Maitland/AMO Morning Monitor – Wednesday 07 April 2021

7th April 2021

In the news

  • The European Commission has backed a call from U.S. Treasury Secretary Janet Yellen for a global minimum corporate tax.
  • Goldman Sachs bought around £75m of Deliveroo shares to prop up trading after the share price slumped 30% on its debut on the LSE.
  • The IMF has forecast that the US economy will be bigger next year than anticipated before the pandemic as the fund predicts GDP growth of 6.4% for the US this year.
  • The Moderna vaccine will be rolled out in the UK from today with the programme starting in Wales.

Politics today

  • Parliament remains in recess today.

Stock market moves

  • In the US, the S&P 500 and Nasdaq 100 retreated overnight, falling o.1% and 0.05% respectively.
  • Asian stocks were mixed as Hong Kong’s Hang Seng Index fell 0.7%, while Japan’s Topix Index added 0.5%.
  • In Europe, the FTSE 100 is up  0.34% and the STOXX 600 is down 0.14%.

Corporate announcements

* Maitland Client

Hilton Food Group PLC Preliminary Results
  • Revenue of £2,774.0m (2019: £1,814.7m).
  • Adjusted operating profit of £67.0m up 20.0%.
  • Basic earnings per share of 55.4p up 18.0%.
  • Robert Watson OBE, Chairman, said: “This response underpinned a strong performance with both volume and profit growth and we concluded our joint venture transition period in Australia and purchase of the related joint venture assets while marking our one year anniversary of the opening of our Queensland facility. In Europe we set up a new facility in Belgium during the year to supply Delhaize and continued to further diversify our product offering in the plant-based, seafood and convenience categories. As with all businesses there remain some uncertainties concerning the full impact of Covid-19, including potential recessionary risks, but our robust and sustainable business model and wide geographical spread make us believe we are well placed to meet any future challenges.”
Impax Environmental Markets PLC Final Results
  • IEM’s NAV total return was 31.0%.
  • Net revenue return of  £5.3m (2019: £6.8m).
  • Dividends per share of 2.3p, down 23%.
  • John Scott, Chairman, said: “We have great confidence in the robustness of the Company’s long-term investment hypothesis, namely that companies developing solutions to sustainability challenges and natural resource constraints will outperform the wider market. There are plenty of challenges on the horizon; valuations in equity markets globally are stretched and investors may be irrationally optimistic about overcoming the pandemic and the extent and resilience of subsequent economic growth. Nonetheless, I am confident that the Manager’s record of stock selection discipline will help mitigate these risks.”
Royal Dutch Shell PLC Shell first quarter 2021 update note
  • The Texas winter storm had an impact on our operations and is expected to have an aggregate adverse impact of up to $200m on Adjusted Earnings.
  • Indicative refining margin for Q1 2021 of $2.65/bbl (Q4 2020: $1.6/bbl).
  • Oil products sales volumes are expected to be between 3,700 and 4,700 thousand barrels per day.
SAGA PLC Preliminary Results
  • Underlying profit before tax down 84.4% at £17.1m (2019: £109.9m).
  • Loss before tax of £61.2m reflecting £59.8m impairment of Travel goodwill in the first half.
  • Strong liquidity position, with total available cash of £75.4m and undrawn revolving credit facility (RCF) of £100m at 31 January 2021.
  • Euan Sutherland, group chief executive, said: “Looking ahead, while we are mindful of economic headwinds and the potential ongoing impacts of COVID-19, it is clear that there is significant pent-up demand among our customer base, the vast majority of whom have now been vaccinated and are ready to enjoy post-lockdown freedom. Saga is a proud British business, with a strong brand, loyal customers and great people and we are excited about the opportunities ahead. We look forward to relaunching our brand later in 2021 which will only enhance our ability to unlock the potential in Saga, returning the business to sustainable growth and creating significant long-term value for all our investors and stakeholders.”
Amundi SA* Societe Generale enters into exclusive negotiation with Amundi with a view to disposing of the asset management activities operated by Lyxor
  • Amundi is in exclusive negotiations with Société Générale to acquire Lyxor for a total cash consideration of €825m, or €755m excluding excess capital.
  • Following the acquisition, Amundi would become the European leader in ETF, with €142bn combined AUM, representing a 14% market share in Europe.
  • Amundi would benefit from strong levers to accelerate its development on the fast-growing ETF segment, while complementing its offering in active management.
  • The transaction is expected to be completed by February 2022 at the latest.
  • Yves Perrier, CEO of Amundi, commented: “The acquisition of Lyxor will accelerate the development of Amundi, as it will reinforce our expertise, namely in ETF and alternative asset management, and allows us to welcome highly recognized teams of people. This acquisition is fully in line with the Crédit Agricole group’s reinforcement strategy in the asset gathering business. It will also further reinforce the business relationships with our historical partner Société Générale. Finally, by creating in France the European leader in passive asset management, it will contribute to the post-Brexit positioning of the Paris financial centre”.
Vodafone Group PLC* Donation to secure vaccine supply in Africa markets
  • Vodafone foundation and Vodacom Group donate to secure covid vaccine supply in its Africa markets.
  • The contribution will buy cold-chain technology and provide logistics support to help to ensure the safe delivery of Covid-19 vaccines that need to be stored at extremely cold temperatures.
  • Nick Read, CEO, Vodafone Group, said: “By supporting Africa’s vaccine roll-out we help to protect some of the most vulnerable communities in the countries we serve. Vodafone also encourages our employees globally to support the vaccine delivery appeals by GAVI, the Vaccine Alliance and UNICEF to help safeguard health workers and the most high-risk people on our planet.”