Maitland/AMO Morning Monitor – Wednesday 21 July 2021

21st July 2021

In the news

  • Jeff Bezos and three others yesterday reached the lower reaches of space in a spacecraft built by the Amazon-founder’s private company Blue Origin.
  • UBS has launched a portfolio that invests solely in hedge funds led by women.
  • Netflix lost 430,000 subscribers in the US and Canada in the second quarter and issued weaker than expected forecasts yesterday.
  • The IFS has warned that Rishi Sunak will impose cuts to public services of up to £17bn compared with the government’s pre-pandemic plans unless action is taken this summer to increase funding.
  • Tom Barrack, former CEO of Colony Capital and an early supporter of Trump during his 2016 presidential campaign, has been arrested and charged with illegally acting as an agent of the UAE.

Politics today

  • The government is expected to announce a 3% pay rise for NHS staff today.

Stock market moves

  • In the US, the S&P 500 gained 1.52%.
  • In Asia, Hong Kong’s Hang Seng Index dropped 0.49% while Japan’s Nikkei and China’s Shanghai Composite Index rose 0.58% and 0.86% respectively.
  • In Europe, the FTSE 100 and STOXX 600 are both marginally up in the early hours of trading.

Corporate announcements

* Maitland Client

Next PLC Trading Statement
  • Full price sales in the eleven weeks to 17 July were up +18.6% versus two years ago.
  • Increasing full price sales guidance for the rest of the year from +3% to +6%.
  • Increasing central guidance for full year profit before tax by +£30m to £750m (pre-IFRS 16).
  • For the full year, surplus cash is forecast to be £240m.
Wickes Group PLC Trading Update
  • Group sales like-for-like growth for the 26 weeks to 26th June of 33.1% year on year, and 22.4% on a two-year basis.
  • First half guidance of around £45m adjusted PBT remains unchanged.
  • Ordered sales have grown by over 30% on a two year basis.
  • David Wood, CEO, said: “This performance once more reflects the strength of our business model and the tremendous support from our colleagues who have worked with tireless dedication to help the nation feel house proud. We are managing to navigate inflationary pressure and industry wide raw material constraints by working closely with our suppliers, and we remain on track to continue to grow in a responsible and sustainable way, providing our customers with the products they need at the best possible value.”
DWF Group PLC* Full Year Results
  • Group net revenue growth up 14% (8% organic) to £338.1m at a gross margin of 50.8%.
  • Gross profit up 21% to £171.8m.
  • New operating structure provides a platform for sustainable, profitable growth
  • New tripartite division operating model, effective 1 May 2021 leading to a greater sharing of clients across practice areas and borders.
  • Increasing number of clients receive services from two or more of Legal Advisory, Connected and Mindcrest.
  • The Board has declared a final dividend of 3.0p per share, taking the total dividend for the year to 4.5p.
  • Sir Nigel Knowles, CEO, said: “FY2020/21 was a transformational year for DWF and I am delighted that the tremendous resilience, dedication and excellence of our colleagues has been rewarded with these strong results. The results reflect a return to pre-COVID-19 activity levels, but they also evidence the importance of the decisive actions we took throughout the year as we focused on driving greater operational efficiency, profitability and strategic alignment.”
Euromoney Institutional InvestorPLC Trading Statement
  • In Q3 to 30 June 2021, group reported revenue of £78.9m, up 14%.
  • In 9 months to 30 June 2021, group reported revenue of £234.4m, down 8%.
  • Net cash at 30 June 2021 was £30.4m compared to £24.8m at 31 March 2021.
  • Expect the Group will deliver a result in line with the Board’s expectations.
Close Brothers Group PLC* Scheduled Trading Update
  • In banking, the loan book increased 9.6% in the first 11 months of the financial year to £8.3bn (30 April 2021: £8.2bn; 31 July 2020: £7.6bn).
  • The annualised net interest margin remained broadly stable on the 2020 financial year (FY 2020: 7.5%), as the bank maintained its pricing discipline.
  • In asset management, continued strong growth with net inflows of 7% (30 April 2021: 6%). Managed assets increased to £15.3bn (30 April 2021: £14.8bn) and total client assets increased to £16.4bn (30 April 2021: £16.0bn).
  • Winterflood has benefited from elevated market activity but has seen a moderation in trading volumes since the Q3 update, average daily bargains stood at 103k in the first 11 months of the financial year (Q3 2021: 120k; FY 2020: 82k).
  • Adrian Sainsbury, Chief Executive Officer, said: “We have navigated the changing environment well and our model has enabled us to perform strongly, making the most of opportunities, throughout the year. We are encouraged by improvements in the economic backdrop, although uncertainties persist”….”I am confident that our proven and resilient model, together with the expertise of our people, leave us well placed to continue supporting our customers and clients and to protect, grow and sustain our business over the long term.”
Future PLC Trading Update
  • The Magazines division performance is in line with expectations.
  • The integration of GoCo is on track to achieve the announced £15m synergies.
  • The Board expects full year profitability to be materially ahead of current market expectations.
  • Zillah Byng-Thorne, CEO, said: “We are delighted that the Group’s strong performance has continued throughout the period, which is testament to the strength of our diversified revenue streams and global reach.”
Polar Capital Technology Trust PLC Final Results
  • Total assets of £3,408m (2020: £2,308m).
  • NAV per share at 2496.44p (2020: 1715.59p).
  • 5.3% discount of ordinary share price to the NAV per ordinary share (2020: 3.4% premium).
  • Sarah Bates, Chairman, said: “The Board does believe that long term trends continue to make a specialist technology trust attractive. We note the explosion of the use of the “cloud” and would point to the opportunities that presents. We discuss the definition of technology and as our Manager describes, we observe some surprising changes in “old economy” companies able to pivot towards, for example, electric vehicles. We expect disruption to continue and think our focus on that disruption will continue to be profitable for investors.”
Royal Mail PLC AGM Trading Statement
  • Group revenue grew by 12.5% vs Q1 2020-21 and by 20.2% compared to Q1 2019-20.
  • Prospects for full year performance remain unchanged.
  • Keith Williams, Chair, said: “For Royal Mail, as expected, parcel volumes decreased and letter volumes increased compared to the exceptional period last year encompassing the UK’s first lockdown, when non-essential retailers closed for the first time. We are starting to see evidence that the domestic parcel market is re-basing to a higher level than pre-pandemic, as consumers continue to shop online.”
Petropavlovsk PLC H1 2021 Trading Update
  • H1 2021 gold production totalled 195.0koz, a decrease of 39% versus 320.6koz in H1 2020.
  • Gold sales totalled 187.1koz in H1 2021 (H1 2020: 312.4koz).
  • Cash as of 30 June 2021 was US$34.4m (31 March 2021: US$7.5m).
  • Denis Alexandrov, CEO, said: “The first half of 2021 was a transitional period for Petropavlovsk as we prepared to launch the Pioneer flotation plant, which heralds the mine’s shift from processing non-refractory ore to being a producer of refractory concentrate to feed our Pokrovskiy POX hub. I am proud to highlight that we launched the plant one month ahead of our revised schedule. With the Pioneer flotation plant and increased deliveries of 3rd-party concentrate in the second half, we are confident of meeting our full-year production guidance for 2021.”
Computacenter PLC Trading Statement
  • The Group will deliver an adjusted profit before tax for the first half of 2021 circa 50% ahead of the same period last year.
  • Affected by substantial supply shortages in the industry caused by the shortage of key components and a strengthening of the pound against other currencies.
QinetiQ Group PLC First Quarter Trading Update
  • Revenue under contract for FY22 is at £940m, up from £800m at April 2021.
  • Expect to deliver in line with our expectations, with mid-single digit organic revenue growth at 11% to 12% operating profit margin.
  • Good order intake in the Cyber & Information business and strong revenue growth in the Maritime & Land business, partially offset by a slower quarter for Global Products.
Antofagasta PLC Q2 2021 Production Report
  • Group copper production in Q2 2021 was 178,400 tonnes, a decrease of 2.5% compared to the previous quarter.
  • Gold production for the quarter increased by 3.9% to 61,400 ounces.
  • Cash costs before by-product credits in the quarter were $1.77/lb.
  • Iván Arriagada, CEO, said: “The cost and production performance over the first half of this year was in line with guidance and supports our strong track record of resilience and operational excellence. We produced 361,500 tonnes of copper at a net cash cost of $1.14/lb over the period and retain guidance for the full year at 730-760,000 tonnes of copper at a net cash cost of $1.25/lb and capital expenditure of $1.6 billion.”
Hochschild Mining PLC Q2 2021 Production Report
  • Gold production in the second quarter at 53,418 ounces.
  • Silver production in the second quarter at 3.1m ounces.
  • On track to deliver overall 2021 production target of 360,000-372,000 gold equivalent ounces.
  • Ignacio Bustamante, CEO, said: “The second quarter results have been solid across our operations and we remain on course to deliver our production and cost targets for the year. In addition, drill results have continued to be encouraging at Inmaculada with 29 million silver equivalent ounces of high grade Inferred resources already added in the first half. We have also seen further positive results from the Snip project in Canada. Finally, today we have also announced that we will be holding a capital markets presentation in September which will cover our exciting rare earths project in Chile.”