Maitland/AMO Morning Monitor – Thursday 3 September 2020
In the news
- DHL has warned of Covid-19 vaccine distribution problems with a lack of cooling delivery infrastructure
- New Zealand has reported 2 new cases of coronavirus, suggesting that the country has its second wave under control
- The UK government is carefully monitoring an increase in Covid-19 hospital admissions in France and Spain concerned that young people could be infecting the elderly and more vulnerable
- Government to spend £500m on trials for quick Covid-19 tests
Stock market moves
- Asia-Pacific stocks edged higher following data that revealed that activity in China’s services sector grew again last month.
- Futures tipped US stocks to edge down 0.1% when trading begins on Wall Street later in the day.
- In Europe, the FTSE 100 and Euro Stoxx 600 are trading up around 0.8% and 1% respectively in the early hours.
- The euro weakened after top policymakers at the ECB warned that the euro’s appreciation against the dollar could increase pressure for additional monetary stimulus.
Corporate announcements* Maitland Client
Melrose Industries PLC Half-year Report
- Revenue decreased to £4,359m (2020: £5,875m).
- The Group made an adjusted operating profit of £56m in the Period.
- The statutory operating loss was £581m; of the £637m adjusting items, only £99m are cash related.
- Whilst the Melrose Board understands the importance of dividends to shareholders and is encouraged by the strong cash performance, it does not consider it appropriate to pay an interim dividend to shareholders this year.
- Justin Dowley, Chairman, said: “We have delivered good returns in tough times before and as we continue to make the strategic changes needed to position our businesses within their changed market environments, we are confident of doing so again.”
Bunzl today announces that it has now completed the acquisition of MCR Safety, a distributor of a variety of largely own brand personal protection equipment and other safety products based in the US.
- Watches of Switzerland Group today announces that Dennis Millard, Chairman has indicated his intention not to seek re-election to the Board at the forthcoming AGM.
- Dennis will continue to Chair the Company until the close of the AGM and will be available until December 2020 to facilitate the transition to a new Chair. It is proposed that Tea Colaianni, Senior Independent Director, will take over as Interim Chair from the close of the AGM.
- The search for a permanent successor to Dennis is underway with external consultants Spencer Stuart appointed in this regard.
- Dennis Millard, Chairman, said: “I would like to pay a particular tribute to our CEO Brian Duffy and his excellent executive team who will continue to drive the business forward and thank the Board for their support during my tenure.”
- Trading in the period continues to be resilient across both business areas, supported by long-term customer relationships and diversified revenues across customers, end markets and geographic regions. As such, the Company expect results for the full year ending 31 March 2021 to be in line with consensus forecasts.
- Growth in Digital Services continues to be driven by demand within the NHS and Public Sector, where the company continues to demonstrate its strength as a key supplier in the UK Government’s digital transformation programme.
- Law Debenture is pleased to announce that Trish Houston has been appointed as COO and to the Board of the Company as an Executive Director effective from 2 September 2020.
- Trish is a Chartered Accountant and brings almost 20 years’ experience in Financial Services and high-growth businesses.
- Most recently, she was a member of the senior management team at JDX Consulting Limited, where she had Executive responsibility for HR, IT and Facilities and oversaw the merger of three businesses.
- Denis Jackson, CEO, said: “We look forward to welcoming Trish to Law Debenture. Her insight and experience will be of great value.”
- Tritax Big Box REIT today announces completion on the sale of its Chesterfield asset for £57.3m.
- The company acquired the asset in March 2014 when it had 6.2 years of lease remaining to Tesco. In 2018, the company implemented a pro-active asset management initiative and agreed an early surrender of the existing lease to Tesco and secured a new 15 year lease to Amazon, significantly enhancing the value of the asset.
- Having completed all key asset management initiatives, and as part of its ongoing portfolio evaluation, the company decided to realise the value created on this asset via a sale to Warehouse REIT. The price is a premium to the 30 June 2020 book value and reflects an IRR of 18.5% per annum.
- Colin Godfrey, CEO, said: “With investment demand in the market remaining strong, and attractive opportunities for us to deploy capital, we expect to complete a number of further disposals during the remainder of this financial year.”
- Group revenue increased 5.2% to £263.7m (2019: £250.7m).
- Assurance revenue was up 6.3% to £226.2m (2019: £212.7m), driven by a strong Managed Detection & Response (MDR) performance (+13.7%) and good growth from the largest revenue contributor, Technical Security Consulting (TSC) (+8.0%).
- Strong cash discipline was maintained with c.117.0% cash conversion (2019: 109.6%), including c. £3.4m benefit of government tax deferral schemes.
- Owing to the resilience demonstrated as a Group and the confidence in continued profitability and cash generation, NCC is recommending an unchanged final dividend of 3.15p (2019: 3.15p) per ordinary share.
- Adam Palser, CEO, commented: “I am pleased with our trading performance for the year. Thanks to the stunning way in which my NCC Group colleagues have risen to the challenge we have weathered the impact of the Covid-19 pandemic to date and emerged with a stronger balance sheet whilst preserving the technical capability that makes NCC Group so distinctive. The investment and progress we have made through our Securing Growth Together transformation programme underpinned our recent resilience and the Group is well placed to thrive when the economy recovers. I would like to thank all my colleagues for their continued resilience and professionalism during these challenging times.”
- The Group outperformed the market in January and February prior to the onset of COVID-19. Significant impact of COVID-19 from March resulted in reduced customer demand and property closures.
- COVID-19 impact resulted in reported total revenue decreasing to £61.9m (H1 2019: £155.3m) and EBITDA for the period was -£3.3m (H1 2019: £45.7m).
- Strong consolidated cash position of £137m and access to further undrawn facilities amounting to £63m providing additional headroom if required.
- Boris Ivesha, President and CEO, said: “Looking ahead, we are focused on maintaining this positive momentum and ensuring that the Group is well-positioned to navigate the ever-evolving trading environment and to capitalise on future opportunities in line with our growth strategy.”
- Strong operational resilience throughout the COVID-19 pandemic with performance of the UK portfolio 15.9% above base case, the best performing period since IPO.
- Generated a total of 502,579 MWh of clean electricity during the period, enough to power approximately 173,000 homes for a year.
- NAV decreased to £582.1m (31 December 2019: £628.0m), or 96.0p per share (31 December 2019: 103.8p) driven primarily by a reduction in power price forecasts.
- Alex Ohlsson, Chairman, said: “The health and safety of all stakeholders and their staff has been our top priority throughout the period and, with safe working protocols in place, we have delivered a record operational outperformance across the UK portfolio for the period, at 15.9% above base case, and remain on track to deliver our target dividend for the year.”
- Greencoat UK Wind today announces a new share issuance programme to be conducted over the next 12 months through a number of tranches , with the initial placing and the initial offer for subscription launching today. The prospectus relating to the Share Issuance Programme is expected to be published shortly.
- Under the Share Issuance Programme, the Company may issue up to a maximum of 750m new ordinary shares over the next 12 months.
- The net proceeds from the Initial Tranche are expected to be used to repay amounts drawn under the Company’s Facility Agreement. The net proceeds from each subsequent tranche under the Share Issuance Programme will be used to (i) repay amounts drawn under the Facility Agreement and/or (ii) apply proceeds to make further investments.
- Shonaid Jemmett-Page, Chairman, said: “Following our investment in the Walney offshore wind farm, and anticipating our commitment to make wind farm investments over the next 18 months, the Share Issuance Programme will enable the Company to pay down debt and continue to capitalise on our strong pipeline of acquisition opportunities in the UK wind farm market.”