Current Markets: Recession Fears Drive Lower Risk Assets

Companies

888 sales hit by gambling regulations as it announces senior debt issuance

888 (888) said sales are “broadly in line with board expectations”, as the online betting and gaming company issued a brief business update alongside announcing that it – through subsidiaries in Wholly owned – will issue £1bn of senior debt and enter into new borrowing agreements to fund the acquisition of William Hill’s non-US business.

The company expects sales of £330-335m for the six months to June 30, with growth in Europe impacted by “safer gambling measures” and the situation in the Netherlands where the company had to cease operations and apply for a business license. Sales at William Hill for the 26 weeks to June 28 are expected to reach between £620m and £630m.

In a separate market update, the company said the debt issuance would consist of a US dollar term loan facility and fixed and floating euro note packages. 888 also intends to borrow over £900 million, through new term loans and revolving credit facilities. The company expects to close the William Hill transaction on July 1.

Shares of 888 were down nearly 4% in morning trading. California

Grainger, Regional and Custodian recover assets

Grainger (GRI) bought its third build-to-let (BTR) scheme in Bristol for £128million as Regional REIT (RGL) and Custodian REIT (CREI) complete a total of £40 million of acquisitions.

Grainger has agreed to finance and acquire the second part of the Redcliff Quarter development by ICG Real Estate and Madison Cairn in Bristol, which includes 374 BTR private homes, 94 affordable homes and six units for commercial space.

Construction is expected to begin in the third quarter of 2022, with practical completion of the final element expected in early 2025. Grainger expects the project, including the commercial element, to generate a gross return on cost of approximately $6 % when fully rented.

The news comes as Regional announces the purchase of three offices in Yorkshire for £26.5million. The Sheffield and Leeds buildings comprise 120,000 square feet (sq ft) in total. Meanwhile, Custodian acquired a 70,000 square foot retail park in Nottingham comprising four units occupied by Wickes, Matalan, Poundland and KFC for £15million. ML

Polymetal finds an auditor, but no dividends in sight

Russian gold digger Polymetal (POLY), which continued to trade in London despite various sanctions related to the war in Ukraine, found a new auditor and informed remaining investors of its new operating terms. “Strong ruble appreciation and continued logistical challenges are putting significant upward pressure on capital spending,” the miner said, though it maintained its 2022 production forecast and said sales in Asia will pick up. were continuing.

The miner said he had $300m (£246m) in cash and a further $400m available from unsanctioned banks, enough to pay off his debts for another six months. Net debt increased by $300 million between the end of March and June 1, to $2.3 billion.

Polymetal is trading around 179p per share after falling from the 300p level seen in April. While trading is allowed to continue in London, few brokers are making purchases. Shares in the company’s Russian National Settlement Depository, however, are blocked due to European Union sanctions. These represent just over a fifth of the shares issued by the miner.

A further update on dividends – which were put on hold in the weeks following the invasion – will come in September, when Polymetal announced it would report 2021 results. Ah

Fossil fuel reserves rise despite net zero targets

A new report from Carbon Tracker shows a huge increase in oil, coal and gas reserves on the books of listed companies over the past decade. This comes despite significant divestments of BP (BP.), Shell (SHEL), Rio Tinto (RIO) and other important actors. The report said fossil fuel reserves and associated “embedded emissions”, i.e. the CO2 that would be released if oil, gas or coal were burned, had increased by 40% since 2011.

“Although some have set ‘net zero’ goals, [stock exchanges in financial centres like London, New York and Toronto] enable ongoing fossil fuel industry activities in place, in many cases to a degree far greater than national reserves,” said Thom Allen, author of the report. Allen estimated global warming at 3 degrees if all reserves of listed companies were extracted and burned, double the ambitious goal set out in the Paris Agreement.

A change from 2011 was the switch to gas reserves from oil.

“Compared to our 2011 report, embedded emissions (and therefore reserves) of listed companies have fallen for oil, while those associated with gas reserves have increased significantly as oil and gas companies gradually shift to gas , many adhering to the notion of gas. as a ‘transition’ or ‘bridge’ fuel,” Allen added. “Integrated emissions from listed coal reserves increased slightly, but we mostly saw regional change as diversified miners divested coal assets, in particularly in thermal coal, while Asian coal companies are increasingly listed on national stock exchanges.” Ah