LONDON MARKET PRE-OPEN: Amigo Holdings first quarter revenue falls

(Alliance News) - Stock prices in London are seen opening slightly higher on Friday ahead of a ...

Alliance News 27 August, 2021 | 7:44AM
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(Alliance News) - Stock prices in London are seen opening slightly higher on Friday ahead of a highly anticipated speech at an annual symposium of central bankers, this year being held virtually.

In early company news, Amigo Holdings posted a fall in first-quarter revenue. Aviation services provider Air Partner expressed optimism over current trading and made an acquisition, while healthcare property investor Primary Health Properties and wealth manager Mattioli Woods also made acquisitions.

IG futures indicate the FTSE 100 index will open 5.92 points higher at 7,130.90. The blue-chip index closed down 25.14 points, or 0.3%, at 7,124.98 on Thursday.

Amigo Holdings reported a fall in revenue as the guarantor loans provider cast doubt over its future.

For the three months that ended June 30, revenue dropped 33% to GBP32.5 million from GBP48.8 million in the first quarter last year, but pretax profit surged to GBP15.0 million from GBP1.4 million.

Amigo said its pause in lending, which continued throughout the three-month period, led to a 41% decline in customer numbers and a 48% reduction in the net loan book. As such, revenue fell compared to the prior year period, primarily driven by the reduction in the loan book, it explained.

Active Covid-19 related payment holidays as at June 30 amounted to 3,000 in the period, down sharply from 42,000 in the first quarter of 2020. All Covid-19 payment holidays have now ended, Amigo said.

Chief Financial Officer Mike Corcoran said: "The extremely challenging situation facing Amigo, resulting from the significant liability for compensation payments for historical lending, provides the context for our first quarter results. Within this context, the performance of the business in the first quarter has been better than anticipated. As Amigo is not currently lending, the business is cash generative and our cost reduction programme has been effective.

"The level of collections remains robust with the impact of Covid-19 less than originally projected. The overall net liability position reflects the remaining complaints provision on the balance sheet. A material uncertainty over the group's ability to continue as a going concern remains."

Primary Health Properties said that it has acquired the Townside Primary Care Centre and adjacent office building in Bury, Lancashire for a total of GBP40 million.

The acquisition will increase PHP's portfolio to a total of 515 assets, of which 19 are in Ireland, with a contracted rent roll of over GBP138 million, the company said.

"We have a strong pipeline of opportunities in the UK and Ireland and are well positioned to continue to grow our portfolio and to support the healthcare systems in these markets through the provision of modern, primary care infrastructure,"Managing Director Harry Hyman said.

Mattioli Woods has bought Richings Financial Management in a deal worth up to GBP1.8 million.

Mattioli Woods said that Iver-based Richings has GBP70 million in assets under advice and that the acquisition is expected to be earnings enhancing in the first full year of ownership.

Chief Executive Officer Ian Mattioli said: "We believe the broader range of products and services offered by Mattioli Woods, including our enhanced product offering to clients from the recent acquisition of investment manager Maven Capital Partners, can help build on the great outcomes Richings' clients already achieve."

Air Partner said it continues to trade strongly despite the travel restrictions and the uncertainty due to the Covid-19 pandemic.

For the first half of its financial year that ended July 31, the company expects an underlying profit before tax of not less than GBP3.7 million. It posted underlying pretax profit of GBP10.5 million in the first half of financial 2020.

Air Partner said it continued to see a strong recovery in its Private Jets division. The UK has exceeded pre-Covid levels over the summer months the company welcomed a number of first-time private jet flyers, in addition to seeing increased demand from existing customers.

The US is also performing very well for Private Jets, Air Partner said, with bookings in in the first half higher than before the pandemic due to the strong demand for leisure travel by high-net-worth individuals, which offset the drop from business travel. However, activity in Europe remains limited.

"The board remains encouraged by this performance and is optimistic about the prospects for both the Charter and Safety & Security divisions for the rest of the financial year. We are looking forward to updating the market further at the interim results at the end of September," the company said.

Separately, Air Partner said it has acquired Kenyon International Emergency Services from PT Lobos, in a deal worth up to USD11.7 million, on a debt free, cash free basis.

Air Partner said the acquisition of the emergency planning and incident response company is expected to be earnings enhancing in first full year of ownership.

The Japanese Nikkei 225 index closed down 0.4%. In China, the Shanghai Composite was up 0.6%, while the Hang Seng index in Hong Kong was up 0.1%. The S&P/ASX 200 in Sydney ended marginally lower.

With the US economy recovered from the worst of the pandemic crisis, there is much anticipation in global financial markets around Federal Reserve Chair Jerome Powell's speech on Friday to see if he will detail plans to roll back the central bank's massive stimulus measures.

But concerns about the impact of the fast-spreading Delta variant of the coronavirus on the economy could make expectations of an announcement at the annual Jackson Hole central banking symposium premature.

The Fed has said it will slow the pace of its massive bond buying program then raise the benchmark lending rate - though no action on the latter is anticipated anytime soon, potentially for years, while the former is viewed as a delicate task.

CMC Markets analyst Michael Hewson said: "Today's European open looks set to be a cautious one, with stocks expected to tread water for the rest of the day as we look towards Jackson Hole and today's speech by Fed Chair Jerome Powell.

"Powell's speech may well lay the groundwork for some sort of roadmap to be laid out at the September meeting, with the timing of any decision likely to be dependent on how good next week's August payrolls report is likely to be. We hear a lot about the risks around the Delta variant, and waiting for the risks to subside, however we could we waiting a long time for that to happen. The virus is hear to stay, and its how we learn to live with it that matters now as we head into the winter months."

The pound was quoted at USD1.3707 early Friday, down from USD1.3723 at the London equities close Thursday.

The euro stood at USD1.1769, marginally higher from USD1.1760. Against the Japanese yen, the dollar was trading at JPY109.95, down from JPY110.04.

Brent oil was quoted at USD72.24 a barrel Friday morning, up from USD71.40 late Thursday. Gold was priced at USD1,804.40 an ounce, higher against USD1,794.77.

Friday's economic calendar is headlined by Powell's speech at 1500 BST. Before this is Irish retail sales at 1100 BST. In the afternoon, there are US personal consumption expenditure figures at 1330 BST - the core reading is the Fed's preferred gauge of inflation.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Amigo Holdings PLC 12.27 GBX 7.16 -
Primary Health Properties PLC 151.50 GBX -1.24 -
Mattioli Woods PLC 802.50 GBX 0.31 -
Air Partner PLC 87.00 GBX -2.79 -

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