Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

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September 21, 2023

A hawkish pause?

Macro & Overnight

The BoE announces its rate decision at mid-day today following lower-than-expected UK inflation data and a Fed FOMC decision to pause its rate hiking yesterday.

Bond yields continue rising across the curve despite the Fed’s pause, as most commentators seemed to view Powell’s unscripted post-game comments as hawkish.

In his Q&A session with the press, he observed that investors might be demanding higher returns given the amount of expected Treasury issuance in coming months. His task of reducing the Fed’s balance sheet adds further upward yield pressure.

In the UK, PM Sunak appears to have fired the starting gun for the next election with a shift to a more populist green agenda.

UK Company News

Aquis Exchange reported H1 revenue up 17%, with PBT up 64% to £1.1m. Markets saw further diversification of its product suite. Technologies a growing contract pipeline. Data saw revenues up 34%, with significant progress towards an EU consolidated tape. Aquis Stock Exchange welcomed five new listings despite a challenging market. It has had a positive start to 2023, with continued revenue growth across all divisions. Trading remains in line with Board expectations.

City Pub Group reported H1 LFL sales up 14% with unchanged operating profits due to inflation. Net debt of only c.£8.0m puts it in a solid position to take advantage of appropriately priced opportunities. It continues to trade in line with expectations. Christmas bookings are ahead of where they were this time last year.

CT Automotive reported H1 revenue up 26% at $68.2m. An equity raise of $9.6m in May boosted its balance sheet. Customer schedules are strengthening as OEMs’ automotive supply chain issues improve. It is confident in achieving its expectations for FY23. 

CVS reported FY revenue up 9.8%, EPS ahead by 11.9%. It is pleased with the momentum in the business and continues to trade in line with market expectations. It will work closely with the CMA in support of its market review. It expects the CMA to provide a further update in early 2024.

DFS reported FY revenue down 5.3%, with profits down 49% and higher net debt. It is confident the market will recover. However, it can’t predict how quickly. It said this is one of the harshest economic climates ever experienced. 

James Fisher reported H1 revenue up 17.2%, with operating profit ahead by 22.8% and EPS by 29.9%. It said there was positive momentum in the Energy Division. Net debt is at £154mwhich it expects to reduce in H2. Trading in July and August aligned with expectations, and the Group’s expectations remain unchanged.

JD Sports reported H1 revenue of +8.3% and PBT of +25.8%. Performance was strong in North American premium Sports Fashion fascias. It has net cash of £1,276.5m, up £263.4m. it is trading in line with the current market consensus expectations of £1.04 billion PBT for the FY. 

Kooth reported H1 Revenues up 29%. Its transformational US contract win in California will go live in January 2024. it remains confident of delivering FY revenue in line with recently raised market guidance.

Prognosticator 

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