Maitland/AMO Morning Monitor – Thursday 22 July 2021

22nd July 2021

In the news

  • The EU has rejected renegotiations of the Brexit deal with the UK after London pushed to overhaul trading rules for Northern Ireland.
  • Cryptocurrencies rose yesterday after Elon Musk disclosed that SpaceX held bitcoin and that Tesla would “most likely” resume accepting it as payment.
  • Shares in Bridgepoint Advisers increased 29% as investors raced to back a rare London listing of a buyout group.
  • Senate Republicans blocked Joe Biden’s $1tn bipartisan infrastructure package in its first procedural vote in the upper chamber of Congress.

Politics today

  • The European Central Bank’s interest rate-setters meet today for their first discussion since unanimously agreeing on a new monetary policy strategy.

Stock market moves

  • In the US, the S&P 500 gained 0.82%.
  • In Asia, stocks rose with Hong Kong’s Hang Seng Index increasing 1.7% and China’s Shanghai Composite Index gaining 0.34%.
  • In Europe, the FTSE 100 is marginally down in the early hours of trading, while the STOXX 600 gained 0.51%.

Corporate announcements

* Maitland Client

IG Group Holdings PLC Directorate Change
  • Bridget Messer, Executive Director and the Group’s Chief Commercial Officer, has informed the Board of her intention to step down from her role.
  • Bridget will continue in her over the coming months and will remain as a director of the Company until the date of the AGM, scheduled for 22 September, but will not stand for re-election.
  • June Felix, CEO, said: “Bridget has made an invaluable contribution to the Group throughout her tenure with the company.  Her knowledge on commercial and regulatory matters have been greatly appreciated, as well as the role she has played in building the values and culture that have helped drive IG’s success.  We thank Bridget for her dedication and wish her well.”

Hiscox LTD Aki Hussain to succeed Bronek Masojada as CEO
  • Group CEO, Bronek Masojada has informed the Board of his intention to retire at the end of the year.
  • The Board announced that it has appointed Aki Hussain, currently Group CFO, as Group CEO from January 2022, subject to regulatory approval.
  • Robert Childs, Hiscox Group Chairman, said: “We are delighted that Aki will be our new CEO and the Board were unanimous in endorsing this appointment. Aki’s ambition, drive and knowledge of the Hiscox Group, combined with his many years’ experience delivering for a variety of financial services organisations, makes him well placed to capture the many opportunities ahead.”
Centrica PLC Half-year Report
  • Adjusted operating profit from continuing operations (excluding Direct Energy) of £262m (2020: £264m).
  • Total free cash flow up 4% to £524m (£504m in 2020).
  • Net debt down to £0.1bn from £3.0bn over H1 2021.
  • Chris O’Shea, CEO, said: “Our first half financial performance was broadly as we expected overall, and we continue to make good progress towards the simplification of our company. Although there is still a lot to achieve, our turnaround remains on track, our balance sheet has been significantly strengthened and the recent changes in colleague terms and conditions will enable us to better serve the needs of our customers. We will continue to strengthen our foundations, as we help our customers on the path to net zero.”
Diploma PLC Directorate Change
  • John Nicholas has indicated his intention to retire as Chairman in the early part of 2022.
  • A process to select and appoint a successor has commenced, led by Anne Thorburn, the Senior Independent Director.
  • Johnny Thomson, CEO, said: “On behalf of the Board, I would like to express our thanks to John for his service over the past eight years.  Under his leadership, Diploma has enjoyed a period of considerable growth and value creation, and we wish him all the best for the future.”
3i Group PLC FY2022 Q1 performance update
  • Increase in NAV per share to 1,063p (31 March 2021: 947p).
  • EBITDA for the quarter was €205m, 107% above 2020 and 67% above 2019.
  • Net debt was £689m and gearing 6.7% (31 March 2021: £750m and 8.2%).
  • Simon Borrows, CEO, said: “3i has made a strong start to its new financial year. Our investment portfolios in Private Equity and Infrastructure are well positioned for another year of good progress. Action’s impressive performance continues, and the group is trading very well now that all stores have fully reopened. We are working on a number of investment and realisation opportunities across the investment teams, but we remain highly selective when deploying new capital in the current environment.”
Moneysupermarket* Moneysupermarket interim results to 30 June 2021: strategic execution on track amid tough market conditions
  • Good progress made in attracting customers more efficiently and improving our data infrastructure.
  • Revenue fell 11% due to Covid-19 market impacts and challenging energy market dynamics.
  • Gross margin rose 3% driven by more efficient customer acquisition and improved conversion in Money.
  • Cash £8.8m at 30 June 2021.
  • Peter Duffy, CEO of Moneysupermarket Group, said: “We helped millions of UK households save on their bills. Strategic improvements to the business are progressing well, improving margin gains.  Our markets are still on the road to recovery ahead of what should be more normal trading conditions in 2022. Cash generation remains strong, with the dividend reflecting our confidence in the business and opportunities ahead.”
  • Outlook: Insurance, excluding travel, has returned to more normal trading. We expect further gradual improvement in Money.  The expected increase in the energy price cap in October should improve customer savings levels, assuming wholesale energy prices decline. On this basis the Board is confident of delivering market expectations for the year.
Unilever PLC Half-year Report
  • Underlying earnings per share of  €1.33, down 2.0% from 2020. 
  • Free cash flow of €2.4bn, compared to €2.9bn H2 2020.
  • Quarterly shareholder dividend of €0.4268 per share.
  • Alan Jope, CEO, said: “Competitive growth is our priority, and we are confident that we will deliver underlying sales growth in 2021 well within our multi-year framework of 3-5%, despite more challenging comparators in the second half.   We have seen further cost inflation emerge through the second quarter.  Cost volatility and the timing of landing price actions create a higher than normal range of likely year end margin outcomes.  We are managing this dynamically and expect to maintain underlying operating margin for 2021 around flat.”
SSE PLC Trading Statement
  • SSE’s disposals programme is on course to realise over £2bn from the sale of non-core assets and businesses.
  • SSE expects capital expenditure and investment total of around £2bn in 2021/22.
  • Gregor Alexander, FD, said: “This represents an exciting future for SSE, and we look forward to updating the market on our capital expenditure and investment plans at our interim results in November. In the meantime, our focus remains on strategic delivery across the group, in doing so creating sustainable value for shareholders and society.”
Countryside Properties PLC Countryside Q3 2021 trading update
  • Adjusted revenue up 184% to £287m (Q3 2020: £101m)
  • Net reservation rate up 53% to 0.81 (Q3 2020: 0.53)
  • Net debt of £33.2m (Q3 2020: £232.1m)
  • Iain McPherson, CEO, said: “Trading in the third quarter leaves us on track for the full year. We are making good progress with our plans to grow Partnerships where our differentiated mixed-tenure model positions us well for the future.” 
Vodafone Group PLC* VODAFONE SPAIN ACQUIRES 2x10 MHZ OF SPECTRUM
  • Vodafone Spain has acquired 2×10 MHz of spectrum in the 700 MHz band from the Spanish Ministry of Economic Affairs and Digital Transformation (‘MINECO’) for €350 million (reserve price for the acquired block).
  • The total amount will be payable in a single instalment following the conclusion of the auction process. In addition, a licensing fee of €15.5m will be payable each year.
  • The spectrum acquired has initial holding rights until 2041, with an automatic renewal with no additional fees for a further 20 years (until 2061), subject to meeting the licence obligations.
  • Colman Deegan, CEO of Vodafone Spain, said: “The new 5G frequencies acquired today will enable Vodafone Spain to accelerate the deployment of our leading 5G network in the coming months, ensuring that consumers and businesses can take advantage of digital transformation opportunities to support economic recovery after the pandemic.”
JTC PLC Pre-close Interim Trading Update
  • Cash conversion during the period was strong and exceeded medium term guidance of 85% – 90%.
  • Net debt at 30 June was £23.6m (31 Dec 20: £75.8m).
  • Underlying EBITDA margin of 33%-38%.
  • Nigel Le Quesne, CEO, said: “JTC has again demonstrated the resilience of its business model and delivered a good performance in the first half of 2021. The positive momentum seen in new business wins, combined with incremental operational improvements, give us confidence for the remainder of the year, which is the first of our new ‘Galaxy Era’ business plan. Our acquisition pipeline remains strong and we expect to continue to act as a key consolidator in the sector while remaining disciplined in terms of quality and pricing. As always, I would like to thank our people for the outstanding service they provide to our clients and I am delighted that their contribution to the Group’s success has again been recognised through our shared ownership programme, which is now in its 24th year.”  
Britvic PLC Q3 Trading Statement
  • Q3 revenue of £384.8m, an increase of 22.8% on last year, and with revenue growth in all business units.
  • Year-to-date revenue increased by 3.1% to £1,001.9m.
  • Simon Litherland, CEO, said: “We remain committed to rebuilding investment behind our portfolio of market-leading brands to ensure we continue to emerge strongly and are well-positioned for the recovery as it evolves. In addition, recent initiatives, such as Rockstar, Plenish and the Aqua Libra Company, give us access to new opportunities and further enhance our medium-term growth prospects. We remain confident that our strategy is fit for the future and will continue to drive growth and create sustainable value for all our stakeholders.”
Big Yellow Group PLC Trading Statement
  • Total revenue for the quarter was £36.6m, an increase of 15.1% (2020 Q1: £31.8m).
  • Like-for-like store revenue increased by 13.8% to £35.4m (2020 Q1: £31.1m), mostly driven by occupancy growth.
  • Average achieved net rent per sq ft increased by 2.7% to £29.04 (2020 Q1: £28.28).
  • Jim Gibson, CEO, said: “We successfully raised £100 million from our shareholders by way of a placing in June, which allowed us to continue to invest in future growth through the recent strategic acquisitions. These, along with our existing development pipeline, have the potential to generate in excess of £40 million of net operating income over the short to medium term, and in so doing create significant value for our shareholders.”
AJ Bell PLC Q3 Trading Update
  • AUM increased to £2.0bn, up 186% over the last year and 43% in the quarter,
  • Total net inflows in the quarter were £524m, including a one-off inflow of £253m,
  • Underlying net inflows in the quarter were £271m, up 115% on the prior year (2020: £126m).
  • Andy Bell, CEO, said: “As we head into the final quarter of our financial year, we remain focused on providing an excellent service to our customers and continuing to support our people as we navigate the current wave of the pandemic. Looking further ahead, the structural growth drivers for our sector remain strong and we are well placed to deliver further growth across our platform.”
Volution Group PLC Trading Update for year ending 31 July 2021
  • Revenue expected to be above £270m.
  • Adjusted EPS of c.20.5p.
  • Organic revenue growth of more than 20% on a constant currency basis.
  • Ronnie George, CEO, said: “Increasing awareness of the importance of indoor air quality, coupled with ever tightening regulations relating to energy efficiency and carbon reduction from buildings, will continue to provide supportive long-term tailwinds for our business.”
Workspace Group PLC First Quarter Trading Update Link:
  • Net debt increased by £8m in the quarter to £573m as at 30 June 2020
  • Cash balances and undrawn facilities of £277m as at 30 June 2020.
  • Total rent roll declined by 6.3% in the first quarter to £97.5m.
  • Graham Clemett, CEO, commented: “With occupancy increasing and pricing beginning to stabilise, this is a solid start to what we expect to be a positive year for Workspace. Looking ahead, we are well positioned to capture the significant growth opportunities in front of us as the market demand for office space continues to shift towards a combination of flexibility, quality and sustainability.”
Centamin PLC Q2 2021 Report
  • Revenue generated of US$177.5 million from gold sales of 97,229 oz at an average realised gold price of US$1,822/oz sold.
  • Cash costs of US$883/oz produced and all-in sustaining costs of US$1,290/oz sold.
  • 2021 capex guidance maintained at US$225 million, with a 65% spend in H2 (previously 55%).
  • Martin Horgan, CEO, said“Centamin has delivered another solid operational performance and we remain on track to meet full year cost and production guidance. During the quarter, excellent progress was made with the Sukari waste-stripping programme which has significantly outperformed budget and resulted in record material mined. This is testament to our team at Sukari delivering improvements in operating efficiencies and further supported by the quick mobilisation and ramp up of the waste-stripping contractor. We look forward to announcing our detailed half-year financials and declaring the interim dividend on Thursday 5th August.”
Howden Joinery Group PLC Half-year Report
  • Revenue of £784.9m was up 68.8% on H1 2020 and 20.3% higher than H1 2019.
  • Gross profit margin of 61.3% (2020: 59.4%; 2019: 61.9%).
  • Profit before tax of £119.2m (2020: loss before tax of £14.2m; 2019: profit before tax of £78.1m).
  • CEO, Andrew Livingston, said: “While we are aware that economic uncertainties persist and also of the strong comparatives we will trade against in the second half, we are encouraged by the progress made so far in 2021 and remain confident in our business model for the future.”
IG Group Holdings PLC IG Group Holdings PLC
  • Net trading revenue up 31% to £853.4m (FY20: £649.2m), with adjusted net trading revenue at £861.3m.
  • Profit before taxation up 52% to £450.3m (FY20: £295.9m), while adjusted profit before taxation up 61% to £477.8m.
  • Final proposed dividend of 30.24p per share, which would represent a full-year dividend of 43.2p per share.
  • June Felix, CEO, said: “Following a sustained period of strong acquisition, elevated demand and new client retention, IG now services a substantially larger client base, which provides a quality asset going into FY22. Today, we believe that we are in a better position than ever before. We have announced revised and upgraded growth guidance that reflects our outperformance in FY21, our strategic acquisition of tastytrade and the quality of our client proposition, putting us in a position of strength to continue to deliver sustainable value for our shareholders.”