Maitland/amo Morning Monitor – Friday 29 July 2022

29th July 2022

In the news

  • Travel misery to continue as train drivers at nine companies announce more walkouts.
  • Britain’s exporters have seen their overseas trade stagnate over the past year despite strong growth in domestic demand for their products and booming export markets, according to a survey by The British Chambers of Commerce..
  • KitKat maker Nestle has put up its prices again due to "unprecedented" increases in costs.
  • Amazon is to raise the price of its Prime service for UK customers due to higher operating costs.
  • Thousands of workers at telecoms giant BT will walk out on Friday in the first of two strikes in a row over pay.

Politics today

  • The Houses of Parliament are in recess.

Stock market moves

  • In the US, the S&P 500 and Nasdaq 100 rose 1.21% and 0.92% respectively.
  • In Asia, Japan’s Topix fell 0.47%, and China’s Shanghai Composite Index is ending its day 0.89% lower. Hong Kong’s Hang Seng Index is currently trading at a 2.39% decrease.
  • In Europe, the FTSE 100 is 0.35% higher in the early hours of trading.

Corporate announcements

* Maitland Client

International Cons Airlines Group IAG Interim Management Report to June 30 2022
  • Operating profit for the second quarter €293m (2021: operating loss €967m), and operating profit before exceptional items €287m (2021: operating loss before exceptional items €1,045m).
  • Loss after tax and exceptional items for the half year €654m (2021: loss €2,048m ) and loss after tax before exceptional items €683m (2021: loss €2,169m).
  • Net debt at June 30, 2022 was down €688m since December 31, 2021 to €10,979m , reflecting the seasonal benefit on cash of bookings for travel in the second half of the year.
  • Luis Gallego, CEO, said: “In line with our net zero commitment by 2050, we have announced the addition of 50 new Boeing 737s and 59 Airbus A320 Neo family aircraft subject to shareholder approval. These modern, fuel-efficient planes will see us over 60 per cent through our shorthaul fleet replacement by 2028. As we build back operational resilience, our strong portfolio of brands, ability to deliver efficiencies through our Group scale, strong capital discipline and our leadership position in sustainability will generate long term shareholder value.”
Standard Chartered PLC 2022 Half Year Report
  • Income up 8% to $8.2bn, up 10% at constant currency (ccy) and excluding debit valuation adjustment (DVA) and normalising for the 2021 IFRS9 interest rate adjustment.
  • Underlying profit before tax up 7% at ccy to $2.8bn; statutory profit before tax up 10% at ccy to $2.8bn.
  • Earnings per share increased 5.1 cents or 9% to 63.4 cents.
  • Bill Winters, CEO, said: “We’ve posted a strong set of results for the first half of the year, with income up 10% on a normalised basis, supported by continued positive momentum in the second quarter, in which we grew income 11%. We remain disciplined on expenses, with significant savings delivered and maintained a strong capital position, with a CET1 ratio of 13.9%. We are also announcing today a new $500m share buy-back to start imminently. We remain confident in the delivery of the financial targets we set out in February.”
Rightmove PLC Half-year Results 2022
  • Revenue up £12.8m/9% on 2021 to £162.7m, as customers continued to increase their use of digital products and upgrade their packages.
  • Operating profit of £121.3m, up 6% on 2021 (2021: £114.9m).
  • Basic earnings per share up 8% to 11.7p (2021: 10.8p), underlying earnings per share up 7% to 11.8p (2021: 11.0p).
  • Peter Brooks-Johnson, CEO, said: “I’m excited by our recent developments to make the process of renting a property easier for tenants and agents. The new lead-to-keys workflow will give tenants the ability to search, view, secure and contract on a property, all from their mobile phones. I hope that this will alleviate some of the stress in this very competitive rental market”.
Croda International PLC Results for the six months ended 30 June 2022
  • Adjusted profit before tax up 26%, reflecting sales growth and higher return on sales, up 70 bps to 26.6% (2021: 25.9%).
  • IFRS profit before tax of £636.5m (2021: £204.1m), including £360.6m profit on strategic divestment.
  • Lower free cash flow reflecting investment in working capital to support sales growth.
  • Steve Foots, CEO, said: “With the successful divestment of the majority of our industrials business, our transition to a pure-play Consumer Care and Life Sciences business continues. Croda is becoming a stronger margin, higher return, less cyclical and lower carbon intensive business. Our focused platform and strategy are enhancing both our full year expectations and our medium-term growth prospects.”
Law Debenture Corp PLC Half-year Report
  • NAV total return with debt and Independent Professional Services (IPS) at FV for H1 2022 of -4.0%.
  • Profit before tax up by 5.9% and valuation up 4.9% to £178.4m.
  • The Group has issued 3.8 million new ordinary shares at a premium to NAV, to existing and new investors, with net proceeds of £30.4m to support ongoing investment.
  •  Dennis Jackson, CEO, said: “Against a very challenging and uncertain political and economic backdrop, with rising global inflation and interest rates, Law Debenture has delivered another resilient performance. The Group has maintained its consistent long-term benchmark outperformance. The strong, consistent income from the IPS business offers our portfolio managers greater flexibility in their investment selection, helping set Law Debenture apart from other UK equity income Trusts and underpinning our confidence in our ability to continue to outperform in the long-term.”
Morgan Advanced Materials PLC Half-year results
  • Adjusted operating profit margin of 13.7%, up by 90 bps, reflecting the drop through on organic growth and the benefits from the restructuring programme.
  • Adjusted earnings per share of 15.9p, up 25.2% on 1H 2021.
  • Positive cash generated from continuing operations at £45.2m, free cash flow of £(1.0)m and net debt/EBITDA (excluding lease liabilities) of 0.5 times.
  • Pete Raby, CEO, said: “Our order momentum remains good. We have seen higher levels of inflation across the business, and we continue to more than offset that through pricing and continuous improvement activity. As previously stated on 5 May 2022, we expect a moderation of growth rates in the second half, reflecting challenges in the wider economy. While mindful of market conditions, we now expect adjusted operating profit for full year 2022 to be around the top end of current analysts’ forecasts.”
AstraZeneca PLC Half-year Report
  • Total Revenue increased 48% to $22,161m. Core EPS of $3.61, with the second quarter benefitting from a Core Tax Rate of 15%.
  • The FY 2022 expectation for the Core Tax Rate remains 18-22%.
  • Interim dividend declared of $0.93 (76.4 pence, 9.49 SEK) per ordinary share, reflecting the Board’s intent to increase to $2.90 in FY 2022, as announced at FY 2021.
  • Pascal Soriot, Chief Executive Officer, said: “Given the ongoing performance of our underlying business and the contribution of our COVID-19 medicines, we are updating our revenue guidance for 2022. This has enabled us to increase our R&D investment in the exciting number of pipeline opportunities that can benefit patients and drive long term sustainable growth for our company.”
Bodycote PLC Interim results for the six months to 30 June 2022
  • Revenues up 14.6% to £358.5m (14.1% at constant currency).
  • Pricing and surcharges successfully mitigating inflation and drove approximately 10% revenue growth.
  • Headline Operating Profit up 6%3 to £50.5m.
  • Net debt of £57m.
  • Full year expectations unchanged.
  • Stephen Harris, Group Chief Executive, said: “While there are obvious geopolitical uncertainties, as matters stand today, we see the prospect of volume growth in each of our key market sectors and geographies and we anticipate making progress in the second half.”
IMI PLC Interim Results
  • 7% sales growth, 13% adjusted profit before tax growth, 18% adjusted basic EPS growth.
  • Adjusted operating margin 70bps higher than H1 2021.
  • Statutory operating profit up 5%.
  • Statutory profit after tax up 12%.
  • Order book growth, £22m of Growth Hub orders, pipelines growing.
  • Roy Twite, Chief Executive, said: “We have made excellent progress with our purpose-led strategy during the first half. We are creating tremendous value for all our stakeholders by increasing customer intimacy, driving market-led innovation and reducing complexity.”
Jupiter Fund Management PLC Interim Report and Accounts 2022
  • Assets under management (AUM) ended the period at £48.8bn.
  • Gross inflows of £6.9bn, net outflows of £3.6bn.
  • Underlying profit before tax (excluding net performance fees) of £53.9m (2021 H1: £79.8m). Underlying profit before tax of £29.7m (2021 H1: £78.2m).
  • Statutory profits before tax of £18.8m (2021 H1: £57.0m).
  • Andrew Formica, Chief Executive, commented: “While the short-term outlook is set to continue to be driven by geopolitical and macroeconomic events, I am confident as I hand over to my successor Matt Beesley that Jupiter remains financially and structurally well placed to deliver growth and investment outperformance over the longer term.”
Aston Martin Lagonda Global Hld PLC Half-year Report
  • Strong demand across product lines with GT/Sports cars fully sold out into 2023 and DBX orders more than 40% higher year-on-year.
  • Wholesale volumes decreased by 8% year-on-year to 2,676 (H1 2021: 2,901).
  • GT/Sports wholesales of 1,561 increased by 22% year-on-year (H1 2021: 1,280).
  • Revenue increased 9% year-on-year to £542m.
  • Gross profit increased by 31% year-on-year to £188m (H1 2021: £143m) and gross margin increased substantially year-on-year to 35% (H1 2021: 29%).
  • Amedeo Felisa, CEO, commented: “With the supply chain challenges that impacted our first half performance expected to ease, we are now focused on accelerating deliveries of the DBX707, continuing to ramp up Aston Martin Valkyrie production, and transitioning to our next generation of sports cars.”