Maitland/amo Morning Monitor – Friday 13 May 2022

13th May 2022

In the news

  • A tribunal yesterday found KPMG auditors deliberately misled regulators during routine inspections of work for Carillion, and KPMG and the Financial Reporting Council agreed a £20m fine, reduced to £14.4m.
  • BP CEO, Bernard Looney, claimed that Britain's energy security will be at risk if chancellor Rishi Sunak imposes a windfall tax on oil companies, adding that a tax raid on his industry would make the UK a less stable environment for investing and potentially hold back plans to wean the country off its dependence on foreign oil and gas.
  • Chancellor Rishi Sunak has chosen Dr Swati Dhingra, an associate professor at the London School of Economics and an outspoken critic of Brexit as the next member of the Bank of England's interest rate-setting committee.
  • BT has signed a £633m deal with US media giant Warner Bros. Discovery that will merge their sports offerings.
  • Stablecoin Tether - a critical cog in the $1.3tn cryptocurrency industry – yesterday failed to maintain its link with the US dollar, highlighting the fragile nature of private stablecoins.

Politics today

  • The Houses of Parliament are not sitting today.

Stock market moves

  • In the US, the S&P 500 fell 0.13%, and the Nasdaq 100 fell 0.18%.
  • In Asia, Japan’s Topix index and South Korea’s Kospi index gained 1.91% and 2.07% respectively, Hong Kong’s Hang Seng Index is trading up 2.05%, and China’s Shanghai Composite Index rose 0.69%.
  • In Europe, the FTSE 100 is trading up 0.83% in the early hours.

Corporate announcements

* Maitland Client

ContourGlobal PLC Trading Update
  • Strong cash flow generation with Funds from Operations reaching $112m in Q1 2022, a 9% increase over Q1 2021, mainly explained by growth in Adjusted EBITDA (+$28m) partially offset by higher distributions to non-controlling shareholders (-$20m) and lower interest paid (+$12m).
  • Adjusted EBITDA was up 15.3% from $180.6m to $208.3m, mainly driven by the Western Group acquisition (+$11m), Mexico CHP (+$11m), Austria Wind (+$8m) and a negative FX variance of $8m.
  • The Company will pay a dividend for Q1 2022 of $4.9115 cents per share / £4.0128 pence per share, equivalent to $32.2m to be paid on 10 June 2022.
  • Joseph Brandt, CEO, said: “Our diversified business remains resilient and well positioned to perform well despite unprecedented turbulence in the global energy markets.  We performed ahead of the Board’s expectations during the quarter and I am pleased to confirm the first quarter dividend payment of USD 4.9115 cents per share, representing a 10% year-on-year growth in line with our dividend policy. This is underpinned by strong operating cash flows and a 15% year-on-year growth in Adjusted EBITDA to $208 million. The outlook for the rest of the year is favorable.”
Sage Group PLC Results for the six months to 31 March 2022 (unaudited)
  • Strong organic recurring revenue growth of 8%, driven by Sage Business Cloud growth of 21%
  • Organic operating margin of 19.9%, in line with expectations
  • Sustained strong cash generation, with underlying cash conversion of 120%.
  • Steve Hare, CEO, said: “While we are mindful of increased macroeconomic and geopolitical uncertainties, our customers remain confident and resilient. Our aim is to knock down barriers to their success, delivering solutions that make their lives easier, and we continue to make good progress against our strategic objectives. I am confident that our ambition to become the trusted network for small and mid-sized businesses will drive the success of Sage, as we focus on growing both revenue and earnings in absolute terms.”
Vietnam Enterprise Investments Ltd Monthly Update
  • As of 30 April, VEIL’s NAV decreased -5.9% over the previous month against a fall of -8.9% for its reference index, the Vietnam Index, both in US dollar terms.
  • The Company’s NAV per share was US$11.54 as of 30 April, and its total NAV was US$2.4 billion (£1.9 billion).
  • The Company repurchased 875,517 shares in April, to be held in treasury, compared with 1,108,150 shares repurchased in March. As of 30 April, 1.7% of issued shares have been repurchased since 1 January 2022.
  • Dien Huu Vu, CEO, said: “Due to pressures from the US Fed’s rate hikes and the devaluation of the renminbi, the Vietnamese dong has depreciated -0.9% year-to-date. However, we still believe that the outlook for the Vietnamese dong remains solid, based on considerable US dollar inflows, a robust external account position, and importantly, the return of tourism after Vietnam’s borders reopened mid-March. The State Bank of Vietnam can also use its foreign exchange reserves, which have increased tenfold over the past decade to US$110bn, to stabilise the exchange rate, if needed. Meanwhile, inflation has shown evidence of spillover effects from petroleum to other categories, resulting in a modest CPI increase of 2.6% year-on-year in April, prompting the State Bank of Vietnam to sustain the exchange rate to prevent imported inflation.”