Royal Mail Gains as Investors Cheer Cost-Cutting Moves
Shares in Royal Mail rise 5% as investors welcome moves by the
company to cut costs despite reducing full-year profit guidance.
The company now expects an adjusted operating profit of around
GBP430 million for the year ending March, compared with previous
guidance of GBP500 million, due to a restructuring charge. "Royal
Mail's latest update showed the firm is continuing to drive
efficiencies with plans to cut a further 700 management jobs," AJ
Bell investment director Russ Mould says. "In streamlining the
business, Royal Mail needs to ensure it doesn't go too far and
diminish its operational capability or spark widespread industrial
action, the threat of which has hung over the business in the
Royal Mail Downgrades FY 2022 Guidance on Plan to Cut Around 700
Royal Mail PLC said Tuesday that it plans to cut 700 manager
jobs, and that it is reducing its guidance for fiscal 2022 because
of the launch of a consultation process for its restructuring.
Pelatro Expects 2021 Results in Line With Expectations
Pelatro PLC said Tuesday that it expects results for 2021 to be
in line with expectations, and that although it anticipated results
for the year to be released in late March or early April this could
be subject to change due to the disruption stemming from Covid-19
Sivota to Buy Majority Stake in Marketing Platform Apester
Sivota PLC said Tuesday that it has entered into a conditional
deal to buy a 57.5% stake in digital marketing engagement platform
Apester Ltd. for $12 million.
Autins Group's FY 2021 Pretax Loss Narrowed
Autins Group PLC reported on Tuesday a narrowed pretax loss for
fiscal 2021 and said medium term guidance remains positive.
PCF Group Shares Slide 50% as Profit Falls, Trading Resumes
PCF Group PLC shares halved in early trading Tuesday after its
trading suspension was lifted and the company said half-year profit
decreased due to the impact of the pandemic.
AIQ Shares Rise on Issue of Loan Notes to Shareholders
AIQ Ltd. shares rose Tuesday after it said it raised 500,000
pounds ($674,500) through the issue of unsecured convertible loan
notes, for working capital purposes and widening its offer to new
Unilever Looks to Jumpstart Growth With Sweeping Overhaul
Unilever PLC said it would restructure its operations into five
stand-alone divisions, reshuffle top executives and cut jobs in a
sweeping reorganization aimed at accelerating sales growth as the
Dove soap owner girds itself against an activist investor and looks
to quell shareholder dissatisfaction.
Pebble Beach Systems' Maintained Momentum Prompts Raised
1119 GMT - Broadcasting-software company Pebble Beach's 2021
performance update shows how it maintained momentum across all key
metrics, prompting analysts at finnCap to raise forecasts for the
year to reflect its performance. Revenue and adjusted Ebitda
generation rose 26% and 19%, respectively. Its order pipeline
remains strong, with orders received rising 75% to an estimated
GBP13.7 million for 2021 from GBP7.8 million in 2020, including
delayed contracts worth GBP1.5 million, the U.K. brokerage says.
"We look forward to 2021 results, expected in April, particularly
around the acceleration in technology investment that will open up
'untapped geographic territories with innovative products that suit
customer needs in those markets,'" the broker says. finnCap has a
20 pence target price on the stock.
Drax Has Improved Prospects, Supported by Power Prices
1111 GMT - Drax Group's midterm prospects have improved,
supported by the power price outlook, John Musk at RBC Capital
Markets says. The U.K. power company has a three-pronged growth
strategy across bioenergy with carbon capture and storage, pellets
and pumped storage, the analyst notes. RBC reaffirms an outperform
rating on the stock and raises the target price to 925 pence from
750 pence. This reflects growth options at the Cruachan 2 pumped
hydro storage power station and increased confidence that merchant
biomass generation without subsidy may be possible beyond 2027,
Musk says. "Growth ambitions are well underway at Drax and we see
an additional boost from medium-term power prices," he says.
Sureserve Is on the Path for Growth
1103 GMT - Sureserve is on the path for growth, mainly driven by
the margins of its compliance and energy-services divisions, Shore
Capital says. The U.K. investment group says revenue for fiscal
2021 rose in line with expectations, but a 70% increase in pretax
profit was higher than expected. "We believe the two divisions
benefit from high revenue visibility, from typically three-to-five
year contracts, plus much longer ones," Shore Capital says.
Although the board suspended dividends, it has outlined an
ambitious growth strategy with potential for mergers and
acquisitions, it adds. Shares are up 6.4% at 92.0 pence.
Boohoo's Outlook Drives Downgrades to Consensus Estimates
1059 GMT - Boohoo's top-line recovery doesn't spark confidence
in RBC Capital Markets, which believes the company is vulnerable to
further market share loss. The U.K. fashion retailer's
international proposition remains uncompetitive, the Canadian bank
says, noting that this is something that would be necessary to at
least maintain market share. RBC cuts its adjusted Ebitda estimates
by around 40% following Boohoo's "recent soft trading performance
and outlook" and reduces its target price to 150 pence a share from
330 pence. RBC also downgrades Boohoo to sector perform from the
previous outperform rating. Shares are currently up 3% at 104.05
National Grid Remains Well Positioned, But Shares Are Fairly
1040 GMT - National Grid remains well-placed in the energy
transition with the fastest regulatory capital value growth among
fully regulated energy-network peers at a guided 6%-8% compound
annual growth rate over the next five years, RBC Capital Markets
says. In addition, higher inflation is a positive for National
Grid's earnings estimates, RBC notes. However, following recent
sector outperformance, the company's shares now look fairly valued,
the banks says. "We raise our PT [price target] to 1100 pence per
share (from 1040 pence) but are forced to downgrade to sector
TinyBuild Set for Exciting 2022 With Potential M&A, Shore
1021 GMT - TinyBuild is an attractive investment opportunity in
a historically fast-moving sector that continues to look exciting
in 2022, Shore Capital says. While 2021 was a strategic year for
the videogame company, 2022 should see it continue to explore
M&A opportunities whilst also investing in its intellectual
property to create a long-term franchises model applicable in
various media sectors, the U.K. investment group says, adding that
it sees earnings incrementally growing over its forecast horizon.
Further, Shore Capital says the company should benefit from its low
staff turnover thanks to good workplace practice and potentially
high staff morale. Shore Capital has a buy rating on the stock.
Shares trade up 2.2% at 185 pence.
Marston's Shares Could Rise if It Delivers in Three Areas
0959 GMT - The performance of Marston's during the fallout from
the Omicron coronavirus variant may not be as bad as first feared
when restrictions were imposed, Shore Capital says. The British pub
operator's like-for-like sales for the 16-week period to Jan. 12
fell compared with fiscal 2019 by 3.9%, with December performance 1
percentage point ahead of the broader market, the U.K. investment
group says. Shore Capital says that if Marston's can return to a
historical level of profitability, reduce debt to below GBP1
billion and realize value from its stake in Beer Co., its shares
could potentially be worth around 180 pence each. Shore Capital has
a buy rating on the stock. Shares trade up 2.2% at 79.8 pence.
Royal Mail Restructuring Plans Seen as Needed Step for
0940 GMT - Royal Mail's restructuring plan is proof of its
commitment to modernizing the business, AJ Bell's investment
director Russ Mould says. The British letter-and-parcel courier
finally seems to be getting its act together, helped by an increase
in parcels being sent during the coronavirus pandemic, Mould says.
"In streamlining the business, Royal Mail needs to ensure it
doesn't go too far and diminish its operational capability or spark
widespread industrial action--the threat of which has hung over the
business in the past," he says. Shares are up 5.1% at 458.80
Pound Seen Shrugging Off Growing Calls for UK PM to Resign
0937 GMT - Calls for U.K. Prime Minister Boris Johnson to resign
are reaching "fever pitch" but sterling is likely to remain little
moved by the political uncertainty, ING says. "Should Johnson
leave, his successor would likely be seen as a safe pair of hands
and we do not see any political risk premium being built into GBP,"
ING analysts say. The prospect of the Bank of England raising
interest rates further and general risk appetite are far more
important for sterling, they say, noting that sterling fell on
Monday in reaction to Russia-Ukraine tensions. GBP/USD trades flat
at 1.3493 and EUR/GBP falls 0.3% to 0.8373.
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(END) Dow Jones Newswires
January 25, 2022 06:57 ET (11:57 GMT)
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