Market Prognosis

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

August 3, 2023

A US “no-landing” has inflationary consequences

Macro & Overnight

Fitch’s US credit rating downgrade yesterday was an “emperor wearing no clothes” moment for bond markets.

Long-term US borrowing rates rose yesterday, flattening the yield curve, but not in a good way. This is an adjustment to higher long-term inflation.

US retail gas (petrol) prices have risen c.15% in the last month.

A no-landing for the US economy has inflationary consequences.

 

UK Company News

Pets At Home‘s Q1 update showed revenue growth of 7.9%. Guidance for FY24 remains the same.

Shaftesbury H1 results showed the valuation of its wholly owned portfolio unchanged at £4.9 billion. Integration savings are ahead of schedule. It has access to £457 million of cash and undrawn facilities. West End remains attractive, with competition for space in our areas anticipated to stay healthy, underpinning rental growth prospects strong leasing pipeline and favourable trading conditions. 

Morgan Sindall said that its H1 revenue was up 14%, profit before tax up 10%, and it has an Order book of £9.1bn, up 7%. The Fit Out business has delivered another outstanding performance. Overall conditions have generally eased across most markets as the year has progressed, but there has been no change to expectations. 

Next updated that it is increasing full-year guidance for profit by £10m to £845m. It last raised guidance as recently as June. 

Jas Fisher has a new CFO. 

Creo Medical updated a step change in its commercial activity with strides made in all facets of the business. Its revenue in H1-2023 of £15.7m was a 15% increase. It is focusing on cost control, with underlying OPEX remaining flat. Its administrative expenses in the period were £18.0m. The pipeline of users and prospective users for Creo’s core technology continues to grow. It has 115 confirmed users at the end of the period, an increase of 44%. 

Facilities by ADF, the market leader in supplying mobile accommodation units to the film and TV industryupdated with strong financial performance in H1-FY23. Productions have been affected by the USA writers’ strikes. However, revenues from the Group’s unaffected UK productions and pipeline should generate between £35 million and £40 million for the FY. Any alleviation of the prevailing strike action will provide the potential for further upside in the current financial year.

CMO, the drop ship builders merchants, said its H1 sales declined 12%. But despite market volatility, it expects EBITDA to align with market expectations, albeit with sales lower at c.£80m. 

Prognosticator 

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