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(Alliance News) - Sirius Minerals said Monday it has come up with a two-stage project development mine plan following a shelved fundraise which had been intended to help pay for its North Yorkshire polyhalite project.
Due to the "market conditions" which hampered its ability to deliver necessary stage 2 financing, Sirius decided to undertake a strategic review and slowed the pace of development at the project.
"Our analysis has identified a two-stage development plan that enables us to achieve the key de-risking milestone of first polyhalite, when the service shaft reaches the polyhalite ore body, with an upfront capital requirement of about USD600 million. The additional works required to reach an installed and ramped up production capacity of 10 Mtpa contemplates up to USD2.5 billion of capital expenditure," said Managing Director & Chief Executive Chris Fraser.
The company is in discussions with potential strategic partners and debt investors with the aim of "securing the best route to finance our revised initial scope of work".
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.3% at 7,340.03
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Hang Seng: down 2.7% at 26,901.91
Nikkei 225: closed down 0.3% at 23,331.84
DJIA: closed up 6.44 points at 27,681.24
S&P 500: closed up 0.3% at 3,093.08
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GBP: firm at USD1.2800 (USD1.2784)
EUR: firm at USD1.1028 (USD1.1019)
Gold: soft at USD1,464.94 per ounce (USD1,467.30)
Oil (Brent): firm at USD61.86 a barrel (USD61.70)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
0930 GMT UK first quarterly estimate of GDP
0930 GMT UK index of production
0930 GMT UK trade
0930 GMT UK monthly service sector figures
1230 GMT UK NIESR monthly GDP tracker
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A Chinese industrial giant is set to come to the rescue of British Steel within days, buying out its embattled Scunthorpe plant and potentially saving 4,000 jobs, it has been reported. After talks with a prospective Turkish buyer collapsed, the Jingye Group has become the leading contender to buy British Steel out of liquidation, with a buyout bid worth a reported GBP70 million on the table. Jingye also is set to sweeten the offer with the promise it can access up to GBP300 million in loans, indemnities and grants to back its plan to boost production at the plant by 10%. Staff at the Scunthorpe facility have been told in an email that contracts between British Steel and Jingye have been exchanged, the Guardian newspaper reported.
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Rain kept shoppers off high streets, resulting in the worst October UK retail footfall result in seven years, numbers from the British Retail Consortium-Springboard Footfall & Vacancies Monitor showed. The analysts also warned that the UK's upcoming general election could damp consumer demand even further. Footfall declined 3.2% year-on-year in the four weeks to October 26, the worst result for the month in seven years.
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Moody's Investors Service late on Friday changed the outlook for the UK to negative from stable, affirming the Aa2 rating. Moody's said UK institutions have weakened as they struggle to copte with the scale of policy changes they face, compounded by a likely weakening of economic and fiscal strength.
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There is not yet any agreement to roll back tariffs imposed on China, Trump said Friday, while insisting Beijing wants a reversal on the duties and to reach a trade deal "much more than I would." Asked by reporters outside the White House if he would meet Chinese President Xi Jinping before the end of the year, Trump said: "We'll see." A key White House advisor earlier said the administration may consider holding off on the next round of tariffs due to be imposed on China on December 15.
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China's consumer prices grew at their fastest rate in almost eight years in October driven by a spike in pork prices caused by an outbreak of African swine fever, according to official figures released Saturday. The consumer price index – a key gauge of retail inflation – rose 3.8% last month on a year before, the National Bureau of Statistics said, accelerating from 3.0% in September and the highest annual rate since January 2012. Prices of pork, the staple meat in China, have more than doubled in the past year, according to the NBS. Producer prices, meanwhile, saw their steepest decline in more than three years, sliding for a sixth straight month, hit by the trade war with the US. The producer price index – an important barometer of the industrial sector that measures the cost of goods at the factory gate – declined 1.6% in October from the previous year, the NBS said. That came after prices shrank 1.2% in September, and represented the sharpest decline since August 2016.
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BROKER RATING CHANGES
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SOCGEN CUTS ROLLS-ROYCE TO 'HOLD' (BUY) - PRICE TARGET 825 (930) PENCE
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HSBC RAISES ASTON MARTIN TO 'BUY' (HOLD) - PRICE TARGET 550 PENCE
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COMPANIES - FTSE 100
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Business-to-business publisher and events organiser Informa said it posted a "resilient" performance for the first 10 months of the year. Group underlying revenue growth was 2.8% for the ten months to October 31, with the "significant, seasonally stronger" November and December trading period yet to come. Forward pacing for the remainder of 2019 provides "reassurance" on its revenue growth guidance of 3.5%, Informa said. Further, "the breadth and balance of the enlarged group, the quality of our revenue growth and strong visibility of forward bookings and renewals into the first quarter of 2020" gives confidence in future growth. "After ten months trading in 2019, despite an unpredictable economic [and] geo-political backdrop, the enlarged Informa Group continues to demonstrate resilience and performance, remaining on track for a sixth consecutive year of growth in underlying revenue, profit, adjusted earnings and cashflow," said Chief Executive Stephen Carter.
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Consumer internet investor Prosus has warned Just Eat shareholders that it will withdraw its takeover bid if they back a merger with Takeaway.com, the Telegraph reported. According to the newspaper, Prosus is not interested in buying both companies. In August, online takeaway platforms Takeaway.com and Just Eat proposed an all-share combination to create one of the largest food delivery companies in the world with a market capitalisation around EUR10 billion and processing orders worth over EUR7 billion per year. The Dutch-listed arm of South African media giant Naspers offered 710 pence per Just Eat share at the end of October, which, it noted, was a 20% premium to Takeaway.com's offer of 594p per share. Early Monday, Prosus published its offer document, setting out again its case for buying Just Eat.
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Miner BHP expressed optimism for its growing Petroleum unit, outlining several major growth projects in the years to come. BHP, which is listed in London, Sydney, New York, and Johannesburg, has multi-commodity assets in Australia, particularly iron ore, as well as copper, iron ore, and coal mines in South America. However, it also has owned oil and gas assets since the 1960s, with producing assets in the Gulf of Mexico, Australia, Trinidad & Tobago, and Algeria, as well as exploration projects across the Americas. In the year to June, the Petroleum unit made up 13% of revenue and 16% of underlying Ebitda. Speaking to investors in Sydney, BHP's Geraldine Slattery, president of Petroleum, said the unit has delivered strong financial performance "over many years" and this is set to continue.
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South Africa's Vodacom, majority owned by Vodafone, reported strong interim profit growth on rising service revenue, particularly from International operations. For the six months to the end of September, the Top 40 telecommunications firm reported a 7.0% rise in pretax profit to ZAR11.28 billion from ZAR10.54 billion the year before. This was on group revenue that rose by 3.9% to ZAR44.39 billion from ZAR42.71 billion the prior year, which was driven by 4.2% growth in service revenue to ZAR36.00 billion to ZAR34.55 billion.
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Barclays UK Chair Ian Cheshire has insisted British businesses would "get on and deal with" whichever government wins the election, despite City fears over Jeremy Corbyn. Speaking to the PA news agency, Cheshire – who formerly led B&Q owner Kingfisher – said UK PLC would "work with" any government elected next month. He said the snap General Election on December 12 was a step forward to breaking the deadlock on Brexit in Parliament and may bring the UK closer to ending uncertainty that has wrought havoc on the economy.
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COMPANIES - FTSE 250
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Baker Greggs reported solid growth in the fourth quarter thus far as it upgraded its full-year profit forecast. Greggs said its performance in the fourth quarter of 2019 to date has "continued to be very strong" despite strengthening annual comparatives. In the six weeks to November 9, total sales were up 12% against a comparative of 9%, while like-for-like sales surged 8.3% against 4.0% growth a year ago. In the year-to-date, total sales are up 13% and like-for-like sales 9.2% higher. Greggs said it now expects underlying pretax profit to be above its previous expectations. In 2018, the maker of sausage rolls, both vegan and meat-filled, achieved profit of GBP89.8 million.
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Cross border payments firm Finablr backed its guidance after strong year-to-date growth. Adjusted income for the first nine months of the year was USD1.17 billion, up 9% on a year ago. Adjusted earnings before interest, tax, depreciation and amortisation was 22% higher at USD182.3 million. Finablr said each of its three segments delivered "strongly" during the period. "We reaffirm the guidance and outlook provided at the time of IPO and remain highly confident in the future prospects of the business," said Chief Executive Promoth Manghat.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Funeral services provider Dignity reported a fall in revenue and profit in the year-to-date. Revenue for the 39 weeks to September 27 was down 8% to GBP225.4 million, while underlying operating profit slid 30% to GBP47.9 million. Third quarter trading was in line with expectations, while the operating performance in the year-to-date has also been consistent with forecasts given a significantly lower number of deaths - in the year-to-date, this was down 5%. Board expectations for 2019 remain unchanged, though Dignity warned its operating performance in 2020 will "rely heavily" on the number of deaths, "which may or may not revert to higher levels witnessed in previous years compared to the 576,000 seen in the last twelve months to September".
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Private equity firms are evaluating a takeover offer for bank note printer De La Rue's product authentication unit, the Daily Mail reported. According to the newspaper, three private equity firms – one headquartered in the UK and two US firms with London offices – are weighing up a bid for the product authentication division, which creates tracking software and physical labels to help prevent trade in fraudulent items, from cigarettes to official football shirts. According to the Daily Mail, citing one analyst, the product authentication unit could be worth up to GBP200 million. De La Rue as a whole has a market capitalisation of GBP162.8 million.
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COMPANIES - INTERNATIONAL
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Chinese customers spent billions of dollars during the opening hours of the country's annual Singles' Day frenzy Monday, the world's biggest 24-hour shopping event that was kicked off by US pop star Taylor Swift. E-commerce giant Alibaba said the first USD1 billion spent on its platforms was reached in just 68 seconds. The total gross merchandise volume settled through its payments platform Alipay hit CNY100 billion, about USD14.3 billion, within 63 minutes and 59 seconds – 43 minutes ahead of last year's pace. The promotion, now in its 11th year, kicked off early with Chinese bargain-hunters snapping up everything from electronics to clothing and housewares via Alibaba and other competing platforms.
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Credit Suisse Group announced a new head of Investment Banking & Capital Markets as incumbent James Amine shifts roles within the bank. David Miller has been with Zurich-based Credit Suisse for 22 years, most recently leading the company's Credit and Credit Products businesses. He has previously been in charge of Leveraged Finance Capital Markets. Amine, who also has been at Credit Suisse for 22 years, led the IBCM unit for over a decade. He leaves to take up a newly-created role at Credit Suisse as head of Private Credit Opportunities.
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Monday's Shareholder Meetings
no events scheduled
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By Tom Waite; thomaslwaite@alliancenews.com
London Briefing is available to subscribers as an email newsletter. Contact info@alliancenews.com
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