Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Gamma Aviation
The global aviation market has been rocked by the COVID-19 pandemic so this morning’s FY20 trading update from Gamma Aviation LON:GMAA makes for interesting reading. The company operates in the business aviation field and also runs a number of contracts for the emergency services so has been somewhat insulated from the worst of the impact, something that was reflected in the fact that for Q4, engineering hours were 80% of those seen in the comparative period a year earlier. It’s not all clear skies however, with ongoing losses at its Hong Kong division weighing, although there’s a reasonable level of liquidity. Audited full year results are expected by the end of April.
BHP Group
BHP Group [LON:BHP] has published results for the second half of 2020 this morning, showing a 17% increase in operating profits, although exceptional losses have impacted EPS metrics. Shareholders have little to worry about however as interim dividends are being hiked 55% after a record half year payout was declared by the board. There may be uncertainty over the short-term economic outlook, but beyond this the company is confident that commodity demand will be maintained. Some investors may find the company’s exposure to coal problematic and there appears to be a tacit acknowledgement that its use for heating and power generation will continue to diminish, although BHP believes that it will be necessary in steel production for many years to come.
Virgin Wines
A quick note from Virgin Wines, who have this morning announced they intend to list on AIM in a couple of weeks’ time. This is surely one niche that has been exceptionally well positioned to benefit from the combined effects of a boom in online shopping and the pubs having been closed. The market is said to be worth £2.4billion a year and – at least pre-COIVD – the company notes it was dispatching 99% of wine ordered before 4pm the same day. With 147,000 subscription members – and 22,000 ‘casual’ customers on top, this is a business worth watching. The question however would seem to be that as hospitality reopens, will imbibers be so eager to escape from drinking in the living room that sales momentum cannot be sustained?
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