Shares in London advanced in morning trading as traders shrug off ongoing Brexit uncertainty.
IC TIP UPDATES:
Aviva (AV.) has appointed Maurice Tulloch as chief executive of the insurance group. Mr Tulloch joined Aviva in 1992 and was appointed to the Board in June 2017. Prior to taking the reins, he was in charge of international insurance with responsibility for Aviva’s life and general insurance operations in several overseas countries. Buy
Ryanair (RYA) reported a 13 per cent increase in traffic to 9.6m during February, with load factor to 96 per cent. Traffic is up 9 per cent over the rolling 12 months to 141m, with load factor also of 96 per cent. The budget airline said it operated over 53,000 scheduled flights in February, and 93 per cent arrived on times when delays from air traffic controllers were not considered. Shares fell less than 1 per cent in early trading. Sell.
Wizz Air (WIZZ) increased its capacity by 9.3 per cent to 2.55m seats during February, with a 12.9 per cent increase in passengers to 2.4m lifting load factor by 3 percentage points to 94.2 per cent. Capacity has increased 16.2 per cent over the rolling 12 months to 37.1m seats, with passenger numbers up 17.8 per cent to 34.2m and load factor 1.3 percentage points higher at 92.6 per cent. Shares were flat in early trading. Buy.
Marshall Motor Holdings (MMH) has completed two acquisitions comprising six Škoda franchised dealerships, making it the largest Škoda retailer in the UK. The group acquired the business and assets of Leicester and Nottingham Škoda from Sandicliffe Ltd in late January before acquiring the business and assets of Bedford, Harlow, Letchworth and Northampton Škoda from Progress Bedford Ltd at the end of February. The aggregate consideration was £3.5m. We remain buyers.
FairFX’s (FFX) focus on rationalising the supply chain to improve margins within its corporate card business – as announced on 25 January – has “now progressed ahead of schedule”. Thanks to better financial terms secured with its supply chain partners, it will “benefit from a greater share of revenues going forward”. Chief executive Ian Strafford-Taylor noted that enhancing FairFX’s supply chain has “long been” integral to its strategy, internalising processes where appropriate and securing better commercial terms to cut costs. The shares, which had fallen considerably in recent months, were up 2.5 per cent in morning trading. Under review.
Tracsis’s (TRCS) trading for the first half ending 31 January has been in line with management’s expectations, with revenues expected to be ahead of the previous year at around £19m versus £18.1m. Cash profits and adjusted profit are also expected to be ahead of the previous year (when these figures came in at £4.3m and £3.9m respectively). Cash balances of £18.7m compare to £18.5m a year earlier and £22.3m as at the July year-end. As previously announced, chief executive John McArthur is leaving and Chris Barnes joined Tracsis on 4 February 2019 as chief executive designate. The shares were up by around 1 per cent this morning; buy.
Shares in Relx (REL) ended Friday down by around 7 per cent on the prior day’s close, following the news that the University of California had decided not to renew its multimillion dollar subscription with the group’s Elsevier business. The university noted that Elsevier was unwilling to meet its “key goal” of “securing universal open access to UC research while containing the rapidly escalating costs associated with for-profit journals”. The market reaction ostensibly reflected concerns that other academic institutions might take a similar view. For context, Relx’s revenues for the year ending December 2018 were £7.49bn. The shares were up by around 1 per cent this morning. Under review.
KEY STORIES:
Ted Baker (TED) chief executive Ray Kelvin has resigned with immediate effect following recent allegations of misconduct by the clothing chain’s founder. Mr Kelvin has taken a leave of absence since December, when the revelations first emerged, although he denies all claims. Nonetheless, following an internal investigation conducted by law firm Herbert Smith Freehills, Mr Kelvin has this morning announced he is leaving the company. Acting chief executive Lindsay Page has agreed to continue in this role, while David Bernstein is acting as executive chairman.
The Daily Mail and General Trust (DMGT) plans to return all of its shares in Euromoney (ERM) and £200m in cash to certain holders of DMGT’s non-voting ‘A’ shares, amounting to around £896m in total. Chief executive Paul Zwillenberg noted that recipients of the distributions will “benefit from direct ownership of Euromoney while retaining exposure to a simplified DMGT Group”. The Rothermere family’s shareholding in DMGT will increase following the proposed distributions. Euromoney’s chief executive Andrew Rashbass said “Euromoney supports DMGT's proposal. The proposed distribution would result in a more diversified shareholder base for Euromoney and we would expect it to result in increased liquidity in our shares”. Shares in DMGT were up by around 4 per cent this morning; shares in Euromoney were down 3 per cent.
OTHER COMPANY NEWS:
Abcam (ABC) shares fell sharply on the release of half-year numbers this morning which, despite reporting an 11 per cent rise in total revenues, revealed slight lower annual guidance. Bosses now expect yearly revenues to grow at 10 per cent overall, while expectations for the full-year adjusted cash profit margins have moderated from 36 per cent to 35 per cent, due to higher investments.
Synthomer (SYNT) shares fell 9 per cent in morning trading after full-year results fell short of analyst consensus expectations for growth in Europe and North America. The specialist chemicals company reported a fall in these regions, attributing the contraction to US dollar headwinds, a fall in raw material prices and a rise in customer de-stocking. Notwithstanding, growth in Asia and the rest of the world was strong, and Synthomer will hope to see record capital spending in capacity expansion here translate into sustained growth here.
Rotork (ROR) shares were down 8 per cent in morning trading, despite a 50 per cent growth in pre-tax profits. But management has guided for a slower 2019, owing to macroeconomic growth and last year’s double-digit constant currency sales growth, and expects lower first half sales against the previous comparable period.
888 Holdings (888) has acquired BetBright's sports betting platform for £15m. The deal is meant to improve 888's product and technology capabilities and support the long-term development strategy for 888Sport. Shares in 888 fell more than 3 per cent in early trading.
