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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May 21, 2024

Another day another bid approach

Macro

It was another strong day for precious metals yesterday, with Bitcoin also rallying hard overnight back up to all-time highs. 

The Pound remains firm despite hopes of an early rate cut. 

Japanese 10-year bond yields are rising towards 1%, but the USD/Yen rate is relatively stable. 

UK Companies

US Advanced Energy Industries has announced that the XP Power board has previously rejected several offers to acquire XP Power. It is now proposing an offer worth £19.50, which directly values XP Power at £571m, to shareholders. 

Another day, another UK mid-cap company receives a bid at an attractive premium.

Diaceutics reported 22% revenue growth in FY 2023 with EBITDA of £2.4 million and cash of £16.7 million (2022: £19.8 million). The Diaceutics pipeline of new business is growing strongly, and the proportion of recurring revenue is now over 50%. 

Forterra updated that its revenue was 6% below the prior period and conditions remain challenging. It recently observed improvement in activity, and it said its full-year expectations remain unchanged, with a greater weighting towards H2 than previously guided. (Note here). 

Gamma expects Adjusted EBITDA and Adjusted EPS for 2024 to be within the range of the latest market forecasts (Note here). 

Topps Tiles reported sales over the first seven weeks of the second half were 7.3% lower. While lead indicators such as GDP, mortgage approvals, and customer confidence are all improving, the tile market is down 20% versus 2019. Topps plans to grow sales to £365 million over the medium term while delivering profit before tax margins in the range of 8-10%.

Watkin Jones, the developer and manager of build-to-rent, student accommodation and affordable housing, has c.£400 million of contractually secure forward sold revenue as of 31 March 2024, of which c. £150 million is for delivery in H2—operating profit to be at least £15 million and within the previously guided range. (Note here). 

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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.