Weekly review

Equity view

Theatre operator Cineworld said on Friday that it had successfully generated positive cash flow in the fourth quarter of 2021 thanks to steady growth in performances and attendances over the period. Cineworld said box office and concession revenues were "particularly strong" in December, at 88% of 2019's pre-Covid level, driven by the success of Spider-Man: No Way Home across the US, UK, and rest of the world as it became the first film to gross more than $1.5bn since the onset of the pandemic.

Fuels and lubricants retailer Vivo Energy revealed on Friday that Doug Lafferty had resigned in order to take up the role of chief financial officer at world-renowned carmaker Aston Martin Lagonda. Vivo said Lafferty will remain a director of the company until he leaves, which will be no later than 13 July, and added that the search for a new CFO was already underway.

Credit data firm Experian reported a 14% rise in third-quarter revenue driven by growth across all geographical units as it lifted annual guidance. The company on Friday said it now expects annual revenue to grow between 16% - 17%, compared with an earlier forecast of a 15% - 17% increase.

Fast-fashion retailer Quiz reported a 20% jump in sales over the Christmas period as it said trading for the full year was set to be in line. In the month of December, sales rose to £8.8m from £7.4m in the same month a year prior, in line with the company’s expectations.

Pub operator Mitchells & Butlers said on Thursday that it had initially made "a strong start to the year", with like-for-like sales growth of 2.7% over the first eight weeks, but warned that renewed Covid-19 restrictions on hospitality venues impacted trading during the all-important holiday trading period. Concerns regarding the emergence of the Omicron variant in December had resulted in further caution in socialising which, in turn, brought about a downturn in activity across the sector and, as a result, like-for-like sales then dropped 6.0% over the seven weeks since its last update, with the adverse impact of the new variant being "particularly felt in the most recent four weeks" as like-for-like sales over the key festive season were down 10.2%.

Aviva chief financial officer Jason Windsor has resigned to join house builder Persimmon, the company said on Thursday. Windsor will take his post with effect from July 2022, it added in a statement.

Food packaging business Hilton Food said on Thursday that full-year trading had been in line with the board’s expectations as it sounded an upbeat note on the outlook. In an update for the year to 2 January 2022, the company said growth was driven mainly by organic expansion. Over the two-year period, it saw "strong, sustained" growth, as it delivered towards its goal of becoming "the global protein partner of choice".

Housebuilder Persimmon said on Thursday that full-year group revenues had risen in 2021 thanks to growth in both new home completions and average selling prices throughout the period. Persimmon stated total group revenues were £3.61bn in 2021, up from £3.33bn, as new home completions grew from 13,575 to 14,551 and average selling prices increased from £230,534 to roughly £237,050.

Oil production firm Genel Energy revealed on Tuesday that chief financial officer Esa Ikaheimonen had announced his intention to leave the company on 16 March. Genel Energy said a search to replace Ikaheimonen, who will depart the company following its 2021 full-year results, was ongoing and added that an announcement will be made in due course.

Industrial and electronics products distributor Electrocomponents said on Tuesday that it had delivered a "strong trading performance" in the third quarter of its trading year, leading it to now expect full-year profits to be "slightly ahead" of consensus estimates. Electrocomponents said third-quarter like-for-like revenues were up 2.1% despite "toughening comparatives", while overall quarterly revenues grew 23%, partly driven by acquisitions.

Student property firm Unite Group said on Tuesday that it had already sold 60% of its entire property portfolio for the next academic year, up from 58% at the same time last year. Unite expects to see strong student demand for the 2022-23 year from both domestic and international students, with the group anticipating "a slightly later sales cycle" for international students than in “a typical year” due to ongoing uncertainty relating to Covid-19. As a result, Unite increased its focus on retaining existing direct-let customers, which led to an increased share of sales to re-bookers.

Low-cost housebuilder MJ Gleeson said on Tuesday that it had "performed well" during the six months ended 31 December. MJ Gleeson stated it had completed the sale of 932 homes, 14.9% more than during the same period in 2019, and just 2.0% fewer than the 951 homes sold during the same time a year earlier.

Real estate investment trust LondonMetric has acquired a long let cold storage and logistics warehouse development in Huntingdon for £53.4m. LondonMetric said on Tuesday that the 300,000 square foot building was pre-let on a 25-year lease to AM Fresh Group, an international agri-tech company that supplies UK supermarkets with fruits, plant-based fresh goods, and flowers. The rent of £2.0m per annum equates to £6.70 per square foot and will be subject to five-yearly CPI+1 linked reviews.

Cybersecurity AI firm Darktrace said on Tuesday that "significant growth" witnessed in the six months ended 31 December had led it to increase full-year expectations. Darktrace said customer numbers had increased 39.6% to 6,531 in the half, helping it deliver strong results in its constant currency, with annual recurring revenues now projected to have grown at least 45% to $426.0m.

Rathbones Group reported total funds under management and administration as at 31 December of £68.2bn on Tuesday, up 24.7% from the £54.7bn it recorded at the end of 2020. The FTSE 250 company said that reflected continuing net inflows, positive market movement and the acquisition of Saunderson House.

XP Power said it expected annual operating profit to be “modestly below” market forecasts due to supply chain issues during the final quarter. The company, which makes power control components for the electronics industry, said analysts had forecast adjusted operating profit for the year to December 31, 2021 of £46m - £48m.

Manufacturer Rotork tapped Kiet Huynh to take over as chief executive officer on Monday, with immediate effect. Huynh, the managing director of Rotork's water and power and its chemical, process and industrial divisions, will succeed Kevin Hostetler, who informed the board of his plans to return to the US in August 2021 but will remain available to support a smooth transition.

Primary care property investor Assura said it had completed £105m in acquisitions during the third quarter using proceeds from its November fundraising. The company on Monday said it had an Immediate development pipeline of 22 schemes, where it expected to be on site within 12 months, totalling a further £166m, up from £145m in the previous three months.

Trading platforms operator Plus500 said on Monday that it had delivered "an outstanding operational and financial performance" throughout 2021, with the group trading ahead of market expectations for the period. Plus500 stated full-year revenues were approximately $718.0m, supported by customer income of approximately $702.0m due to "a consistently high level" of customer trading activity throughout the year.

Renewable infrastructure fund Greencoat UK Wind said on Monday that the commissioning of the Windy Rig and Glen Kyllachy wind farms, and their subsequent acquisitions, had been completed. Greencoat stated the addition of Windy Rig, a 43.2-megawatt subsidy-free project located near Castle Douglas in Dumfries and Galloway, and Glen Kyllachy, a 48.5-megawatt subsidy-free project located in the Highlands, increased its net generating capacity to 1,422 megawatts and the number of subsidy-free assets in its portfolio to three, from a total of 43 operating wind farms.

Economic news

The UK economy recovered to above pre-pandemic levels in November, with growth across all industries, according to figures released on Friday by the Office for National Statistics. GDP grew 0.9%, up from 0.2% in October and coming in ahead of expectations for 0.4% growth. That left the economy 0.7% above its level in February 2020, just before the first wave of the pandemic hit.

The minimum isolation period in England for people who test positive for Covid-19 is to be cut to just five days, the government confirmed on Thursday. Health secretary Sajid Javid told MPs that the length of time people needed to isolate following a positive result would be reduced from seven days to five from Monday.

Households’ financial wellbeing fell sharply at the end of 2021, a survey showed on Wednesday, as savings came under pressure and the cost of living rose. The Scottish Widows Household Finance Index, which measures households’ overall perceptions of financial wellbeing, fell to 40.1 in the fourth quarter from 44.0 in the third. It was the fastest fall since the second quarter of 2020, when the UK was in the first national lockdown.

The Financial Conduct Authority announced two market studies on Tuesday, to investigate access to wholesale data. In response to a call for input, the FCA said it had heard concerns that limited competition in the markets for benchmarks and indices, credit ratings and trading data could increase costs for investors and affect investment choices.

UK retail sales continued to grow in December, despite the emergence of the Omicron variant and fresh restrictions, industry research showed on Tuesday. According to the BRC-KPMG Sales Monitor for December 2021, sales rose 2.1% on a total basis year-on-year in the five weeks to 1 January, or by 0.6% on a like-for-like basis. Compared to 2019, total sales rose 4.9%.

Footfall at UK retail destinations fell last week, with Central London suffering the biggest decline amid work from home guidance, according to data released on Monday by retail analyst Springboard. Footfall dropped 6% from the week before, with Central London seeing a 25.6% slump. The decline on local high streets was far more modest, however, with footfall in market towns down 2.8% and up 2% in Outer London.

International events

US retail sales unexpectedly slumped in December amid rising prices, according to figures released on Friday by the Commerce Department. Retail sales fell 1.9% on the month following a 0.2% increase in November. This marked the biggest decline in 10 months and was well short of expectations for a flat reading.

China's foreign trade surplus surged at the end of 2021, but only as a result of the drag on imports from weakness in the country's property sector. The Asian giant's trade surplus reached a record $94.5bn in December, as import growth slowed in year-on-year terms, from 31.7% for November to 19.5% last month (consensus: 27.8%).

Germany’s economy grew by 2.7% in 2021 despite surging Covid-19 and new restrictions and supply chain constraints, according to preliminary official data released on Friday. The statistics office said that growth was still 2% lower than 2019 pre-pandemic levels. German GDP fell 4.6% in 2020 as the pandemic crippled Europe’s largest economy.

Claims for unemployment benefits unexpectedly jumped in the seven days ended 8 January but still remained low by historic standards and broadly in line with the pre-pandemic average of around 220,000. According to the Labor Department, US initial jobless claims totalled 230,000 last week, well ahead of estimates for a print of 200,000 and the previous week's unrevised total of 207,000.

Wholesale prices in the States increased less quickly than expected last month as food and energy prices slipped. According to the US Department of Labor, so-called final demand prices edged up at a month-on-month pace of 0.2%, pushing the annual rate of gains one tenth of a percentage point lower to 9.7% (consensus: 9.8%).

The cost of living in the US increased a bit more quickly than expected last month. According to the US Department of Labor, the headline US consumer price index rose at a month-on-month pace of 0.5% in December.

Industrial production unexpectedly jumped across the Eurozone in November, official data showed on Wednesday. According to Eurostat, the European Union’s statistics office, seasonally-adjusted industrial production rose by 2.3% month-to-month in November. Consensus had been for a rise of just 0.5%.

China’s factory gate inflation slowed at a faster-than-expected rate in December, official data showed on Wednesday. According to data released by China's National Bureau of Statistics, the producer price index slowed to a four-month low of 10.3% from 12.9% in November, below consensus for 11.3%. The reduction was attributed to moves by Beijing to curb high raw material prices and ease the energy crisis.

Economists at Goldman Sachs believe the economic impact from Omicron should be mostly in the rearview mirror come the end of the first quarter. Key to that assessment, both confirmed cases and hospital admissions were now headed lower not just in South Africa but also in London, with the latter being the first place in the northern hemisphere that saw a major outbreak.

Grand Theft Auto maker Take-Two Interactive has agreed to buy Zynga in a $12.7bn deal. Under the terms of the agreement, Take-Two will pay $9.86 per Zynga share. Zynga stockholders will receive $3.50 in cash and $6.36 in shares of Take-Two common stock for each of their shares. This represents a premium of 64% to Zynga’s closing share price on Friday.

Eurozone unemployment fell again in November as the single currency region continued to claw its way back from the impact of the Covid-19 pandemic. The jobless rate fell to 7.2% in November, according to the European Union’s statistics agency Eurostat, down from 7.3% in October and close to pre-pandemic levels. It is also significantly lower than the 8.1% recorded in 2020.

Emerging markets should prepare for heightened turbulence as the US Federal Reserve tightens policy, the International Monetary Fund has warned. In a blog post, the IMF said US growth was expected to remain robust, with inflation moderating later in the year as supply disruptions ease.