Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Beaufort Securities Breakfast Alert - Bezant Resources, Next, Ryanair Holdings

Beaufort Securities Breakfast Alert - Bezant Resources, Next, Ryanair Holdings

Markets

Europe
The FTSE-100 finished yesterday's session 0.52% lower at 7,648.10, whilst the FTSE AIM All-Share index was up 0.09% at 1,050.54. In continental Europe, the CAC-40 finished 0.45% lower at 5,288.60 whilst the DAX was down 0.36% at 12,871.39.

Wall Street
Last night in New York, the Dow Jones closed 104.79 points (0.42%) higher at 24,824.01. The broader-based S&P 500 added 22.20 points (0.83%) to end at 2,695.81 and the tech-focussed Nasdaq jumped 103.51 points (1.5%) to 7,006.90.

Asia
In Asian markets this morning, the Hang Seng gave up earlier gains and was 9.88 points lower at 30,505.43, while the Nikkei 225 remains closed until Thursday and stands at 22,764.94.

Oil
In early trade today, WTI crude recently up 0.02% at $60.38 per barrel and Brent was flat at $66.57 per barrel

 

 Headlines

US blocks sale of Moneygram to China's Ant Financial
The US has blocked the $1.2bn (£880m) sale of money transfer firm Moneygram to China's Ant Financial, the digital payments arm of Alibaba. It is the highest profile Chinese deal to be rejected by Washington since Donald Trump came to power. Regulators overseeing foreign investments in the US had refused to support the takeover, the firms said. The geopolitical environment had "changed considerably" since the merger was announced last year, they added. The collapse is a blow to the ambitions of Alibaba's billionaire executive chairman Jack Ma, who had promised President Trump that he would create a million US jobs. Alibaba, which owns Ant Financial together with Alibaba executives, saw the US market as a way to expand overseas in the face of fierce domestic competition form the likes of Tencent's WeChat. But in a joint statement on Tuesday, Ant Financial and Moneygram said they had abandoned the deal "following the inability of the companies to obtain the required approval for the transaction from the Committee on Foreign Investment in the United States, despite extensive efforts to address the Committee's concerns." Reports suggest the committee had cited security concerns over the takeover. Moneygram chief executive Alex Holmes said he was "disappointed" by the outcome and noted the "geopolitical environment has changed considerably" in the year since the deal was announced.

Source: BBC News

Company news

Bezant Resources (LON:BZT 0.38p) – Update
Bezant Resources announced that it has made the final payment due with respect to its exercise of the option over two alluvial platinum and gold licences in the Choco region of western Columbia. The final option payment of US$200,000 has been made, thereby securing Bezant’s 100% interest on the FKJ-083 and HCA-082 licences covering c. 2,659ha. Management can now focus on pursuing project level funding options to continue development of the FKJ-083 licence.

Our view: The above announcement should help with management’s strategy of obtaining project level financing to achieve full-scale production on the FKJ-083 licence. We look forward to further announcements regarding potential funding options. In the meantime, our recommendation remains under review.

Beaufort Securities acts as corporate broker to Bezant Resources plc

REQUEST A CALL FROM A BROKER REGARDING THIS RECOMMENDATION

Next (LON:NXT 4,500.00p) – Sell
Next has published its annual Christmas trading update, a general read across for the health of the UK high street retailer. In its last update (November) the board said “We believe the most reliable guide to sales for the balance of the year are the full price sales for the year to date, which are down -0.3%”. Today’s news was sales up 1.5%, so significantly above guidance and results in a small increase to FY18 (to January) profit guidance from £717m to £725m. Note the shares trade ex-div of a 45p dividend tomorrow.

Our view: Next is an interesting beast, very cash generative, decent balance sheet (net debt of circa £950m), growing on line sales but declining sales in its shops. This morning’s sales news is positive although nothing like a reversal of Next’s long term high street decline. And the outlook statement is less positive, with FY19 profit guidance of £705m (down 3% on FY18 to Jan) and free cash (for divis and share buybacks) of £525m versus a market cap of £6.57bn. Due to the negative outlook, we expect the shares to underperform and change our recommendation to SELL.

REQUEST A CALL FROM A BROKER REGARDING THIS RECOMMENDATION

Ryanair Holdings (LON:RYA EUR15.00) – Buy
Ryanair this morning provided its traffic update for December 2017. During the month, passenger traffic increased by +3% y-o-y to 9.3 million customers, while the load factor grew +1% y-o-y to 95%. The rolling annual traffic to December rose +10% to 129 million customers. Passenger traffic represents the number of earned seats flown, while load factor represents the number of passengers as a proportion of the number of seats available for passengers.

Our view: December passenger statistics were weaker than expected. Slower rate of growth was due to flights cancellations announced previously plus adverse weather conditions, while load factor remained strong. The recent sharp fall in share price was due to Ryanair agreeing to formally recognise pilots’ unions to avoid strikes during Christmas period. Such move is likely to push up the long-term cost base through improved pay and working conditions. We anticipate European airline market to continue consolidate with Ryanair one of the leading player. And despite rising cost pressure, Ryanair’s lower passenger costs should maintain its competitive advantages. Ryanair publishes Q3 results on 5 February 2018. We maintain our Buy rating on the shares with a target price of €19.00.

REQUEST A CALL FROM A BROKER REGARDING THIS RECOMMENDATION

To read Beaufort's full research archive click here

 

Important Risk Warnings and Disclaimers 

This report is published by Beaufort Securities Ltd ("Beaufort Securities"). Beaufort Securities Ltd is Authorised and Regulated by the Financial Conduct Authority and is a Member of the London Stock Exchange. 

RELIANCE ON THIS NOTE FOR THE PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE YOU TO A SIGNIFICANT RISK OF LOSING ALL OF THE FUNDS, PROPERTY OR OTHER ASSETS INVESTED OR OF INCURRING ADDITIONAL LIABILITY. 

This document is not an offer to buy or sell any security or currency. This document does not provide you with individually tailored investment advice. It has been prepared without regard to the your financial circumstances and objectives The appropriateness of a particular investment or currency will depend on your individual circumstances and objectives. The investments and shares referred to in this document may not be suitable for you. 

This research is non-independent and is classified as a Marketing Communication under FCA rules. As such it has not been prepared in accordance with legal requirements designed to promote independence of investment research and it is not subject to the prohibition on dealing ahead of the dissemination of investment research in COBS 12.2.5. However Beaufort Securities has adopted internal procedures which prohibit analysts from dealing ahead of non-independent research, except for legitimate market making and fulfilling clients' unsolicited orders. 

By receiving this document, you will not be deemed a client or provided with the protections afforded to clients of Beaufort Securities. When distributing this document, Beaufort Securities is not acting for you and will not be responsible for providing advice to you in relation to this document. Accordingly, Beaufort Securities will not be responsible to you for providing the protections afforded to its clients. 

Beaufort Securities may effect transactions in shares mentioned herein and may take proprietary trading positions in those shares, and may receive remuneration for the publication of its research and for other services. Beaufort Securities may be a shareholder in any of the companies mentioned in this report. Accordingly, this document may not be considered as objective or impartial. Additionally, information may be available to Beaufort Securities or the Group, which is not reflected in this material. The remuneration of the author of this report is not tied to the recommendations on any shares mentioned nor to the any transactions undertaken by Beaufort Securities or any affiliate company. Further information on Beaufort Securities' policy regarding potential conflicts of interest in the context of investment research and Beaufort Securities' policy on disclosure and conflicts in general are available on request. Please refer to http://www.beaufortsecurities.com/important-info. 

Past performance is not a guarantee of future performance. Investments may go down in value as well as up and you may not get back the full amount invested. The listing requirements for securities listed on AIM or the ICAP Securities & Derivatives Exchange are less demanding and trading in them may be less liquid than main markets. This may make it more difficult to buy and sell these securities. 

 

This document includes certain statements, estimates, and projections with respect to the anticipated future performance of securities listed on stock exchanges and as to the market for these shares. Such statements, estimates, and projections are based on information that we consider reliable and may reflect various assumptions made concerning anticipated economic developments, which have not been independently verified and may or may not prove correct. No representation or warranty is made as to the accuracy of such statements, estimates, and projections or as to its fitness for the purpose intended and it should not be relied upon as such. Opinions expressed are our current opinions as of the date appearing on this material only and may change without notice. Other third parties may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. Those reports reflect the different assumptions, views, and analytical methods of the analysts who prepared them. This report has not been disclosed to any of the companies mentioned herein prior to its publication. 

This document is based on information Beaufort Securities has received from publicly available reports and industry sources. Beaufort Securities may not have verified all of this information with third parties. Neither Beaufort Securities nor its advisors, directors or employees can guarantee the accuracy, reasonableness or completeness of the information received from any sources consulted for this publication, and neither Beaufort Securities nor its advisors, directors or employees accepts any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document (except in respect of wilful default and to the extent that any such liability cannot be excluded by the applicable law). You should not rely on this document and should not use it substitution for the exercise of the independent judgment of yourself or your adviser. 

The information contained in this document is confidential and is solely for use of those persons to whom it is addressed and may not be reproduced, further distributed to any other person or published, in whole or in part, for any purpose. Other persons who receive this document should not rely on it. Beaufort Securities, its directors, officers and employees may have positions in the securities mentioned herein.

 

© Proactive Investors 2018

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use