Maitland/AMO Morning Monitor – Friday 7 January 2022

7th January 2022

In the news

  • Analysis by the House of Commons Library claims over a million people will move into the higher 40p rate tax band by 2026.
  • Ark Invest’s Innovation exchange traded fund has dropped 9 per cent this year following a sharp fall in 2021 as investors shifted out of unprofitable tech stocks.
  • Microchip maker Arm is investigating payments to senior executives at its Chinese joint venture, presenting a potential complication to its takeover by US rival Nvidia.
  • The gap between chief executives’ pay and average earnings narrowed in 2020 as companies hit by the pandemic cancelled bonuses and investors stepped up scrutiny of pay policies.
  • The Hunterston B nuclear power station closes down at noon today, reducing Britain's nuclear capacity by an eighth and prompting calls from the industry for greater government backing for the sector.

Politics today

  • The Houses of Parliament are not sitting today.

Stock market moves

  • In the US, the S&P 500 and Nasdaq 100 fell 0.10% and 0.13% respectively on Thursday.
  • In Asia, Japan’s Topix and China’s Shanghai Composite Index fell 0.067% and 0.18% respectively, while Hong Kong’s Hang Seng Index gained 1.49%.
  • In Europe, the FTSE 100 has opened down at 0.8%.

Corporate announcements

* Maitland Client

C&C Group PLC Trading Statement
  • Positive consumer sentiment and the return of customers to on-trade hospitality, driving increased profit and cash generation in the Q3.
  • Continued execution of cost reduction programme to deliver €18m of savings in FY2022.
  • Implementation of a price increase to manage inflationary cost pressures.
  • Effective management of the well-publicised UK supply chain disruption.
Smiths Group PLC Completion of Smiths Medical sale
  • Smiths Group PLC announced that it has completed the sale of Smiths Medical to ICU Medical, Inc. in accordance with the terms of the sale agreement entered into between the parties.
  • The transaction was originally announced on 8 September 2021 and it represented an enterprise value of $2.7bn for Smiths Medical, including approximately $1.85bn in immediate cash.
  • 99.97% of the shareholder votes received at the General Meeting on 17 November 2021 were in support of the sale.
  • Paul Keel, CEO, said: “At our capital markets event in November, we emphasised the exciting and tangible opportunity we have to deliver on our significant potential. I am pleased to announce that we have completed the sale of Smiths Medical ahead of schedule, another example of the accelerated pace at which we are now moving. This is our largest portfolio move in over a decade and positions us even more strongly to access the growth available in our industrial technology core.”
Essentra PLC FY 2021 Pre-close trading update
  • Strategic reviews of Filters and Packaging divisions are progressing as planned following the Board’s decision to become a pure play Components business. As previously guided, both reviews are likely to conclude in Q2 2022 at the earliest.
  • Overall, a strong Q4 performance, revenue increased +12.7% on prior year on a like-for-like basis and +11.1% vs. Q4 2019.
  • The Company expects to deliver FY 2021 operating profit in the range of analysts’ forecasts.
  • Paul Forman, CEO, said: “The Board is making good progress with the strategic reviews of both the Filters and Packaging divisions and remains committed to finding the right outcome for each of our three strong businesses to thrive independently and to maximise shareholder value in the relatively short term.”
Aston Martin Lagonda Global Hld PLC FY 2021 Trading Update
  • Wholesales grew 82% to 6,182 as planned.
  • Year-end cash balance of c.£420m, higher than previously anticipated.
  • Following an extensive and challenging development and testing schedule which has now successfully completed, the Aston Martin Valkyrie hypercar programme is in production and deliveries to customers have commenced.
  • Tobias Moers, CEO, said: “The Valkyrie programme is now running at rate for 2022 having focused on delivering with no compromises in the face of supply chain challenges and huge complexity in the production ramp-up which resulted in a timing impact for 2021. With a full year of Aston Martin Valkyrie programme deliveries in 2022 we are expecting to deliver significant growth, in addition to the launch of our second DBX derivative, intended to disrupt the performance luxury SUV market and the final edition of the V12 Vantage.”
Royal Dutch Shell PLC Shell fourth quarter 2021 update note
  • Trading and optimisation results in Integrated Gas are expected to be significantly higher compared to Q3 2021, overcoming ongoing supply issues and capturing unique optimisation opportunities generated through the large scale and scope of the LNG trading portfolio in the prevailing high LNG spot price environment.
  • Upstream adjusted earnings pre-tax depreciation is expected to be between $2.8 and $3.1bn, with taxation charge expected to be between $2.4 and $2.8bn.
  • Oil products adjusted earnings pre-tax depreciation is expected to be between $800 and $1,000m, with taxation charge expected to be $300m.
  • Corporate segment adjusted earnings are expected to be a net expense of $900 to $1,000m for the Q4, excluding the impact of currency exchange rate effects.