Global growth back at pre-crisis levels, says World Bank

FTSE-100
FTSE-100 Chart (1 Year)

FTSE-100 1 Year Chart

Today’s edition features:

  • Jubilee Metals Group (JLP.L)
  • Joules Group (JOUL.L)
  • Morrison (WM) Supermarkets (MRW.L)

Visit Company News »

 


Markets

Europe
The FTSE-100 finished yesterday’s session 0.45% higher at 7,731.02, whilst the FTSE AIM All-Share index was up 0.33% at 1,067.94. In continental Europe, the CAC-40 finished 0.67% higher at 5,523.94 whilst the DAX was up 0.13% at 13,385.59.

Wall Street
Last night in New York, the Dow Jones gained 102.80 points (0.41%) to close at 25,385.80.
The S&P-500 added 3.58 points (0.13%) to end at 2,751.29 and the Nasdaq gained 6.19 points (0.09%) to 7,163.58.

Asia
In Asian markets this morning, the Nikkei 225 was down 61.79 points at 23,788.20, the Hang Seng was 92.24 points (0.30%) higher at 31,103.65 and the Shanghai Composite fell 3.38 points (0.10%) at 3,410.52.

Oil
In early trade today, WTI  was up 0.78% at $63.45 per barrel and Brent was 0.51% higher at $69.17 per barrel.


Headlines

Global growth back at pre-crisis levels, says World Bank
The World Bank says global economic growth is likely to speed up this year, after a stronger than expected 2017. The bank’s new forecast is that the world economy will expand by 3.1% this year before slowing slightly. It will be the first time since the financial crisis that growth is operating at its full potential. However, the report warns the upswing will be short term, with gains in improving living standards and reducing poverty levels at risk long term. For the immediate future, the bank sees a reasonably upbeat prospect. The bank’s president Jim Yong Kim said: “The broad-based recovery in global growth is encouraging”. The forecast is better than what the bank was expecting in its previous assessment last June. Among the large economies, the up-rating is especially marked for the eurozone, though the bank still thinks it will slow somewhat this year, but by less than its previous forecast.

Source: BBC News


Company news

Jubilee Metals Group (JLP.L, 3.55p) – Speculative Buy
Jubilee has announced that it has secured investment from two financial institutions: Miton Group and International Wealth Group comprising £4.5m (before expenses) through the issuance of 125M new ordinary shares at a price of 3.6p per share. The funds will be used to support the expansion drive of Jubilee’s global metals strategy. The above investment recognises Jubilee’s success and expertise in the recovery of metals from surface materials and tailings.

Our view: The above institutional investment confirms that Jubilee’s strategy of securing low-risk and low-capital intensity material across a range of commodities is working. Having successfully implemented the Hernic and DCM projects Jubilee is now focused on diversification into base metals through the earn-in agreement with BMR and the development of the Kabwe project in Zambia. We look forward to the completion of Phase 1 and the decision to proceed with the Kabwe earn-in agreement by 28 February. In the meantime, we maintain our Speculative Buy recommendation.

Beaufort Securities acts as corporate broker to Jubilee Metals Group plc

REQUEST A CALL FROM A BROKER REGARDING THIS RECOMMENDATION

Joules Group (JOUL.L, 309.00p) – Buy
Joules yesterday provided its trading update for the 7 weeks to 7 January 2018. During the period, retail sales (c.71% of revenue) advanced by +19.2% against last year, led by continued growth in both the stores and e-commerce channels. No update was provided on its Wholesale division (c.29% of revenue). Joules is scheduled to release its Interim results on 31 January 2018.

Our view: Joules’ Christmas trading update demonstrated continued strong momentum for the brand. The sales figure also takes into account of the returns received or anticipated. At its pre-close H1 trading update announced on 12 December, the company noted that it has surpassed 1 million active customers mark for its Retail division and added net 10 new stores. For Wholesale division, the CEO said Spring/Summer 18 order book saw a “good growth”. We believe Joules’ strong brand footprint and expanding loyal and highly engaged active customer base will continue to drive its momentum forward. The shares are currently valued at FY18E and FY19E P/E multiple of 27.1x and 22.7x, along with dividend yield of 0.7% and 1.0%, respectively. In view of positive trading along with a confident outlook, we reiterate our Buy rating on the shares and set a target price of 340p.

REQUEST A CALL FROM A BROKER REGARDING THIS RECOMMENDATION

Morrison (WM) Supermarkets (MRW.L, 232.30p) – Buy
Morrison yesterday provided its trading statement for the 10 weeks to 7 January 2018. During the period, total sales advanced by +2.6% (+2.8% including fuel), while like-for-like (‘LFL’) sales grew by +2.8% (+3.0% including fuel), comprised of +2.1% growth in Retail and +0.7% rise in Wholesale, against last year. KPIs showed LFL number of transactions during the period rose +2.3% while items per basket fell by -4.4%, implying continuing customer trend of ‘top-up’ rather than ‘main weekly’ shopping. On the operational front, the group said its online sales (Morrison.com in partnership with Ocado) grew by +10% and commenced trials for Wholesale supply to McColl’s earlier than initially planned. Phased rolling programme to supply McColl’s will commence this month.

Our view: Morrison reported strong Christmas trading. LFL sales of +2.6% came despite tough comparable of +3.3% growth same time last year. Altogether, given encouraging Halloween and Christmas sales, Q4 performance is now highly promising. On the other hand, as the group continue to invest in prices, the full year (to end-January) expectations remain unchanged. The management also said at the analyst conference that run rate inflation has ticked down “a touch”. Consensus is currently forecasting full year revenue of £17,049m (+4.4%), PBT of £374m (+11.0%) and EPS of 12.1p (+11.0%) with net debt reduced to £948m (FY17: £1,224m). It is currently valued at FY18 and FY19 P/E multiple of 19.2x and 17.6x, along with dividend yield of 2.6% and 2.8%, respectively. In light of strong performance and growing Wholesale channel (partnership with Amazon, Ocado and McColl’s), we maintain our Buy rating on the shares with a target price to 250p.

REQUEST A CALL FROM A BROKER REGARDING THIS RECOMMENDATION

To read Beaufort’s full research archive click here

Compiled by:
Charles Long, Ben Maitland, Sheldon Modeland & Kazunaga Senga
(t) +44 (0) 207 382 8384
(e) info@beaufortsecurities.com


Weekly diary


Click here to see all this week’s planned corporate and economic announcements.


Recommendations
During the three months to end-December 2017, the number of stocks on which Beaufort Securities published recommendations was 193, and the recommendations were as follows: Buy – 22; Speculative Buy – 163; Hold – 6; Sell – 2.

Full definitions of the recommendations used by Beaufort Securities in its publications and their respective meanings can be found on our website 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 NEX 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.


Beaufort Securities Limited, 63 St Mary Axe, London, EC3A 8AA.
Authorised and regulated by the Financial Conduct Authority (Register No. 155104).
Members of the London Stock Exchange, NEX and QCA.

Comments are closed.