Royal Mail, Ashmore, Energean Oil and Gas & more

Shares in 500-year-old Royal Mail fell as much as 9.7% in morning trade.

IC TIP UPDATES: 

Emerging markets-focused asset manager Ashmore (ASHM) has raised its interim dividend from 4.55p to 4.8p per share, the first hike in distributions since 2014. Judging by the group’s 42 per cent year-on-year rise in pre-tax profit to £132m, that seems appropriate, particularly as the group expects recent asset underperformance to swing back. Either way, client capital allocation remains steady; net inflows in the six months to December hit $5.7bn. Buy.

Energean Oil and Gas’s (ENOG) Karish gas project in Israel could see delays from coronavirus-related restrictions, as its floating production storage and offloading (FPSO) vessel is being built in China. The company said its contractor TechnipFMC had flagged that the China travel restrictions fit the definition of a force majeure event and so could see the production deadline extended. Energean said work continued on the site on Liuheng Island, off China’s east coast. The company’s share price was off 4 per cent on the news, to 726p. Buy. 

A first-quarter trading update from Victrex (VCT) detailed 6 per cent revenue lift to £67.7m, after a good period for automotives and signs of stabilisation from electronics and resellers. The high-quality plastics manufacturer also experienced growth in aerospace but warned of headwinds for the coming year, while energy was “notably weaker”. The group noted that its positive start to the year took place against weaker comparative performance from last year, and retained its outlook. Sell.

KEY STORIES: 

Beazley (BEZ) reported a 15 per cent rise in gross written premiums last year and a 15 per cent return on equity, up from 5 per cent the prior year. Pre-tax profits more than trebled and came in 21 per cent ahead of consensus expectations. While the combined ratio rose to 100 per cent, from 98 per cent, that also came in 1 percentage point ahead of analyst expectations.  

Royal Mail (RMG) said that it may fail to deliver its transformation plan and reach its targets for 2024 as it faces the threat of further strike action. The postal operator reported that it would push ahead with its company wide shake-up despite the Communication Workers Union (CWU) issuing a timeline for industrial action. Performance in its third quarter was in-line with expectations, but the group warned of a decline in its letter delivery business. 

OTHER COMPANY NEWS: 

Future (FUTR) is holding a capital markets day today for institutional investors and analysts. The event will be hosted by Zillah Byng-Thorne and members of senior management. The group said in its announcement this morning that Ms Byng-Thorne will present an overview of Future’s data driven strategy for organic and acquisitive growth. The presentation will provide further detail and insights into Future’s content development and organic growth, and the rationale driving its M&A decisions. The group said that management will also address the importance of diversification. No new material information will be provided. Future has also announced the appointment of Meredith Amdur – currently chief executive of Rhetorik – as an independent non-executive director.

Stock Spirits (STCK) expects increases to taxes – 10 per cent in Poland and 13.2 per cent in the Czech Republic – to have an impact on trading, but performance in both markets has nevertheless been significantly ahead of the same period last year. The group saw its categories in Italy decline in the first quarter.