Maitland/AMO Morning Monitor – Thursday 25 February 2021

25th February 2021

In the news

  • Chancellor Rishi Sunak is expected to raise corporation tax in his budget on the 3rd March.
  • McKinsey partners have voted out global managing partner Kevin Sneader.
  • GameStop shares surged nearly 104% during afternoon trading on Wednesday.
  • Australian parliament has passed legislation that will force Facebook and Google to pay news outlets for content.
  • A review by US regulators of the single-shot Johnson & Johnson coronavirus vaccine has found it is safe and effective.

Politics today

  • EU leaders are to discuss the introduction of vaccination passports at an EU summit starting today.
  • Education Secretary Gavin Williamson will lay out plans for teacher-assessed grades for GCSE and A-Level students in England today.

Stock market moves

  • In the US, the S&P 500 closed yesterday’s session 1.1% higher.
  • In Asia, stocks rallied with the Kospi index advancing 3.1% and Hong Kong’s Hang Seng Index gaining  2.1%.
  • In Europe, the FTSE 100 is up 0.29% and the STOXX 600 is up 0.29%.
  • West Texas Intermediate crude remains near its one-year peak at $63.47 a barrel.

Corporate announcements

* Maitland Client

Anglo American PLC Anglo American Preliminary Results 2020
  • Underlying EBITDA of $9.8bn (2019: $10.0bn).
  • Net debt of $5.6bn.
  • Final dividend of $0.72 per share, consistent with 40% payout policy.
  • Mark Cutifani, CEO, said: “Looking further out, we benefit from a sequence of high returning growth options, mainly in copper, PGMs, and now also crop nutrients. Our business is increasingly positioned to supply those products that are fundamental to enabling a low carbon economy and catering to global consumer demand trends. Combined with our integrated approach to technology and sustainability – also helping us reach carbon neutrality across our operations by 2040 – we are well positioned to meet the expectations of our full breadth of stakeholders.”
Serco Group PLC* Final Results
  • Revenue up 20% at £3,884.8m (2019: £3,248.4m);
  • Underlying Trading Profit up 36% at £163.1m (2019: 120.2m).
  • Earnings per share increased by 37% on an underlying basis and 153% on a reported basis.
  • Dividend per share (recommended re-instated): 1.4p.
  • Rupert Soames, Group CEO said: “Turning to our financial performance in 2020, growing Revenues by 20% (2019: +15%) and Underlying Trading Profit by 36% (2019: +29%), is all the more impressive as it follows strong growth in 2019 and underlines the momentum behind Serco’s return to robust financial health.  This performance is particularly gratifying given the disruption caused to some parts of our business by Covid-19; despite approaching £400m of Covid-19 related revenues, the net impact of Covid-19 was around 1% of Underlying Trading Profit, and the balance of the 35% increase in profits came from the normal operations of the business…. It is pleasing finally to be able to re-start paying dividends, last paid in 2014. The Board has thought carefully about this, particularly in the light of the current circumstances.”
Serco Group PLC* Directorate Change
  • Serco announces that Lynne Peacock will assume the role of Senior Independent Director when John Rishton succeeds Sir Roy Gardner as Chairman on 21 April 2021.
  • Lynne is currently Chair of the Remuneration Committee and is a member of the Group Audit and Nomination committees.
  • Sir Roy Gardner, Non-Executive Chairman, said: “I would like to thank John personally for his support as the Senior Independent Director and I would also like to welcome Lynne to the role of Senior Independent Director when John becomes Chairman, a position for which her considerable experience makes her well suited.”
Standard Chartered PLC SCPLC Final Results 2020
  • Profit for the year $751m (2019:$2,340m).
  • Income down 3% to $14.8bn.
  • Asset-to-deposit ratio down from 64.2% to 61.1%.
  • José Viñals, Group Chairman, said: “Repayment holidays, fee waivers and loan extensions were offered to individual and small business customers, and we made $1 billion of financing available at cost to those providing critical goods and services in the fight against the virus. We also established a $50 million Global Charitable Fund to help those affected within our communities. So far, we have donated $28 million across 59 markets, with a comparable sum contributed by colleagues and the Group to support and stimulate economic recovery.”
Bae Systems PLC Final Results
  • Sales increased 4% to £20.9bn.
  • Underlying EBITA increased 1% to £2,132m.
  • Underlying earnings per share increased by 2% to 46.8p.
  • Charles Woodburn, CEO, said: “Thanks to the outstanding efforts of our employees and close cooperation with our customers, suppliers and trades unions, we have delivered a strong set of results against a challenging backdrop of the global pandemic. Throughout 2020, we focused on keeping our people safe and supporting our communities, whilst continuing to deliver for our customers. In 2021, we will continue to drive operational performance, progress our sustainability agenda and invest in high-end discriminating technologies to meet our customers’ priorities, which will ensure we are well positioned to grow the business and contribute to the economic prosperity of the countries in which we operate.”
Aston Martin Lagonda Global Holdings PLC Final Results
  • Retail1 sales of 4,150 vehicles (down 32%) and wholesales2 of 3,394 vehicles (down 42%).
  • Revenue declined 38% to £612m.
  • Operating loss of £323m, including £98m of adjusting operating items.
  • Tobias Moers, CEO, said: “On joining Aston Martin, my first priority was successfully launching our first SUV, the DBX. Demand is strong and we have wholesaled 1,516 units with all dealers now having their demonstrator and floorplan models. Actions were already underway on rebalancing supply to demand for GT and Sports cars, where we have made tremendous progress and are ahead of plan with encouraging signs for demand. Finally, Specials are integral to our plan. The era defining Aston Martin Valkyrie is a priority this year and we are on track for deliveries to start in the second half.”
St James's Place PLC Final Results
  • Underlying cash result £264.7m (2019: £273.1m).
  • Gross inflows of £14.3bn (2019: £15.1bn).
  • Proposed final dividend of 38.49 pence per share (2019: nil).
  • Andrew Croft, CEO, said: “In the near term, whilst we are encouraged by the moderate growth in new business we have seen in the early weeks of 2021, the external environment remains challenging. There remain difficult months ahead but as COVID-19 restrictions ease, we are hopeful there will be an economic recovery and we will see a return to more normal growth in new client investments. The demand for trusted advice is stronger than ever and I am confident that given the quality of The Partnership, the strength of our client proposition, and the resilience of the St. James’s Place community, we are ideally placed to continue to grow and deliver on our new five year planning assumptions.”
Grafton Group PLC Final Results
  • Revenue down 6% to £2.5bn.
  • Operating profit in down 6% to £193.3m.
  • Dividend of 14.5p (2019: 19.0p)
  • Gavin Slark, CEO, said: “We are very encouraged by the Group’s strong performance through the second half of last year and while we remain cautious about first half revenue trends in our markets in light of Covid uncertainty, we expect to make further progress in the current year and are confident that our 11,000 colleagues will continue to deliver for our customers. We finished last year in an excellent financial position that provides a strong platform for the future growth and development of our Group.”
Morgan Sindall Group PLC Final Results
  • Revenue of £3.0bn, down 1%.
  • Adjusted profit before tax down 29% to £63.9m.
  • Net cash of £333m (FY 2019: £193m).
  • John Morgan, CEO, said: “Despite the differing challenges each division faced, the Group has continued to make strategic and operational progress. Again, we have an improved cash position and have further strengthened our balance sheet, allowing us to make the right decisions and actions for the long-term benefit of the business. Our strategy remains the same, based on organic growth and operational improvement in markets geared towards future demand for affordable housing, urban regeneration and infrastructure and construction investment. We welcome the Government’s continued support for our activities and the recognition of the industry as a key driver for economic stability and recovery.
Howden Joinery Group PLC Howden Joinery Group Plc 2020 Preliminary Results
  • Revenue of £1,547.5m (2019: £1,583.6m).
  • Profit before tax was £185.3m (2019: £260.7m).
  • 2020 final dividend of 9.1p per share recommended and special dividend of 9.1p per share to be paid.
  • Andrew Livingston, CEO, said: “Following a sharp drop in sales in quarter two when the UK entered its first national lockdown, our performance improved significantly in the second half, with sales up 16% compared to the equivalent period in 2019, as we benefitted from pent-up demand and the consumer’s desire to invest in their homes. The year ended strongly with profit and cash flow ahead of expectations and we were able to repay the Government furlough and other support taken earlier in the year. We are also pleased to be resuming dividend payments.”
Inchape PLC Final Results
  •  Group revenue down 27% at £6.8bn.
  • Operating profit down 56% at £166m.
  • Statutory loss before tax of £128m, reflecting £257m of exceptional charges.
  • Duncan Tait, CEO, said: “Inchcape has strong foundations, and the growth of Distribution remains its central focus. As we enter the next phase of our journey, we will be supercharging certain elements – in particular, our use of data and digital – which will drive even faster growth of our distribution core. At the same time, we see significant opportunity to capture more of a vehicle’s lifetime value – an area that is underserved by us today. This will in turn drive growth within our current footprint, and open up opportunities for even faster expansion in new markets, with both existing and new OEM partners. In setting the future direction we concluded that there are plenty of opportunities for an ambitious Inchcape to thrive in this new world of mobility, and established the goal to become the undisputed distributor of choice for OEMs.”
Hikma Pharmaceuticals PLC Final Results
  • Core Group revenue up 6% at $2,341m.
  • Core operating profit up 11% at $579m.
  • Cashflow from operating activities of $464m.
  • Siggi Olafsson, CEO, said: “Our response to the pandemic demonstrates the resilience of our business, which enabled us to deliver a strong financial performance and continued progress against our longer-term strategic objectives. We achieved good revenue growth in all our businesses and an improvement in core profitability. We expanded our portfolio with successful new launches and new partnership agreements, enhanced our manufacturing capabilities and continued to focus on the development of a more diverse, energised and engaged workforce. These achievements leave us well positioned for future growth and we look forward to continued success in 2021.”
Greencoat UK Wind PLC Final Results Announcement
  • Net cash generation (Group and wind farm SPVs) was £145.2m.
  • Total dividends of 7.1p per share.
  • £1.1bn outstanding borrowings as at 31 December 2020, equivalent to 33 per cent of GAV.
  • Shonaid Jemmett-Page, Chairman, said: “With the support of shareholders through equity issuance carried out during the year, 2020 was an active investment year as we added three new assets to our portfolio to take our generation capacity to approximately 1.2GW. Alongside these ROC-accredited assets, we were also able to secure agreements to acquire two subsidy free wind farms after they become operational. The pipeline of potential acquisitions remains healthy and we look forward to adding further attractive growth opportunities in due course as we continue to play our role in helping to decarbonise the UK economy.”
Spectris PLC 2020 full year results
  •  LFL sales declined 10.7% to £1,336.2m.
  • Statutory operating loss of £23.3m.
  •  Dividend increase of 5% for the full year and £200m share buyback programme announced.
  • Andrew Heath, CEO, said: “The stronger order intake in the last three months of 2020 provides momentum for the first quarter of 2021 although, clearly, much uncertainty remains and we expect the immediate economic backdrop to remain challenging. However, the actions taken last year position the Group well for any market recovery in 2021. The cost base has been reduced and capability retained, creating a strong operating leverage opportunity and balance sheet optionality. We will maintain our approach, acting with purpose, and being values-led, to deliver long-term, sustainable financial health.”
Mondi PLC Final Results
  • Underlying EBITDA down 18% at €1,353m.
  • Group revenue down 8% at €6,663m.
  • Recommended full year dividend of 60.0 euro cents per share, up 5%.
  • Andrew King, CEO, said: “Looking ahead, although the near-term macroeconomic outlook continues to be uncertain, we remain confident in the structural growth drivers in the packaging sectors in which we operate and the strength of our paper position. We are seeing strong order books supporting price increases in most packaging and pulp grades, and are encouraged by the improving uncoated fine paper demand. We are planning longer project-related maintenance shuts and are seeing input cost pressures and currency headwinds, although the benefits from our capital expenditure programme will continue to support our performance.”
Evraz PLC Annual Financial Report
  • Net profit $858m (FY2019:$365m).
  • Net debt $3,356m (FY2019:$3,445m).
  • Consolidated EBITDA $2,212m (FY2019:$2,601m).
  • Alexander Frolov, CEO, said: “In 2021, EVRAZ will continue to improve its safety culture, customer focus and operational efficiency, using digital tools where appropriate. The Group aims to achieve significant progress in its key investment projects, the foremost of which is to upgrade the rail mills in North America and Nizhny Tagil. EVRAZ will also focus on making the best possible use of the opportunities that arise as the markets begin to recover from the pandemic in 2021.”
Centrica PLC Final Results
  • Adjusted basic EPS of 6.5p, down 11%.
  • Adjusted operating profit £699m (FY2019:£901m).
  • Group net debt £2,769m (FY2019:£3,181m).
  • Chris O’Shea, CEO, said: “We have made a good start to the turnaround of Centrica, with the sale of Direct Energy now complete and our significant Group restructure on track. However, our journey to transform has only just started, as we seek to restore shareholder value by improving customer experience, retention and employee engagement, while maintaining a strong balance sheet. It won’t be easy, but I am confident we have the people, the brands and the market positions to deliver a successful turnaround in the coming years.”
Drax Group PLC Annual Financial Report
  • Adjusted EBITDA £412m (F2019: £410m).
  • Dividend up 7.5% to 17.1p per share(FY2019: 15.9p per share).
  • Net debt £776m (FY2019: £841m).
  • Will Gardiner, CEO, said: “Drax has supported its customers, communities and employees throughout the Covid-19 pandemic and I want to thank colleagues across the Group for their commitment and hard work over the last year. We have delivered strong results, a growing dividend for shareholders and excellent progress against our business strategy.”
Kaz Minerals PLC Unaudited Results for the year ending 31/12/20
  • EBITDA1 $1,431m representing a margin of 61% (FY2019: $1,355m).
  • Operating profit increased by 9% to $1,005m (FY2019: $923m).
  • No final dividend.
  • Andrew Southam, CEO, said: “KAZ Minerals’ operations proved resilient in 2020, despite the challenges posed by Covid-19. The Group delivered strong production, which combined with improved commodity prices in the second half of the year, saw the Group report EBITDA of $1.4 billion at a 61% margin. The Group remains a first quartile copper producer with a highly competitive net cash cost of 64 USc/lb. I am pleased that the Aktogay expansion project remains on track to start up by the end of 2021.”
Genus PLC Interim Results
  • Revenue £285.5m (FY2019: £270.7m).
  • Profit before tax £48.4m (FY2019:£36.6m)
  • Adjusted earnings per share up 44%.
  • Stephen Wilson, CEO, said: “Both PIC and ABS grew adjusted operating profits in double digits, with China, Brazil, India and Russia, being notably high growth markets.  PIC’s expansion in China was significant, gaining share with large producers that have been re-stocking following the spread of African Swine Fever in 2019.   PIC Europe’s growth was also very strong reflecting success with key accounts, leveraging our genetics and supply chain.”
Shaftesbury PLC Trading update
  • 45% of rent collected for the quarter to 31 December 2020.
  • 36% of January 2021 rents collected to date.
  • Available liquidity at 31 December 2020 of £358.2m.
  • Brian Bickell, CEO, said: “Our strategy of supporting the survival and reopening of our existing hospitality and retail businesses is aimed at ensuring our locations will be animated, interesting and welcoming for returning customers. Our portfolio is located in the heart of the most vibrant part of London and we are optimistic that the appeal of our carefully-curated destinations will drive the return of footfall and trading.”
Associated British Foods PLC Pre-Close Period Trading Update
  • Estimate for the loss of sales in the periods of store closures during this period is £1.1bn.
  • Group’s net cash before lease liabilities of £650m at this half year (2019: £801m).
  • The cash outflow for the group in the first half is expected to be £900m.
Genesis Emerging Markets Fund LD Half Year Financial Results to 31 December 2020
  • Fund’s NAV rose by 19.1% in sterling total return terms to £9.67 per Participating Preference Share.
  • Fund’s share price rose by 25.9% to £8.90.
  • Hélène Ploix, Chairman, said: “There is reason to be optimistic in the near-term outlook despite the uncertainties caused by Covid. The Investment Manager’s Report below notes revenue growth for the companies in the portfolio should accelerate in 2021 and valuations appear attractive, despite the strong returns seen in the period under review. Further, the Investment Manager observes many of the portfolio holdings have enhanced their competitive positions during this challenging period and will capitalise on this improvement during the years ahead.”
Pantheon International PLC Half-year Report
  • NAV per share up 8.9% to 3,139.2p.
  • Net assets at 30 November 2020 of  £1,698m (31 May 2020: £1,559m).
  • Assets in the portfolio generated underlying (pre-FX) returns of 15.4%.
  • Sir Laurie Magnus, Chairman, said: “PIP’s financial strength and tilt towards more resilient sectors gives the Board confidence that PIP will continue to produce attractive returns for shareholders which can outperform public market benchmarks over the long term.”