AO and Ei in alphabeti-spaghetti shoot-out

A look at the day's fireballs and furballs, including AO, Ei, Nakama, BTG, KCom and CYBG

Inside of a washing machine
Bish, bash, Bosch ... AO's shares were down 5.6%

Increasingly, the best thing about electronics retailer AO World PLC (LON:AO) seems to be the use of the Ramones’ “Blitzkrieg Bop” in its adverts.

The shares were down 5.6% today after disappointing interims – or, perhaps more accurately, a slightly worrying outlook statement.

“While our core UK and Germany MDA markets have been challenging, with the UK MDA market becoming tougher than expected, we take encouragement that we are at least maintaining market share in this core category in the UK and growing significantly in Germany,” said Steve Caunce, the chief executive officer.

“While we faced some operational challenges with our driver model in Germany which had an effect on our second quarter we expect to return to our targeted growth levels in Germany over the next few months,” Caunce added.

Black Friday – we’re not expecting the Steely Dan song of the same name to replace “Blitzkrieg Bop” in AO’s adverts – will soon be on us and the company is expecting its “biggest ever” Black Friday, which probably means it won’t sell as much as on Boxing Day but, hey-ho (let’s go).

From AO to Ei Group PLC (LON:EIG), the company formerly known as Enterprise Inns.

It hailed “a great summer for pubs and another successful year” as it posted underlying earnings (EBITDA) of £287mln, unchanged from the year before.

Just as well it wasn’t a terrible summer for pubs and an unsuccessful year, then …

On the other hand, the number of pubs it owns has fallen to 3,718 from 4,051 at the end of September.

Net debt narrowed to a still mind-boggling £2.0bn at the end of September from £2.1bn a year earlier but the company assured the market it has sufficient available bank facilities to repay the £100.5mln of corporate bonds due to be redeemed on December 6 of this year.  

11.30am: Recruiter all in favour of lowering headcount 

Interim results from Nakama Group PLC (LON:NAK) came only a couple of months after the prelims but already there are signs of a turnaround.

The recruitment consultancy said net fee income (NFI) in the six months to the end of September was flat, year-on-year, but a 23% reduction in its own headcount meant that the company moved into the black at the pre-tax level, with a profit of £186,000, versus a loss the year before of £437,000.

The shares shot up by just over a third to 1.35% as Andrea Williams, the chief executive, claimed the first phase of the group’s turnaround plan was starting to bear fruit.

“As we have committed to focusing our efforts on core markets, we have had to implement changes across most of our business units, early results are promising,” Williams said.

"Whilst the NFI has not seen any significant changes from the same period last year we have created a more focused and lean operation and are pleased to show a return to profitability in H1 2018. Having posted a loss before tax of £437,000 in H1 2017, I am pleased with the improvement seen this year to date,” she added.

Say farewell to BTG PLC (LON:BTG), the global healthcare group.

The shares shot up by a third to 824p after US medtech Boston Scientific unveiled an 840p per share cash offer for the company’s shares.


10.30am: By 'eck, it's grim up north for Kcom and CYBG

The words “revised dividend commitment” in the headline of Kcom Group PLC’s (LON:KCOM) trading update sounded ominous, and so it proved.

The shares lost more than a third of their value as the Hull-based telecoms group issued a profit warning and went back on its previously stated commitment to pay a dividend for the current financial year (to March 31, 2019) of at least 6p; the new commitment is to pay not less than 3p.

To be fair to the company’s management, it has acted swiftly to deteriorating conditions rather than existing in a state of denial that seems to affect some directors who can’t believe their master-plans are going awry.

KCom has said that, given the changes to the group's medium-term trading performance, cash flow and balance sheet, the board now considers it inappropriate to commit to continuing to pay an uncovered dividend, i.e. a dividend per share that is lower than earnings per share.

As well as earnings per share that fail to cover the company’s previous dividend commitment, the debt situation has worsened, with net debt rising to £108.5mln from £62.6mln six months earlier.

The profit warning was attributed largely to flat revenues, which were driven by lower than expected order intake, in the group’s enterprise division and continued customer churn in the group’s national network services division.

“It is the board's view that these trends will continue into the following financial year,” the company warned shareholders.

Definitely a case of going to Hull and back …


If CYBG PLC (LON:CYBG) shareholders were distraught yesterday over the announcement that chief operating officer Debbie Crosbie was slinging her hook to take over as chief executive officer of TSB, they were even more upset today at the reaction to the bank’s full-year results.

The shares were down almost 10% at 224.4p after the Yorkshire Bank owner revealed a statutory loss of £145mln, due to legacy payment protection insurance compensation costs.

The net interest margin fell by one-tenth of a percentage point to 2.17% while the tier 1 ratio – a measure of balance sheet strength – fell two percentage points to 12.7% from a year earlier.

Proactive news headlines:

Highlands Natural Resources Limited (LON:HNR) does not believe the withdrawal of its permit applications in West Denver will have a material impact on its near-term financial performance. Revenues are being generated from the East Denver Colorado shale project and these should increase significantly when six new wells begin production in December to cover its overheads for 2019.

Simec Atlantis Energy Limited (LON:SAE) has agreed in principle to sell a 25% shareholding in the Uskmouth power plant conversion project for £32.9mln.

W Resources PLC (LON:WRES) has commenced production of tungsten and tin concentrate at the La Parrilla mine in Spain as part of a planned staged build-up to full mine production in the second half of 2019. Production is expected to reach 10 to 15 tonnes per month from November 2018, with first shipment planned for December 2018.

Grades at the first level of the KV1 kimberlite pipe on the Kareevlei project in South Africa have exceeded the expectations of owner and operator BlueRock Diamonds PLC (LON:BRD).

IronRidge Resources Limited (LON:IRR) has intercepted more high-grade lithium at the Ewoyaa project in Ghana.  Among the highlights were 56 metres at 1.71% Li2O, 67 metres at 1.32% Li2O, and 45 metres at 1.56% Li2O.

SkinBioTherapeutics PLC (LON:SBTX)  said it has begun the third and final phase of a human study of its skin cream as it confirmed it remains in talks with potential commercial partners. A total of 120 people will take part in the trial, which is designed to test whether SkinBiotix retains the beneficial property to improve skin barrier health when in a cream formulation.

Tlou Energy Ltd (LON:TLOU) is making “excellent progress” with the ongoing drill programme at its Lesedi coal bed methane project in Botswana.

Gaming Realms PLC’s (LON:GMR) business-to-business (B2B) software division, Alchemy Bet, has secured a deal to host Casonic, a new online casino brand from Norwegian gaming company River iGaming.

Europa Oil & Gas (Holdings) PLC (LON:EOG) is to raise up to £5mln to fund its Irish Atlantic Margin projects and also a new venture in Morocco. A firm placing will provide £4mln at 3p per share, while existing shareholders can subscribe up to another £1mln through an open offer at the same price.

Eckoh PLC (LON:ECK), the provider of secure payment products and customer contact solutions, has seen a return to sales growth in the UK.

ClearStar Inc (LON:CLSU) has inked two new contracts for its services with an expected annual combined value of over US$1mln.

Following a review of all data gathered to date at the Kochang gold and silver mine in Thailand, Bluebird Merchant Ventures Limited (LON:BMV) has established an initial estimate of the mineral potential of between 550,000 and 700,000 tonnes, derived from a small area. Grades in this area range from between 5.2 grams per tonne to 6.6 grams of gold and from 27.3 grams to 34.8 grams silver.

Thor Mining PLC (LON:THR) (ASX:THR) has appointed London-based Argent Partners as corporate advisors to assist with completion of off-take and financing arrangements for Molyhil. The company said it has had approaches from, and held discussions with, a number of entities with interests ranging from both molybdenum and tungsten concentrate off-take, to those with potential interest in financing and other partnering initiatives, in respect of the Molyhil project.

Adamas Finance Asia Limited (LON:ADAM), the London quoted pan-Asian diversified investment vehicle, has appointed VSA Capital Limited as its corporate broker with immediate effect. 

European Metals Holdings Limited (LON:EMH) (ASX:EMH), the specialty lithium development company with assets in the Czech Republic, have released a copy of its latest Investor presentation on the company's website.

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