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 industry, updated 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.
This communication is provided for information purposes only, and is not a solicitation or inducement to buy, sell, subscribe, or underwrite securities or units. Investors should seek advice from an Independent Financial Adviser or regulated stockbroker before making any investment decisions. Progressive Equity Research Ltd (“PERL”) does not make investment recommendations.
Opinions contained in this communication represent those of PERL and/or our affiliates at the time of publication and PERL does not undertake to provide updates to any opinions or views expressed. PERL does not hold any positions in the securities mentioned in this communication, however, PERL’s directors, officers, employees, contractors and affiliates may hold a position, and/or may perform services or solicit business from, any of the companies or related securities mentioned.
Any prices quoted in our research are as at the previous day’s close.