Maitland/AMO Morning Monitor – Thursday 13 January 2022

13th January 2022

In the news

  • US inflation soars to 7 per cent for first time since 1982, stoking the Federal Reserve’s fears about the threat of elevated inflation and its consequences for the economic recovery.
  • Prime Minister Boris Johnson yesterday faced calls to resign from leaders of the Scottish Conservative party and some English Tories after he attended a Number 10 “bring your own booze” event during lockdown.
  • The British parliament and not the Bank of England must decide whether to introduce a state-backed digital currency, a House of Lords committee has said.
  • Bosses of water companies that regularly breach permits by discharging raw sewage into rivers and the sea should be stripped of their annual bonuses, MPs will recommend in a report today.
  • Short positions in plant-based meat producer Beyond Meat's shares have increased 40 per cent since October, making it one of the most shorted companies in US markets.

Politics today

  • The House of Commons sits from 9.30am with Cabinet Office questions, followed by any UQs. Commons Leader Jacob Rees-Mogg is up next with the weekly business statement. The main business will be backbench debates on detention of Bahraini political prisoners and on the joint Online Safety Bill committee’s first report.
  • The House of Lords sits from 11am with questions on the imprisonment of Georgia’s former president, the impact of ambulance queues and the scale of money laundering in the U.K. The main business will be the second day of the Health and Care Bill’s committee stage.

Stock market moves

  • In the US, the S&P 500 rose 0.3% whilst the Nasdaq 100 rose 0.4%.
  • In Asia, Japan’s Topix index fell 0.6%, South Korea’s Kospi index fell 0.4% and China’s Shanghai Composite Index fell 0.9%.
  • In Europe, the FTSE 100 is trading down 0.1%.

Corporate announcements

* Maitland Client

LXi REIT PLC* Board Changes
  • LXi Reit plc today announces Board changes as part of a thorough Board succession planning process.
  • Stephen Hubbard (Non-Executive Chairman of the Company) and Colin Smith OBE (Non-Executive Director and Senior Independent Director of the Company), who have both been with the Company since its IPO in February 2017, have each informed the Board of their respective intentions to step down from the Board ahead of the Company’s 2022 AGM.
  • The Board and Investment Advisor would like to express their deep thanks to Stephen and Colin for their invaluable guidance, insights and service and their significant contributions to the growth of the Company over the past five years. During their time they have overseen the growth in value of the Company’s portfolio to £1.33bn across 170 assets.
  • The Company announces three appointments to the Board, which will take effect from 13 January 2022: Cyrus Ardalan as the Company’s Chairman Designate; Hugh Seaborn as the Company’s Non-Executive Senior Independent Director Designate; and Ismat Levin as a Non-Executive Director of the Company.
  • Stephen Hubbard, Chairman, said: “It has been a privilege to serve as Chairman of LXi REIT plc since IPO, working closely with an excellent Board and the outstanding Investment Advisor team. Much has been achieved and the Company is well positioned to make further progress and continue to deliver enhanced value to shareholders.”
Dechra Pharmaceuticals PLC Trading Update and Notice of Half Year Results
  • Dechra Pharmaceuticals today issues the following unaudited Trading Update covering the half year reporting period from 1 July to 31 December 2021 (the Period).
  • Highlights include: Group net revenue for the Period increased by c.15% at constant exchange rates (CER) (c.10% at actual exchange rates (AER)).
  • European Pharmaceuticals net revenue growth was c.10% at CER in the Period (AER c.5%), including the acquisitions of Osurnia (acquired 28 July 2020) and Tri-Solfen in Australia and New Zealand (acquired 5 February 2021). Existing net revenues increased by c.8% at CER in the Period (AER c.3%).
  • North American Pharmaceuticals net revenue growth was c.26% at CER in the Period (AER c.21%).
  • Four additional Equine products and two additional anaesthetic products acquired during the Period for a combined consideration of U$29m.
Tesco PLC Q3 and Christmas Trading Statement 2021/22
  • Highest share in 4 years; growing share both in stores & online; 22 consecutive periods’ switching gains.
  • Strong large store and convenience performance; online sales remain significantly ahead of pre-COVID levels (19 week 2-year LFL +58.7%) with c.1.2m orders per week; highest online share since pandemic began.
  • Over 95% promotional sales now on Clubcard Prices; 8.5m customers now accessing Clubcard via app.
  • Ken Murphy, Chief Executive Officer, said: “Despite growing cost pressures and supply chain challenges in the industry, we continued to invest to protect availability, doubled down on our commitment to deliver great value and offered our strongest ever festive range. This put us in a strong position to meet customers’ needs as, once again, COVID-19 led to a greater focus on celebrating at home.”
Persimmon PLC Trading Statement
  • Persimmon PLC today announces the following update ahead of its Final Results for the year ended 31 December 2021, which will be released on 2 March 2022.
  • Persimmon has delivered total Group revenues of £3.61bn, (2020: £3.33bn) in the year.  New housing revenues of £3.45bn were c. 10% ahead of last year (2020: £3.13bn) and c. 1% ahead of 2019 (2019: £3.42bn).
  • New home legal completions of 14,551 were c. 7% ahead of the prior year (2020: 13,575) and included 12,018 new homes sold to private owner occupiers (2020: 11,363). The Group’s average selling price increased by 2.8% over last year to c. £237,050.
  • Dean Finch, Group Chief Executive, said: “We have continued to secure high quality land opportunities, bringing over 20,500 new plots into the business in 2021 representing in excess of 140% of current consumption levels. This strong pipeline provides excellent momentum for the Group’s future growth.”

 

Persimmon PLC Appointment of Chief Financial Officer
  • The Board of Persimmon PLC today announces the appointment of Jason Windsor as Chief Financial Officer.
  • Jason is expected to join in the summer and will become an Executive Director on the Board at that time. He will succeed Mike Killoran, who announced in July 2021 that he would be retiring in mid-January 2022 after more than 25 years with the Group.
  • Roger Devlin, Chairman, said: “Jason is a well-respected and proven FTSE 100 CFO and we are delighted to have recruited someone of his calibre and experience as Chief Financial Officer to complement our strong management team.”
Aviva PLC Resignation of Group CFO Jason Windsor
  • Aviva PLC today announces that Jason Windsor has resigned as CFO and as a Director of the Company with effect from July 2022, to take up the position of CFO at Persimmon plc (“Persimmon”).
  • Over the next six months Jason will remain focused on the delivery of the Company’s full year results, due on the 2nd of March 2022, and on ensuring the effective transition of his responsibilities.
  • The search for a new CFO is underway, and a further update will be issued when appropriate.
  • Amanda Blanc, Group Chief Executive Officer, said: “Jason has been a valued colleague at Aviva in a variety of roles since joining the group in 2010, including as Chief Financial Officer over the past two and a half years, an important period of transformation for the Company. I would like to take this opportunity to thank him, on behalf of the Board and colleagues across Aviva, for his commitment and contribution during his time here. He will leave with our best wishes for his future career.”
Hays PLC Second Quarter Trading Update
  • Fees up 37%, led by Perm up 61%. Temp up 22%, with strong margin and volume growth through the quarter. Fees up 11% versus Q2 FY20.
  • Operating profit for the year to 30 June 2022 is expected to be c.£200m.
  • Strong net cash position of c.£235m, in line with our expectations and after paying c.£170m in core and special dividends in November 2021 (30 September 2021: £360m; 31 December 2020: £380m).
  • Alistair Cox, Chief Executive Officer, said: “We saw strong performances in all regions in the quarter, and we expect operating profit for the year to 30 June 2022 will be c.£200m, ahead of consensus market expectations.”
Marks and Spencer Group PLC Christmas 2021/2022 Trading Statement
  • Food sales increased 12.4%, with sales excluding hospitality and franchise up 16.4%.
  • Clothing & Home sales increased 3.2%.
  • International sales increased 5.1%, with online sales more than doubling.
  • Steve Rowe, Chief Executive Officer said: “The market continues to be impacted by the headwinds and tailwinds that we reported in the first half, but I remain encouraged that our transformation plan is now driving improved performance.”
IP Group PLC Pre-closed-period update
  • IP Group PLC, the developer of intellectual property-based businesses, today issues an unaudited pre-close update ahead of its results for the 12 months to 31 December 2021.
  • FY21 profit anticipated to be above £425m (FY20: profit £185.4m).
  • FY21 Hard NAV per share* anticipated to be above 165p (FY20: 125.3p), a return of at least 31%.
  • Net cash and deposits of £276m at 31 Dec 2021 (FY20: £203m).
  • Portfolio companies well-funded having raised over £2bn in 2021 (FY20: £1.1bn).
John Wood Group PLC Full year trading update
  • John Wood Group PLC (‘Wood’ or ‘the Group’) today announces a trading update for the financial year ended 31 December 2021 (‘FY21’), including the headline unaudited financial results, alongside the proposed sale of its Built Environment business.
  • FY21 results in line with our expectations for revenue and adjusted EBITDA, as set out in our trading update on 12 November 2021, and in line with consensus.
  • Margin improvement of around 0.5 percentage points (at c.8.7%) despite lower revenue.
  • Net debt of c.$1.4bn (30 June 2021: $1.3bn).
  • Strategic review of Built Environment: Board has concluded that a full sale process is the best option to deliver value for our shareholders and this process is underway. A sales agreement is expected to be announced in Q2.
  • Robin Watson, Chief Executive Officer, said: “2021 saw improving momentum across our businesses, against a backdrop of continued challenging market conditions. Together with significant growth in our order book, this enables us to start 2022 confident that activity levels are improving.”
Mitchells & Butlers PLC First Quarter Trading Update
  • Like-for-like sales in the year to date have declined by 1.5%, with total sales in decline of 5.2%.
  • Like-for-like sales growth of 2.7% over the first eight weeks.
  • The Group currently has cash balances on hand of £235m, with undrawn unsecured facilities of £150m.
  • Phil Urban, Chief Executive Officer, said: “Whilst we expect activity to continue to be adversely impacted in the short term, we are encouraged by the latest data on the Omicron variant which we believe will boost consumers’ confidence to return to pubs and restaurants allowing us to regain the momentum which was beginning to build, supported by the benefits from our new set of Ignite initiatives.”
Provident Financial PLC Fourth Quarter Trading Update
  • Provident Financial PLC today publishes a trading update covering the three months to the end of December 2021, unless otherwise stated.
  • The Board intends to declare an ordinary dividend of approximately 30% of adjusted ongoing earnings1 in respect of FY’21 and anticipates providing guidance for a longer-term, progressive dividend policy with the FY’21 results.
  • The Consumer Credit Division was closed on schedule at the end of December and in accordance with the previously announced closure costs of £100m.
  • PFG has also announced today, following regulatory approval, the next phase of its strategy to reinforce its position as a leading specialist bank with a focus on the financially underserved.
  • Malcolm Le May, Chief Executive Officer, said: “PFG is well positioned to deliver attractive and sustainable returns to shareholders built on a platform of credit cards, vehicle finance and personal loans underpinned by a strong balance sheet.”
Safestore Holdings PLC Final Results
  • Group revenue for the year up 15.1% (up 15.5% in CER)
  • Like-for-like Group revenue for the year in CER up 13.8%.
  • Underlying EBITDA up 26.2% in CER which, combined with an increased gain on investment properties of £321.1m (FY2020: £126.5m), resulted in statutory operating profit9 of £417.0m (FY2020: £212.2m).
  • Frederic Vecchioli, Chief Executive Officer said: “Pleasingly, the strong performance of the final quarter has continued into the first two months of the new financial year with Group like-for-like revenue up 17.3% CER compared to the first two months of the prior year. Whilst accepting the potential for further disruption arising from Covid-19 restrictions, I look forward with confidence to the 2021/22 financial year.”
Hilton Food Group PLC Trading Update
  • Hilton Food Group PLC, the leading international multi-protein food  business, today provides a trading update for the 52 weeks ended 2 January 2022.
  • Full year trading in line with Board’s expectations.
  • Dutch competition authority clearance for acquisition of Foppen.
  • Joint Venture agreed with Agito Group Pty Ltd further enhancing our technology expertise.
Provident Financial PLC Board Changes for PFG and Vanquis Bank
  • PFG today announces the next phase of its strategy to reinforce its position as a leading specialist bank  with a focus on the financially underserved.
  • With effect from today, PFG has restructured the Board of Vanquis Bank to substantially align its membership with the Board of PFG.
  • As part of the new governance structure, and with effect from today, the following directors of PFG have each been appointed to the Board of Vanquis Bank, such that they now hold roles on the PFG and Vanquis Bank Boards, as well as to the relevant Board Committees of Vanquis Bank: Patrick Snowball (Chairman), Malcolm Le May (Chief Executive Officer), Neeraj Kapur (Chief Financial Officer), Andrea Blance (SID and Remuneration Committee Chair), Angela Knight (NED), Paul Hewitt (NED), Graham Lindsay (NED) and Margot James (NED).
  • Elizabeth Chambers will retain her position on the PFG Board as an Independent Non-Executive.
  • Patrick Snowball, Chairman, said: “I would like to thank Robert for his Chairmanship of the Vanquis Board and his support and thoughtful contributions as a member of the Group Board. I would also like to extend my gratitude to the other departing members of the Vanquis Bank Board for their help and support.”
Countryside Properties PLC Board changes and trading update
  • Countryside Properties PLC today announces that, by mutual agreement, CEO Iain McPherson is to step down with immediate effect.
  • The Board will conduct a thorough process in the search for a new CEO and whilst that search is underway John Martin, Chair, will stand in as interim CEO. During this time, he will conduct a review of each of the Company’s developments across every region to ensure that each site is being developed in accordance with the plans set out during the investment process.
  • John Martin, Chair, said: “I would like to thank Iain for his unwavering commitment and dedication to Countryside as leader of our business in the South and subsequently as Group CEO and to wish him every success in the future.”
  • Trading in the first quarter of our new financial year has been below the Board’s expectations. 
  • The realisation of legacy assets and the associated share buy-back programme are proceeding in line with our plan and earlier guidance. Net debt at 31 December 2021 was £72m.