Proactive Investors - 8.15am: FTSE 100 lower but Serco jumps after raising guidance
The FTSE 100 fell in early exchanges on Thursday weighing up hawkish comments from leading central bankers at a conference in Portugal, yesterday.
At 8.15am, London’s blue-chip index was down 16.16 points, or 0.2%, at 7,484.33 while the FTSE 250 fell 28.03 points, or 0.2%, at 18,384.78.
“Subdued market volatility remained the dominant theme over the last 24 hours, even as central bank governors pointed to further tightening ahead,” Deutsche Bank’s Jim Reid said.
Discount retailer B&M Value Retail slipped 1% despite what analysts called a “strong” trading update.
The retailer reported sales in B&M UK grew by 11.3% to £1.06bn, with both grocery and merchandise categories performing ‘very well.’
Peel Hunt noted “the shares have had a great run but we are slightly concerned about valuation, so stick with a hold.”
Shore Capital also kept its hold rating. “We remain cautious due to the increasingly challenging year-on-year comparisons expected for the remainder of the year, a worrisome increase in shrinkage, and the potential need for price adjustments to support low-income UK consumers,” it said.
Over in the FTSE 250, Serco was a star performer with shares up 6.7%.
The outsourcer increased its full-year revenue guidance by 4% to at least £4.8bn and lifted its underlying trading profit guidance by 4% to £245mln.
Peel Hunt raised 2023 pre-tax profit forecasts by 5% to £220mln.
“In our opinion the business is well placed to navigate the current macro-economic challenges (strong inflation protection and economic resilience) and to retain the significant Australian immigration contract due for rebid later this year,” it said.
Ashtead (LON:AHT) slipped as Exane BNP downgraded the company to 'neutral' from ‘outperform’ and cut its price target to 5,550p from 6,250p.
7.52am: B&M sales up as shoppers head for value
B&M European Value Retail SA (LSE:BME) reported strong growth in first-quarter revenues with ‘strong, profitable trading momentum’ across all three of its businesses.
Total sales rose by 13.5% to £1.32bn in the 13 weeks to 24 June 2023, compared to £1.61bn in the same period last year.
Sales in B&M UK grew by 11.3% to £1.06bn, with both grocery and merchandise categories performing ‘very well’ the company said in a statement.
"Our strong trading momentum demonstrates the strength of our unchanged strategy to relentlessly focus on price, product and excellence in retail standards,” commented B&M chief executive Alex Russo.
7.49am: WANDisco laments "wasted year"
WANDisco has published its results for financial 2022 which were delayed after the firm said in March it had found signs of possible “sophisticated” fraudulent activity.
The Sheffield-based data migration platform firm said revenue for the year to December 31, 2022 rose to US$9.7mln from US$7.3mln. In January, the company has forecast revenue of not less than US$24mln.
Pre-tax loss narrowed to US$28.4mln from US$38.8mln while loss per share was US$0.45 compared to US$0.65 the year prior.
Interim chief executive officer Stephen Kelly described 2022 as a “wasted year.”
But “having got off to a bad start, FY23 will be different,” he pledged.
“I am determined that it will serve as a real transition year towards a sustainable, growth-focused future for our business.”
He said the “early results of our turnaround plan show we can bring this focus to bear.”
The firm said on Wednesday that a US$30mln equity raise would be confirmed next week.
7.31am: Boohoo keeps pressure on Revolution Beauty board
Boohoo upped the pressure on the board of Revolution Beauty demanding that the beauty products supplier publishes details of share option awards given to senior executives.
The online retailer holds a 26.6% stake in Revolution Beauty and the latest move continues the war of words between the two firms.
Boohoo wants the terms of the grant of the free share awards granted to chief executive Bob Holt and chief financial officer Elizabeth Lake together with any award letters issued to the relevant individuals published without delay.
It also wants public confirmation that the proposed terms were not amended following the announcement by boohoo on 19 June of its intention to vote against the appointments of Bob Holt and Elizabeth Lake at Revolution Beauty annual general meeting.
Boohoo pointed out shareholders were not consulted on the Free Share Awards, did not approve its terms, nor approve the appointment of its two main beneficiaries as directors.
“This all demonstrates a lack of transparency and actions which are self-serving and not in the best interests of shareholders,” boohoo said.
At a dramatic AGM, shareholders, led by boohoo voted to remove Holt, Lake and chair Derek Zissman.
But the three were subsequently reappointed in controversial circumstances.
7.02am: FTSE 100 expected to edge lower
London’s blue chips are expected to edge lower at the open on Thursday following hawkish comments from a number of leading central bankers at a conference in Portugal.
Spread betting companies are calling the FTSE 100 down by around 5 points. The index closed 39.03 points higher, or 0.5%, at 7,500.49 on Wednesday.
US stocks were mixed Wednesday after the chair of the Federal Reserve warned that interest rates may need to rise further to curb inflation.
At a closely watched conference in Sintra, Portugal, Jerome Powell said "although policy is restrictive, it may not be restrictive enough and it has not been restrictive for long enough."
The Dow Jones Industrial Average fell 74.08 points, or 0.2%, at 33,852.66. The S&P 500 shed just 1.55 points, at 4,377.86, though the Nasdaq Composite rose 36.08 points, or 0.3%, at 13,591.75.
Asian markets were also mixed. In Tokyo, the Nikkei 225 index was up 0.1%. In China, the Shanghai Composite was flat, while the Hang Seng index in Hong Kong fell 1.3%.
Back in London and the early focus will be provided by updates from B&M, De La Rue (LON:DLAR), Moonpig, R&Q and Serco.