De La Rue (DLAR); FY18 revenue grows 7% while adjusted net income declines 9%
Stock up 2.19% to 514p at 8:17
DLAR’s FY (Mar-18) revenue grew 7% (LFL +4%) to £493.9m, while adjusted operating profit declined 11% (LFL +7%) to £62.8m and adjusted EPS declined 9% to 42.9p (reported +99% to 93.7p). Total dividend unchanged at 25p per share.
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Long hot Italian summer
Likely September elections may be a referendum on euro and EU membership
Italy’s failure over the weekend to form a government was driven by the refusal of the Italian President Mattarella to appoint the hardline Eurosceptic Paolo Savona to the position of economy minister. From the perspective of President Mattarella the recent election was not a referendum on the euro; for the Five Star/League coalition his refusal to accept Savona was interference in the democratic process. An incoming caretaker government is being put in place but is not the issue; elections later in the year will in effect be the referendum on the euro. For investors, this creates significant uncertainty over the summer months and into the autumn.
Read more...The sale of Pret to JAB Holdings for £1.5bn is positive news for Whitbread’s Costa flotation
Pret to be sold to JAB Holdings
The agreed sale of Pret A Manger to JAB Holdings for £1.5bn including debt is positive news for Whitbread, as it prepares to float Costa Coffee. The EBITDA multiple reported to be about 15 times historical EBITDA suggests that the pricing should be towards the upper end of a range defined by Starbucks (15.7 times) and Dunkin’ Brands (16.7 times) at one end and Greggs (8.1 times) at the other.
Read more...Palace Capital PLC (PCA); Additional 11,000 sqft in Harlow leased to Exela, unit rentals rise
Stock down 0.85% to 350p at 8:08
PCA has signed a new five year lease with Exela to let out a total of 28,500 sq. ft. of office space in Harlow at better terms.
Read more...Future (FUTR); notice of General Meeting for proposed capital reduction
Stock flat at 506.0p at 08:10
FUTR will hold a general meeting at 2:00 p.m. on 14 June 2018 for the purpose of approving the capital reduction. The capital reduction, if approved by Shareholders and confirmed by the Court, is expected to increase the distributable reserves of the company by approximately £47,385,898.
Read more...7digital Group (7DIG); launch of streaming music service; contract won with PEEX; result notice
Stock flat at 4.32p at 8:03
7DIG has announced the launch of Juke streaming music service in the German market. The company has also signed a contract with PEEX to offer improved live music experience. Year-end preliminary results are expected on or before 29 June 2018.
Read more...OnTheMarket (OTMP); listing agreements with over 8,500 agent branches
Stock up 1.42% to 178.5p at 8:01
As of 25 May, OTMP has signed listing agreements with UK estate and letting agents with more than 8,500 offices. It has added over 3,000 branches since admission to AIM in February.
Read more...Energy drives estimates higher – but oil now under pressure
Risks rising as Russia and OPEC debate turning the taps back on in H2
While it may seem that global investor sentiment has broadly improved over the last 3 months, following the rapid recovery in equity markets, returns have been dominated by the energy sector, Exhibit 1. With Russia and Saudi Arabia now discussing production increases to head off a loss in market share to US shale, this momentum in the oil price may now ease. Separately, despite volatility in emerging markets we note that profits forecasts have been largely stable in 2018, suggesting that any underperformance is due to the rising dollar rather than weakening profits trends. In developed markets, the median 2018 earnings estimate in the US continued to rise over the last month while in Europe and the UK estimates are stable, despite a marked slowdown in the economic data.
Read more...GVC Holdings (GVC); provides trading update and announces change in reporting currency
Stock up 4.58% to 1028.0p at 8:04
For the period 1 January to 20 May 2018, GVC posted a double-digit online NGR growth of 18% on a constant currency (cc) basis. The company completed the Ladbrokes Coral Group acquisition on 28 March 2018.
Read more...Italy: Political risk strikes (again) in eurozone
Political power and resolve of EU and ECB should not be underestimated (again)
The prospect of a populist Five Star/League coalition government in Italy has spooked Italian bond markets with yields soaring in recent weeks. Nevertheless, this price move may still be viewed in the context of a correction, given the clearly large difference in fundamental credit quality between Italy and Germany, both from a political level and as measured by the government debt burden as a percent of GDP. It is a situation which is likely to create investor anxiety but the precedent of Greece suggests that the ultimate political power of the EU and ECB is considerable. An “Italexit” scenario would create a high degree of market uncertainty but remains low probability in our view.
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