NatWest ROTE Upside May Not Be Sustained Given Wider Scrutiny on Profits

NatWest ROTE Upside May Not Be Sustained Given Wider Scrutiny on Profits

0915 GMT - The upside from NatWest's extended return on tangible equity guidance as a target for sustainable returns over the medium term may be hindered by wider scrutiny on the sector's profits, Shore Capital says in a note after the U.K. lender posted GBP3.34 billion in profit for 2022. "A 14-16% sustainable ROTE may justify an even higher valuation multiple, but we are not convinced this will be sustained given the political ramifications of large U.K. banks being so profitable," analyst Gary Greenwood says. Shore rates the stock buy. Shares are down 7.6% at 282.5 pence. ([e-mail])

Companies News: 

Smith & Nephew Appoints Rupert Soames Chair Designate; Roberto Quarta to Retire

Smith & Nephew PLC said Friday that Rupert Soames has been appointed chairman effective Sept. 15, replacing Roberto Quarta, who is retiring this year.

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Segro Swung to 2022 Pretax Loss on Valuations Although Adjusted Profit Rose

Segro PLC said Friday that it swung to a pretax loss in 2022 on an unrealized valuation deficit in the portfolio, though adjusted pretax profit and revenue rose.

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NatWest Launches GBP800 Mln Buyback After 4Q Pretax Profit Beat Views

NatWest Group PLC on Friday posted a rise in pretax profit for the fourth quarter of 2022, which came in slightly ahead of market views, and said it intends to start a share buyback program of up to 800 million pounds ($959 million) in the first half of 2023.

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Pod Point 2022 Pretax Loss Widened on Higher Costs; Revenue Rose

Pod Point Group Holdings PLC said Friday that revenue for 2022 rose but that its pretax loss widened as costs increased.

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Purplebricks Group Hangs Up 'For Sale' Sign; Cuts FY 2023 Guidance

Purplebricks Group PLC on Friday launched a strategic review of the business which could lead to a sale of the company or some or all of its business and assets.

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Kingspan Group Warns of Tough 2Q Comparative After 2022 Pretax Profit, Revenue Rose

Kingspan Group PLC said Friday that the second quarter of 2023 has a tough comparative as it reported a rise in 2022 pretax profit and revenue as trading profit reached record levels.

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EnQuest Sees Lower Production, Higher Costs in 2023

EnQuest PLC on Friday said it expects its 2023 production in a range lower than its 2022 average with higher operating and cash capital expenditures.

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Rambler Metals' Pauses Mine Operations Pending Delivery of Supplies

Rambler Metals & Mining PLC said Friday that while it continues discussions around its financial restructuring, it has decided to pause operations, pending the delivery of key supplies to its Ming copper mine in Canada.

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EnSilica 1H Pretax Loss Narrowed, Revenue Rose; Secures EUR5 Mln Contract

EnSilica PLC said Friday that its first half pretax loss narrowed and revenue rose, and it secured a 5 million euro ($5.3 million) contract.

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SolGold Says Completion of Cornerstone Deal Delayed

SolGold PLC said Friday that it expects the Cornerstone Capital Resources Inc. transaction to close during the week starting Feb. 27 after experiencing delays in its completion.

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Atlantic Lithium in Talks With Potential Investor

Atlantic Lithium Ltd. said Friday that it is in talks with Minerals Income Investment Fund of Ghana over a potential $30 million investment in the company.

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Harland & Wolff Finalizes Saipem Contract Payment, To Cut Methil Workforce

Harland & Wolff Group Holdings PLC said it has concluded negotiations around its amended contract with Saipem Ltd. and that it intends to reduce staff at its Methil facility.

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HealthBeacon Says 1H 2022 Challenges Continue to Subside; Backs Guidance

HealthBeacon PLC said Friday that availability and cost pressures experienced in the first half of 2022 have continued to subside, and backed its revenue guidance.

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Tasty Names New CFO

Tasty PLC said Friday that Chief Financial Officer Mayuri Vachhani will step down and leave the company at the end of March to pursue other opportunities, and named Ian Davies her replacement.

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Zaim Credit Systems to Ask Shareholders to Remove Director, Change Name

Zaim Credit Systems PLC said Friday that it will ask shareholders at a general meeting to vote on resolutions to remove Vladimir Golovko from the board with immediate effect, and to change the company name to Adalan Ventures PLC.

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Maintel Holdings CEO Ioan MacRae Resigns

Maintel Holdings PLC said Friday that Chief Executive Ioan MacRae has resigned with immediate effect.

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Tertre Rouge Assets Shares Restored to Trading

Tertre Rouge Assets PLC said Friday that its shares have been restored to trading following the publication of its interim results.

 
Market Talk: 

NatWest's Lower 2023 Profits Implied by Guidance Disappoint

0851 GMT - NatWest's newly issued guidance for 2023 is likely the focus of the investment community as it implies a lower preprovision profit, broadly offset by a better credit-cost guide, Jefferies says in a note after the U.K. bank reported a fourth-quarter beat and capital returns above expectations. "Guides are problematic," analyst Joseph Dickerson and associate Aqil Taiyeb say, noting a preprovision profit GBP580 million lower than current consensus is implied, with the midpoint of the guided range on credit costs representing a GBP460 million lower charge than consensus. Jefferies rates the stock buy. Shares drop 8.5% to 279.5 pence. ([e-mail])

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NatWest's ROTE Seems Sustainable But Mix Not as Good, RBC Says

0855 GMT - NatWest's return on tangible equity guidance looks sustainable, but the mix wasn't as good as consensus expected, RBC Capital Markets says in a note. The U.K. bank posted a fourth-quarter beat and said it continues to target a 14-16% ROTE in 2023 where consensus had penciled in 15.8%. "As discussion in the market turns from rate rises to rates potentially coming down, we expect that investors will switch from interest rate sensitivity into stocks which are higher quality and are likely to deliver more sustainable shareholder returns," analyst Benjamin Toms says, noting that this dynamic could act as a headwind for the lender. Shares sit at the bottom of the FTSE 100 index, shedding 8.3% at 280.2 pence. ([e-mail])

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Segro's 2022 Robust on Wider Trends

0913 GMT - Logistics and warehouse developer Segro has delivered a strong operational year in 2022, supported by wider structural trends, as it delivers modern spaces into an under-supplied market, Goodbody says. This should support the company's underlying earnings growth, and management expects further rental growth in the portfolio as supply remains highly constrained across its markets, Goodbody analyst Colm Lauder says in a research note. "However, we anticipate further capital declines, with a degree of 'catching-up' from Continental Europe versus the U.K., which will put further downward pressure on net asset values," the Irish brokerage says. Goodbody retains its hold rating. Shares are up 0.7% at 841.6 pence. ([e-mail])

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NatWest Seen as Delivering Across the Board

0927 GMT - NatWest finished the year in fine style as an embarrassment of riches further strengthened its financial position, Interactive Investor says in a note after the bank posted a 25% on-year income boost for 2022. While the recent share-price rally has reflected improving prospects, "a slightly perplexing reaction has hit the shares in early trade, perhaps in light of some profit taking after the share price spike of 24% over the last three months, while a weaker market generally is also clouding sentiment," head of markets Richard Hunter says. Shares, which are up 6.4% in the year to date, shed 7.7% at 282.1 pence. ([e-mail])

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Segro's Results Are Generally Positive, But Uncertainty Weighs

0934 GMT - Logistics and warehouse developer Segro's 2022 results have many positives, with net rental income up 19%, a dividend hike and strong occupier demand, Interactive Investor says. However, rising global interest rates and the exaggerating effects of the U.K.'s failed autumn mini-budget have caused the value of Segro's properties to retreat by 11%, and the forecast dividend yield of around 3% is below more office-focused rivals like Land Securities at more than 5%, analyst Keith Bowman says in a market comment. "For now, and balancing ongoing interest rate and economic outlook uncertainty against expected longer-term growth in e-commerce and required properties, analyst consensus opinion currently points towards a strong hold," Bowman says. Shares are up 2.1% at 853.0 pence. ([e-mail])

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Kingspan's In-Line 2022 Earnings Back Current 2023 Forecasts

0941 GMT - Kingspan's 2022 profit and EPS were in line with analyst forecasts, Shore Capital analyst Graeme Kyle says in a note. Although the building and insulation-materials company said 1Q profit will be in-line with the comparative period, and warned of strong comparatives for 2Q, Shore estimates the 2H will be above 2022's 2H, and backs its FY 2023's profit forecasts of EUR840 million, Kyle says. "We do not expect to change our Kingspan forecasts following this announcement," he says. Shore Capital rates the stock buy. Shares are up 6.3% at EUR63.52. ([e-mail])

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BP, ENI, Repsol Seen Cutting Emissions Faster Than Peers

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02-17-23 0513ET