Maitland/AMO Morning Monitor – Thursday 10 June 2021
In the news
- The CMA will probe Amazon over how the online retailer uses its data to unfairly advance its own products.
- The SEC is looking to change rules around share trading after January's explosion in "meme stocks" highlighted inefficiencies in the market.
- The sudden departure of two veteran executives from Deutsche Bank was linked to a continuing investigation into the alleged mis-selling of foreign exchange derivatives to corporate clients in Spain.
- El Salvador has become the first country to make bitcoin legal tender.
- Boris Johnson will today meet Joe Biden to discuss post-Brexit settlement in Northern Ireland ahead of the G7 summit.
Stock market moves
- In the US, the S&P index closed down 0.18%
- In Asia, Japan’s Nikkei rose 0.34%, while Hong Kong’s Hang Seng Index 0.24% and China’s Shanghai Composite Index rose 0.24% and 0.55% respectively.
- In Europe, the FTSE 100 is trading down 0.2% and the STOXX 600 is trading up 0.2% in the early hours of the morning.
Corporate announcements* Maitland Client
Mitie Group plc Full Year results for the twelve months to 31 March 2021
- Group revenue of £2,560m (FY20 £2,174m).
- Operating profit before other items of £63.4m (FY20 £86.1m).
- Average daily net debt significantly reduced to £47.1m (FY20 £327.6m) post-IFRS 16.
- Phil Bentley, CEO, said: “As businesses slowly start to reopen and our customers’ employees return to offices, we are starting to see some green shoots of recovery in the variable project and discretionary spend works and we anticipate this continuing as re-occupation plans solidify. With some high-quality new contract wins, short-term support to the public sector and additional synergies from the integration of Interserve, we now anticipate FY22 will be materially ahead of our prior expectations.”
- Net operating income increased to £409.8m, up £157.8m (63%).
- Profit before tax up 127% to £224.0m (2020: £98.7m).
- Stockbroking net trading revenue up 72% to £54.8m driven by higher client numbers (up 28%) and the increasing appeal of the international shares offering.
- Lord Cruddas, CEO, said: “CMC continues to provide clients with market leading trading platforms and client service, even during periods of extreme volatility and trading activity, holding true to our values. This technological excellence provides the Group with a solid foundation on which to serve current and future clients, along with the expertise to continue to invest in new products that will deliver sustainable growth.”
- Profit for the period of £3.8m (31 March 2020: £17.2m).
- Loans advanced totalling £46.4m, secured against UK renewable energy, social housing and PFI projects.
- Total shareholder return for the period of -8.8% (31 March 2020: -8.1%) and total shareholder return since IPO in 2010 of 100.3%.
- Ian Reeves CBE, Chairman, said: “A core driver of the success of the Company over the ten years since IPO has been its approach to analysing, underwriting and approving investments. The Company maintains an attractive pipeline of new investments and follow-on investments in existing investee companies as part of the optimisation of those investments, which together total c.£175 million at the end of the period.”
- Revenue down 29% to £262.8m (2020: £368.9m).
- Operating profit down 38% to £161.2m (2020: £258.9m)
- Profit before tax down 37% to £157.4m (2020: £251.5m).
- Nathan Coe, CEO, said: “There has been a dramatic shift towards buying online which means we now have more buyers than ever turning to Auto Trader to help with their next car purchase, making us even more relevant to retailers and manufacturers. This positions us ideally to enable the buying and selling of cars online, which will materially improve the car buying experience and the business of our customers.”
- Adjusted profit before tax up 4% at £278.3m (£267.0m in 2020).
- Revenue down 2% at £1,318.2m (£1,338.4m in 2020).
- Total dividend per share for the year up 7% at 17.65p (16.50p in 2020).
- Andrew Williams, CEO, said: “For the year ahead, we expect our markets to continue to recover, albeit at varying rates, while acknowledging that there are potential headwinds including currency, inflation, and supply chain constraints. Organic constant currency revenue for the period from the beginning of January to the end of May is up 10% year-on-year. We have made a good start to the year, order intake is currently ahead of revenue and the same period last year, and we also have a good pipeline of potential acquisition opportunities. We currently expect to deliver full year low double-digit percentage organic constant currency profit growth (prior to any IAS 38 impact) and a more normal level of return on sales. We look forward to making further progress, in this year and the longer term.”
- LXi REIT has exchanged contracts on the forward funding acquisition of a 94,000 sq ft garden centre in Reading for a total cost of £19 million, reflecting an accretive 5.3% net initial yield (net of acquisition costs).
- The property is pre-let to Dobbies, the UK’s largest garden centre operator and an existing LXi tenant, on a new 35-year lease, with no break right, and benefits from CPI plus 1% pa rental uplifts, reviewed on an annual basis, with a collar of 1.5% pa and a cap of 4% pa.
- The rent has been set at a low and sustainable level which is forecast to provide rent cover of at least two times (net income of twice the rental level) and the property is underpinned by a strong residual value.
- LXi is working with Dobbies to ensure that the development, which will replace an existing small garden centre, is built with sustainable materials, and that the property incorporates energy efficiency features such as solar panelling, rainwater harvesting, air/ground source heat pumps, recycling/waste management and EV charging points.
- LXi has also sold a small, ancillary retail parade acquired last year as part of the Co-op foodstore portfolio purchase. The sale proceeds of £575,000 represent a 100% premium to the purchase price paid by the company.
- LXi has also proactively completed the extension of the occupational lease terms on six Greene King pubs from 13 years to expiry to 20 years to expiry, without break, in return for a 10% reduction in the passing rent.
- The company also announced that its Investment Advisor, LXI REIT Advisors Limited, has made two appointments to further strengthen its team: Michael Maddox joins as Assistant Fund Manager and Charlotte Price joins as Financial Controller.