Robert Gardner said: “Just as expectations of the end of the stamp duty holiday led to a slowdown in house price growth in March, so the extension of the stamp duty holiday in the Budget prompted a reacceleration in April.
“However, our research suggests that while the stamp duty holiday is impacting the timing of housing transactions, for most people it is not the key motivating factor prompting them to move in the first place.”
Gardner added: “Housing market activity is likely to remain fairly buoyant over the next six months as a result of the stamp duty extension and additional support for the labour market included in the Budget, especially given continued low borrowing costs and with many people still motivated to move as a result of changing housing preferences in the wake of the pandemic.”
