Maitland/AMO Morning Monitor – Thursday 1 July 2021

1st July 2021

In the news

  • Government scientists have recommended over-50s receive booster jabs this autumn.
  • The UK is likely to secure an exemption for financial services from rules on taxing multinationals being brokered at the OECD.
  • Private equity firms have had their busiest six months since records began, striking 6,298 deals worth more than $500bn.
  • Greensill insurers claim the collapsed finance company misled them.
  • Opec will meet today to discuss whether to increase supply.

Politics today

  • Chancellor Rishi Sunak will announce plans to transform the City of London into a hub for green finance.
  • The EU is due to launch its digital vaccination certificate for fully-vaccinated residents.

Stock market moves

In the US, the S&P 500 rose 0.13%.

Most Asian stocks fell with Japan’s Nikkei Index slipping 0.29% and Hong Kong’s Hang Seng losing 0.57%. China’s Shanghai Composite Index was little changed.

In Europe, the FTSE100 is up 1.13% and the STOXX600 is up 0.89%.

Corporate announcements

* Maitland Client

Berkeley Group Holdings (The) PLC Directorate Change
  • Berkeley announces that Andy Kemp has today been appointed to the Board of the Company. 
  • With effect from 1 July 2021, Andy has also been appointed as a member of the Audit Committee and the Remuneration Committee. 
  • Diana Brightmore-Armour has stepped down as a member of the Audit Committee with effect from the same date.
  • Glyn Barker, Chairman, said: “We are delighted to welcome Andy to the Board.  As former Chair of PwC’s Non-executive director advisory programme and previous member of PwC’s Audit and Risk Assurance executive board, Andy brings valuable governance and relevant financial experience to the Board and its Committees. I would like to thank Diana for her contribution to the Audit Committee over the past year.” 
Associated British Foods PLC Trading update
  • Third quarter sales last year were very strongly ahead of the prior year, with an increase of 9%.
  • Net cash before lease liabilities for the group increased from £705m at the beginning of the quarter to over £1.45bn at the end of the quarter.
  • The group’s adjusted effective tax rate for the full year is now expected to be some 31%, down from 34.9% forecast at the half year.
PZ Cussons PLC Trading update
  • Adjusted Profit Before Tax is expected to be ahead of consensus and the prior year.
  • Revenue up +7%, with all Regions and Hygiene, Baby and Beauty categories in growth. 
  • Net Debt reduced since Q3 and lower than last year.Jonathan Myers, CEO, said: “In the longer term we are working to sustain the early impetus of the turnaround over the coming years. We have much to do but I am confident that we are building the team and the momentum to deliver this multi-year transformation. The commitment and determination of the PZ Cussons team around the world has been clear for me and all to see over the past year and I am grateful for their hard work. We have re-ignited our pioneering spirit and are ready for the challenges and opportunities ahead.”
AO World PLC Final Results
  • Group revenue increased 62% to £1,661m (2020: £1,026m). 
  • Group Adjusted EBITDA increased 191% to £64m (2020: £22m). 
  • Group operating profit increased to £30m (2020: £(4)m loss).
  • John Roberts, CEO, said“Coming out of the pandemic, the direction of travel is firmly with AO, and our proven ability to build scale and drive growth gives us confidence to look towards further European expansion over the next five years.  We’ll continue to make choices that create long-term value for our share owners, as well as make our mums proud.”
Interim results for six months ended 30 April 2021 Interim results for six months ended 30 April 2021
  • Revenue was $1.4bn for the period.
  • Adjusted EBITDA margin of 36.4% (H1 20: 37.7% CCY).
  • Statutory operating loss from continuing operations of $154.8m (H1 20: Operating loss of $906.7m).
  • Stephen Murdoch, CEO, said: “Our recovery programme and specifically our systems transformation are progressing as planned despite the challenges of executing this within the constraints of a global lockdown. I am proud of the resilience, flexibility and professionalism of our teams across the organisation. As a business, we continue to monitor the impact of COVID-19 on our workforce, with particular focus currently on supporting our colleagues in India.”
Aveva Group PLC Capital Markets Day and Trading Update
  • The Group achieved approximately 10% revenue growth in the first two months of the financial year on an organic constant currency basis.
LXi REIT PLC* Results of the Placing and PrimaryBid Offer
  • Further to the Company’s announcements on 24 and 30 June 2021, the Board of LXi REIT is pleased to announce it has raised gross proceeds of £100 million pursuant to the Placing and approximately a further £4 million of gross proceeds pursuant to the PrimaryBid Offer.
  • The Board, taking into account the strength of the Company’s near term investment pipeline and in response to investor demand, as announced on 30 June 2021, determined to increase the size of the Placing to £100m (from approximately £75m).
  • The Company will issue a total of 75,187,970 New Ordinary Shares in the Placing at the Issue Price of 133p per New Ordinary Share. In addition, the Company will issue 2,781,955 New Ordinary Shares pursuant to the PrimaryBid Offer at the Issue Price.
  • The Placing was significantly oversubscribed above the £100m cap and a scaling-back exercise was therefore carried out.
  • Stephen Hubbard, Chairman of LXi REIT plc, said: “The proceeds of this fundraise will allow us to capitalise in the near-term on the significant identified pipeline of sale and leaseback and other long income, forward funding opportunities. The properties in the pipeline have been sourced in the vast majority of cases off-market and are diversified across a range of defensive and structurally supported sub-sectors and let to high-quality tenant covenants. These are expected to be accretive and further strengthen and diversify our portfolio. We look forward to updating shareholders as we execute on these attractive investment opportunities.”