London shares are struggling for direction, with all major indices showing minor losses in mid morning trading. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Hotel Chocolat (HOTC) saw revenues climb 14 per cent in the 26 weeks to 29 December 2019, driven by new locations - nine in the UK and two in the UK, as well as three joint-venture locations in Japan. However, the cost of expansion came in slightly higher than expected due to supply chain inefficiencies that the group expects to address in the coming year. Buy.
Countryside Properties (CSP) reported flat completions and a £1,000 reduction in the average selling price of its homes during the first quarter. However, net reservations rose to 0.81 per outlet a week, up from 0.63, the same time last year. Strong demand for affordable and PRS homes also meant the total forward order book had increased 65 per cent to £1.6bn by the end of December. Buy.
Shares in Asos (ASC) are up this morning after the online retailer reported retail sales up by a fifth in the four months to the end of December. The group ad a record performance over Black Friday, though investments in customer acquisition and US duties led to a 170 basis point slip in the gross margin. Moving into 2020, the group is looking to focus on customer retention and long-term growth. We are reviewing our sell recommendation.
Emis’s (EMIS) trading for 2019 was in line with management’s expectations, with growth in revenues and adjusted operating profits maintained at similar levels to the half year. Net cash at the year-end was £31.1m, up from £15.6m. Buy.
KEY STORIES:
Olivier Brousse, chief executive of infrastructure investor John Laing (JLG), has handed in his resignation to take up a senior position at French utility giant Veolia. Mr Brousse, who will remain with the FTSE 250 group to assist with an orderly transition, was commended by chairman Will Samuel for his work, “particularly in delivering the successful IPO and his leadership”.
Accesso Technology (ACSO) has announced the end of its formal sale process (first initiated last July). This sales process followed the receipt of approaches from various interested parties. After meeting interested parties, Accesso’s management team has concluded that the process is unlikely to result in an offer for the group at a value it deems attractive to shareholders. The group is now no longer in an offer period as defined by the City Code on Takeovers and Mergers. Accesso also gave a trading update – with revenues expected to be at, or marginally below, the lower end of previous guidance, at between $117m-118m. Adjusted reported cash profits, excluding costs tied to the formal sales process, are expected to land at no less than $27m, with cash EBITDA of no less than $6m. Accesso’s shares were down by more than a fifth this morning.
OTHER COMPANY NEWS:
Over-the-counter derivatives dealer CMC Markets (CMCX) says net operating income came in ahead of expectations in the three months to December, as higher retention of client income offset lower client trading activity. Following a strong start to trading in 2020, CMC now expects operating income will exceed the upper end of the current range of analyst forecasts. Shares are flat in early trading.
JTC (JTC) said its revenue and adjusted cash profits were in line with consensus analyst forecasts in 2019, as the fund, corporate and private wealth services group hit its own organic growth target of 8 to 10 per cent. Private client activity was particularly strong, as revenues climbed 54 per cent to £14.9m, while the acquisition of corporate services provider Exequitiv Partners has “integrated well”. A decent pipeline of M&A opportunities has also led the firm to increase its banking facility from £100m to £150m.
The Daily Mail and General Trust’s (DMGT) first-quarter trading was in line with expectations, and its full-year outlook for 2020 remains unchanged. Revenue was up 1 per cent on an underlying basis, with a “solid performance” from B2B and consumer media. It bought the ‘i’ for £50m last November, and a Competition and Markets Authority (CMA) review is underway. The group had pro-forma net cash of £160m at the year-end.
2019 was “one of the most successful years” in Computacenter’s (CCC) history, with its best ever revenue, profit, earnings per share and cash generation from ongoing operations. The board is comfortable with the upper end of current market expectations – having upgraded its full-year guidance in December. Revenues rose by 16 per cent and by 17 per cent at constant currencies, with organic revenue of 4 per cent at constant currencies. The group says that 2019 has “set a high bar for the business as we go into 2020” but cites “multiple growth drivers”. Results are due out in March.
Craneware (CRW.L) expects to report revenues for the six months to December at similar levels to its comparative period, in line with management’s expectations, along with around 10 per cent growth in adjusted cash profits. New sales were over 30 per cent ahead of the first half of FY2019, driven by more contracts being secured as the group worked through the backlog of contracts delayed from the second half of last year. Bosses expect to meet market expectations for the year ending June.
Hyve (HYVE) has given a trading update for the period from 1 October to today – coinciding with the group’s AGM (held at 9am this morning). The group said it has made a good start to the year, with a performance in line with management’s expectations. Revenues for the quarter ending December 2019 were up 7 per cent on a like-for-like basis. Forward bookings of £187m are up 3 per cent on a like-for-like basis, something the group links to strengthening and diversifying its portfolio. It is confident about meeting full-year expectations, notwithstanding economic and geopolitical uncertainty.
