Daily Market Highlights (24.08.2022)
RS2 posts surge in profits but lowers 2022 guidance
The MSE Equity Price Index moved 0.56% lower to 3,639.569 points as the declines in the ordinary shares of RS2, HSBC and Trident outweighed the uplift in APS. Meanwhile, IHI and Malita traded unchanged as overall trading activity in equities amounted to €0.05 million. Download today’s Equity Market Summary.
The ordinary shares of RS2 Software plc slid by 7.3% to an over three-year low of €1.40 on a total of 29,000 shares. Today, RS2 published its interim results showing that despite the marginal increase revenues, EBITDA grew by 7% to €4.15 million whilst net profit surged to €1.6 million compared to €1.09 million in H1 2021. On the one hand, the Group’s financial performance was dented by the prevailing macroeconomic headwinds and delays in business but boosted by a €2.13 million exchange gain on operating activities. RS2 noted that the results for H1 2022 vary when compared to the projections made at the time of the issuance of the preference shares in February 2021. Nonetheless, the Group continues to maintain its momentum and the execution of its strategy in all business segments as new markets were penetrated which will result in increased volume generation going forward. Overall, RS2 is now expecting to generate revenues of approximately €41 million for the 2022 financial year compared to the original forecast of €68.4 million. Furthermore, EBITDA is now anticipated to amount to €6.8 million (earlier projection of €11.1 million) whilst profit before tax has also been revised lower to €3.9 million compared to €7.6 million at the time of the issuance of the preference shares.
Also among the large companies by market value, HSBC Bank Malta plc lost 2% to the €0.75 level across 1,029 shares.
The other negative performing equity today was Trident Estates plc with a drop of 1.4% to the €1.46 level after opening at a low of €1.37 (-7.4%). A total of 1,098 shares changed hands.
Also in the property sector, Malita Investments plc remained at the €0.775 level albeit on just 500 shares. Today, Malita published its interim results showing a 1.6% decline in revenue to €4.21 million due to a drop in the net income related to the ‘Affordable Housing’ project. The financial performance of Malita was significantly dented by the negative movement amounting to €32.5 million in the fair value of its operating sites. Overall, Malita reported a net loss of €27.2 million which contributed to the net asset value per share to drop to €0.7524. The Directors declared an unchanged net interim dividend of €0.0112 per share which is payable on Thursday 29 September to all shareholders as at close of trading on Friday 2 September. In their commentary, the Directors explained that the ‘Affordable Housing’ project has entered a new phase as some sites have been completed and started welcoming tenants. Meanwhile, Malita is continuing with the issuance of new invitations for tender for the unfinished sites. Malita also explained that it is currently negotiating offers received for the purchase of band clubs.
A single deal of 6,805 shares left the share price of International Hotel Investments plc at the €0.72 level.
Meanwhile, APS Bank plc recaptured the €0.65 level (+1.6%) on a total of 6,000 shares.
The RF MGS Index trended lower for the fifth consecutive day as it dropped by a further 0.72% to 928.848 points. The 10-year German Bund yield reached an eight-week high of 1.38% on expectations of higher interest rates despite the more apparent risks of a recession materialising.
This report contains public information only and is not to be construed as investment advice or an offer to buy or sell any securities. Information contained herein is based on data obtained from sources considered to be reliable, but no representations or guarantees are made with regard to the accuracy of the data. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Rizzo, Farrugia & Co. (Stockbrokers) Limited is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta and a member of the Malta Stock Exchange.