12th Oct 2022. 8.58am

Regency View:


Regency View:


DS Smith surges higher on upbeat forecast

It’s early days, but our position in DS Smith (SMDS) is off to a strong start thanks to an upbeat trading statement released this week…

The cardboard packaging maker jumped 12% after it said overall annual performance is likely to be ahead of its expectations, helped by strong revenue growth and cost cuts.

DS Smith expect half-year adjusted operating profit of at least £400m vs £276m a year earlier.

Miles Roberts, Group Chief Executive, said:

“I am very pleased with the performance in the year to date and the momentum in our business. We remain focussed on delivering for our customers and managing our costs in an inflationary environment. While the macro-economic outlook remains uncertain, performance this year is ahead of our previous expectations and we look forward to the remainder of the year with confidence.”

SMDS Daily Candle Chart

SMDS Daily Candle Chart

Vodafone and Three in talks to create UK’s biggest mobile operator

This news has been circulating for a while, we mentioned it in our original Buy Vodafone (VOD) report, but Vodafone has finally confirmed that it is in talks with CK Hutchison, owner of rival telecoms group Three…

The combined group would create the biggest mobile operator in the country and has the potential to increase Vodafone’s UK margins.

In a statement, released last week, Vodafone said it would own 51% of the combined business and Hong Kong conglomerate CK Hutchison 49%.

“As Ofcom has identified, some operators in the UK — Vodafone UK and Three UK — lack the necessary scale to earn their cost of capital,” the statement said…

“By combining our businesses, Vodafone UK and Three UK will gain the necessary scale to be able to accelerate the rollout of full 5G in the UK and expand broadband connectivity to rural communities and small businesses.”

The merger is very likely to be scrutinised by the UK’s Competition and Markets Authority and we await further update.

VOD Daily Candle Chart

VOD Daily Candle Chart

Qinetiq buys Aussie training firm and sells Belgian space division

It’s been a busy month of wheeling and dealing for defence firm Qinetiq (QQ.) who announced two transactions last week…

The first of which was the acquisition of Air Affairs in Australia for a cash consideration of A$53m (£31m).

Air Affairs provides targets and training services, and electronic warfare capabilities to the Australian Defence Force, as well as aerial surveillance and reconnaissance in support of government firefighting efforts. It owns and operates a fleet of special mission aircraft and maintains an advanced manufacturing and engineering facility providing design, manufacture and certification operations.

In the 12 months to 30 June 2022, Air Affairs delivered A$43m revenue, adjusted earnings (EBITDA) of A$5m.

Qinetiq also announced that it has reached an agreement to sell QinetiQ Space NV in Belgium to Redwire Space Europe for a cash consideration of €32m (£28m).

Commenting on the divestment, Qinetiq’s statement said:

“Space NV products provide limited operational synergies and alignment with our global ambition”.

QQ. Daily Candle Chart

QQ. Daily Candle Chart

Nasal version of Oxford/AstraZeneca Covid vaccine fails in trial

AstraZeneca (AZN) suffered a setback in the development of its nasal vaccine, dealing a blow to hopes for a more effective way to prevent transmission of the virus.

Oxford university said on Tuesday a nasal formulation of the vaccine elicited mucosal antibody responses in a “minority of participants” and systemic immune responses were weaker compared with intramuscular vaccination.

Oxford’s chief investigator on the trial, Sandy Douglas said:

“We believe that delivery of vaccines to the nose and lungs remains a promising approach, but this study suggests there are likely to be challenges in making nasal sprays a reliable option”

The covid vaccine has been a zero-sum game for AstraZeneca, and subsequently the shares have been relatively unmoved by this setback.

AZN Daily Candle Chart

AZN Daily Candle Chart

JD Sports and Nike announce connected partnership

JD Sports (JD.) recently announced that it has signed a connected partnership with Nike which gives customers priority access to select Nike member-exclusive products…

The deal offers JD’s customers, starting in the UK, access to select Nike member-only footwear and apparel when they opt to link their JD and Nike Membership accounts through the JD mobile app.

By linking their membership accounts, JD and Nike customers unlock an instant reward bonus, curated collections, and earlier access to select Nike member products.

“In this Connected Partnership the two companies will harness their technological and digital expertise to serve consumers in a more convenient and rewarding way. It also highlights JD and Nike’s ability to provide a compelling and differentiated proposition both in-store and online through a deep understanding of their consumers” read the statement.

Nike biggest player in the lucrative footwear market, and this partnership has plenty of positives for JD Sports.  

JD. Daily Candle Chart

JD. Daily Candle Chart


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