Maitland/AMO Morning Monitor – Wednesday 12 January 2022

12th January 2022

In the news

  • Hedge Fund billionaire Ken Griffin has sold a $1.2bn stake in Citadel Securities to venture capitalists Sequoia and Paradigm.
  • Consumer price growth in the OECD group of developed nations hit 5.8% in November, increasing pressure on central banks to raise interest rates.
  • Conservative politicians have called for the Prime Minister to resign if it is determined that he broke lockdown rules by attending a garden party at Downing Street in May 2020.
  • A jump in real yields has jolted markets in early 2022 and was behind a pullback in high-flying technology stocks, according to investors.
  • One of Unilever's top 10 shareholders has accused the group of prioritising sustainability at the expense of the business.

Politics today

  • The House of Commons sits from 11:30am with women and equality questions, followed with the report and third reading stages of the Commercial Rents (Coronavirus) Bill aimed at helping landlords and tenants resolve pandemic rent debt.
  • The House of Lords sits from 3:00pm, with questions on the U.K.’s diplomatic influence since Brexit, potential breaches of the Commonwealth Charter by Eswatini’s government and the impact of rising energy prices.

Stock market moves

  • In the US, the S&P 500 closed up at 0.92%, along with the NASDAQ 100, which rose 1.47%.
  • In Asia, Japan’s Topix Index rose 1.64% along with China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index, closing up 0.83% and 2.59% respectively.
  • In Europe, the FTSE opened up this morning at 0.5%.

Corporate announcements

* Maitland Client

Sainsbury (J) PLC Q3 Trading Statement
  • Expects to report underlying profit before tax of at least £720m in the financial year to March 2022.
  • Investments in value, new products and service have driven volume market share gains, growing ahead of the market through Q3.
  • Full price Clothing sales were up 38% versus two years ago.
  • Simon Roberts, CEO, said: “We delivered great service in our supermarkets and strong availability this Christmas when it mattered most. I’m hugely grateful to all our team for everything they did to deliver for our customers and we closed all our stores on Boxing Day this year to give our colleagues a well-deserved break. We are increasing base pay for Sainsbury’s and Argos store colleagues to £10 an hour from March to recognise their brilliant efforts every day in serving our customers.”
Whitbread PLC Q3 FY22 Trading Update
  • Continued market outperformance in the UK, with Premier Inn total accommodation sales 10.6% ahead of FY20 and like-for-like UK accommodation sales 5.5% ahead.
  • Total UK sales were 3.1% ahead of FY20, with total food and beverage sales down 11.1%.
  • Resilient trading in the UK despite the onset of the Omicron COVID-19 variant with total UK accommodation sales growth 5.1% ahead of FY20.
  • Alison Brittain, CEO, said: “In Germany, our open hotel estate now stands at 32 hotels, all now branded Premier Inn, with a further 43 hotels in the pipeline. Whilst the current German Government COVID-19 restrictions are a significant drag on market demand, the opportunity for the Group to create value in Germany remains compelling. We will continue to take opportunities to grow the estate at pace, and our commitment to that market will be substantial, delivering attractive long-term returns.”
JD Sports Fashion PLC Trading Update
  • Total revenues for the twenty-two week period to 1 January 2022 in like for like businesses were more than 10% ahead of the same period in 2020.
  • Anticipated outturn for the full year will be at least £875m.
  • Predicted profit before tax for the full year to 29 January 2022 will be ahead of current market expectations, averaging £810m.
  • Peter Cowgill, CEO, said: “The commitment of our colleagues is crucial to our success and I would like to thank everyone in our various businesses for their significant contribution in delivering this outstanding performance.”
Bunzl PLC Acquisition
  • Bunzl, the specialist international distribution and services Group, completed the acquisition of Tingley Rubber Corporation in late December, a distributor of own brand PPE based in New Jersey, US.
  • Tingley generated revenue in 2021 of $68m (c. £49 m).
  • The business is focused on protective footwear and apparel and has a strong product portfolio.
  • Frank van Zanten, CEO, said: “I am pleased to announce the acquisition of Tingley which will further enhance our North American safety offering with its innovative brand portfolio and represents our 14th acquisition completed in 2021.  The Group’s committed spend over 2020 and 2021 combined was approximately £950 million, making the last two years one of the most successful periods in our history for acquisitions.  Our pipeline remains active, supported by the strength of our balance sheet.”
Grafton Group PLC 2021 Trading Update
  • Group total revenue from continuing operations increased by 25.7% to £2.11bn in 2021 from £1.68bn in 2020.
  • Strong performance from the Group’s portfolio of high returning businesses with adjusted operating profit forecast of £270.4m.
  • Proceeds received at year end on divestment of Traditional Merchanting business in Great Britain enhances Group’s strong financial position.
  • Gavin Slark, CEO, said: “The Group’s portfolio of high returning businesses performed strongly leading to a record outcome for the year. 2021 was also a year of significant strategic change for Grafton with the sale of the traditional merchanting business in Great Britain and the acquisition of IKH in Finland.  The overall outlook remains positive and we look to the future with confidence given the strength of our businesses, strong balance sheet and good pipeline of investment opportunities.”
Trust Pilot Group PLC Trading update for the year to 31 December, 2021
  • Trustpilot expects to report total revenue of $131m for FY21, representing a 29% growth YoY.
  • The Group expects to report FY21 annual recurring revenue of $144m, compared to $119m in the prior year.
  • Total bookings increased to $150m, up by 32% YoY.
  • Peter Holten Mühlmann, CEO, said: “We are very encouraged by this excellent financial result, with revenue ahead of expectations and strong growth in bookings and ARR. Over the past twelve months, we have continued to make strong progress against our strategic ambitions for Trustpilot to be the most trusted and most used global consumer reviews platform. Through this, we are fast becoming a universal symbol of trust that inspires confidence in people and businesses, thus providing a real benefit to society.”

     

Vistry Group PLC Trading Update
  • The Group is expected to deliver FY21 adjusted profit before tax of £345m, compared to £143.9m in 2020. 
  • Net cash position at 31 December 2021 of £234m, compared to £38.0m the previous year.
  • The Group expects to deliver a significant step up in profits and returns in FY22.
  • Greg Fitzgerald, CEO, said: “We are focused on leveraging the Group’s unique combination of Housebuilding and Partnerships assets as well as our strength and capability across all housing tenures, with our target of delivering sector leading returns in the medium term.  I’m delighted with the progress in the year – our Housebuilding and Partnerships businesses are together securing new, high quality development opportunities, while working successfully alongside each other on a number of existing sites.  This successful joint approach is delivering enhanced overall returns.”
     
Dunelm Group PLC Second quarter trading update
  • Total sales of £407m in the second quarter were up £46m compared to FY21.
  • Gross margin in the second quarter increased by 160bps compared to the same period last year.
  • The Group had net cash of £48m at 25 December 2021.
  • Nick Wilkinson, CEO, said: “Whilst there are several macro uncertainties to be navigated, we feel well placed to continue to deliver profitable growth across all channels and grow market share as the 1st choice for home for UK homelovers.”
Pagegroup PLC Fourth Quarter and Full Year 2021 Trading Update
  • Group gross profit of £246.8m, up 55.1% compared to 2020.
  • Net cash of £152m, compared with £195m in Q3 of 2021, and £166m in Q4 of 2020.
  • 2021 full year operating profit marginally in excess of previous guidance of in the region of £165m.
  • Steve Ingham, CEO, said: “Looking ahead, there continues to be a high degree of global macro-economic uncertainty as COVID-19 remains a significant issue and restrictions remain in a number of the Group’s markets. However, we are maintaining our focus on driving progress towards our long-term strategic goals.”

     

Savills PLC Year End Trading Update
  • The Group has experienced an extraordinarily strong final trading period, eliminating many 2020 losses.
  • The Group has benefited from substantially lower levels of discretionary expenditure in respect of travel, entertaining and marketing events.
  • The last quarter of 2021 saw volumes in EMEA exceed the five year average.
  • The Group’s previous expectations for the year ahead remain unchanged at this early stage.
  • Savills intends to report 2021 full year results on 10 March 2022.