Maitland/AMO Morning Monitor – Tuesday 24 September 2019
What really matters... COVID-19
The FTSE, CAC and DAX are expected to open down this morning.
In Asia, the Hang Seng, Nikkei and Shanghai Composite are up as stocks gain on the resumption of high-level US-China trade talks.
Stock market moves
In other news
- Thomas Cook's management will be investigated over the group's collapse by a UK government-backed probe
- The UK's Supreme Court is set to make a ruling on whether the Prime Minister's decision to suspend Parliament was lawful
- Leaders of the UK, France and Germany join the US in blaming Iran for the recent attacks on Saudi Arabia
- Shadow Business Secretary Rebecca Long Bailey and Deputy Leader Tom Watson are due to speak at the Labour Party Conference in Brighton
- Prime Minister Boris Johnson remains in New York and is expected to meet with US President Donald Trump, Irish Taoiseach Leo Varadkar, UN Secretary General António Guterres and Dutch Prime Minister Mark Rutte
Corporate announcements* Maitland Client
Tui Group* Pre-Close Trading Update
- The group’s diversified portfolio of Hotels & Resorts destinations continues to deliver balanced results, with demand shifting from Western to Eastern Mediterranean.
- The group successfully launched the new TUI Cruises Mein Schiff 2, Marella Explorer 2 and Hanseatic nature for Hapag- Lloyd Cruises, with high occupancy levels and robust daily rates continuing to be delivered.
- FY19 is closing out in line with expectations and the group reiterates FY19 underlying EBITA guidance of approximately up to minus 26% compared with underlying EBITA rebased in FY18 of €1,177m.
- Friedrich Joussen, CEO, said: “We are currently assessing the short term impact of Thomas Cook’s insolvency under the current circumstances, on the final week of our FY19 financial result. Our vertically integrated business model proves to be resilient, even in this challenging market environment…Going forward, our two key digital strategic initiatives will deliver greater customer reach in new markets complementary to our existing markets, through our new GDN-OTA platform as well in our Destination Experiences markets through our Musement platform, driving further demand to our own Holiday Experiences businesses. TUI is well-positioned to become an integrated digital tourism platform business.”
- Group adjusted operating profit for the full year down 3% at £270.5m (2018: £278.6m).
- Banking adjusted operating profit increased 1% to £253.7m, benefiting from a continued disciplined approach to lending and the diversity of their business portfolio.
- The net interest margin was broadly stable at 7.9%, the bad debt ratio remained low at 0.6% and the loan book grew by 5.7% to £7.6bn.
- Continued good momentum in the Asset Management division with strong net inflows at 9%.
- Winterflood delivered solid trading profitability in a difficult market environment, with only two loss days in the year. Operating profit down 29% at £20m reflecting significantly lower market activity.
- The board is proposing a full year dividend per share of 66.0p, up 5%.
- Preben Prebensen, CEO, said: “I am pleased that the group has delivered a very solid performance, maintaining strong returns and profitability. […] The disciplined application of our business model and investment in key strategic initiatives give us confidence that we can continue to support our customers in a wide range of market conditions.”
- Close Brothers Group announces that after ten years, Preben Prebensen has decided that the time has come to step down as chief executive, and move on to the next stage of his career.
- The Board will now commence a formal search for a successor, considering both internal and external candidates. Preben will remain with the group for the next 12 months to ensure a smooth handover.
- Mike Biggs, Chairman, said: “I am immensely grateful for Preben’s strong and successful leadership during a period of significant growth and development for Close Brothers. Preben has refocused, professionalised and strengthened the organisation, while preserving the core values and long-term discipline which are at the heart of our business model.”
- Revenue rose 5.5% to £195.6m (2018: £185.3m).
- Like-for-like sales rose 1.7ppts to 1.5% (2018:0.2%).
- Underlying profit before tax fell 7.9% to £22.0m (2018: £23.9m).
- Basic EPS fell 14.9% to 5.7p (2018: 6.7p).
- Cardfactory.co.uk sales grew by 25% with strong performance against external and internal KPIs.
- 26 net new stores opened, driving additional revenue growth.
- Karen Hubbard, CEO, said: “We have delivered a satisfactory sales performance in the first half of the year. A strong seasonal performance, which saw another year of record sales for both Valentine’s Day and Mother’s Day, was achieved against the backdrop of an increasingly challenging UK high street environment and consequent weaker footfall. The successful seasonal trading, combined with more sophisticated use of data and improvements to our customer experience, gives us confidence for the key Christmas trading period ahead. We are pleased with the progress made on the strategic initiatives that are underway. These include using consumer insight to develop our customer proposition across all channels and a number of commercial partnerships. Maintaining a sharp focus on the execution of these various initiatives is a key priority for the senior leadership team. Although the current economic uncertainty continues to impact consumer confidence, we remain positive about the resilience of the card market, the strength of the Card Factory business model, and our growth opportunities for the business over the medium term.”
- Revenue of £122.5m (2018 : £136.9m).
- Profit before tax and exceptional items of £13.9m (2018 : £18.2m).
- Statutory profit before tax of £13.5m compared to £18.2m in the prior year.
- Operating margin before exceptional items of 11.6% (2018 : 13.4%).
- An interim dividend of 4.00 pence per share (2018 : 3.90 pence) has been declared.
- Outlook: “The first half of 2019 has been disappointing. However, it was always expected to be a year of pricing transition for the business which would lead to elevated levels of risk. We now have plans in place to address our specific brand related challenges and to ensure that the business is appropriately scaled to perform in the current market. We are entering a period of less demanding trading comparisons and, as our new pricing establishes and our strong second half brand plans take effect, our focus is now on returning to long-term growth. Despite continuing economic uncertainty we expect to meet the revised profit expectations communicated in July.”
- Workspace is pleased to announce the appointment of Graham Clemett as Chief Executive Officer with immediate effect.
- Graham has been serving as Interim CEO since June 2019, when his predecessor Jamie Hopkins stepped down.
- Graham Clemett, CEO, said: “Workspace is a leading player in one of UK property’s most exciting sectors. We have a fantastic opportunity ahead of us, and I look forward to working closely with the talented Workspace team to ensure that we maintain our successful momentum.”
- Tritax EuroBox PLC , which invests in Continental European logistics real estate, announces that it has acquired two prime, modern logistics facilities in the GVZ Freight Village of Bremen in Germany for a total consideration of €60.3 million, reflecting a net initial yield of 4.8%, which is highly reversionary against current market rents in this location.
- Purpose-built in 2013 and 2019 respectively, these two high specification facilities have a combined gross internal area of 57,537 sqm, eaves heights of 12.2 metres along with significant yard area and parking.
- Nick Preston, Fund manager of Tritax EuroBox, said: “Situated in Bremen, one of the strongest logistics locations in Germany, these two modern, high specification facilities provide attractive income with scope for reversionary income growth and identified value enhancement through asset management. Bremen benefits from excellent transport and infrastructure connectivity, strong occupier demand and extremely low vacancy rates which underpin the rental growth evidenced in the region. The acquisition of these two well-specified assets adds further to our high-quality logistics portfolio across Continental Europe, which now totals €670 million of which €212 million is in Germany.“