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UK PMI data points to further weakness ahead
1147 GMT – Purchasing managers’ index data suggests the UK economic contraction did not worsen in November, but some forward-looking data such as new orders suggest the rate of contraction may accelerate in the coming months, Berenberg economists Holger Schmieding and Callum Pickering said. Say in a note. They say the recovery in business expectations is likely linked to the improving political situation, but current activity remains under severe strain due to weak confidence, cost pressures and tight fiscal conditions. The data suggests UK firms are adding jobs despite the worsening outlook, but the slow pace of job creation is perhaps an ominous sign that employment will begin to fall as the winter recession deepens, Berenberg says. (xavier.fontdegloria@wsj.com)
Companies News:
United Utilities 1H pretax profit rose, but underlying losses swung
United Utilities Group Plc said on Wednesday that pretax profit rose in the first half on lower net finance costs, but it slipped to a loss on an underlying basis as macroeconomic conditions weighed on earnings.
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Johnson Matthey swings in 1H pretax profit, maintains dividend
Johnson Matthey plc on Wednesday reported a swing in pretax profit despite lower revenue for the first half of fiscal 2023 and maintained its dividend payout.
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Bakkavor sees FY 2022 profit at lower end of views despite 3Q top-line growth
Bakkavor Group PLC said on Wednesday that revenue rose well in the third quarter despite macro pressures and that it sees full-year profit in line with market forecasts, though at the low end of expectations.
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Pets hit by higher costs on Home Group 1H pretax profit; Behind the FY guidance
Pets at Home Group Plc on Wednesday reported a 19% drop in pretax profit in the first half of the fiscal year after booking higher costs, but increased dividend payouts and upheld its full-year underlying guidance.
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Britvic financial year 2022 pretax profit, revenue growth on growing volumes; Dividend lift
Britvic Plc said on Wednesday that fiscal 2022 pretax profit and revenue rose on higher volumes and despite macroeconomic headwinds and lifted its dividend.
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Halfords Group 1H pretax profit falls on higher costs; Dividends are kept
Halfords Group PLC said on Wednesday that pretax profit fell in the first half amid higher selling costs and operating costs but demand for the service continued to grow.
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Best hopes to finalize negotiations with Globe Invest before the end of the year
Best of the Best Plc said on Wednesday it hopes to finalize agreements with Globe Invest Ltd, which has signaled its intention to take a stake in the company before the end of the year.
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Coates Group Revenue Rises in October from 2H; 2022 meeting views
Coates Group Plc said on Wednesday it is on track to meet its full-year expectations and with strong organic growth in the second half of the year.
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De La Rue Swings on 1H Pretax Losses; Expected to miss FY forecast
De La Rue plc on Wednesday reported a pretax loss after booking extraordinary charges in the first half of fiscal 2023 and said adjusted operating profit for the year would miss market estimates.
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Hostelworld sees 2022 revenue, with earnings improving at a steady pace
Hostelworld Group Plc said on Wednesday that strong bookings and revenue momentum continued after its performance update in October and that it expects full-year revenue and earnings to improve significantly.
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DP Eurasia 10-month system sales up 12%, behind 2022 guidance
DP Eurasia NV said on Wednesday that 10-month system sales rose 12%, supported by pricing.
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Rotork’s four-month revenue rose 19%; FY 2023 guidance to follow
Rotork Plc said on Wednesday that revenue rose 19% for the four months ended October 30, boosted by higher selling prices as well as measures taken to improve supply-chain issues.
Market Talk:
Pets at home help increase sales to new customers
1136 GMT – Pets at home group is picking up more new customers, HSBC says, after the UK pet-goods retailer stuck to its full-year guidance, although first-half underlying pretax profit fell amid higher transportation and energy costs. 1H results matched expectations, supported by increased second-quarter sales and customers, HSBC said. “This is another good update from Pets and builds on the strong 1Q update in August,” HSBC analyst Paul Rossington said in a note. “The key for us is that this is supported by increased new customer growth.” However, shares of pets fell by 3.6%. (philip.waller@wsj.com)
UK PMI data add to signs of immediate recession
1121 GMT – The UK economy is likely already in recession, Capital Economics UK economist Ashley Webb says in a note after November’s purchasing managers’ index data. The composite PMI, which ticked from 48.2 to 48.3 in October, is consistent with a 0.2% quarterly contraction in the three months to November, a figure slightly better than the current forecast for the overall 4Q, he said. The data also showed that price pressures continued to moderate, but growth in firms’ input costs remained high, Webb said. “While domestic inflationary pressures remain very strong, we do not think weakening activity will persuade the Bank of England to stop raising interest rates just yet,” he says. (xavier.fontdegloria@wsj.com)
Halfords’ lack of consistency may be behind the share’s decline
1112 GMT – Given that Halfords said a few months ago it would hit its fiscal 2023 target, its current guidance for earnings below expectations has stalled its share momentum and prompted profit-taking, AJ Bell investment director Russ Mold said. Says shares are down 5.4%. Despite this, the company’s strategy of promoting its motoring services division provides more predictable and recurring revenue, making the customer base more resilient to weather, he says. “The big thing that worries investors … is the lack of consistency,” Mold says. (michael.susin@wsj.com)
Halfords’ lack of consistency may be behind the share’s decline
1112 GMT – Given that Halfords said a few months ago it would hit its fiscal 2023 target, its current guidance for earnings below expectations has stalled its share momentum and prompted profit-taking, AJ Bell Investments director Russ Mold said. Says shares are down 5.4%. Despite this, the company’s strategy of promoting its motoring services division provides more predictable and recurring revenue, making the customer base more resilient to weather, he says. “The big thing that worries investors … is the lack of consistency,” Mold says. (michael.susin@wsj.com)
Sage makes progress, but margins remain uncertain
1109 GMT – Sage is making progress but risks remain, Deutsche Bank says, upgrading the accountancy-software firm to a sell-off and raising its price target to 800 pence from 590p. Management is making the right decisions in a competitive environment to boost growth, while investments are accelerating revenue momentum despite a tough economy, says Deutsche. “Having said that, there remains uncertainty around margin progress going forward, with management choosing to invest in upside growth. [operating expenditure] In FY22, Deutsche analyst Johannes Schaller writes, “There appears to be scope for better operating leverage in FY23, but with shares trading above software peer-group multiples, we could see more of this. Already, economic risks persist, particularly in the UK.” At the same price.” Shares rose 0.3% to 811p. (philip.waller@wsj.com)
BT Group looks confident
1047 GMT – BT Group struck a confident tone in its business update on Tuesday when the company confirmed it would implement an agreed CPI +3.9% price increase across its consumer brands in April and said EE would become the flagship brand, Jefferies analysts Jerry Dellis and Yee Sin Yeoh said. says the research note. The UK telco will direct its efforts towards EE as the BT brand is phased out, with the former having broad consumer appeal, balanced representation across the ages and strong consumer appeal in cities, analysts say. BT also noted that customer churn is under control even as early adopters of CPI +3.9% price increase contracts begin to exit their tie-ins, they added. Jefferies has a buy rating on the stock with a price target of 250.00 pence. (kyle.morris@dowjones.com)
Shares of Hostelworld may travel to the upside
1042 GMT – Shares of Hostelworld trade at an undervalued price given near-medium-term growth opportunities and a marked discount to its historical average range, Shore Capital said in a note. Online hotel-booking platforms are a unique way to invest in the travel industry, and it’s good to see its recovery accelerating, now clear of the pandemic’s disruption, say Shore analysts Katie Cousins and Greg Johnson. “Over the medium term, we believe the group has scope to benefit from increased investment in its technology and social facilities,” say analysts. Shore Capital maintains its buy recommendation for Hostelworld stock as it sees a significant increase in 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 Newswire
November 23, 2022 07:37 ET (12:37 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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