Shares in London's main indices are in positive territory again as sterling slips back again on weaker economic data. Click here for The Trader Nicole Elliott's latest views on the markets.
IC TIP UPDATES:
Aviva (AV.) has announced plans to return up to £600m to shareholders via a share buyback. It’s part of its previously-trailed intention to deploy £2bn in excess capital this year, which will also include £900m for debt reduction and £500m for bolt-on acquisitions. Buy.
National Grid (NG.) has sold its remaining 25 per cent ownership stake in Cadent Gas to Quadgas Investments Bidco. The deal is expected to complete between March and October 2019 and will generate cash proceeds of approximately £1.2bn. Despite this, the shares have barely moved and are up less than 1 per cent. Buy.
KEY STORIES:
Shares in Plus500 (PLUS) were up a further 5 per cent in early morning trading after the spread-betting specialist more than trebled revenue during the first quarter. With average revenue per customer up more than a quarter and the average customer acquisition cost down almost half, that helped drive cash profits up to $237m, from $78m the previous year. Management has raised its full-year expectations.
Virgin Money (VM.) reaffirmed full-year guidance after reporting net lending of £200m during the first three months of the year. Mortgage balances were up 10 per cent year-on-year, while credit cards rose 14 per cent. Deposits were also running ahead of guidance, up 7 per cent at £31bn.
First quarter numbers from online takeaway service provider Just Eat (JE.) were 5 per cent ahead of analysts’ forecasts, but the group is sticking to its previously-announced annual guidance. The group still expects to report revenues in the region of £660m-£700m for 2018, and cash profits between £165m-£185m. There’s a bit of softness in Australia which has caused management to err on the side of caution, although international orders are up by 46 per cent in total to 21.9m. Overall, group revenues rose by 49 per cent to £177m in the opening period.
First quarter results for BP (BP.), out this morning, are a mixed bag. Buoyed by stronger prices, earnings (defined as replacement cost net income) came in at 12.98 cents a share, up 22 per cent on the first three months of 2017. Year-on-year, net cash flow was also up at $3.6bn, though down 38 per cent quarter on quarter. Limited divestments, and a share buyback programme meant net debt and gearing both crept up. Still, at 545p, BP’s shares are trading at their highest level since the Macondo well disaster.
Severn Trent (SVT) has made the first of its planned land sales. The group announced its intention to sell off surplus land assets in November last year and hopes to make an additional £5m-£15m in profits from its effort. The first site is around five miles east of Nottingham and was bought by Persimmon (PSN) for £21.8m, with the intention of building 830 homes alongside new leisure facilities. Shares are up 2 per cent.
OTHER COMPANY NEWS:
EVR Holdings (EVRH) – the creator of virtual reality music content – announced its final results after market-close yesterday, and a £25m share placing. Shares would be placed at 16p each, raising £20m, while the group said chief executive Anthony Matchett and chief operating officer Steven Hancock each also intend to sell up to 15.6m shares. EVR is still pre-revenue, having not yet released its flagship product MelodyVR. This will launch “imminently” in the UK and the US, and EVR intends to use some of the placing proceeds to accelerate international product launches. During 2017, the group’s pre-tax loss expanded from £2.6m to £6.2m.
