Maitland/AMO Morning Monitor – Monday 2 December 2019

2nd December 2019

Market Information

The FTSE, CAC and DAX are all expected to open down this morning.

In Asia, stocks have generally risen after new data showed stronger than expected manufacturing activity in China.


In the news

  • EU financial services chief Valdis Dombrovskis warns Brussels is ready to cut off the City of London’s post-Brexit market access
  • Activist hedge fund TCI outlines plans to punish companies that fail to disclose their carbon dioxide emissions
  • South Western Railways begins month long strikes

The political day

  • UKIP interim leader Pat Mountain to launch the party's General Election manifesto

Top Financial Announcements

* Maitland Client

Ocado Group PLC Convertible Bond Offering
  • Ocado Group plc today announces the launch of an offering of approx. £500m of guaranteed senior unsecured Convertible Bonds due 2025.
  • The net proceeds of the issue of the Bonds will be used to fund capital expenditure in relation to Ocado Solutions’ commitments and general corporate purposes. The Offering enables Ocado Group to diversify its funding sources and capitalise on attractive issuance conditions.
  • The Bonds will be issued by Ocado Group and initially guaranteed by Ocado Operating Limited, Ocado Innovation Limited, Ocado Central Services Limited, Ocado Solutions Limited and Ocado Holdings Limited, with the Guarantors subject to change in certain circumstances.
Fresnillo PLC Capital Markets Day
  • Fresnillo has narrowed its 2019 outlook to c. 885koz ±1% of gold and c. 55moz ±1% of silver, both within stated guidance.
  • In 2020, Fresnillo expects to produce c. 54moz ±5% of silver and c. 857koz ±5% of gold.
  • Total capital expenditure in 2019 is expected to be $585m with around $65m from Juanicipio being rescheduled into 2020.
  • A forecast for 2022 is included for the first time at around $415m.
  • Octavio Alvídrez, CEO, said: “Our priorities for 2020 are to stabilise production, and to unlock the full potential of our current mines and projects. We will focus on operational improvement and efficiency, while de-risking and advancing our development pipeline, most notably the new Juanicipio mine. We are confident that with the proactive measures put in place at our mines, together with our consistent, focused strategy, we will deliver on these priorities and that we will continue to create sustained value for stakeholders in the long-term, balancing growth with returns and maintaining a solid financial position.”
Capital & Counties Properties Plc Business Update
  • Sale of Capco’s interests in Earls Court completed successfully with initial net proceeds of £156m received and £211m to be received over the next two years.
  • Capco is now positioned as a prime central London property investment business and will convert to UK REIT status before the end of 2019.
  • Capco’s strong balance sheet and significant financial flexibility (approximately £900m of cash and undrawn facilities) positions it to capitalise on further investment opportunities. Over £50m invested recently through targeted acquisitions at Covent Garden.
  • Capco will target a progressive dividend policy over the medium-term by driving rental growth and securing income. Administration costs expected to be approximately £20m on a run rate basis from the end of 2020.
Ted Baker PLC Independent Review of Inventory
  • Ted Baker has identified that the value of inventory held on its balance sheet has been overstated.
  • Based on preliminary analysis, the Board estimates an impact on value of £20m to £25m. The Board believes that any adjustment to inventory value will have no cash impact and will relate to prior years.
  • The Board has appointed Freshfields Bruckhaus Deringer LLP, and will be appointing independent accountants, to undertake a comprehensive review of this issue, and they will report to a sub-committee, chaired by independent director Sharon Baylay.
  • Ted Baker is committed to ensuring the independent review is completed in an efficient and transparent manner and will update the market as appropriate.
Tritax Group* Appointment of CFO
  • Tritax Group is pleased to announce the appointment of Alasdair Evans as Chief Financial Officer of Tritax Group, which acts as the Fund Manager to Tritax Big Box REIT and Tritax EuroBox plc.
  • Alasdair will be responsible for leading the finance team and all financial matters relating to the Group, supporting not only the existing funds but also the strategic growth of Tritax.
  • Alasdair has over 35 years’ experience in finance, 20 years of which in senior finance roles in real estate.
  • Henry Franklin, Partner, said: “We are delighted to welcome Alasdair to the Tritax team as Chief Financial Officer of the Group. Alasdair’s wealth of experience in senior finance roles in real estate businesses and his strategic financial and commercial expertise and capability will be invaluable to the Group as we continue to deliver on Tritax’s growth strategy and build further on the successful track record of the Group’s real estate platforms. We very much look forward to working with him at Tritax.”