Maitland/AMO Morning Monitor – Thursday 08 July 2021

8th July 2021

In the news

  • The ECB’s first new strategy for almost two decades will be announced today.
  • Companies and accountants have attacked plans to overhaul UK auditing and corporate governance, claiming the changes will stifle businesses’ growth and increase costs.
  • Demand for staff surged again in June as lockdown measures were eased, with the number of permanent jobs available growing at its fastest rate since 1997.
  • Brussels and the UK are planning to work more closely together on antitrust enforcement through sharing information and investigations.

Politics today

  • Transport Secretary Grant Shapps will give a statement on international travel in the Commons at 11.30am. The PM on Afghanistan (12.30 p.m.)
  • The Prime Minister will give a statement on Afghanistan in the Commons at 12.30pm.

Stock market moves

  • In the US, the S&P 500 rose 0.3% and the Nasdaq 100 rose 0.2%.
  • Asian stocks slipped as Hong Kong’s Hang Seng Index fell 2.5% and China’s Shanghai Composite index declined 0.6%.
  • In Europe, the FTSE 100 is down 0.96% and the STOXX 600 is down 0.76%.

Corporate announcements

* Maitland Client

Watches of Switzerland Group PLC FY21 Results
  • FY21 Group revenue increased to £905.1m (FY20: £810.5m).
  • Adjusted EBITDA increased 34.9% to £105.4m.
  • Capital expenditure of £26.0m (FY20: £23.4m).
  • Brian Duffy, CEO, said: “The momentum we bring into FY22 underpins our confidence for the financial year ahead. Sustained capital investment will continue to support our growth plans in the UK. Our success in the US proves our model works in this market and we will continue to invest in our stores and new projects, whilst pursuing selective acquisitions at attractive returns in our ambition to become the clear leader in the market.”
Entain PLC H1 Post Close Trading Update
  • Total Group net gaming revenue up 11% in H1.
  • FY21 EBITDA now expected to be in the range of £850m to £900m.
  • Jette Nygaard-Andersen, CEO, said: “We have a powerful platform at Entain that enables us to deliver consistent growth from our existing markets, whilst also entering new markets, all powered by our industry leading technology capabilities, business intelligence and analytics. Our platform provides us with a significant opportunity to align our business better with our customers and increasingly deliver a wider breadth of exciting products, content and experiences as the worlds of media, entertainment and gaming converge.”
3i Infrastructure PLC Q1 Performance update
  • Total income and non-income cash was £22m.
  • Cash balance of £287m.
  • On track to deliver a FY22 dividend target of 10.45p per share.
  • Phil White, Managing Partner and Head of Infrastructure, said: “During the period, we invested in leading independent telecommunications provider DNS:NET, our first sizeable investment in Germany, which further diversifies our portfolio. The portfolio continues to show resilience, despite the current market conditions, and to provide a solid level of income. We have a good pipeline of potential investment opportunities across our target markets and have liquidity to invest, though we continue to be patient and selective in what are still very competitive market dynamics.”
Unite Group PLC Quarterly valuation and reservations update
  • Unite UK Student Accommodation Fund’s property portfolio was independently valued at £2,795m.
  • London Student Accommodation Joint Venture’s investment portfolio was independently valued at £1,702m.
  • Collected 95% of rent due for the 2020/21 academic year.
  • Joe Lister, CFO, said: “The sustained momentum in our sales reflects the strength of student demand for the 2021/22 academic year and greater visibility over an enhanced campus experience this autumn. There remains some uncertainty over travel restrictions for international students and, assuming these are eased in time for the start of the academic year, we anticipate a return to full occupancy and 2-3% rental growth in 2021/22.”
B&M European Value Retail S.A.* Trading Statement
  • Group revenue growth of +3.1% on a constant currency basis (Q1 FY21: +27.7%).
  • Core B&M UK fascia delivered two-year like-for-like revenue growth of +21.3% versus pre-pandemic levels of FY20.
  • While it continues to be too early in FY22 to accurately predict likely revenue and profitability outcomes, the Group is on track with its plans for the year and expects the two-year LFL in the core B&M UK business to remain strong.
  • Simon Arora, Chief Executive, said: “The Group has made a strong start to the new financial year and sales remain significantly above pre-pandemic levels. As expected, trading throughout the first quarter was volatile as we annualised against the high comparatives from last year. Although there remains much uncertainty as to how consumer spending evolves over the coming months, we remain optimistic that our combination of exceptional value across a wide range of product categories and our convenient Out of Town locations will continue to resonate with customers.”
Persimmon PLC Trading Update
  • Total revenue of £1.84bn (2020: £1.19bn).
  • Forward sales of £1.82bn (2020: £1.86bn).
  • Cash of £1.32bn (2020: £0.83bn).
  • Dean Finch, CEO, said: “Persimmon is well placed for the future with a strong balance sheet and healthy liquidity. As such, we are pleased to announce the accelerated payment of the surplus capital distribution of 110p per share in respect of the year ended 31 December 2020, which will be paid on 13 August 2021.”
WH Smith PLC Trading Statement
  • In High Street, total revenue in the 18 week period to 3 July 2021 was 86% versus 2019.
  • In Travel, total revenue in the 18 week period to 3 July 2021 was 48% versus 2019.
  • Cash of £95m and revolving credit facility of £250m remains undrawn.
  • Anticipate a small improvement to management’s expectations for the current financial year.
Electrocomponents PLC Trading Statement
  • One-year like-for-like Q1 revenue growth was 37%.
  • Web one-year Q1 revenue increased 41% like-for-like.
  • The full year gross margin is expected to be broadly flat.
  • Lindsley Ruth, CEO, said: “Electrocomponents has delivered a very strong trading performance across all regions during Q1 due to ongoing market share gains as our offer continues to resonate with our customers, an improved market backdrop and weaker comparatives. We expect industry supply chain constraints to reduce both product availability and customer demand into the balance of the year, thereby slowing top line growth, albeit we expect to still deliver at least twice the industry growth. Despite the external pressures, including cost inflation, we remain well positioned strategically and continue to focus on investing in the business to support the exciting growth opportunities we see.”
Great Portland Estates PLC Trading Update
  • £12.7m of new annual rent signed.
  • 86% of June rent collected to date.
  • Total prospective capex of c.£900m.
  • Toby Courtauld, CEo, said: “As momentum in our markets builds, we can expect demand for our flexible and sustainable spaces to grow. With our sizeable development programme designed to satisfy customers’ changing needs, our low leverage and high liquidity providing significant capacity for growth and our talented and innovative team, we are well placed to capitalise in such a dynamic market environment.”
Grafton Group PLC Trading Update 8 July 2021
  • Revenue growth ahead of expectations in May and June.
  • Group Adjusted operating profit for the year in continuing operations upgraded to c£240m.
  • Group revenue for the half year was £1.55bn, an increase of 46.5% from the first half of 2020.
  •  Gavin Slark, CEO, siad: “Grafton traded ahead of expectations in the first half and, despite some ongoing uncertainty caused by the pandemic and sector-wide supply chain pressures, the Group has increased current year profit guidance for continuing operations supported by its market leading businesses and strong financial position.”
Pantheon International PLC Monthly Performance Update
  • The unaudited NAV per share at 31 May 2021 of 3,448.4p is an increase of +565.6p (+19.6%).
  • In the month to 31 May 2021, valuation gains added 175.5p (+5.2%).
  • PIP made £49.6m of new commitments during the month.
Mode Global Holdings PLC* Mode signs contract with THG for payments launch
  • Mode Global Holdings Plc has now formally signed with THG Plc, the proprietary technology platform specialising in taking brands direct to consumers globally.
  • This follows the Memorandum of Understanding that was previously announced on June 14.
  • Mode will be available to use when paying at THG brands starting from the end of Q3 2021.
  • Ryan Moore, CEO of Mode, said: “We’re pleased to announce that we have now officially signed with THG, embarking on an exciting new partnership. Our innovative payments system provides additional choice to customers, which helps to bring cost savings and increase payment efficiency. The Mode team are now busy at work onboarding THG’s brands onto our payments platform; there are exciting times ahead and we look forward to welcoming THG’s customers.”