Maitland/AMO Morning Monitor – Tuesday 13 August 2019
The FTSE, CAC and DAX are expected to open down this morning.
Asian markets are broadly lower today with shares in Hong Kong off the most.
In the news
- US proposes "sector by sector" trade deal following UK's EU exit
- Pound recovers slightly after hitting a 10 year low
- Peso plunges after Argentine President Mauricio Macri suffered a shock defeat
The political day
- International Trade Secretary Elizabeth Truss, Brexit Secretary, Steve Barclay and Defence Secretary, Ben Wallace, are expected to meet with the US National Security Advisor, John Bolton
- Work and Pensions Secretary, Amber Rudd, is expected to respond to the latest employment statistics
- The Transport Committee will publish a report into road safety and driving while using a mobile phone
Top Financial Announcements* Maitland Client
TUI AG (TUI)* 3rd Quarter Results
- Underlying Q3 EBITA year-on-year €100.9m euros (Q3 2018: €186.8m); impact due to Boeing 737 MAX grounding €144m.
- Group turnover in the period up 3.7% versus previous year, to €4.745bn.
- Guidance for full year 2019 reiterated.
- Fritz Joussen, CEO, said: “We are consistently pursuing our digital transformation roadmap, transforming TUI into a global platform company. The strength of our globally unified brand and direct access to our customer base, already comprising more than 21 million customers, offers great potential.”
- Revenue 6.2% higher at £223.3m with strong contribution from recent acquisitions.
- Underlying operating profit 8.3% higher at £39.3m.
- Continued focus on returns with underlying operating margin 30 basis points higher at 17.6%.
- Underlying basic earnings per share 8.9% higher at 14.7 pence.
- Martin Payne, CEO, said: “”The business has performed well in the first half with good revenue growth and improved margins through selective cost reductions and acquisitions. The medium-term fundamentals of our markets remain strong. Whilst we are mindful of current political and economic uncertainty, management continues to focus on self-help measures and together with an encouraging start to the second half, the Board’s profit expectations for the year remain unchanged.”
- Total group sales growth of +5.5% (H1 FY19: +3.2%).
- Card Factory like-for-like sales +1.5% (H1 FY19: -0.2%), a robust sales performance in a challenging consumer environment.
- Further expansion of our store network with 26 net new UK stores opened (H1 FY19: 25).
- Karen Hubbard, CEO, said: “Our quality and value proposition continues to resonate well with customers – reflected by the good performance of our seasonal ranges in the first half of the year. We continue to work hard at making sure we have the right ranges at the right prices for our customers, in the store and online. Alongside that, we remain focused on our important commercial and business efficiency initiatives – all of which will make Card Factory a much stronger business for the long term. We continue with the trials within Aldi and The Reject Shop in Australia, a further update will be given at our interims announcement in September.”
- New Customer numbers in Q2 2019 were 23% ahead of Q1 2019 (Q1 2019: 21,306).
- Active Customer numbers in Q2 2019 were 11% ahead of Q1 2019 (Q1 2019: 97,921).
- Revenue from non-EEA countries represented approximately 48% of the Group’s revenues in the period (H2 2018: 40%).
- Revenue from customer spreads and overnight charges totalled approximately $175m (H2 2018: approximately $193m).
- Asaf Elimelech, CEO, said: “The Group performed well during what was a difficult period for the entire industry. Financial markets from February 2019 to April 2019 were very stable, providing a limited number of trading opportunities for customers. Against this backdrop, the Company continued to invest in focussed marketing, with sequential increases in the number of New and Active Customers and in customer retention levels, as well as lower customer acquisition costs. Given the market backdrop, we continued to concentrate on delivering significant enhancements to the trading platform, with the addition of functionality which appeals to more sophisticated traders, and to the level of customer service, with Plus500 becoming the first major CFD trading provider to integrate WhatsApp as an additional customer communication channel.”
- Net Asset Value decreased to $703.8m (2018: $857.0m).
- Dividend per share decreased to 2.46 pence (2018: 4.02 pence).
- Share price rose to £0.8960 (2018: £0.8870).
- Rupert Dorey, Chairman, said: “The Board remains satisfied with the performance of the Company’s portfolio in the first half of the year which has benefitted from the more defensive positioning taken by the Investment Manager. During the six months ended 30 June 2019, the Company’s NAV total return was 5.79% and 6.02% per Sterling Ordinary Share and per U.S. Dollar Ordinary Share, respectively. During the same period the Company’s share price total return was 4.01% per Sterling Ordinary Share and 3.15% per U.S. Dollar Ordinary Share. The Company’s Net Asset Value (“NAV”) per share experienced strong relative performance over the first six months of 2019, outperforming its relevant benchmark, the S&P / LSTA Leveraged Loan Index (the “Index”), by 28 basis points (“bps”) as the risk-off sentiment experienced during Q4 2018 dissipated.”
- Net Asset Value per share (total return) rose to 27.6% (2018: 20.3%).
- Share price (total return) remained 23.4% from last year.
- Small and Mid Cap Market Equities (total return) rose to 17.2% (2018: 7.5%).
- Mark Pacitti, Chairman, said: “I am pleased to present this Interim Financial Report of Smithson Investment Trust plc (the “Company”) for the period from incorporation to 30 June 2019 (the “Period”). It is the second interim report of our extended first financial reporting period which commenced on the date of the Company’s incorporation on 14 August 2018 and will end on 31 December 2019. The Company commenced trading on the London Stock Exchange’s Main Market on 19 October 2018 and subsequently entered the FTSE 250 Index in December 2018. As I reported to the shareholders in the first interim report for the period from incorporation to 31 December 2018, I am very pleased to note that the Company has again performed well in comparison with its peers. It has also produced extremely good results in absolute terms during this six month period to 30 June 2019. Although the Company has been trading for a relatively short period of time, the Board is very satisfied with its progress.”
- During the first half of 2019, the Company’s net asset value total return was 13.5%, 1.4% below the benchmark return of 14.9%.
- The share price total return was 11.7%, as the discount widened from 1.3% at the end of 2018 to 2.9% at the end of June.
- A second interim quarterly dividend of 1.175p per ordinary share will be paid in September. Total dividends paid in respect of the period are 2.35p per ordinary share (2018: 2.1p).
- 10.8m shares (1.2%) were bought into treasury at an average discount of 2.8%.
- Outlook: “The prospects for the rest of 2019 and next year depend to some degree on whether the interest rate cuts and other forms of easier policy are viewed as a form of policy insurance to prolong the economic upswing or as emergency treatment for a moribund global economy. With global growth forecasts low but positive, the former looks more likely, in which case the recent fall in bond yields is probably overdone.”