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Thu, 8th Mar 2018 - Author: Morning Shot

Mixed close on Wall St. as the Nasdaq closed higher but the S&P and Dow failed to turn positive. No such problem in the Asia Pac area where the ASX led the way closing higher by 0.69%, Nikkei 0.55% and Shanghai Comp. 0.54%.


The commodities markets traded pretty mixed spot WTI performed well after a DoE data came in better than expectations at 2.408M vs exp 2.723M. But this was not enough to boost oil prices as they still managed to close lower. 


 Overnight and through to this morning copper prices are looking weak, prices look set to test the previous wave low of $3.07/lb. But on a more interesting note in base metals Trump revealed that not all countries will be affected by the proposed tariffs. 


Despite risk sentiment looking positive overnight gold moved higher and trades 0.20% in the green. There was a strong technical rejection at the $1340/oz level and now it looks like we may have a range between there and $1304/oz. 


Morning Shot


#DOM Domino's Pizza -  FY17 Net £66.8M vs £65.2M y/y, Underlying PBT £96.2M vs exp £91.9M, Rev £474.6M vs exp £460.5M.


#LLOY Lloyds Banking Group is today launching a share buyback programme to repurchase up to £1 billion of ordinary shares, as previously announced on 21 February 2018.

#GFS G4S - 
Operational and financial highlights - Core businesses:
Profitable growth: PBITAb +4.2% (10.9% ex Middle East & India)
Strong growth in technology-related security revenues: +11.4%
Growing deployment of Cash solutions technology: 19,500 locations +30%
Disciplined growth reflected in improving margins: 6.7% (2016: 6.6%)
Productivity gains on track: £90m to £100m by 2020
Operating cash conversion: 106% (2016: 133%)
Financial strength: net debt to EBITDAd of 2.4x (2016: 2.8x)
Final Dividend +5%: 6.11p per share (2016: 5.82p); Full year 9.70p per share (2016: 9.41p)

· Operating EPS1,2 up 7% to 54.8 pence (2016: 51.1 pence)
· Operating profit3 up 2% to £3,068 million (2016: £3,010 million)
· Operating profit from eight major markets excluding divestments up 6% to £3,508 million (2016: £3,300 million)
· IFRS profit after tax £1,646 million (2016: £859 million)
· 2017 total dividend per share up 18% to 27.4 pence (2016: 23.3 pence)
· Dividend payout ratio 50%, 2017 target delivered
· General insurance net written premiums up 11% to £9,141 million (2016: £8,211 million)
· Value of new business1 up 25% to £1,243 million (2016: £992 million)
· Aviva Investors fund management revenue up 14% to £577 million (2016: £506 million)
· Total group assets under management1 (AUM) up 9% to £490 billion (2016: £450 billion)
#CWD Countrywide
2017 Results
·       Group:  Income for the full year was £671.9 million (2016: £737.0 million) while adjusted EBITDA was 23% lower at £64.7 million (2016: £83.5 million) driven by poor performance in Sales and Lettings.
 ·       Sales and Lettings: adjusted EBITDA was down 45% at £26.4 million (2016: £48.4 million). Third consecutive year of under-performance in this core area.
 ·       Financial Services: adjusted EBITDA of £19.7 million (2016: £22.7 million) with performance in traditional high street sales force impacted by less referred business from Sales and Lettings but encouraging growth in alternative Financial Services channels resulting in the value of total mortgages arranged up £2.0 billion to £17.7 billion.
 ·       B2B: Strong performance across B2B with a 13% increase in adjusted EBITDA to £35.6 million (2016: £31.5million) driven by Surveying and our commercial business, Lambert Smith Hampton.
  ·        Cash flow and net debt: Operating cash flow of £58.1 million (2016: £27.9 million) benefited from focus on managing working capital and introduction of new capital disciplines in the second half.   Net debt to adjusted EBITDA of 2.97x.
 ·       Loss after tax of £208.1 million (2017: profit of £17.5 million) reflecting £225.9 million of principally non-cash exceptional charges for goodwill, intangible and other asset impairments.
·       Dividend: The Board is not recommending a dividend for 2017 (2016: 5 pence per share).
2018 - The foundations for recovery
·      Management changes and strategic reset: chief executive leaves the Group and Peter Long appointed executive chairman
·      Promotion of industry veteran, Paul Creffield, to Group operations director
·      Immediate priorities for the Group:
o  Back to basics in Sales and Lettings to regain market share and gradually return to profitable growth
o  Cost efficiency
o  Financial discipline and better cash flow conversion
·      2018 lay the foundations to restore profitable growth
·      Detailed recovery plan to be presented at 2018 interims
#PMO Premier Oil
2017 Financial highlights
·     Comprehensive refinancing completed; cash and undrawn facilities at year-end of US$541.2 million
·     Cash flows from operations of US$496.0 million up 15% (2016: US$431.4 million)
·     Opex of US$16.4/boe, maintaining low cost base
·     Development and exploration capex of US$275.6 million, down 58%
·     Positive free cash flow of US$71.2 million, net debt reduced to US$2.7 billion
·     EBITDAX increased to US$589.7 million (2016: US$494.1 million)
·     US$253.8 million post-tax loss after previously disclosed impairments and refinancing costs
#RRS Randgold Resources are set to continue talks with Excellency President Joseph KABILA KABANGE of the Democratic Republic of Congo next week.
RICS House Price Balance (Feb) 0% vs exp 7% prev 7%
What to look out for
ECB Rate decision and press conference and Bank of Canada's (BoC) Poloz speaks.


The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.


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