Morning Shot

Tuesday, 27th March 2018 07:45 - by Morning Shot

Stocks rebounded yesterday as Trump is set to open talks with China regarding the tariffs. The outperformer was the Nasdaq up 3.26%, in the Asia Pac region, the Nikkei closed 2.40% positive and the ASX traded flat. The Shanghai Comp. also traded in the green and was up around 0.50%.

In the base metal complex copper made a small comeback after underperforming recently. The industrial metal traded higher by around 1% as a weaker USD and easing trade tensions helped the commodity climb. We now trade around the $3.00lb area with the next major resistance at $3.0150/lb.

Golds impressive winning streak continued yesterday but overnight the yellow metal traded flat as global risk sentiment returned to the markets. If we do sell off we could see some support at $1341/oz.

Spot WTI is consolidation at the lofty $65.65/oz area this morning, today aftermarket we will see the release of the API crude oil inventory data and remember last time out there was a surprise draw of -2.739/bbl.

Morning Stories

#FERG Ferguson Reports H1 PBT £598M vs £556M y/y, Trading Profit £698M vs £630M y/y, Rev £10.03B vs £9.38B y/y and Co. Affirms outlook 

Spread betting names - ESMA said to ban binary options and restrict CFD for retail investors 

#GSK Plans to initiate strategic review of Horlicks and other consumer nutrition products - Novartis sells stake in consumer health venture to GSK for $13bn

#NOG Nostrum Oil and Gas

Financial

·     Revenue of US$405.5 million (2016: US$348.0 million)

·     EBITDA1 of US$232.0 million (2016: US$194.0 million)

·     EBITDA margin of 57.2% (2016: 55.7%)

·     Net operating cash flows2 of US$182.8 million (2016: US$202.1 million)

·     Closing cash3 for the period of US$127.0 million (2017: US$101.1 million)

·     Net debt of US$960.9 million (2016: US$857.9 million)

·     Total debt of US$1,087.9 million (2016: US$959.1 million)

·     Net debt / EBITDA ratio of 4.1x (2016: 4.4x)

·     Operating costs of US$4.1/bbl (2016: US$3.7/bbl)

·     Transport/boe cost reduced to US$4.8/bbl (2016: US$5.3/bbl)

·     Nostrum pushed outstanding debt maturities to 2022 through a successful refinancing campaign

·     New hedging agreement entered into in January 2018 equal to 9,000 boepd with a put strike price of US$60.0 until 31 December 2018

#JHD James Halstead

·     Revenue higher at £126.0 million - an increase of 5.4%

·     Operating profit higher at £23.9 million - an increase of 1.6%

·     Pre-tax profit higher at £23.7 million - an increase of 2.0%

·     Basic earnings per ordinary share 8.8p - a increase of 3.5%

·     Interim dividend increased to a record 3.85p - an increase of 2.7%

·     Net cash at £47.5 million

#SGC Stagecoach - Our expectation of the Group's adjusted earnings per share for the year ending 28 April 2018 has not changed from when we announced our interim results in December 2017.

#MOSB Moss Bros

Financial Highlights

·      Total Group revenue, excluding VAT, was up 3.0% on the previous year to £131.8m.

·      Group like-for-like* sales of £137.3m, including VAT, up 1.6% (2016/17: up 5.3%):

-     Like-for-like* retail sales including e-commerce up 2.9% (2016/17: up 6.0%)

-     Like-for-like* hire sales down -6.2% (2016/17: up 1.5%)

·      E-commerce sales including VAT up 13.5% (2016/17: up 15.7%) now 12% of total sales (2016/17 11%)

-       Mobile and tablet sales growth strong and now 48% of total e-commerce sales

·      Profit before tax delivered of £6.7m, -6.1% lower than prior year (2016/17: £7.1m).

·      EBITDA** of £13.3m (2016/17: EBITDA** £13.6m), driven by increasing sales, continued tight control of costs but affected by the impact of significant cost headwinds.

·      Gross margin -1.5% lower at 59.8%, due largely to the impact of the weaker pound

·      Ongoing strong cash position of £17.5m (28 January 2017: £19.5m) through close management of working capital and after a further £8.5m capital investment across the business.

·      Cash generated from operating activities of £12.6m (2016/17: £16.0m).

·      Basic earnings per share of 5.33 pence, down 3.3% (2016/17: 5.51 pence).

#GFRD Galliford Try announces a fully underwritten rights issue to raise gross proceeds of approximately £157.6 million. A prospectus containing full details of the Rights Issue is expected to be made available on the Group's website

#HZM Horizonte Minerals

Highlights

·    Agreement with Vale SA to acquire 100% of the advanced Vermelho nickel-cobalt project in Brazil

·    Fundraise of £9.2 million completed in January 2018 (£7.0 million of which was raised in the United Kingdom and closed before year end) - cash of £9.4 million as at year end

·    Contracts awarded for Araguaia Feasibility Study

·    Announcement of the limonite mineral resource at Araguaia of 20.7 million tonnes grading 1.13% Nickel and 0.12% Cobalt (0.9% nickel cut off)

·    Completed and filed the Mine Construction Licence for Araguaia to SEMAS, the Pará State authority responsible for environmental licensing, for the construction of the Project, including mine, associated infrastructure and pyro-metallurgical processing plant

·    Improved nickel market fundamentals

·    Feasibility study well advanced completion planned for mid-year 2018

#MGGT Meggitt announces the sale of its Thomson Aerospace and Defense subsidiary to Umbra Cuscinetti S.p.A., has completed.

#OPM 1PM PLC - £35m Funding Facility with British Business Bank

What to look out for

US CB Consumer Confidence and API Crude Oil Inventories 

Kind Regards

Rajan Dhall

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.