Maitland/AMO Morning Monitor – Monday 17 January 2022
In the news
- GlaxoSmithKline and Pfizer are looking for a bid of at least £60bn for their consumer healthcare joint venture, bolstered by shareholder opposition to Unilever’s £50bn offer.
- António Horta-Osório has resigned as chair of Credit Suisse after a board investigation found that he had breached Covid-19 quarantine rules more than once.
- Electric cars sales in Europe accounted for more than 20% of new cars sold across 18 European markets in December 2021, surpassing diesel cars, as a result of generous government subsidies and strict emissions regulations.
- UK hospitality companies have cut back staff and operations as many have been left waiting for emergency grants promised before Christmas.
- The self-isolation period for people in England testing positive for Covid-19 has been cut to five days if they test positive on days five and six.
- The House of Commons sits from 2.30 p.m. with Home Office questions, followed by any post-weekend UQs, the Elections Bill, and a debate on the experiences of midwives in the NHS.
Stock market moves
- In the US, the Nasdaq 100 gained 0.8% and the S&P 500 rose 0.1%.
- In Asia, Japan’s Topic Index added 0.4% and China’s Shanghai Composite Index rose 0.6% while Hong Kong’s Hang Seng Index fell 1%.
- In Europe, the FTSE100 is trading up 0.4%.
Corporate announcements* Maitland Client
Tritax Eurobox PLC* Forward funded development of prime logistics asset in Sweden for €39.4m
- The Company completed the acquisition of the land and agreed to fund the development of a 17,832 sqm prime sustainable logistics facility consisting of two units for SEK 402 m (€39.4m).
- The investment of SEK 402m reflects a net initial yield of 4.0% based on the income from a 12 month target rental guarantee the Company will receive from the developer of SEK 16.4 m (€1.6m) from completion of construction.
- From completion of the land purchase and during the construction phase, the Company will receive from the developer an income return equivalent to the agreed net initial yield.
- Alina Iorgulescu, Assistant Fund Manager, commented: “We have already made good progress at our adjacent asset, obtaining the building permit in December, meaning we are looking forward to starting on site in a few weeks’ time. This is also our fourth off-market deal with Verdion demonstrating our close relationship, bringing forward these ESG led, high quality assets in key locations where land supply is constrained. Today’s off-market funding is at an attractive yield, which also offers the opportunity to capture the strong rental and capital value growth evident in this prime logistics market and to deliver sustained value to our stakeholders.”
- The Company has announced the appointment of Lloyd Smith as CFO, effective 21 March 2022.
- Lloyd joins from the ATI Group where he held the position of CFO at several of its UK and Ireland businesses. Prior to joining ATI, he spent five years in audit at EY and four years in PwC’s Deals Team working with a mix of private equity firms, AIM-listed businesses, banks and other private companies.
- Matthew Bradley, Forward Partners’ current Chief Financial Officer and Chief Investment Officer, will be leaving the Company in June.
- Nic Brisbourne, CEO, commented: “We’re delighted to welcome Lloyd to the Forward Partners family. He brings a deep experience of venture scaling from his time at ATI and a strong practice background from two of the big four accountancy firms. I look forward to working with him as we grow the Group.”
- Strong demand in 2021 underpinned by continued low interest rates and good mortgage availability.
- Total UK home completions increased by 47% to 14,087 in 2021 (2020: 9,609) including 2,501 affordable homes.
- The Company ended the year with strong net cash of £837.0 m (31 December 2020: £719.4 m cash), ahead of expectations due to the timing of land spend.
- Pete Redfern, CEO, commented: “Looking ahead, we are well placed to deliver against our targets. The outlook is positive and Taylor Wimpey is particularly well positioned. We maintain a sharp focus on delivering sustainable growth, strong profitability, and increased cash returns for shareholders over the long term.”
- The Company has agreed to acquire Canadian assets of Teligent Inc. for $45.75m.
- The transaction is expected to be completed by the end of Q1 2022.
- The acquisition in line with Hikma’s expansion into Canada and includes a portfolio of sterile injectable products, in-licenced ophthalmic products and a pipeline of seven additional products.
- Riad Mishlawi, President, commented: “This acquisition further expands our portfolio of essential sterile injectable medicines and gives Hikma an entry into the highly attractive Canadian injectables market. The combination of our sales and marketing expertise and this portfolio of exciting products will enable us to expand our North American business and develop a solid position in this important market.”
- The Group’s like-for-like store revenue increased by 13% in the quarter while total revenue increased by 30% as a result of four recent store openings and a full quarter’s contribution from the Armadillo stores.
- Occupancy across all 104 stores decreased by 245,000 sq ft (4.0% of the MLA at 31 December 2021) compared to a loss of 21,000 sq ft in the same quarter last year.
- Closing occupancy for all stores was 85.5%, an increase of 2.9 ppts from 82.6% last year with like-for-like closing occupancy of 86.9%, an increase of 1.5 ppts from the same time last year.
- James Gibson, CEO, commented: “Average occupancy over the quarter was higher than the prior year and we have also seen a strong contribution from average rate growth, which has shown a further improvement from the half year. As stated in November, we expect the market to return to a more normalised trading environment over the coming months.”
- Assets under management declined by US$4.0bn over the period, comprising net outflows of US$2.2bn and negative investment performance of US$1.8bn.
- The Group’s relative performance was positive in local currency, equity and investment grade strategies, and weaker in some US dollar-denominated strategies.
- External debt, equities and alternatives themes had net inflows while there were net outflows in the blended debt, local currency and corporate debt themes.
- Mark Coombs, CEO, commented: “Persistent global inflation expectations, new COVID-19 variants and weaker growth in China meant challenging market conditions for Emerging Markets continued through the final months of 2021. However, the global macro economic environment is expected to be more supportive for Emerging Markets in 2022. Targeted fiscal and monetary stimulus will support China’s growth, Fed policy tightening is already reflected in valuations, and commodity prices are providing a tailwind to the terms of trade, and therefore the external accounts, of exporters.”
- Strong balance sheet and access to significant liquidity of £652m, including cash of approximately £342m.
- Rent collection in relation to the first quarter of 2022, invoiced in December 2021, is currently 86 per cent (adjusted for monthly payment plans).
- Portfolio valuation uplift with independent property valuation of Covent Garden of £1.7bn, representing a like-for-like increase of 4.6% in the second half of the year .
- Ian Hawksworth, CEO, commented: “Covent Garden has had a strong second half of 2021 and despite the backdrop of the Omicron variant, consumers continued to be attracted to the West End’s most vibrant destination. We are pleased with the strong levels of leasing activity and improving market indicators which have contributed to a valuation uplift in the second half. We look ahead with confidence to continued progress in 2022 and in the long-term prospects of the Covent Garden estate and the West End.”
- The Company announced that John Dawson will retire as CEO after 13 years of service.
- The Board has initiated a formal search for a successor.
- Dr. Roch Doliveux, Chairman, commented: “We have commenced a formal process to appoint a successor who will lead the Group through its next phase of growth whilst also ensuring the Company remains fully focussed on the execution of its strategy of delivering life changing gene therapies to patients.”
- John Dawson said: “The world-class management team at Oxford Biomedica is surrounded by a dedicated workforce of over 740 people who have demonstrated a unique robustness and ability to deliver – exemplified several times over the recent years and certainly by our contribution to the fight against the pandemic. I believe this is the right time to start the transition to a new leader given the robustness of the senior team and Company as a whole, which is undoubtedly stronger than ever before.”
- The Group has announced the appointment of Shawn Purvis as President and CEO of QuinetiQ US, effective 16 February 2022.
- Shawn is currently a member of the Executive Leadership Team and Corporate Vice President at Northrop Grumman Corporation and leads Grumman’s Enterprise Services sector.
- Shawn will join QinetiQ’s Global Leadership Team led by Steve Wadey, QinetiQ’s Group CEO and also join the QinetiQ Inc. Board.
- Steve Wadey, CEO, commented: “With more than 25 years of experience in the US defence and intelligence industry and a track record of transformational leadership, driving P&L performance of complex organisations and large scale acquisition integration, Shawn is the right leader to build our disruptive mid-tier company in the US by supporting and protecting the US warfighter.”