City round-up

ITV and BBC Britbox; Ted Baker; Weir Group; Beeks

ITVBroadcaster ITV has announced that it is in the final stages of talks with the BBC to establish its Britbox service to rival Netflix.

ITV chief executive Carolyn McCall. said: “People in Britain want to see a place where there is a home for British content.”

She said 43% of UK households were in favour of such a service, with the number rising to 50% in homes which had Netflix.

“It is important to us to take this opportunity now: it is pro-choice. It will be very distinctive.”

She said there was no formal agreement and there were still regulatory processes to go through, but that if launched the service would provide a “huge range of content”.

ITV will spend £25m on the venture this year and £40m in 2020.

The Competition and Markets Authority and media regulator Ofcom are being consulted on this latest venture.

ITV announced an increase in annual pre-tax profit of 13% to £567 million. Underlying earnings fell 4% to £810m.

The group also said advertising remained under pressure from Brexit uncertainty and forecast total advertising to fall 3% to 4% over the first four months of this year.

Ms McCall added: “ITV’s operational performance across 2018 was strong despite the uncertain economic and political environment, with total external revenue up 3%, including total advertising revenues up 1%.

“We delivered great viewing figures on air and online with ITV setting a host of new records and achieving an impressive 3% growth in total viewing.”

Ted Baker

High Street fashion retailer Ted Baker has forecast a fall of more than £10m in full-year pretax profit, blaming the impact of foreign exchange rates, higher costs to upgrade its systems and inventory write-downs.

It now expects to post profit before tax of about £63m for the year to 26 January, lower than the £73.5m reported last year.

Last year the company was embroiled in a “hugging” scandal involving founder Ray Kelvin.

Shares fell 11% after the profits warning.

Weir Group

Operating profit on a like-for-like basis was up 13% for year and pre-tax profit by 22% including the ESCO acquisition. Revenue rose 23% to almost £2.5bn and the dividend is up 5% to 46.2p.

Jon Stanton, chief executive, said: “The last year has been transformational for the Group. With ESCO, we completed our largest ever acquisition while also agreeing the sale of the Flow Control division.

“The result is a more focused and higher-quality global business that is simpler and stronger with more than 80% of the Group’s revenues from attractive upstream mining and oil and gas markets.

“At the same time, we have made significant progress on our We are Weir strategy and delivered good order and profit growth, underpinned by strong cash generation.

“Looking to the full year, we currently expect our mining and infrastructure markets to continue to benefit from positive industry fundamentals with oil and gas activity to improve modestly from current levels.  Overall, assuming market and macro-economic conditions remain supportive, we anticipate the Group will deliver another year of good constant currency revenue and profit growth, supported by strong execution of our We are Weir strategy.”

Alistair Douglas, Investment Manager at Brewin Dolphin Scotland, said: “Weir Group’s shares have had a strong start to the year and this looks like a positive set of results from the business – revenues rose nearly a quarter and operating profit is up 13% on a like-for-like basis.

“The integration of ESCO appears to be going well, and the recent sale of its Flow Control division will help Weir to reduce the debt taken on to complete this deal.  Importantly, it backs up the group’s transformation plans of making the business simpler and more focused.  Weir should also benefit over the coming years from the investments it has made in technology, which will drive further efficiencies and organic growth.”

Taylor Wimpey

Britain’s third largest homebuilder posted a pretax profit of £810.7 million for 2018 – up 19% on the previous year – after selling 15,275 homes – boosted by the government’s help-to-buy scheme and low mortgage rates.

Beeks Financial Cloud

A good first half performance saw the Linwood-based cloud computing and connectivity provider for financial markets report underlying profit before tax up 46% to £0.41m.

Gordon McArthurGordon McArthur, CEO, pictured, said: We are pleased to report on a steady first half performance, in which we have delivered both revenue and profit growth, while expanding our geographic footprint and service. With the expected launch of Brazil later this year, we will have a footprint in all the key trading centres around the world and we continue to evaluate new locations to deploy our low latency Cloud. 

Signing our first Tier 1 organisation was a major milestone for the Group as it demonstrates our growing capabilities, and as we move into the second half of the year, our focus will be on expanding our institutional customer base both for hybrid cloud management and our core low latency offering.

This is a good first half performance, during which 99% of the Group’s revenue was recurring. As is usual, we expect to see the majority of new contract wins and growth to be weighted in the second half of the financial year.”

Financial Highlights

  • Revenues increased by 36% to £3.50m (H1 2018: £2.57m)
  • Annualised Committed Monthly Recurring Revenue (ACMRR) up 26% to £7.45m (H1 2018: £5.93m)
  • Gross profit up 43% to £1.70m (H1 2018: £1.20m)
  • Gross profit margin 49% (H1 2018: 46%), impacted by the expansion into two new data centres which are expected to become more profitable in the second half of the year with a third in planning stage
  • Underlying EBITDA* increased by 49% to £0.94m (H1 2018: £0.63m)
  • Underlying profit before tax** up 46% to £0.41m (H1 2018: £0.28m)
  • Underlying basic EPS** up 88% at 0.96p (H1 2018: 0.51 pence)
  • Net cash as at 31 December 2018 is £1.84m (H1 2018: Net cash £2.55m)
  • Proposed maiden interim dividend of 0.20p (H1 2018: 0.0p)

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