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Royal Dutch Shell
“Royal Dutch Shell’s strategy update including the potential to return $125 billion through dividends and share buybacks between 2021 and 2025 failed to provide the energy required to boost the FTSE 100. As the index’s biggest constituent, Shell’s share price has a major influence on the direction of the UK market. Sadly its 1.4% decline acts as a drag on the FTSE and, together with weakness from housebuilders, sees the UK market drop 0.5% to 7,150,” says Russ Mould, Investment Director at AJ Bell.
AO World
“Like something out of a Greek myth, online white goods retailer AO World keeps pushing the ball up the hill in terms of growing customer numbers, yet the losses continue to mount up.
“Surely by now the patience of its management will be wearing thin, let alone long suffering shareholders, with the stock at a big discount to the 285p ticket price from a February 2014 IPO.
“The company, which sells items like TVs, dishwashers and fridges, may be pointing to a smaller underlying loss this morning but its statutory loss was materially higher year-on-year – reflecting finance charges and the costs of management changes.
“And an improvement in underlying profit in its UK division was partly a reflection of reduced marketing spend, action which needs to be balanced against the requirement to maintain brand awareness.
“The need for action to bring its European business up to speed is evident in these results with margins under pressure.
“Founder John Roberts, who returned as CEO in January, has an ambition to make trading in Europe profitable by 2021 but, unlike its products, this doesn’t come with a warranty and will likely be treated with a healthy dose of scepticism until it can be delivered.
“Roberts’ plan appears to be focused on getting the entire ‘eco-system’ of the group – retail, mobile, recycling, logistics, financial services and business-to-business trade – into greater harmony.
“Rock band AC/DC are not necessarily known for their tunefulness, but investors would definitely settle for Roberts changing the record to Back in Black.”
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