Maitland/AMO Morning Monitor – Thursday 8 November 2018

8th November 2018

Market Information

The FTSE is set to open up. Both the German DAX and French CAC are expected to open up.

Stocks in Asia were mainly higher, with the exception of mainland China, after a stateside rally saw the Dow Jones Industrial Average and S&P 500 record their best post-midterm elections rally since 1982.

In the news

  • Trump on the attack as Democrats win the House of Representatives
  • Princes Charles vows not to be a "meddling" king
  • UK housing market at weakest for 6 years as Brexit looms

Top Financial Announcements

* Maitland Client

National Grid PLC Report for the period ended 30 September 2018
  • Profit before tax down 4% to £816m (2017: £846m).
  • Capital investment up 7% to £2.1bn.
  • EPS down 28% to 19.7p (2017: 18.5p).
  • John Pettigrew, CEO, said: “Investment in our networks increased to £2.1bn, including further progress on our three major interconnector projects. In the UK, we are implementing a cost efficiency and restructuring programme to ensure that we continue to drive outperformance for customers and shareholders. In the US, we have completed a full refresh of our rate plans so that all our distribution businesses are now operating under new rates, a major milestone which will support our continued growth.”
Burberry Group PLC Half-year Report
  • Revenue down 3% to £1,220m (2017: £1,263m).
  • Adjusted operating profit down 4% to £178m (2017: £185m).
  • Marco Gobetti, CEO, said: “We are energised by the early results as we begin to transform and reposition Burberry. The initial response from influencers, press, buyers and customers to our new creative vision and Riccardo’s debut collection Kingdom has been exceptional.  Mindful that we are only in the first phase of our multi-year plan, we continue to manage dynamically through the transition.  We confirm our outlook for the full year.”
AstraZeneca PLC Year-to-Date and Q3 2018 Results
  • Total revenue down 6% to $15,673m.
  • Reported operating profit down 23% to $2,310m.
  • Reported EPS down 34% to $0.88.
  • Pascal Soriot, CEO, said: “Today marks an important day for the future of AstraZeneca, with the performance in the quarter and year to date showing what we expect will be the start of a period of sustained growth for years to come. Commercial execution has been exceptional and our new medicines are now firmly established as the drivers of growth, supporting our continued success in Emerging Markets.”
Sainsbury PLC Half-year Report
  • Underlying revenue up 7% to £272m (2017: £255m).
  • Underlying profit before tax up 20.4% to £302m (2017: 251m).
  • Underlying group sales up 3.5% to £16,884m (2017: £16,310m).
  • Mike Coup, CEO, said: “The market remains very competitive and we are transforming our business to meet rapidly changing customer needs. We have fundamentally changed how our 135,000 Sainsbury’s store managers and colleagues work and I would like to thank them for their ongoing hard work through this period. Our proposed combination with Asda will create a dynamic new player in UK retail, with the ability to further lower prices and to reduce the cost of living for millions of UK households. The Competition and Markets Authority is conducting its in-depth Phase Two review into the proposed combination and we continue to engage constructively with the CMA and Panel.”
BAE Systems PLC Trading Statement
  • Group outlook for 2018 remains unchanged. 
  • Group underlying EPS to be in line with the full-year underlying EPS for 2017.
  • Interim dividend of 9.0p per share.
Coca-Cola HBC AG Q3 Trading Update
  • Net sales revenue up 2.6% to €1,868.5m (2017: €1,822m).
  • Volumes up 4.2% to 615.7m unit cases (2017: 591m).
  • Established markets volumes broadly stable.
  • Zoran Bogdanovic, CEO, said: “As expected, the slowdown in price/mix growth primarily reflected the timing of planned pricing activity, and we expect an acceleration in the final quarter. October trading has been strong, and we look to the full year confident that 2018 will be another year of good growth in both revenue and margins.”
OneSavings Bank PLC Trading update
  • Loan book growth up 16% to £8.5bn (2017: £6.9bn).
  • Organic originations £730m (2017: £677m).
  • Andy Golding, CEO, said: “We recognise the current uncertain macroeconomic outlook. However, our strong balance sheet with sensible LTVs and affordability testing, our strong capital position and robust stress tests, which include a number of Brexit scenarios, give us confidence in our business going forward.”
BBA Aviation PLC Trading Statement
  • Group total revenue up 27% YOY.
  • Revenue growth in Aftermarket Services business was 2.2%.
  • Mark Johnstone, CEO, said: “While we noted a softening of the US B&GA market in the summer, the market continues to be impacted by global economic uncertainty which is impacting flying hours. We continue to believe that over the longer term flying hours are correlated to US GDP and this is supported by many of the typical market indicators which remain positive. In addition, Signature’s organic revenue growth continues to outperform US B&GA movements growth due to the strength of our market leading network. Ontic and our discontinued ERO business continue to perform well.”
Hikma Pharmaceutical Trading Statement
  • Expected Injectables revenue raised to $825-$850m.
  • Expected Injectables operating margin raised to 39%-40%.
  • Siggi Olafsson, CEO, said: “Today we are raising our full year guidance, as we are delivering revenue growth and, more importantly, improving profitability ahead of our expectations in both our Generics and Injectables businesses.  In the MENA, our Branded business is continuing to grow steadily and we remain on track to meet our full year guidance.  Across the Group, we are benefiting from our large and well-diversified portfolios, new product launches and our high-quality, flexible manufacturing facilities.”
Superdry PLC Pre-Close Trading Statement
  • Group revenue increased to £414.6m (H1 2018: £402m).
  • Ecommerce revenue increased to £65.4m (H1 2018: £61.2m).
  • Store revenue decreased to £177.4m (H1 2018: £181.5m).
  • Euan Sutherland, CEO, said: “Superdry has made significant progress in the first half. We are six months into a product diversification and innovation programme and, as we said in the summer, it will take up to 18 months for the benefits to come through. In the meantime we are well prepared for peak trading and the team remains highly focused on the delivery of sales growth and further efficiencies in the remainder of the year.”
Auto Trader Group PLC Half Year Report
  • Revenue up 7% to £176.8m (H1 2018: £165.0m).
  • Profit before tax up 9% to £114.5m (H1 2018: £105.3m).
  • Basic EPS up 12% to 9.78p per share (H1 2018: 8.71p).
  • Trevor Mather, CEO, said: “We have had a great first half of the year driven by strong adoption of new products and advertising packages by both retailers and manufacturers. We strengthened our market leading position with our audience of car buyers, by continuing to focus on providing the best car buying and selling experience in the UK. We do this by providing the best choice of cars, free valuations, extensive reviews and most recently showing finance options, so that car buyers can understand the monthly cost of owning their next vehicle.”
IMI PLC Interim Management Statement
  • Full year 2018 results to be in-line with current market expectations.
  • Organic revenues up 5%.
  • Aftermarket sales up 5%.
3i Infrastructure PLC Half-year Report
  • Total return of 9.3% on opening NAV, ahead of 8% target return.
  • NAV per share increased to 226.4p.
  • Total Shareholder Return of 16.2% (FTSE 250: 6.1%).
  • Richard Laing, Chairman, said: “I am delighted with our performance in the first half of the financial year.  The Company continues to outperform its objectives and is on track to deliver the full year dividend target for FY19, up 10% from last year.  We remain confident in our business model and strategy.”
Beazley PLC Trading Statement
  • Gross premiums written increased by 11% to $1,958m (2017: $1,762m).
  • Premium rates on renewal business increased by 3%.
  • Speciality lines grew by 11%.
  • Andrew Horton, CEO, said: “Our business continues to deliver double digit premium growth and has been aided by higher rates in some classes following last year’s catastrophe losses.  Geographically, the main engine of our premium growth continues to be the US market, where we saw premiums rise 18% relative to the first nine months of last year. We expect this positive momentum to continue and are aiming to deliver high single digit growth for the group again in 2019.”
Halfords FY19 Interim results
  • Revenue increased to £599.9m (H1 2018: £588.7m).
  • Underlying profit before tax fell to £30.5m (H1 2018: £36.8m).
  • Basic EPS decreased to 12.4p (2017: 14.8p).
  • Graham Stapleton, CEO, said: “Despite the challenging UK consumer environment, we delivered a robust sales and cash flow performance in the first half, with costs and profit broadly in line with our expectations. We are making good early progress as we implement our new strategy, and we are encouraged by the initial signs. We are moving to a more customer centric approach, leveraging our expertise to provide a more differentiated shopping experience and an integrated and more convenient services offer.”
Tate & Lyle PLC Half-year Report
  • Profit before tax flat at £166m.
  • Diluted EPS up 5% to 27.9p.
  • Nick Hampton, CEO, said: “The three programmes we announced in May 2018 to sharpen the focus on our customers, accelerate portfolio development and simplify the business are progressing well. With our clear direction, strong financial position and a strengthened leadership team driving greater pace and agility across the organisation, we remain well-placed to realise the growth potential of our business.”
TI Fluid Systems PLC Q3 2018 Trading Update
  • Group revenue of €2,568.9m (2017: €2,592.4).
  • Revenue for Europe and Africa at €1,037.6m (2017: €1,040.2).
  • Expects 2018 Adjusted EBIT margin to be broadly in line with 2017.
Inmarsat PLC 3rd Quarter Results
  • Group revenue increased by 3.9% to $336.4m.
  • Group EBITDA increased by 7.7% to $173.6m.
  • Medium term guidance remains unchanged.
  • Rupert Pearce, CEO, said: “Inmarsat remains at the forefront of our chosen markets, leveraging the strength of our established market position, continuing to deliver an exciting technology roadmap and taking a highly disciplined approach to costs and capital expenditure. As a result, the Group remains well placed to continue delivering medium-term growth in revenue, EBITDA, and free cash flow.”
Howden Joinery Group PLC Trading Update
  • UK depots’ total revenue increased by 7.5%.
  • Gross margin performance in line with expectations.
  • Expects to add 33 depots in the UK in 2018.
Derwent London PLC Q3 2018 Business Update
  • Lettings increased by 6.0% to £14.6m.
  • Total lettings of £23.0m (£11.8m announced on 9 August 2018).
  • John Burns, CEO, said: “Second half lettings have already substantially exceeded those in the first half.  We have now successfully de-risked both of our on-site developments and lowered our vacancy rate, placing us in an excellent position to progress our next two major developments.”
Inchcape PLC Trading Update
  • Group revenue remained flat at £2.28bn.
  • Distribution revenue up by 1%.
  • Retail revenue down by 1%.
  • Stefan Bomhard CEO, said: “Distribution, which comprised around 90% of our profitability in the first half, performed as we expected over the period.  We are particularly pleased with our strength in South America over the quarter, and our profit performance and market share gains in Asia. Distribution is core to Inchcape, and we believe this higher return and cash generative business model will drive future growth opportunities for the Group.”