Maitland/AMO Morning Monitor – Wednesday 19 January 2022

19th January 2022

In the news

  • UK inflation jumped to 5.4% in December, its highest rate in 30 years.
  • Goldman Sachs chief, David Solomon, warns of 'wage inflation everywhere', with the company reporting a fourth quarter net income of $3.8bn, down from $4.36bn last year.
  • Official data on Tuesday showed UK unemployment fell to 4.1% in three months to November, 0.1 percentage points above its pre-pandemic levels.
  • German banks are becoming complacent about the risk of borrowers defaulting and the potential for interest rate rises, according to the central bank's vice-president.
  • Microsoft has agreed to buy video game maker Activision Blizzard for $75bn, the tech company's biggest deal to date.

Politics today

  • The House of Commons sits from 11:30am with COP26 questions followed by the main business of the report stage of Michael Gove’s Building Safety Bill.
  • The House of Lords sits from 3pm with questions on the Middle East, human rights abuses in Colombia and the repair of coal tips in Wales.

Stock market moves

  • In the US, the Nasdaq 100 and S&P 500 both closed down, at 2.57% and 1.84% respectively.
  • In Asia, Japan’s Topix Index fell 2.97%, with Hong Kong’s Hang Seng Index and China’s Shanghai Composite Index also trading down at 0.18% and 0.31% respectively.
  • In Europe, the FTSE 100 opened down 0.2%.

Corporate announcements

* Maitland Client

Burberry Group PLC Burberry Third Quarter Trading Update
  • Retail revenue 13 weeks ended 25 December is £723m, compared to £688m last year.
  • Acceleration in full-price comparable store sales up 26%.
  • Forecast for current year adjusted operating profit to grow in the region of 35% at CER.
  • Gerry Murphy, Chair, said “Despite the ongoing challenges of the external environment, we are confident of finishing the year strongly and providing an excellent platform on which to build when our new CEO Jonathan Akeroyd joins in April.”
Antofagasta PLC Q4 2021 PRODUCTION REPORT
  • Cash costs before by-product credits in 2021 were $1.79/lb, 14.7% higher than last year.
  • Net cash costs for the full year were $1.20/lb, below guidance and 5.3% higher than in 2020.
  • Group copper production for the full year was 721,500 tonnes, within the guidance range and 1.7% lower than last year.
  • Iván Arriagada, CEO, said, “In 2022 we expect copper production to be 660-690,000 tonnes at a net cash cost of $1.55/lb as grades decrease at Centinela Concentrates and the drought continues to impact Los Pelambres. However, we have a long-term solution to the water shortage which will come in the second half of the year when our desalination plant is commissioned.”
Pearson PLC Trading Statement
  • Reports a net debt of less than £400m and a strong cash performance.
  • Sales in English Language Learning grew 17% for the full year.
  • In Q4, revenue grew 13% due to a phasing benefit in BTECs.
  • Andy Bird, CEO, said “Led by a strong management team, we are repositioning the business, driving digital innovation and an increased focus on the consumer through the launch of Pearson+. We are well placed to build on this momentum in the year ahead and look to the future with confidence.”
Experian PLC Directorate Changes
  • Experian announces that after 19 years at Experian, Kerry Williams has notified the Company of his intention to retire as Chief Operating Officer and as an Executive Director of the Company.
  • Williams will remain with Experian through to 31 March 2023
  • Craig Boundy will succeed Kerry Williams, with Jennifer Schulz to assume the role of CEO, North America for Experian from 1 April 2022.
  • Brian Cassin, CEO, said: “Kerry has played a pivotal role in taking the business to the strong position it is in today. We thank him for this and wish him well for his retirement. Craig and Jennifer will build on these strong foundations as we progress our journey of innovation-led growth and I look forward to continuing to work closely with them in the years to come.”
Crest Nicholas Holdings PLC Final Results
  • Revenue at £786.6m, reflecting strategic progress and underlying strength of housing market.
  • Profit after tax increased to £70.9m (FY20: £10.7m loss after tax).
  • Strong sales momentum with sales per outlet week of 0.80 (FY20: 0.59) with average outlets at 59 (FY20: 63).
  • Peter Truscott, CEO, said, “It is right that we remain aware of the broader macroeconomic uncertainty, but the fundamentals of our sector remain strong. I am confident that our strategy is the right one to navigate this environment and ensure we deliver maximum value for all of our stakeholders.”

 

Centamin PLC Q4 2021 Report
  • Q4 revenue of $183m, generated from gold sales of 99,936 oz.
  • Q4 cash costs of $972/oz produced and all-in sustaining costs of $1,256/oz sold.
  • Q4 capital expenditure of $86m, exceeding the annual guidance of $225m.
  • Martin Hogan, CEO, said “We have commenced 2022 with confidence and excitement and look forward to delivering on our clear roadmap to growing and unlocking further value from Sukari and our exploration portfolio, as outlined at the capital markets event on 8 December 2021.”
Wetherspoons (J.D.) PLC Trading Update
  • The company’s interim results are expected to be announced on 18 March 2022.
  • Like-for-like sales decreased by 11.7% and total sales by 13.3% in the 25 weeks to 16 January 2022.
  • Sales in the second quarter were affected by the “Plan B” restrictions announced by the government in December.
  • Tim Martin, chairman, said “As mentioned in our update on 13 December 2021, the uncertainty created by the introduction of plan B Covid-19 measures makes predictions for sales and profits hazardous. The company will be loss-making in the first half of the financial year, but hopes that, with the ending of restrictions, improved customer confidence and better weather, it will have a much stronger performance in the second half.”

     

WH Smith PLC Trading update for the 20 week period to 15 Jan 22
  • WH Smith PLC will announce its 2022 Interim results on Wednesday 27 April 2022.
  • Total Group revenue was 85% of 2019 revenue for the 20 weeks to 15 January 2022.
  • Access to liquidity was £345m being cash on deposit of £95m, as at 31 December 2021,
  • Carl Cowling, CEO, said, “Looking ahead, although we are seeing a small impact from the Omicron variant, we anticipate a resumption in the recovery of our Travel markets over the coming months. We are well placed for the key trading period in Travel this summer and the ongoing recovery in our markets.”
Diploma PLC Trading Statement
  • Underlying revenue growth was 16% driven by organic revenue initiatives and  continued strong demand.
  • The company continues to expect underlying growth to moderate as the year progresses.
  • Operating margin is in-line with expectations, with a continued focus on managing supply chain pressures and tight labour markets.
  • Diploma PLC remains very positive about its prospects, and is well-positioned to deliver attractive long-term growth at sustainably high margins.
Liontrust Asset Management PLC Trading Update
  • Net inflows of £0.8bn in the three months ended 31 December 2021 and £2.9bn for the nine months ended 31 December 2021.
  • Assets under management and advice were £37.2bn as at 31 December 2021, an increase of 20% over the financial year.
  • The proposed acquisition of Majedie Asset Management Limited was announced on 7 December 2021 which will add £5.8bn of AuMA (as at 30 November 2021).
  • John Ions, CEO, said, “I am confident about maintaining our growth given the strength of Liontrust’s investment capability, distribution and communications and therefore continuing to deliver for our clients and investors.”