Maitland/AMO Morning Monitor – Tuesday 11 January 2022

11th January 2022

In the news

  • The Prime Minister is pressuring scientific advisers to recommend slashing the Covid-19 isolation period down to five days.
  • A newly leaked email has revealed that one of the Prime Ministers top officials, Martin Reynolds, invited more than 100 Downing Street staff to a ‘Bring Your Own Booze’ party at No10.
  • Corporate bond issuance reached $101bn in the first week of 2022, with US deals reaching a record pace.
  • Credit Suisse is disputing SoftBank founder Masayoshi Son's account of the latter's deal with Greensill Capital.
  • Take-Two Interactive has acquired mobile gaming specialist Zynga for $12.7bn.

Politics today

  • The House of Commons sits from 11:30am with BEIS questions, Labour debates on cutting VAT on household energy bills, and calling on reform of business rates.
  • The House of Lords sits from 2:30pm with questions on DWP support for larger families, Kazakhstan and more, and will hold the first day of the Heath and Care Bill's committee stage.

Stock market moves

  • In the US, the S&P 500 dropped 0.14% on Monday while the Nasdaq 100 rose 0.14%, fluctuating ahead of a key US inflation reading expected to strengthen the case for tighter monetary policy.
  • This has affected Asian stocks as well, with Japan’s Topix and China’s Shanghai Composite Index closing at -0.44% and -0.73% respectively. Hong Kong’s Hang Seng Index is currently ending its day downwards at -0.18%.
  • In Europe, the FTSE 100 has opened marginally up at 0.5% this morning.

Corporate announcements

* Maitland Client

Electrocomponents PLC Trading Statement
  • Q3 like-for-like revenue growth of 21%, with group revenue growth of 23%.
  • Industrial product ranges, accounting for 75% of group revenue, grew 20% on like-for-like basis.
  • Like-for-like revenue growth for EMEA, Americas and Asia Pacific are 14%, 37% and 25% respectively.
  • Lindsey Ruth, CEO, said: “As we enter Q4 we are mindful of external pressures, including the Omicron variant and supply chain constraints, although our better than expected Q3 trading means we expect full year profit to be slightly ahead of consensus estimate.”
Dechra Pharmaceuticals PLC Dechra acquires worldwide rights to verdinexor
  • Has acquired the worldwide rights to verdinexor, a novel treatment of all forms and stages of canine lymphoma in dogs.
  • Terms include global product rights, first right of refusal for other species with the trademark Laverdia, worldwide marketing rights, rights to intellectual property, and more.
  • The product was conditionally approved by the FDA Center for Veterinary Medicine on 11 January 2021.
  • Ian Page, CEO, said: “Its addition to our portfolio will expand Dechra into a new, niche therapy area, while also offering veterinarians and dog owners a simple to use, effective medication for lymphoma that extends the time a family has with their pet.”
Phoenix Group Holdings PLC 2021 Bulk Purchase Annuity Transactions
  • Completion of four Bulk Purchase Annuity (BPA) transactions during the second of of 2021, covering £4.0bn of premiums which comprises £3.6bn of external deals and a £0.4bn tranche of the group’s Pearl Pension Scheme.
  • Equates to total BPA premiums of £5.5bn contracted for the year (FY20: £2.5bn).
  • Expects to deliver in excess of £1bn of total new business long-term cash generation for 2021.
  • Andy Briggs, CEO, said: “This reflects the investment we are making into our growing Open business and the Standard Life brand, which supports us in delivering Phoenix’s purpose of helping people secure a life of possibilities.”
Games Workshop Group PLC Half-year Report
  • Revenue of £191.5m (H1 2020: £186.8m).
  • Operating profit of £88.5m (H1 2020: £92.0m), with profit before taxation at £88.2m (H1 2020: £91.6m).
  • Basic earnings per share of 217.2p (H1 2020: 226.1p).
  • Kevin Rountree, CEO, said: “We have proven once again that the Warhammer hobby creates exciting experiences and allows people around the world to come together and have some fun. We continue to focus on making the best miniatures in the world and to document and deliver an exciting operational plan.”
Darktrace PLC Pre-Open Trading Update
  • For the six months ended 31st December 2021, shown year-over-year growth of 39.6% in customer base.
  • Expects at least 45% in constant currency ARR and at least 50% in revenue, expecting year-over-year revenue growth of between 42% and 44% (previously 37% to 39%).
  • Increasing the guidance for its FY 2022 adjusted EBITDA margin to between 3% and 6% (previously 2% to 5%).
  • Cathy Graham, CFO, said: “The power of our innovative underlying technology, Self-Learning AI, enables us to expand our ability to protect organisations from the cyber threats of today and tomorrow.”
Unite Group PLC Trading update and Q4 fund valuations
  • 60% of rooms are now sold for 2022/23 academic year (2021/22: 58%), supportive of guidance for full occupancy and rental growth of 3.0-3.5% for 2022/23.
  • Property portfolio independently valued at £2,867m by 31 December 2021 (+1.6% for the quarter, +4.6% for the year).
  • Investment portfolio independently valued at £1,819m by 31 December 2021,(+3.1% for the quarter, +10.4% for the year).
  • Joe Lister, CFO, said: “Reflecting this positive outlook, we continue to see strong investment demand for UK student accommodation, as reflected in the valuation performance for USAF and LSAV in 2021.”
Rathbones Group PLC FUMA update and notice of results
  • Total funds under management and administration (FUMA) of £68.2bn (FY2020: £54.7bn, +24.7%).
  • Investment Management business recorded gross inflows of £4.5bn (FY2020: £3.9bn).
  • Rathbone Funds recorded £4.4bn gross inflows (FY2020: £3.6bn).
  • Outlook: “Rathbones remains in a strong position to continue delivery of strategic initiatives, secure the delivery of our ambitions for Saunderson House, and explore further opportunities to drive growth.”
XP Power Limited Trading Update
  • Orders up 65% at constant currency and 58% as reported to £88.6m, with a book to bill of 1.51x.
  • Q4 revenue of £58.8m, +4% year-on-year and -1% as reported.
  • 2021 adjusted operating profit is anticipated to be modestly below the lower end of current market expectations.
  • Outlook: “While we remain mindful of the ongoing uncertainties in respect of component supply and freight capacity and costs and are continuing to monitor the situation carefully, we are optimistic on the Group’s prospects for the year ahead and plan to invest in new manufacturing capacity in 2022 to support the future growth of the Group.”
Kainos Group PLC Kainos acquires Blackline Group
  • Completed the acquisition of US based Blackline Group Inc, a speciality services firm that focuses on procurement and is an advisory partner for Workday Strategic Sourcing.
  • The acquisition is Kainos’ sixth in the Workday partner ecosystem and the third in the Americas.
  • Terms of the acquisition have not been disclosed.
  • Brendan Mooney, CEO, said: “We are always striving to achieve the best business outcomes for our customers and extending our capability to include procurement helps us to achieve this goal.  At the same time, we are also excited by the new opportunities that combining the experience and expertise of the Kainos and Blackline teams will create for our business.”