UK PMI Data Point to Further Weakness Ahead
1147 GMT - Data from a purchasing managers index suggested the
U.K. economic contraction didn't worsen in November, but some
forward-looking data such as new orders signal the rate of
contraction could accelerate in the coming months, Berenberg
economists Holger Schmieding and Kallum Pickering say in a note.
The rebound in business expectations is likely linked to the
improving political situation, but current activity remains under
severe strain from weak confidence, costs pressures and tight
financial conditions, they say. The data suggest U.K. companies are
still adding jobs despite the worsening outlook, but the slowing
pace of job creation is probably an ominous sign employment will
start to fall as the recession deepens in winter, Berenberg says.
(xavier.fontdegloria@wsj.com)
Companies News:
United Utilities 1H Pretax Profit Rose, But Swung to Underlying
Loss
United Utilities Group PLC said Wednesday that pretax profit
rose for the first half on lower net finance expenses, but it swung
to a loss on an underlying basis as macroeconomic conditions hit
earnings.
---
Johnson Matthey Swung to 1H Pretax Profit, Keeps Dividend
Johnson Matthey PLC on Wednesday reported a swing to pretax
profit for the first half of fiscal 2023, despite lower revenue,
and maintained its dividend payout.
---
Bakkavor Sees FY 2022 Profit at Lower End of Views Despite 3Q
Top-Line Growth
Bakkavor Group PLC said Wednesday that revenue grew well in the
third quarter despite macro pressures, and that it sees full-year
profit in line with market forecasts, though at the lower end of
expectations.
---
Pets at Home Group 1H Pretax Profit Hit by Higher Costs; Backs
FY Guidance
Pets at Home Group PLC on Wednesday reported a 19% fall in
pretax profit for the first half of the fiscal year after booking
higher costs, but raised the dividend payout and backed its
full-year underlying guidance.
---
Britvic FY 2022 Pretax Profit, Revenue Rose on Increased Volume;
Lifts Dividend
Britvic PLC said Wednesday that fiscal 2022 pretax profit and
revenue rose on increased in volume and despite macroeconomic
headwinds, and lifted its dividend.
---
Halfords Group 1H Pretax Profit Fell on Higher Costs; Keeps
Dividend
Halfords Group PLC said Wednesday that pretax profit for the
first half fell amid higher sales costs and operating expenses but
service demand continues to increase.
---
Best of the Best Hopes to Finalize Negotiations With Globe
Invest Before Year End
Best of the Best PLC said Wednesday that it is hoping to have
finalized agreements with Globe Invest Limited, which signaled its
intent to take a stake in the company, before the end of the
year.
---
Coats Group Revenue Rose in 2H to October; Sees 2022 Meeting
Views
Coats Group PLC said Wednesday that it is on track to meet its
full-year expectations, and with strong organic growth in the
latter half of the year.
---
De La Rue Swings to 1H Pretax Loss; Expects to Miss FY
Forecast
De La Rue PLC on Wednesday reported a swing to pretax loss for
the first half of fiscal 2023 after booking exceptional charges
mainly related to the termination of a contract and said that it
will miss adjusted operating profit market forecasts for the
year.
---
Hostelworld Sees 2022 Revenue, Earnings Improving on Persistent
Momentum
Hostelworld Group PLC said Wednesday that strong bookings and
revenue momentum have persisted since its performance update in
October, and it expects full-year revenue and earnings to
significantly improve.
---
DP Eurasia 10-Month System Sales Grew 12%, Backs 2022
Guidance
DP Eurasia NV said Wednesday that 10-month system sales rose by
12%, supported by pricing.
---
Rotork Four-Month Revenue Rose 19%; To Meet FY 2023 Guidance
Rotork PLC said Wednesday that revenue for the four months ended
Oct. 30 rose 19%, boosted by higher selling prices as well as
measures taken to improve supply-chain issues.
Market Talk:
Pets at Home's New Customers Help to Boost Sales
1136 GMT - Pets at Home Group is picking up more new customers,
HSBC says after the U.K. pet-goods retailer stuck to its full-year
guidance, though first-half underlying pretax profit fell amid
higher transport and energy costs. The 1H results matched
expectations, supported by increased second-quarter sales and
customers, HSBC says. "This is another good update from Pets and
builds on a strong 1Q update in August," HSBC analyst Paul
Rossington says in a note. "Key for us is that this is supported by
an increase in new customer growth." Still, Pets shares drop 3.6%.
(philip.waller@wsj.com)
UK PMI Data Add to Signs of Immediate Recession
1121 GMT - The U.K. economy is likely to have already fallen
into recession, Capital Economics U.K. economist Ashley Webb says
in a note after November's purchasing managers index data. The
composite PMI, which ticked up to 48.3 from 48.2 in October, is
consistent with a 0.2% quarterly contraction in the three months to
November, a figure that is slightly better than what current
forecasts for overall 4Q imply, he says. The data also showed price
pressures continued to moderate, but growth in firms' input costs
remained high, Webb says. "With domestic inflationary pressures
still very intense, we don't think that the weakening activity will
convince the Bank of England to stop raising interest rates just
yet," he says. (xavier.fontdegloria@wsj.com)
Halfords's Lack of Consistency Could Be Behind Share Fall
1112 GMT - Given that a couple of months ago Halfords said it
would hit its FY 2023 target, its current guidance for earnings to
be at the bottom end of expectations has halted its shares'
momentum and prompted a profit taking, AJ Bell Investment Director
Russ Mould says as shares drop 5.4%. Despite this, the company's
strategy to bolster its motoring services division offers a more
predictable and repeating revenue, making the business more
resilient to weather the consumer backdrop, he says. "The big thing
which may be worrying investors...is the lack of consistency,"
Mould says. (michael.susin@wsj.com)
Halfords's Lack of Consistency Could Be Behind Share Fall
1112 GMT - Given that a couple of months ago Halfords said it
would hit its FY 2023 target, its current guidance for earnings to
be at the bottom end of expectations has halted its shares'
momentum and prompted a profit taking, AJ Bell Investment Director
Russ Mould says as shares drop 5.4%. Despite this, the company's
strategy to bolster its motoring services division offers a more
predictable and repeating revenue, making the business more
resilient to weather the consumer backdrop, he says. "The big thing
which may be worrying investors...is the lack of consistency,"
Mould says. (michael.susin@wsj.com)
Sage Makes Progress, But Margin Uncertainty Lingers
1109 GMT - Sage is making progress but risks remain, Deutsche
Bank says, upgrading the accountancy-software firm to hold from
sell and increasing its price target to 800 pence from 590p.
Management is making the right decisions in a competitive
environment to increase growth, while investment is boosting
revenue momentum despite a tougher economy, Deutsche says. "Having
said that, uncertainties remain around margin progress going
forward, with management choosing to invest the growth upside into
[operating expenditure] in FY22," Deutsche analyst Johannes
Schaller writes, adding that economic risks remain, particularly in
the U.K. "There appears to be scope for better operating leverage
into FY23, but with shares trading above software peer-group
multiples, we see a lot of this already priced in." Shares rise
0.3% to 811p. (philip.waller@wsj.com)
BT Group Looks Confident
1047 GMT - BT Group struck a confident tone in its business
update Tuesday when the company confirmed it would implement the
contracted CPI +3.9% price rises across its consumer brands in
April and said that EE will become the flagship brand, Jefferies
analysts Jerry Dellis and Yi Hsin Yeoh say in a research note. The
U.K. telecom company will direct its efforts toward EE as the BT
brand will be phased out, with the former having wider customer
appeal, balanced representation across ages and strong customer
appeal in cities, the analysts say. BT also noted that customer
churn is under control even as the earliest adopters of the CPI
+3.9% price rise contracts start to exit their tie-ins, they add.
Jefferies has a buy rating on the stock with a 250.00 pence price
target. (kyle.morris@dowjones.com)
Hostelworld's Shares Could Travel Far to the Upside
1042 GMT - Hostelworld's shares trade at an undemanding price
given the near- to medium-term growth opportunities and marked
discount to its historic average range, Shore Capital says in a
note. The online hotel-booking platform is a unique way to invest
in the travel industry and it's pleasing to see its recovery
accelerate now it's clear of pandemic disruption, Shore analysts
Katie Cousins and Greg Johnson say. "Across the medium term, we
believe the group has scope to benefit from its increased
investment into technology and social features," say the analysts.
Shore Capital retains its buy recommendation for the Hostelworld
stock as it sees significant upside to its fair value target of 140
pence and a positive business outlook. Shares are down 0.5% at 92.0
pence. (joseph.hoppe@wsj.com)
Contact: London NewsPlus; paul.larkins@wsj.com
(END) Dow Jones Newswires
November 23, 2022 07:37 ET (12:37 GMT)
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