Maitland Morning Monitor – Wednesday 11 July 2018

11th July 2018

Market Information

The FTSE is expected to open down this morning, while the German DAX and French CAC both opened down.

Asia-Pacific shares outside Japan fell heavily as the US-China trade war escalated once again.

In the news

  • Facebook hit with first fine over data scandal (Financial Times)
  • We change or die, M&S boss warns (The Times)
  • Tories draw 'battle lines' over May's Brexit plan (The Times)

Top Financial Announcements

* Maitland Client

Sainsbury (J) PLC Directorate Change
  • The company has agreed to appoint Martin Scicluna as its new Non-Executive Chairman. Martin will join the Board as Chairman-Designate and Non-Executive Director from 1st November 2018.
  • Martin Scicluna said:“I’m delighted to join Sainsbury’s, a company I have long admired for its clear customer focus and its strong values. Mike Coupe and his management team have positioned the business for a successful future of delivering significant value for shareholders, customers and other stakeholders.”
Micro Focus International PLC Interim Results
  • Statutory revenue: $1,974.2m (2017: $696.0).
  • Statutory loss before tax: $68.5m (2017: $83.1m).
  • Kevin Loosemore, Executive Chairman, said: “I am pleased to report that since March there has been an improved momentum in the HPE Software integration process and a slowdown in the rate of revenue decline. This has led to revenues for the period being at the better end of management guidance. The Micro Focus strategy and proven operating model has seen us successfully acquire and integrate a number of transactions over recent years.”
Burberry Group PLC First Quarter Trading Update
  • Retail revenue: £479m (2017: £479m).
  • Comparable sales: 3% (2017: 4%).
  • Marco Gobbetti, CEO, said: “While we know it will take time to achieve our ambitions, our progress to-date and the energy in and around the company give me confidence for the future”.
Barratt Developments Trading Update
  • Expected profit before tax: £835m (2017: 765.1m).
  • Operating margin: 17.7% (2017: 17.2%).
  • Sales rate for 2018: 0.72 (2017: 0.72).
  • David Thomas, CEO, said: “It has been a very good year for the Group both operationally and financially with strong customer demand for our high quality new homes across our business. We begin the new financial year with a healthy forward order book, a strong cash position and a continued focus on delivery of operational improvements across our business. Across the country we are building much-needed new homes, creating jobs and supporting economic growth.”

NEX Group PLC* Trading Statement
  • Group revenue up 7% on a constant currency basis.
  • NEX Markets revenue increased by 2% on a constant currency basis.
  • NEX Optimisation’s revenue increased by 7% on a constant currency basis during the first quarter compared to the same period last year.
  • Michael Spencer, Group CEO, said: “We’ve seen a solid start to the year with episodic volatility driving volumes across the EBS and BrokerTec platforms and increased demand for our products and services from TriOptima and Reset.  As previously outlined, the transaction with CME remains on track to complete in the second half of the current calendar year.”
Indivior PLC 2018 Guidance Below Expectations
  • The company has announced that its previous FY 2018 financial guiance is no longer valid based on recent US market developments for SUBOXONE and early uptake levels of SUBLOCADE.
  • Shaun Thaxter, CEO, said: “Given the swift and material change in US market dynamics as well as the early-stage reimbursement and distribution model challenges we are experiencing with SUBLOCADE, we are removing our FY 2018 net revenue and net income guidance.”
PageGroup PLC Quarterly Trading Update
  • Gross profit up 16% to £208.2m (2017: £181.8m).
  • Net cash: approximately £85m (30 March 2018: approximately £91m).
  • Steve Ingham, CEO, said: “We are pleased with the Group’s strong performance in the first half. However, there remain challenges in a number of our markets, including Brexit in the UK, trading in Catalonia and forthcoming elections in Latin America.”
Wetherspoon (JD) PLC Pre-close Trading Statement
  • Like-for-like sales up by 5.2%
  • Total sales up by 5.6%.
  • Tim Martin, Chairman, said: “We are frequently asked about the effect of Brexit on the Company and the economy. The main advantage of Brexit is that the EU is a protectionist system that imposes high tariffs on non-EU imports such as wine, rice, coffee, oranges, children’s shoes and clothes, and over 12,000 other products. Leaving the EU allows the UK to adopt the approach of countries like Singapore, Hong Kong, Switzerland and Australia by dismantling these tariff walls, which improves general living standards.”
Grafton Group PLC Trading Statement
  • Group revenue up 8.6% to £1.45bn (2017: £1.33bn).
  • Like-for-like Group revenue up by 3.8%.
  • Gavin Slark, CEO, said: “We were pleased with the Group’s performance in the first half though the trading pattern was heavily influenced by the weather.  The very cold conditions experienced in March and April have been followed by a hot and dry May and June which has benefited a number of businesses, particularly Woodie’s.  We enter the second half well placed to deliver our expectations for the financial year.”
G4S PLC 2017 Segmental Results
  • Core business as previously reported: Revenue (FY 2017): £7,427m.
  • Core business as previously reported:Adjusted PBITA (FY 2017): £496m.
  • Underlying business at H1 2018 exchange rates: Revenue (FY 2017): £7,255m.
  • Underlying business at H1 2018 exchange rates: Adjusted PBITA (FY 2017): £7,255m.
Pershing Square Holdings Ltd* Acquisition of Shares
  • The company has been advised by Pershing Square Capital Management, L.P. that CEO Bill Ackman, PSH Board Member Nick Botta, all members of the Pershing Square investment team, other PSCM employees and members of the PSCM advisory board have purchased a total of 20,659,629 PSH public shares since they began acquiring shares subsequent to the 10 May 2018 closure of the $300m Company Tender Offer.
  • Since 29 May 2018, Mr. Ackman has purchased a total of 19,650,471 public shares at an average price of $14.87 per share for a total additional investment in PSH shares of $292 million, and Mr. Botta has purchased a total of 850,000 public shares at an average price of $14.88 per share for a total additional investment in PSH shares of $12.6m.
  • In total, assuming all PSH management shares are converted to public shares, the PSCM Affiliates would currently own 29,742,154 public shares of the Company, or approximately 13.4% of the Company on a fully diluted basis. The PSCM Affiliates have increased their investment in PSH because they believe that PSH is substantially undervalued.
  • As a result of the Company Tender Offer and the recent purchases by the PSCM Affiliates over the last three months, the Company’s free float has been effectively reduced by 42,931,343 public shares, or 18.3%.