Edison Investment Research

Global earnings revisions still on a downward trend

Equities bridging a gap in corporate performance - for now

Consensus profits forecasts on a global basis remain on a downward trend even as January’s recovery in risk assets such as equities and corporate debt continues into February. The primary reason for this at first sight paradoxical state of affairs is not hard to find; the US Fed has placed interest rates on pause and acknowledged the slowing of the global economy. Nevertheless, the clock is ticking on the persistence of the current profits downgrade cycle, which is also consistent with economic weakness evident outside the US. While not shifting our neutral stance on equities for the full year, near-term market performance is now in our view more tightly bound than usual to the turn in the direction of global profits forecasts. Therefore, in the short-term we would not chase the rally, at least until there is some evidence of stabilisation in earnings or positive news in respect of US/China trade.

OnTheMarket (OTMP); traffic exceeds 23.5m visits on their portal

Growth in property stock and visits together produce record levels of leads for the company’s estate and lettings agent customers

OnTheMarket announced that traffic at its portal in January exceeded 23.5m visits (a new monthly record). The company displayed over 600,000 UK residential property listings. Its UK property stock is already over 80% of Zoopla’s and ~60% of Rightmove’s as of 31 January 2019.

Amur Minerals (AMC); two of the three QAQC steps to validate Master Data Set completed

ASL results have indicated that the sample is devoid of cross sample contamination or any analytical drift

The steps completed include the acquisition of the original result for each interval sampled and verification that Alex Stewart Laboratory (ASL) can consistently replicate its results internally.

Stride Gaming (STR); trading performance since the start of the year in line with expectations

The group is clearly focussed on winning and retaining mass market recreational customers

Stride Gaming will conduct its Annual General Meeting (AGM) at 9.30am today, where Nigel Payne, the company’s non-executive chairman, will announce the group’s trading performance since the beginning of the financial year. She will say trading has been broadly in line with expectations despite continuous challenging trading conditions.

S&U (SUS); reports trading update for the period 7 December 2018 to 31 January 2019

Full year results will be in line with consensus expectations the company says

Motor finance subsidiary Advantage Finance and property bridging operation Aspen continue to produce record profits and make good progress. Company borrowing was reduced from £118m to £108m during the period, compared to £105m the previous year. Current facilities of £135m are sufficient to support the expected growth.

Indivior (INDV); appeal against lifting an injunction that allows generic competitor denied

The company intends to file an emergency motion with the US Court of Appeals for the Federal Circuit

Pharmaceuticals group Indivior has announced that a US court has denied its appeal against the lifting of an injunction that allows rival Dr Reddy’s Laboratories to launch a generic competitor to suboxone film, its top-selling treatment for opioid addiction.

Ocado Group (OCDO); reports healthy revenue growth of 12.3%

EBITDA declined £15.5m to £59.5m as a result of the costs of developing the Ocado Smart Platform

The fact that an M&S deal wasn’t announced with Ocado’s results doesn’t mean that it isn’t happening. Management says it is “continuing to engage” with multiple retailers in a variety of markets with a view to adding more partnerships to its platform, which could include Marks. Equally, Ocado is stressing that its own ambitions run much wider.

Numis Corporation (NUM); reports marginal loss in trading book for first four months of the FY

The company expects a significant increase in revenue with regard to the UK macroeconomic and political landscape.

Performance of the Corporate Broking & Advisory division was in line with H2 last year, but below the comparative period, whereas average deal fees remained in line with the previous year. Deals transaction volumes and institutional income were both nearly 25% lower than the previous year.

Ryanair (RYA); announces third quarter underlying pre-tax loss of 22.1m

The news comes two weeks after Ryanair cut its full-year profit forecast for the second time

Low-cost airline Ryanair Holdings has announced a third-quarter underlying pre-tax loss of €22.1m and warned that it does not expect fares to rise this summer. The loss, which excludes €61.5m of exceptional charges at its Lauda operations, compares to group profits of €113m in the same period a year earlier. Revenues increased by 9% over the period, to €1.53bn, as passenger numbers advanced by 8% to 33m.

Circassia Pharma (CIR); FDA Pre-submission meeting for Novel Nitric Oxide Product AirNOvent complete

Circassia had acquired the exclusive commercialisation rights for the ventilator-compatible nitric oxide product AirNOvent in USA and China from AIT Therapeutics in January 2019.