54 1GM Thursday December 3 2020 | the times
BusinessMarkets
5
news in brief
Max back in demand
Ryanair is expected to cement
and possibly extend its orders for
the Boeing 737 Max, the ill-fated
short-haul aircraft, which has
been grounded for more than
18 months because of two fatal
crashes that killed more than 350
people. Europe’s largest short-
haul airline and one of Boeing’s
most important customers is
waiting to take delivery of the
135 Max jets it has already
ordered. Details of those
deliveries and the potential to
increase the order by a further
75 to 210 aircraft are expected in
an announcement today.Energy firm switch-off
Yorkshire Energy, a small gas and
electricity supplier with 74,000
household customers, has
become the latest to cease
trading. Ofgem, the energy
regulator, said it was working to
appoint a new supplier to take on
Yorkshire’s customers. The
company was founded in 2018
and was based in Leeds. Investec
said that suppliers to about
1.2 million households had now
gone bust since the start of 2018
and they expected to see “more
market exits”.Conduit makes debut
Conduit Holdings, a Bermuda-
based reinsurance business, was
valued at £826 million after listing
on the London Stock Exchange
in one of the biggest flotations in
the City this year. The group
priced its shares at 500p apiece
and the stock rose on its debut to
close at 510p. Its listing helps to
drive a revival in flotation activity
after Covid-19 hit the market. It
follows The Hut Group’s initial
public offering in September,
when the online retailer raised
almost £1.9 billion.Deal ruling overturned
The Court of Appeal in London
has overturned a judgment
blocking the transfer of £12 billion
in annuities from the Prudential
to Rothesay Life, the specialist
provider, paving the way for a
second transfer hearing. The deal,
which would have been the
largest ever such transfer,
covering 400,000 policyholders,
was announced in 2018. Last year
the High Court blocked the deal
amid concern from policyholders
about Rothesay’s strength. The
hearing is expected next year.Commodities
ICIS pricing (London 7.30pm)Crude Oils ($/barrel FOB)
Brent Physical 47.84 +0.72
BFOE(Mar) 48.36 +0.83
BFOE(Feb) 48.31 +0.80
WTI(Mar) 45.44 +0.71
WTI(Feb) 45.57 +0.69Products ($/MT)Spot CIF NW Europe (prompt delivery)
Premium Unld 382.00 383.00 +10.00
Gasoil EEC 388.50 390.50 +4.25
3.5 Fuel Oil 261.50 262.75 +7.50
Naphtha 397.00 401.00 +5.00ICE Futures
Gas Oil
Dec 391.50-391.25 Mar 400.00-399.75
Jan 394.00-393.75 Apr 402.00-401.50
Feb 397.25-397.00 Volume: 601858Brent (9.00pm)
Feb 48.14-48.13 May 48.05-48.02
Mar 47.95-48.06 Jun 48.00-48.01
Apr 48.06-48.03 Volume: 1788492LIFFECocoa
Dec 1750-1717 Mar 1701-1654
Mar 1792-1793 May 1705-1550
May 1757-1748 Jul 1720-1630
Jul 1735-1701
Sep 1715-1685
Dec 1709-1695 Volume: 83047RobustaCoffee
Jan 1340-1338 Sep 1400-1397
Mar 1361-1358 Nov 1450-1392
May 1387-1363
Jul 1397-1380 Volume: 36548White Sugar (FOB)
Reuters Oct 386.80-383.50
Dec 387.20-381.00
Mar 402.90-402.60 Mar 389.90-385.20
May 397.20-391.00 May 385.40-367.70
Aug 392.40-387.70 Volume: 47291PRICES
Major indices
New York
Dow Jones 29883.79 (+59.87)
Nasdaq Composite 12349.37 (-5.74)
S&P 500 3669.01 (+6.56)
Tokyo
Nikkei 225 26800.98 (+13.44)
Hong Kong
Hang Seng 26532.58 (-35.10)
Amsterdam
AEX Index 610.94 (-0.47)
Sydney
AO 6811.30 (-0.90)
Frankfurt
DAX 13313.24 (-69.06)
Singapore
Straits 2810.95 (-3.17)
Brussels
BEL20 3709.69 (-7.99)
Paris
CAC-40 5583.01 (+1.37)
Zurich
SMI Index 10435.36 (-13.85)
DJ EURO Stoxx 50 3521.32 (-3.92)London
FTSE 100 6463.39 (+78.66)
FTSE 250 19877.77 (+32.96)
FTSE 350 3679.17 (+37.99)
FTSE Eurotop 100 2855.15 (+6.58)
FTSE All-Shares 3651.32 (+37.15)
FTSE Non Financials 4351.98 (+40.70)
techMARK 100 5991.15 (+18.65)
Bargains n/a
US$ 1.3355 (-0.0065)
Euro 1.1041 (-0.0075)
£:SDR 0.98 (+0.00)
Exchange Index 78.34 (-0.21)
Bank of England official close (4pm)
CPI 109.05 Oct (2015 = 100)
RPI 294.30 Oct (Jan 1987 = 100)
RPIX 290.10 Jun (Jan 1987 = 100)
Morningstar Long Commodity 515.06 (+0.11)
Morningstar Long/Short Commod3758.62 (+11.37)London Financial Futures
Period Open High Low Sett Vol Open Int
Long Gilt Dec 20 134.74 134.78 134.57 134.58 2180 9831
MAR 21 133.72 133.96 133.52 133.66 276928 468117
3-Mth Sterling Dec 20 99.950 99.960 99.950 99.950 39919 471339
Mar 21 99.960 99.970 99.955 99.960 43550 688246
Jun 21 99.975 99.985 99.975 99.980 40209 833096
Sep 21 99.985 99.995 99.980 99.990 38194 561846
Dec 21 99.985 100.00 99.985 99.990 34186 492476
3-Mth Euribor Dec 20 100.53 100.54 100.53 100.53 64427 472903
Mar 21 100.53 100.54 100.53 100.54 47116 326956
Jun 21 100.54 100.54 100.54 100.54 13787 367284
Sep 21 100.54 100.55 100.54 100.54 35784 339552
DEC 21 100.54 100.55 100.54 100.55 30718 370283
3-Mth Euroswiss Dec 20 100.77 100.78 100.77 100.77 2301 50465
Mar 21 100.77 100.78 100.77 100.77 4612 44227
Jun 21 100.77 100.78 100.77 100.77 2310 28978
Sep 21 100.77 100.77 100.76 100.76 2176 20968
FTSE100 Dec 20 6364.0 6458.0 6340.5 6449.0 112948 749491
MAR 21 6326.5 6416.0 6324.5 6408.0 2684 7209
FTSEurofirst 80 Dec 20 4821.5
MAR 21 4805.5© 2019 Tradeweb Markets LLC. All rights reserved.
The Tradeweb FTSE Gilt Closing Prices information contained
herein is proprietary to Tradeweb; may not be copied or
re-distributed; is not warranted to be accurate, complete or timely; and does not constitute
investment advice. Tradeweb is not responsible for any loss or damage that might result
from the use of this information.than 40,000-strong workforce, pared
back its operating costs and
suspended refurbishments at its pubs,
which previously had been running
at about 250 sites a year.
Unlike other companies in the
sector, however, Mitchells & Butlers
did not turn to shareholders for
emergency equity. In June it agreed
an additional £100 million of credit
facilities on condition that it ruled
out dividends and share and bond
buybacks before the end of next
September. Still, last month the chain
reported a 34.1 per cent slide in
revenues to just under £1.5 billion
over the year to September 26 and a
pre-tax loss of £123 million, against
last year’s profit of £177 million. Withcan bounce back when its outlets are
allowed to reopen, and before the
coronavirus struck it was
outperforming the wider market on
like-for-like sales.
Mitchells & Butlers traces its roots
to 1898 and the merger of two
Midlands brewers and pub operators,
but it was created in its present form
in 2003, when it was demerged from
the former Bass brewing
conglomerate. It operates 1,650 pubs,
bars and restaurants under brands
from Miller & Carter and Browns to
Toby Carvery and All Bar One.
Covid-19 has been devastating for
Mitchells & Butlers. It closed all its
sites for the first lockdown,
furloughed almost all of its moreD
rinkers and diners keen to
quench their thirst at a
Mitchells & Butlers Vintage
Inn or wanting to take the family out
for a meal at a Harvester will have
been able to do so again as of
yesterday — probably.
The reality is that a tiered set of
restrictions that came into effect at
the end of the second national
lockdown mean that life is still far
from normal.
At least the pubs and restaurants
chain has shown how quickly tradingMiles Costello Tempus
Buy, sell or hold: today’s best share tipsWheel spins back in favour of GVC
I
t’s just as well that GVC hasn’t
been quoting odds on whether
there will be a coronavirus
vaccine before Christmas. The
sports betting and gaming
group, which could have done so via
its novelty bets, might have been
facing big payouts to optimistic
punters after a treatment prepared
by Pfizer and Biontech was yesterday
granted approval for use in Britain as
early as next week.
Indeed, the company has not been
accepting gambles on anything
Covid-related, though that’s not to
say that it has ignored the virus, far
from it. The pandemic will have
come as a shock to a business used to
reporting consistently healthy
increases in earnings. In fact, the
early months looked decidedly dicey,
particularly in Britain, after football
and horse racing were suspended
and it was forced to shut its bricks-
and-mortar shops.
Initially, the company warned that
it faced a pre-adjusted hit to profits
of as much as £100 million a month,
but it halved this after cutting costs,
including by putting staff on
furlough.
GVC was founded as Gaming VC
Holdings in Luxembourg in 2004,
although, in the tradition that led
Paddy Power Betfair to rebadge itself
as Flutter Entertainment, it is
preparing to change its name toEntain. The group has grown rapidly
through acquisitions and operates
numerous brands, both digitally and
on the high street, including
Ladbrokes, Bwin, Coral, Sportingbet,
Foxy Bingo and Partypoker. Its
business is spread across 20
countries, employing 24,000 staff,
and in its most recent financial year
it made an underlying pre-tax profitof £535.8 million on revenues of more
than £3.6 billion. It has particularly
high hopes for its fast-growing
business in the United States, where
it has a joint venture with MGM
Resorts, the hotels and casinos
operator, and a sports tie-up with
Yahoo, the search engine.
Its online business has been
boosted during the Covid-19
outbreak as customers denied the
mainstream sporting calendar turned
to more esoteric sporting events, as
well as casino games such as roulette
and poker. This meant that at the
half-year stage GVC was able to
report an 11 per cent fall in net
gaming revenue and a 5 per cent fall
in pre-adjusted profit — less direA good bet
Share priceSource: Refinitiv£12108642
2016 2017 2018 2019 2020Net gaming revenue
H1 2020
H1 2019Underlying operating profit
H1 2020
H1 2019Underlying pre-tax profit
H1 2020
H1 2019Interim dividend
H1 2020
H1 2019Six months to June 30£1.6bn
£1.8bn£223.9m
£260.3m£55.4m
£212.1mZero
17.6pthan might have been expected— as
its digital businesses delivered
double-digit growth in their main
markets.
GVC is also beginning to move
differently under the leadership of
Shay Segev, the former chief
operating officer of Playtech, the
gaming software company. Mr Segev,
44, who became chief executive this
year, has a technology background
and plans to build on the strengths of
GVC’s digital operations. He also
plans to withdraw the group from
unregulated markets and is going to
press further into America, a high-
growth sports gaming market that is
liberalising its laws state-by-state.
His aim is to increase GVC’s
presence from nine states to more
than twenty by the end of next year.
The group has a market share of
about 18 per cent in each state it is in.
Mr Segev is keen not only to grow in
developed markets but also to open
in new ones.
GVC is guiding for profit before
tax and other items of between
£770 million and £790 million, which
would be marginally ahead of last
year and, in the light of the year it
has been through, is highly
respectable.
The shares, up 1½p, or 0.1 per cent,
at £10.40 yesterday, were avoided
by this column in March and have
risen sharply since then. Trading at
16 times Shore Capital’s forecast
earnings for a prospective yield of
3.3 per cent, they are not expensive
and have become a much more
attractive long-term proposition.ADVICE Buy
WHY In a strong position to
capitalise on growth in online
sports betting and gaming,
particularly in Americaavailable liquid capital of
£225 million, Mitchells & Butlers
should be able to withstand some
knocks over the coming months, but
a further prolonged lockdown could
be catastrophic — as, indeed, it
would for the whole sector.
Nevertheless, the shares, up 10½p,
or 4.6 per cent, to 240½p yesterday,
are richly priced, trading at 32 times
Liberum’s forecast earnings. With no
dividend in sight, not tempting.ADVICE Avoid
WHY Optimism about the
outlook is built into the pricegvc
Mkt value £6bn
PE ratio 16xDividend yield
3.3%mitchells & butlers
Revenue £1.5bn
Pre-tax loss£123m Liquid
capital £225m