Maitland/AMO Morning Monitor – Monday 8 June 2020
In the news
- Marches took place around the world for the second consecutive weekend as protesters demanded an end to racial injustice and to declare that "Black Lives Matter." In Bristol, protesters pulled down a statue of Edward Colston, a prominent 17th Century slave trader. The statue was later dragged through the streets and thrown into the harbour.
- On Sunday former Republican Secretary of State Colin Powell endorsed Joe Biden, arguing that President Trump had “drifted away from the constitution” and was someone who “lies all the time." Recent polls have shown a steady Biden lead nationally and in the battleground states, but with 150 days to go, the race remains unpredictable.
- Industry sources last night played down weekend speculation about a possible tie-up between AstraZenca and Gilead, potentially the biggest ever healthcare deal, with sources casting doubt on the rationale and timing for such a move.
- Reports this morning suggest that Boris Johnson is preparing to announce new laws to prevent foreign takeovers that could pose a risk to national security. This would involve introducing legislation making it mandatory for British companies to report attempted takeovers that could give rise to security concerns, backed by the threat of criminal sanctions.
- In Brazil, the government has reacted to worsening Covid-19 figures by removing months of data from its website, saying it would now only be reporting cases and deaths in the past 24 hours, rather than giving a total figure as most countries do.
- 2.30pm Home Office Questions (topical questions likely to focus on weekend protests and marches)
- 3.30pm Rees-Mogg to respond to Emergency Debate on conduct of House of Commons business
- House of Lords returns under hybrid measures, allowing peers to participate both virtually and in person
Stock market moves
- Global stocks rallied at the end of last week after data emerged that employment rose in the US last month, hinting to investors that a strong economic recovery could follow the pandemic.
- The Nikkei and the Shanghai Composite have started the week positively, up 1.37% and 0.28% respectively.
- In Europe, the FTSE 100 and EuroStoxx 600 have both opened down.
- Dow Jones futures traded 64 points higher overnight, with S&P500 and Nasdaq futures also pointing to a positive Monday open.
- The pound has risen to both the euro and dollar respectively.
Corporate announcements* Maitland Client
Segro PLC Acquisition of prime London urban warehouse park
- SEGRO plc has acquired Perivale Park, a 34 acre urban warehouse estate in Perivale, West London, from Federated Hermes for £202.5m.
- The estate provides 55,100 sq m of lettable space across 23 units and 8 acres of land which is currently leased as a vehicle compound but has medium term development potential.
- Alan Holland, Business Unit Director for SEGRO’s Greater London portfolio, said: “Perivale Park is a perfect fit for SEGRO, sitting adjacent to the A40 and nestled between our core holdings in Greenford and Park Royal. It offers a rare opportunity to build further scale and drive value in an area where we already have considerable expertise and knowledge of the local market and customer base. It also offers medium-term development and redevelopment potential in one of London’s prime, and most supply-constrained, industrial clusters.”
- Having discussed the Draft Report with Deloitte and with that report to be finalised, the Company has concluded that the additional procedures that the Company and Deloitte will now need to perform in order to finalise the 2019 Results means that it will not be possible to publish the 2019 Results by 30 June 2020.
- After consultation with the FCA, if the 2019 Results are not published by 30 June 2020 the Company anticipates that trading in the Company’s shares will be temporarily suspended with effect from 7.00 a.m. on 1 July 2020 until publication of the 2019 Results.
- Deloitte has indicated to the Company that it intends to resign as auditor following the publication of the 2019 Results. The Company is currently engaged in a competitive tender process to appoint a new auditor.
- The group claims that performance across the company’s financial and operational KPIs remains strong, with the Group continuing to attract significant numbers of new customers at an attractive cost.
- Revenue from Customer Income remains at record levels, with the Company generating approximately $249.0m in Q2 to date.
- The Board continues to expect Customer Trading Performance to be neutral over time, consistent with aggregate Customer Trading Performance representing an insignificant proportion of revenue over many years historically.
- David Zruia, Interim CEO, said: “We are pleased the business has continued to generate record levels of Customer Income, added over 100,000 new customers so far in Q2 and has materially grown the net client deposits balance to almost half a billion dollars. We have consistently stated that Customer Trading Performance is subject to significant market movements and is therefore likely to fluctuate. This is magnified during periods of heightened market volatility such as those we are currently experiencing and given the growing scale of the business. Nonetheless we continue to expect this performance to revert to a medium-term historic level of near zero and our outlook for the year remains unchanged.“
- Over the six month period, the Company’s net asset value per share increased by 16.4% while the comparative index declined by 12.9%. The share price rose by 21.7%.
- The net revenue return per share was a negative 0.18p (six months to 30 April 2019: negative 0.11p). No interim dividend is being recommended.
- A significant outcome of the current crisis is an acceleration in the underlying rate of change occurring in the world.