The MSE Equity Total Return Index prolonged its positive performance to four straight months, as a gain of 2.77% was registered in May, to reach 9,768.332 points. A total turnover of €7.77 million was generated - spread over 1,041 transactions. From the 22 active equities, gainers amounted to 10, while fallers amounted to 11. The month was yet again characterized by a number companies publishing their financial results.
Trident Estates plc headed the list of gainers as it surged by 31.34% to €1.76, as it traded over 28 deals worth a total of €150,047. On Wednesday May 8, the company published the financial statements for the financial year ended January 31, 2019. The group registered a profit before tax of €1.1 million, compared to €437,000 in the previous year. The main driver of this increase was a fair value gain on investment property of €803,000, compared to a figure of €165,000 in the prior year.
The company has planned a rights issue for the last quarter of 2019, which together with a banking facility, shall finance the Trident Park project. This project was the highlight of the year for the group, as works have remained on schedule for the park to welcome its first tenants in early 2021. The park also remains the main focus of the company for the coming year.
The board of directors has resolved to recommend a final net dividend of €0.00666667 per share, to be paid on June 26, 2019, to all registered shareholders as at May 26, 2019. The dividend is subject to approval at the Annual General Meeting, which shall be held on June 25, 2019.
In the food and beverage sector, Simonds Farsons Cisk plc posted another solid performance, as it appreciated by 13.51%, to close at €10.50. A total of 34 transactions saw 45,137 shares exchange hands. During the month, the company published its financial statements for the year ended January 31, 2019. The group registered a 5% increase in turnover to €99.8 million, driven by growth across all three operational segments. The beverage importation company has continued to enhance its product offering, in response to changing consumer trends. The food importation company also registered growth in turnover, despite incurring higher costs related to distribution. The franchised food business registered another positive result, driven mainly by the Burger King and KFC franchises.
The profit before tax figure of €14.1 million exceeded the group's projections, mainly as a result of a lower depreciation charge, and a favourable movement in the loss allowance with respect to the group's trade and other receivables. The results relate only to continuing operations, following the 'spin-off' to Trident Estates plc. The Earnings per Share figure stood at €0.504, compared to €0.459 in the previous year.
The group's net borrowings decreased by €6 million, resulting in a lower gearing ratio of 23.4%, compared to the previous year's figure of 28.8%.
The board of directors has recommended the payment of a final net dividend of €0.10 per share. If approved at the Annual General Meeting of June 24, 2019, the dividend shall be paid on June 25, to all shareholders on the register as at May 25, 2019.
Riding on the wave of the financial statements for 2018 presented at the end of April, International Hotel Investments plc (IHI), traded on 56 occasions and registered a price appreciation of 12.33%, to close at €0.82. Furthermore, the company has announced that its Annual General Meeting has been scheduled for June 13, 2019.
The banking industry was predominantly afflicted by negative performances, as out of the four active equities, only Bank of Valletta plc registered a marginal positive performance of 0.38%. The latter traded 188 times, for a total turnover of €1.02 million, to close at €1.33.
The bank held its Annual General Meeting on May 9, 2019, during which the financial statements for 2018 were approved. The AGM also approved the resolution that an amount in excess of €53 million, shall be capitalised from the company's reserves for the purpose of a bonus issue of 1 bonus share for every 10 shares held. Shareholders on the register on June 11, 2019, shall be eligible for the said bonus issue.
The shareholders also resolved that the directors be authorised to issue a financial instrument that qualifies for additional tier one capital up to a maximum of €150 million in nominal value.
Subsequently, on May 15, 2019, the bank issued an interim directors' statement with regards to the financial performance of the bank for the first quarter of 2019, which was broadly in line with expectations and lower than that achieved during the first quarter last year.
Net Interest Income remains under pressure due to the low interest environment and high levels of liquidity. During the quarter, the bank incurred higher costs with regards to continuing investment in HR, IT security, governance and risk management. Results were also impacted by lower impairment provisions reversals. Customer deposits increased overall since year-end, while overall asset quality improved with further reduction in corporate non-performing loans.
The bank confirmed that it will be seeking to raise new contingent to further strengthen its regulatory capital, with work in this regard well under way and in line with the plan to go to the market later this year.
With regards to the February cyber incident, a substantial part of the irregular payments has already been recovered. However, the bank has prudently set aside a provision for the outstanding amounts which shall be re-assessed in the light of new developments.
Towards the end of the month, precisely on May 27, 2019, Bank of Valletta plc announced that its board of directors has authorised the submission of an application to the Listing Authority requesting the approval for admissibility to listing of €50,000,000 Bank of Valletta plc 3.75% Unsecured Subordinated Bonds 2026-2031. The bonds will form an integral part of the issuer's capital plan, and will strengthen the bank's Tier 2 Capital. The proceeds will be used to meet part of the bank's general financing requirements.
Subject to approval, preference for subscription will be given to existing bondholders of the BOV bonds maturing in 2019; shareholders; as well as existing employees. Any remaining balance shall be made available to the general public through an intermediaries' offer. Further detailed information shall be made available to the public in the prospectus which will be published following the necessary regulatory approval. The approval was granted on June 4, 2019.
HSBC Bank Malta plc traded lower at €1.65 over 68 deals of a combined 189,393 shares - a drop of 4.62%. The bank issued an Interim Directors' Statement, in which it stated that profit before tax for the first quarter of 2019 was in line with management expectations but was lower than the corresponding period in 2018.
Revenue from retail banking was higher than the same period in 2018, however this was offset by lower revenue in commercial banking, due to lower loan balances. This was in line with the bank's enhanced risk management, which has in fact resulted in continued expected credit loss recoveries. The board is also focused on reducing costs through digitalisation and process optimisation. The bank has maintained a robust liquidity position and a solid capital base.
The bank's CEO, Mr Andrew Beane, stated that the bank has made further progress on its strategic plan, and growth actions are now gaining traction.
Lombard Bank plc registered a similar drop in value, this time of 5.04%, as the equity featured in eight separate trades worth less than €33,000. The price at the end of the month read €2.26.
FIMBank plc registered a substantial depreciation of 14.89%, as the price plunged to $0.60. A volume of 394,197 shares traded over 22 transactions. The bank held its annual General Meeting last Tuesday, in which all ordinary and extraordinary resolutions on the agenda were approved, including the financial statements for 2018. The AGM also approved the bonus issue of one bonus share for every 30 ordinary shares held.
Despite the overall positive 2018 financial results published in the last days of April 2019, RS2 Software plc (RS2) retreated by 9.68%, to close at €1.40. The total number of shares exchanged amounted to 498,459 shares and yielded a total turnover of €734,000.
On May 30 2019, MaltaPost plc published its preliminary statement of half yearly results, for the six-month period ended March 31, 2019. During the period, the company registered a profit before tax of €1.4 million, translating to an 8% increase over the corresponding period last year.
As a result of a reduction in foreign mail, revenue was down by around 30% to €17 million, despite an upward trend in revenue from parcels, registered letters and document management services. This negative performance in revenue however was compensated for by a proportionate decrease in expenditure to €15.7 million, compared to €23 million in the previous year.
In line with the company's strategy, revenue from e-commerce has increased and operational efficiency improved, however, these do not yet compensate for the continuing decline in Letter Mail volume and rising costs. Increasing staff wages and a regulated service tariff structure were also cited as challenges for the company. In fact, the company has been interacting with its regulator so as to conclude the revision of a service tariff structure that allows flexibility and addresses the ever-changing market realities. During the month, the equity traded on 30 occasions, in which a total of 159,734 shares exchanged hands. The end result was a 12% price appreciation, to close at €1.40.
Following the rescheduling of the board meeting to approve the 2018 financial statements, GlobalCapital plc published their results last May 7, 2019. Trading in the equity subsequently resumed, following the temporary suspension from trading imposed by the Listing Authority, for failure to publish the required financial information within the deadline.
The results show a profit before tax figure of €1.2 million, compared to €4.6 million in 2017. The main difference from the previous year, was a €2.2 million net loss on financial investments, compared to the gain of €1.05 million registered in the previous year. The increase in fair value of investment property was also lower than the €2.1 million recorded in 2017, as a gain of €1.7 million was recorded last year.
GlobalCapital Life Insurance Limited registered a total comprehensive income of €0.2 million, compared to €4.7 million in 2017. The company reported an increase in ordinary business, mainly from protection and unit linked business, however, interest sensitive single premium business was lower. Global Capital Health Insurance Agency Limited registered a decrease in profit before tax from €0.7 million to €0.2 million, while Global Capital Financial Management Limited sustained another loss of €0.9 million, compared to a loss of €88,000 in 2017.
As announced last year, the company has the intention to raise €6 million in additional equity through the proposed Rights Issue, which is expected to be completed in 2019. The aim is to improve working capital to support the company's business strategy. In view of the above results, the board of directors has resolved not to recommend a dividend. The company announced that its Annual General Meeting shall be held on June 26, 2019.
Despite a single trade of a mere volume, the equity registered a negative performance during the month of May of 16.67%, to close at €0.25.
In the property sector, Malta Properties Company plc traded 62 times as 1,059,617 shares changed hands. The share price climbed 6.67% to €0.64.
MIDI plc presented the resolutions which shall be considered at the Annual General Meeting which shall be held on June 11, 2019. Among the ordinary resolutions, the AGM shall consider the 2018 audited financial statements, as well as the final net dividend of €0.008 per share. If approved, the dividend shall be paid on June 28, 2019, to all shareholders who were on the register as at May 10, 2019.
Despite this news, MIDI closed 4.13% lower at a price of €0.58. The equity generated a turnover of €142,836 over 19 transactions.
On May 29, 2019, Tigne Mall plc announced that its Annual General Meeting shall be held on June 20, 2019. Among other resolutions, the AGM shall consider for approval the directors' recommendation of a final net dividend of €0.0131 per share. If approved, the dividend shall be paid on July 5, 2019 to all shareholders on the register as at the date of the AGM.
A total of 29 transactions of a combined 257,290 shares yielded a decline of 4.76%, the close off the month at €0.90.
On May 6, 2019, in the same sector, Malita Investments plc held its Annual General Meeting during which all ordinary resolutions on the agenda were approved, including the 2018 financial statements and the net final dividend of €0.01417 per share. The dividend has been paid on May 10, 2019, to all shareholders who were on the register as at close of business April 5, 2019. During the month of May, the equity traded 44 times, as 297,163 shares changed ownership. The outcome was a 5.75% decline, to settle at €0.82.
Plaza Centres plc also experienced a fall in share price, as this dropped by 3.85%, to close at €1. Nineteen transactions spread over the 31-day period generated a turnover of €136,181.
An equity which enjoyed a positive performance during the month of May was Malta International Airport plc - as 86 trades worth slightly less than €825,000 yielded an 11.94% price appreciation, to close at €7.50. The company held its Annual General Meeting on Wednesday, May 15, 2019, whereby, among other resolutions, the 2018 financial statements, as well as the payment of the final net dividend of €0.12 per share were approved. Prior to this, exactly on May 7, 2019, the company provided the market with a traffic update for the month of April, showing a 10.5% growth in passenger movements over the corresponding period in 2018. In total, 653,100 passenger movements and 4,554 aircraft movements were recorded. The airport kicked off its summer schedule with a 6.3% increase in seat capacity, while seat load factor was up by 3.2 percentage points to 83.3%. The United Kingdom was once again the top market, followed by Italy, Germany, France and Spain, all of which registered growth in passenger numbers.
On May 23, 2019, BMIT Technologies plc announced that it has entered into a promise of sale agreement with regards to a building in the 'Tal-Handaq' area in Qormi. The property is being sold with all of the rights and appurtenances for a consideration of €4 million. The property was being leased to BMIT Technologies prior to this agreement, where it houses its largest data centre. The promise of sale agreement is valid until January 23, 2020, by which time BMIT must attain the relevant permits and approval of purchase at the shareholders' general meeting.
This acquisition will allow BMIT to carry out its operations from its own property, whilst also mitigating financial expenses, disruption of operations, and loss of business. Furthermore, the Group will incur less expenditure on rental of premises since the remaining term of their current lease will not have to be honoured. The company held its Annual General Meeting on May 27, during which all the ordinary resolutions on the agenda were approved, including the annual report and financial statements for 2018. Despite the positive news, the equity suffered a marginal decline of 0.94%, as 57 trades worth a total of €342,163 resulted in a closing price of €0.525.
Telecommunications Company, GO plc, which owns 51% of the previously mentioned BMIT, experienced totally different fortunes. The share price increased by 4.67% over 97 deals worth slightly less than €1 million, to close at €4.48. The company held its Annual General Meeting on Tuesday, May 28, during which, all ordinary resolutions on the agenda were approved. This includes the payment of a net dividend of €0.14 per share and the 2018 Annual Report and Financial Statements.
Following the publication of its financial statements for 2018 which took place in April, Medserv plc's share price appreciated by 6.6% during the month of May, to close at €1.13. The equity traded on 64 occasions in which a total of 403,262 shares exchanged hands. Back in April 2018, Medserv plc had announced that its two major shareholders, Mr Anthony S Diacono and Malampaya Investments Limited, whose beneficial owner is Mr Anthony J Duncan, had the intent to source a strategic purchaser to acquire their shareholding in the company.
On May 20, the company announced that these major shareholders have now received non-binding offers from interested offerors. The potential sellers are in the process of evaluating the said offers, and it is anticipated the company will shortly grant the offerors access to further information as part of the process.
The company also issued an interim report, showing a turnover of €12.5 million in the first quarter of 2019, a 51% increase from the corresponding period last year. This led to an improved EBITDA of €3.6 million, compared to the previous year's figure of €1.4 million.
The positive start is likely to continue throughout the year, as all of the company's subsidiaries have the opportunity to increase their earnings as a result of discoveries or new contract awards. The company's operations in Libya have continued without any disruption, despite the conflict in the country.
In Cyprus, the company supported ExxonMobil's drilling campaign, resulting in a significant gas discovery. This has led to an increase in exploration drilling campaigns which are expected to commence in Q4 2019. Operations in Egypt also saw an increase in earnings as the company is now using its own acquired equipment in servicing its client.
Retail conglomerate, PG plc posted a gain of 2.50% to close at €1.64. In total, 100,774 shares were exchanged over 22 deals.
In the insurance sector, Mapfre Middlesea plc registered a loss of 6.72% to settle at €2.22, as 6,820 shares traded over nine deals.
Meanwhile, three trades of 20,250 Grand Harbour Marina plc shares had no impact on the share price of €0.74.
In the sovereign debt market, from 26 active issues, 17 Malta Government Stocks posted gains, while nine traded lower. The vast majority of the shorter-dated issues drifted, while the longer-dated securities registered increases. The biggest positive price movement was registered by the 2.1% Malta Government Stock 2039(I), as the price appreciated by 3.11%, to close at €110.
In the corporate debt market, from 60 active bonds, 47 registered price movements. The gainers amounted to 25 while fallers amounted to 22. The 5% Hal Mann Vella Group plc Secured Bonds €2024 headed the list of gainers, while the 5.3% United Finance plc Unsecured € Bonds 2023 topped the list of fallers. The former increased by 3.25% to close at €108, while the latter declined by 3.29%, to close at €103.
This article, which was compiled by Jesmond Mizzi, Managing Director of Jesmond Mizzi Financial Advisors Limited, does not intend to give investment advice and the contents therein should not be construed as such. The Company is licensed to conduct investment services by the MFSA and is a Member Firm of the Malta Stock Exchange and a member of the Atlas Group. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information, contact Jesmond Mizzi Financial Advisors at 67 Level 3, South Street, Valletta, or on Tel: 21224410, or email [email protected]