Edison Investment Research

Could the US Fed be enabling a continuation of the trade war?

US Fed commentary counters the negative effects of US trade policy

Doveish comments from a number of US Fed policymakers in recent days have validated a very sharp decline in US interest rate expectations. In response to these comments, US equities have also rallied. It is hardly a surprise that the US Fed would respond to lower growth and inflation prospects with easier policy. However, while bond markets are correctly in our view discounting lower prospective interest rates, equity investors should also factor in lower profits expectations for 2019 as the effects of the trade war bite. It also makes us uneasy from a longer-term perspective to see monetary policy used to counter the self-inflicted harm from an arguably sub-optimal US policy on trade.

Regional REIT (RGL); announces sale of Sheffield office building for £8.8m

Regional REIT announced that London and Scottish Property Investment Management (LSPIM) has contracted to sell the office building known as Aspect Court, Pond Hill, Sheffield, to Sheffield Hallam University for £8.8m on behalf of the company. This reflects a net initial yield of 6.6%.

PPHE Hotel Group (PPH); announces inclusion in the FTSE 250 index

PPHE Hotel Group has announced that the company is set to join the FTSE 250 and FTSE All Share Indices. The company will be included as a constituent of the indices with effect from the start of trading on 24 June 2019.

Custodian REIT (CREI); final results post NAV increase of 2.7% to £426.6m

Custodian REIT also raised £13.4m of new equity

Custodian REIT posted its final results for the year ended 31 March 2019. NAV per share total return of 5.9% comprises 6.1% of the company’s income and a 0.2% capital decrease. PBT decreased 27% to £23.6m, mainly due to a £8.9m aggregate property valuation decrease. EPRA earnings per share stood at 7.3p with a portfolio value of £572.7m.

SCISYS Group (SSY); announces positive start to 2019 with new contracts

From 1 January 2019, the group’s two former divisions, media & broadcast and Annova systems, have started operating as a combined division

SCISYS released its AGM statement in which it reported a positive start for the year. According to the company, the group has won new contracts and generated strong cash flow in line with the board’s expectations. It also delivered a record opening order book. The board expects 2019’s earnings to follow the same pattern as previously, being heavily weighted towards the 2nd half of the year.

Osirium Technologies (OSI); secures contract with an overseas telecom services provider

Osirium will provide its full PxM platform offering with an initial phase of 250 devices

Osirium Technologies has announced that it secured a three-year contract covering software and professional services with a major provider of business and domestic telecoms services in Southern Europe. Osirium will provide its full PxM platform offering with an initial phase of 250 devices.

Fidelity China Special Situations (FCSS); posts NAV total return of -5.3%

The company increased its dividend by 10% to 3.85p per ordinary share

Fidelity China Special Situations reported in its final results for the year ended 31 March 2019 that NAV total return was -5.3%, underperforming the MSCI China Index return of +0.9%. The company’s share price total return was -0.3%.

GB Group (GBG); announced its annual results for the year ended 31 March 2019

GB Group reports performance above original market expectations

GB Group’s revealed its annual results today, reporting a revenue increase of 20% to £143.5m (2018: £119.7m), with underlying organic revenue at constant currency of £130.1m. Adjusted operating profit increased by 22% to £32.0m (2018: £26.3m), while adjusted EPS increased 19% to 18.2p (2018: 15.3p).

Findel (FDL); revenue up 5.7% to £506.8m for FY 2019

Findel’s digital-first and value-led strategy has helped it to deliver robust FY19 results. A strong sales performance by Studio, the core customer-facing business, and a 170bp improvement in the retail gross margin drove 5.7% growth in group revenue to £506.8m and a 17.7% increase in underlying PBT to £28.8m (slightly ahead of our recently upgraded estimate of £28.5m), on a like-for-like basis after taking into account the adoption of IFRS 9 and IFRS 15 in FY19. 

John Laing Group (JLG); announces sale of JLEN Investment Advisory Agreement

The company has agreed to the sale of its remaining fund management activities

John Laing Group has reached an agreement with Foresight Group CI for the sale of the Investment Advisory Agreement between John Laing Capital Management (JLCM) and John Laing Environmental Assets Group (JLEN).