Maitland/AMO Morning Monitor – Thursday 6 January 2022

6th January 2022

In the news

  • Prime Minister Boris Johnson and Chancellor Rishi Sunak were reportedly challenged by Leader of the House of Commons Jacob Rees-Mogg to abandon their £12bn tax rise during yesterday's cabinet debate.
  • The Society of Motors Manufacturers and Traders warned that a record increase in electric car sales risks being confined to London and south-east England without wider investment in street-charging infrastructure.
  • A record $330bn for US private start-ups has been raised in 2021, doubling the total from 2020.
  • £4.1bn has been poured into the UK's build-to-rent property market in 2021, with more than half spent during Q4. This is approximately £500m higher than 2020's record.
  • NatWest has joined emergency talks with the government over a rescue scheme for struggling energy companies.

Politics today

  • The House of Commons sits from 9:30am with DCMS and attorney general questions, then will focus on the UK's Russian strategy.
  • The House of Lords sits from 11am on for oral questions on occupied hospital beds, vaccine distribution, and public health concerns, with Home Affairs Minister Susan Williams providing with a COVID update for peers.

Stock market moves

  • In the US, the S&P 500 and Nasdaq 100 fell 1.94% and 3.12% respectively on Wednesday. The Nasdaq 100 has tumbled the most since March, likely due to concerns over the Fed rising yields.
  • In Asia, Japan’s Topix closed down 2.07% while China’s Shanghai Composite Index dropped 0.25%. Hong Kong’s Hang Seng Index is finishing its day at 0.66%.
  • In Europe, the FTSE 100 has opened down at 0.9%.

Corporate announcements

* Maitland Client

B&M European Value Retail S.A.* Q3 FY22 Trading Update
  • Group revenue growth in Q3 FY22 of 0.1% year-on-year on a constant currency basis.
  • Total B&M UK fascia revenue in Q3 down (2.5)% year-on-year, with one-year like-for-like revenue down (6.2)% and up 14.0% on a two-year basis versus pre-pandemic levels of Q3 FY20.
  • Strong performance across categories, with excellent sell-through of Seasonal ranges supporting gross margin in the quarter.
  • FY22 Group adjusted EBITDA (on a pre-IFRS16 basis) now expected to be in the range of £605m to £625m, ahead of the current analysts’ consensus estimate of £578m.
  • Simon Arora, CEO, said: “The Group has delivered a very strong Golden Quarter, with our two-year like-for-like performance demonstrating strong retention of new customers. Our decision to take receipt of imported Christmas stock early in the season meant we were able to provide customers with great products at great prices. The consistency of performance in the core B&M UK business reflects the growing appeal of our stores as a destination visit for seasonal products, as well as the strength of our supply chain. I would like to thank all of our colleagues for helping to deliver our best-ever Christmas. Although the pandemic continues to create challenges for retailers and consumers alike, our relentless focus on value-for-money remains undiminished. Despite ongoing supply chain disruption, inflationary pressures and uncertainty surrounding possible Covid-related restrictions, we remain confident in B&M’s prospects for 2022.”
Next PLC Trading Statement
  • Q4 full price sales up 20.0% (vs. 2019/20), £70m ahead of previous guidance for period.
  • Increased full year profit before tax guidance to £822m (+£22m or +9.8% vs 2019/20).
  • Guidance for 2022/23 assumes full price sales growth of +7.0% vs 2021/22, representing +6.5% compound annual growth against 2019/20. Estimates that profit before tax will be at £860m (+4.6%).
  • Outlook for inflation 2022: “In addition to the increases in the cost of our goods, we are also experiencing increases in UK operating costs, mainly as a result of UK wage inflation. We anticipate that average wage inflation across the NEXT Group will be 5.4%, driven by the increase in the national living wage of 6.6% along with wage inflation in sectors where there are labour shortages, most notably in Warehousing and Technology.”
Glencore PLC Glencore closes sale of Ernest Henry Mine
  • Glencore and Evolution Mining have closed the sale and purchase of Glencore’s 100% interest in Ernest Henry Mining (EHM), owner of the EHM copper-gold mine in Queensland, Australia.
  • Glencore has received A$800m and will receive a further A$200m in 12 months time.
  • Glencore will offtake 100% of the copper concentrate produced at EHM.
  • After Evolution’s acquisition of EHM, all agreements implementing the economic joint ventures between Glencore and Evolution have ended. Glencore has no further obligation to deliver any metals under these agreements from 1 January 2022. Evolution also assumes all rehabilitation obligations and liabilities, and will replace Glencore’s rehabilitation bonds.
Greggs PLC Trading Update
  • Total sales of £1,230m for FY2021 (2020: £811m, 2019: £1,168m), two-year sales growth of +5.3%.
  • Two-year like-for-like sales performance for Q4 of +0.8%, for FY2021 down -3.3%.
  • Ended 2021 with a cash position of £198m.
  • Roger Whiteside, CEO, said: “We enter 2022 with a strong financial position that will support our ambitions to accelerate the rate of growth in our shop estate whilst developing new digital channels and extending the trading day. Whilst conditions in the first few months of 2022 are likely to remain challenging, we are confident that we are well placed to make progress on the many attractive opportunities that lie ahead.
Pantheon International PLC Monthly Performance Update
  • NAV per share of 421.1p (+26.8p or +6.8% for November 2021).
  • Net asset value of £2.3bn with net available cash balances of £220m.
  • Net portfolio cash flow of £20.8m for November 2021, and £93.4m during six months to 30 November 2021.
  • 37 new investments are made in the six months to 30 November 2021, amounting to £264.1m in new commitments.
PureTech Health PLC LYT-100 Shows Improved AE Profile vs Pirfenidone
  • Announced results demonstrating that approximately 50% fewer subjects treated with PureTech’s LYT-100 experienced gastrointestinal-related adverse events compared to subjects treated with pirfenidone (17.4% vs. 34.0%).
  • Intends to advance LYT-100 into late-stage clinical development for the treatment of IPF, beginning with a dose-ranging study initiating in H1 2022.
  • Together with a Phase 3 study, PureTech believes these results could serve as the basis for registration in the US.
  • Julie Krop, M.D., Chief Medical Officer, said: “The ability to pursue a 505(b)(2) development path for LYT-100 based on the validated biology and known clinical benefits of pirfenidone significantly de-risks our path to approval and has the potential to make this important therapy available to patients faster.”
Greggs PLC Chief Executive Succession
  • Announces the appointment of Roisin Currie, current Retail and Property Director, as successor to CEO Roger Whiteside as he approaches retirement age. This is effective from Greggs’ AGM in May 2022.
  • Roisin will be appointed as CEO Designate and as an Executive Director with effect from 1 February 2022.
  • Roisin currently holds responsibility for Greggs’ UK retail operations, its central support team, the development of Greggs shop estate, and delivery business. She previously held People Director roles at Asda.
  • Ian Durant, Chairman, said: “[Roisin] has deep experience of our culture and our strategic plan, and will lead with energy and character. Roger Whiteside has been an outstanding Chief Executive and I wish him well for the future. Roisin and I look forward to working with Roger to ensure a smooth transition.