Maitland/AMO Morning Monitor – Thursday 10 September 2020
In the news
- Boris Johnson admits large gatherings could be curtailed all winter, after yesterday imposing a blanket ban on social meetings of more than six people.
- Irish PM Micheal Martin criticizes Boris Johnson's plans to remodel Brexit deal, as the EU considers legal action.
- Health professionals raise doubts over 'Operation Moonshot' plan for millions of daily Covid-19 tests.
- TikTok's owner is in discussions with the US government over a possible arrangement for the app to avoid a full sale of its US operations.
- Matt Hancock is expected to deliver a COVID-19 update this morning.
Stock market moves
- In Europe, the FTSE 100 has opened marginally down, while the Eurostoxx 600 has opened up.
- Asian markets have largely risen this morning after tech stocks on Wall Street were lifted yesterday. The Topix is up 0.8%, alongside the Shanghai and Shenzhen Composites.
- US futures were up on Wednesday evening after this successful day on Wall Street, with the S&P 500 up 2%, marking its best day since June.
- Sterling has risen to both the dollar and the yen.
Corporate announcements* Maitland Client
Morrison(Wm.)Supermarkets PLC Interim Results
- Group like-for-like sales ex-fuel/ex-VAT up 8.7% (2019/20: up 0.2%).
- Total revenue down 1.1% to £8.73bn (2019/20: £8.83bn), significantly impacted by very low demand for fuel during and after lockdown, which is now rebuilding.
- Basic EPS before exceptionals down 26.2% to 4.71p (2019/20: 6.38p).
- David Potts, CEO, said: “From the start of the pandemic we stepped up and put the company’s assets at the disposal of the country to help feed the nation. Morrisons is at the heart of local communities and responded quickly when it mattered most, and we are very grateful for the British public’s appreciation of all the vital work our colleagues are doing. I believe we are seeing the renaissance of British supermarkets. We are now looking forward to holding on to what we created in the first half, building on our colleagues’ inspiration and innovation, and sustaining the momentum of a broader, stronger Morrisons. I’d like to again thank every Morrisons colleague for their incredible efforts: you’ve earned your key worker status several times over.”
- British Land announces that Chris Grigg has informed the Board of his intention to step down as CEO and from the British Land Board.
- He will step down as CEO following delivery of the company’s 2021 interim results on 18 November 2020 and leave the Board and the company on 31 December 2020.
- Simon Carter, currently Chief Financial Officer, will succeed Chris as Chief Executive Officer on 18 November 2020.
- Simon Carter, CFO, said: “It has been a great pleasure to work with Chris and it is an honour to succeed him as CEO. Over his time at British Land I have seen first-hand the significant cultural, organisational and strategic change Chris has delivered right across our company. Like many businesses, we face short-term challenges because of the current covid crisis, and we continue to respond to the longer-term structural changes in the way people are using real estate. I am convinced however that this brings opportunity and I am confident that with our expert teams and world class assets we are well placed to continue the evolution of British Land and deliver sustainable value over the long term.”
- National Grid has announced the appointment of Paula Rosput Reynolds to succeed Sir Peter Gershon as Chair.
- Paula will join the Board on 1 January 2021 as Non-executive Director and Chair Designate and will assume the role of Chair after a transitionary period and no later than the conclusion of the 2021 Annual General Meeting.
- Sir Peter will remain as Chair until this time.
- Paula Reynolds said: “I am honoured to be joining National Grid’s Board as the entire industry is evolving. I am looking forward to working with John Pettigrew and the rest of the Board and meeting National Grid employees and key stakeholders.”
- Total sales increased in the eight months to February by 6.8%, supported by an 8.8% increase in rolling 12-month unique active customer numbers.
- Profit before tax fell 13.3% to £109.1m (2019: £125.9m), reflecting impact of Covid-19 and the store closure period.
- Strong recent trading with total year on year sales growth of 59% in July and 24% in August, partly as a result of pent up demand and the timing of our Summer Sale and reflecting a resilient homewares market.
- Nick Wilkinson, CEO, said: “Whilst the year to date performance has been materially ahead of our initial expectations, it is very difficult to provide any meaningful guidance on the future outlook given the uncertainty in the wider economy and the potential impact of further regional or national lockdowns. However, we remain confident in our ability to adapt to the environment and are well positioned to continue to grow market share and help even more customers create a home they love.”
- For the eight-month (pre-COVID-19) period to 29 February 2020, LFL Underlying NGR up 11% and LFL underlying operating profit up 61%.
- Group operating profit fell 40% to £23.5m (2019: £39.0m).
- EPS fell 66% to 7.4p (2019: 2.5p).
- Outlook: “We expect to rebuild our revenues through the year with an increase in footfall expected once social distancing and other supply constraints reduce and customer confidence returns. The pace at which revenues return will determine our ability to restore the dividend and invest in the transformation of Rank.”
- John O’Reilly, CEO, said: “The need to deliver on Rank’s long-standing promise to excite and to entertain our customers has never been more important. The post-lockdown expectations of customers who are looking for ways to safely enjoy their leisure time and spend will be higher than ever, and we are determined to ensure our brands are well-positioned to benefit from this shift. Our venues, in particular, are ultra-safe and invariably benefit from being large in size. This gives us extra opportunities to offer something special to our casino and bingo customers within a COVID-19 safe environment and we are looking forward to welcoming more of our customers back.”
- Games Workshop Group announces today that trading for the three months to 30 August 2020 was ahead of the Board’s expectations.
- Current estimates show sales of c. £90m in the Period against a prior year of £78m for the same period.
- Operating profit for the Period before royalty income is estimated to be c. £45m (2019: £28m) and royalty income is estimated to be c. £3m (2019: £2m).
- 1H 2020 pro forma revenue was $177m and operating cash flow was $68m.
- 1H 2020 pro forma production was 52.1 kboed, compared with full year guidance of 44.5 – 51.5 kboed.
- Energean’s stand-alone loss after tax for the period ended 30 June 2020 was $77.3m (30 June 2019: $4.5m), which is stated after a non-cash impairment charge of $63.0m that reflects the lower commodity price outlook.
- Mathios Rigas, CEO, said: “Despite some COVID-19-related disruptions, in the year-to-date we have made solid progress on our flagship gas project in Israel, which is scheduled to deliver first gas in 2H 2021. We have successfully performance-tested all three Karish development wells, delivered a resource upgrade at Karish North, completed the installation of the 8 bcm/yr capacity, 90km pipeline that will deliver Energean’s gas sales (currently at 5.6 bcm/yr) into the Israeli domestic market, completed the hull of our FPSO in China and moved it to Singapore, and have commenced heavy lifting operations.”
- Group revenue in Q3 in CER grew by 5.0%.
- Group like-for-like storage revenue in Q3 in CER increased 2.2%.
- All geographies operating normally post lockdown.
- Frederic Vecchioli, CEO, said: “I am pleased to report a solid performance in the third quarter despite strong comparative quarters in both 2018 and 2019. I would like to thank our staff for the tremendous effort and resilience demonstrated over recent months, the result of which is that the business has responded well to the COVID-19 lockdown. Occupancy performances in June and July, as lockdown eased, were strong driving like-for-like closing occupancy for the Group above prior year levels. Our top priority is to build on the post lockdown recovery and deliver the significant organic growth opportunity represented by the 1.7m square feet of unlet space in our existing fully invested estate.”
- UK & Ireland Electricals like-for-like revenue +12%.
- International like-for-like revenue +16%, Nordics +17%, Greece +12%.
- UK & Ireland Mobile total revenue -56%.
- Outlook: “We have made great progress so far this year in keeping our colleagues safe, helping our customers and further strengthening our financial position. We have the competitive pricing, market leadership, strong supplier relationships and ample liquidity needed to react to any economic outcome whilst continuing to make good progress against our strategic priorities. Despite the strong current trading, the economic outlook for this year remains uncertain. We expect to provide an update on our 2020/21 guidance at our Interim results.”
- Empiric Student Property has announced that Duncan Garrood will be joining the Company as Chief Executive Officer on 28 September 2020.
- Additionally, William Atkinson, who was appointed in July 2020, will also join Empiric on the same day as Property Director and a member of the Senior Leadership Team.