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 29, 2023

Better than expected, again

Macro & Overnight

Oil prices, bond yields and the Dollar all stepped back from the brink overnight, and Asian equities firmed up for an end-of-quarter rally.

Q3 GDP data showed that the UK grew faster than expected, which, combined with prior period revisions, makes the UK one of the stronger-performing European economies from the COVID pandemic.

Better than expected is becoming a recurring theme in comments about the UK economy, although it has yet to really impact its stock market.

Some UK Company News

East Imperial, the NZ-based premium mixer brand, reported H1 revenues stalled in Q2 due to a pause in production as the business rationalised resources and a delayed cash injection. The company raised £2.2m for a convertible note placement in August 2023 via INL Investments as a cornerstone partner. The raise covers working capital and finances excess operating costs as the business moves towards a break-even position.  Management continues to commit to getting to its cashflow break-even goal as soon as possible. 

East Imperial remains an early-stage brand trying to break into the super-premium drinks segment. It has been given a lifeline from its China distributor, and we are waiting to see if this is sufficient. With supply agreements in place in other Asian markets and the US, management is working hard to reach a critical break even.  

Likewise, the floor coverings distributor reported that H1 revenue increased by 17.3%, and despite showing losses due to growth investment, it generated cash from operations, allowing further investment in property, plant and equipment. It continues to invest in point of sale and is on target to meet FY expectations. It is in sight of its short-term objective of more than £200m of revenue. 

Likewise is run by the former CEO of industry leader Headlam and is taking share in a market with traditionally strong barriers to entry but is ripe for disruption. Tony Brewer knows his way around the sector, has assembled an experienced team and has made some interesting acquisitions. One to keep an eye on.   

Prognosticator 

 

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