Maitland/AMO Morning Monitor – Tuesday 14 December 2021

14th December 2021

In the news

  • New Omicron infections in the UK are reaching 200,00 a day, adding urgency to the govrenment's vaccine booster rollout plan.
  • European gas futures increased by 11% yesterday after German foreign minister Annalena Baerbock said that the Nord Stream 2 pipeline's current form does not comply with EU law and could not be permitted.
  • The US Department of Labour is investigating Apple over alleged whistleblower retaliation against an employee who complained of workplace harassment and unsafe working conditions.
  • The number of UK job vacancies hit another record high in the September to November period, official figures show.
  • NatWest has been fined £265m for failing to prevent a £365m alleged money laundering scheme.

Politics today

  • Prime Minister Boris Johnson faces four major Commons votes on his Plan B measures this evening at around 6:30pm.
  • House of Commons sits from 11:30am with justice questions followed by UQs and a motion on extra winter payment towards heating bills of pensioners and vulnerable people.
  • House of Lords sits from 2:30pm with questions on tuna imports, vaccine donation, amendments to the Arm Forces Bill and new COVID regulations.

Stock market moves

  • In the US, markets closed downwards on Monday with the S&P 500 dipping -0.91% and the Nasdaq 100 dropping -1.53%.
  • In Asia, Japan’s Topix closed -0.22% while China’s Shanghai Composite finished at -0.53% on Tuesday. Hong Kong’s Hang Seng Index is ending its trading down -1.46%.
  • In Europe, the FTSE 100 is currently trading up 0.7%.

Corporate announcements

* Maitland Client

Ocado Group PLC Trading Statement
  • Retail revenue of £547.8m (Q4 2020: £570.1m, -3.9%), average orders per week of 375,100 (Q4 2020: 345,700, +8.5%).
  • Strong, mid-teens sales growth expected for 2022.
  • Value of the average basket fell 12% to £118
  • Tim Steiner, Chairman of Ocado Retail, said: “At a time of growing momentum in the channel shift from physical stores to online we are bringing significantly more capacity to market and are confident that we are on  a strong, long-term growth trajectory”.
Rentokil Initial PLC Acquisition of Terminix by Rentokil Initial plc
  • Rentokil Initial will acquire Terminix for stock and cash, and issue Terminix shareholders of approx. 643.29m new Rentokil Initial shares and approximately US$1.3bn in cash.
  • This will value the entire share capital of Terminix at US$6.7bn or value of US$55.00 per share of Terminix common stock.
  • The transaction provides a premium of 47.0% of the closing price of Terminix stock on 13 December, and a premium of 32.5% over 90-day volume weighted average share price.
  • Richard Solomons, Chairman of Rentokil Initial, said: “Under Andy Ransom’s leadership, our Combined Group will have a highly talented and experienced management team able to more effectively create value and enhance long-term growth.  We believe the combination is a compelling opportunity for all stakeholders to participate in the value creation of the Combined Group.”
Altice UK S.a r.l. Statement regarding BT Group plc
  • Notifies that Altice UK has further acquired 585,476,188 shares in BT, increasing its ownership to 18.0% of BT’s issued share capital.
  • Does not intend to make an offer for BT and bound by this statement for purposes of Rule 2.8 of the UK’s Takeover Code.
  • Patrick Drahi, Altice owner, said: “We continue to hold [the Board and Management of BT] in high regard and remain fully supportive of their strategy, principally to play the pivotal role in delivering the expansion of access to a full fibre broadband network; an investment programme which is so important to both BT and to the UK.”
3i Group PLC Appointment of Chief Operating Officer
  • Ms Jasi Halai, currently Group Financial Controller, will join the Group Board as Chief Operating Officer in May 2022.
  • She will also join the Executive Committee.
  • Ms Halai joined 3i in 2005 and has held a variety of posts in the business, most recently as Group Financial Controller and Operating Officer.
  • David Hutchison, Chairman, said: “”We are delighted to announce Jasi’s promotion to the Board as Chief Operating Officer  She has played an important Group role for a number of years managing the Group’s central financial operations and we look forward to her contribution to the Board over the coming years.”
Results for the year ended 31 October 2021 Chemring Group PLC
  • Revenue of £393.3m and £408.0m at 2020 exchange rates (2020: £402.5m).
  • Underlying EBITDA at £76.4m and £79.4m at 2020 exchange rates (2020: £74.6m)
  • Total dividend of 4.8p (2020: 3.9p), with new policy to target a medium-tend dividend cover of c. 2.5x underlying EPS.
  • Michael Ord, CEO, said: “Chemring is well placed, with a robust strategy, market-leading positions across different geographies and sectors, and with products and services that are critical to our government and blue-chip customers around the world. Chemring’s long-term prospects remain strong.”
GCP Infrastructure Investments Ltd Annual report and financial statements
  • Annual profit of £62.4m (2020: -£0.7m).
  • Net assets of £916.8m (2020: £914.8m), with NAV per share of 103.92p (2020: 103.99p).
  • Dividend of 7.0p per share for the year (2020: 7.6p). Target of 7.0p set for FY2022.
  • Ian Reeves CBE, Chairman, said: “The Company remains well placed to capture exciting investment opportunities, which are aligned with the original investment policy and objectives, as part of the UK’s transition to net zero. It also maintains an attractive pipeline of new investments and follow-on investments in existing investee companies as part of optimisation programmes.”
Syncona Limited Freeline reports 2022 priorities and guidance
  • Portfolio company Freeline Therapeutics anticipates data across all programmes by mid-2022.
  • Decided to discontinue further development of its pre-clinical work for FLT210 in hemophilia A.
  • Proposed implementing an approximate 25% reduction in the size of its workforce.
  • Expects that cash runway will be extended by an additional quarter to Q2 2023.
BMO Global Smaller Companies PLC Half-year Report
  • NAV of 183.39p per share (2020: 134.49p), giving a total return of 5.6% (Benchmark total return: 4.3%).
  • Share price ended at 167p, delivering total return of -0.1%.
  • Interim dividend increased by 3.6% to 0.57p per share.
  • Outlook: “While recent supply chain and logistical issues are causing disruption to the operations of some businesses, we remain encouraged by the performance of most of the companies in the portfolio. Demonstrating effective cost management and the ability to move up pricing will be important drivers in the near term for company management teams.”
Polar Capital Technology Trust PLC UNAUDITED RESULTS FOR SIX MONTHS TO 31 OCT 2021
  • Total net assets of £3.76m (H1 2021: £3.41m, +10%).
  • Net Asset Value per ordinary share of 2782.81p (H1 2021: 2496.44p, +11.5%).
  • No interim dividend has been declared, nor were there for H1 2021 or FY2020, and there is no intention to declare a dividend for the year ending 30 April 2022.
  • Sarah Bates, Chair, said: “The assets of the Company comprise mainly of securities that are readily realisable and accordingly, the Company has adequate financial resources to meet its liabilities as and when they fall due and to continue in operational existence for the foreseeable future.”