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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August 22, 2023

Cake Box recovers from growing pains

Macro & Overnight

Softbank has announced the ARM IPO, likely to be the year’s most significant.

European gas prices had another spike yesterday but remain way below last year’s levels.

UK Company News

Artisanal Spirits, owner of the Scotch Malt Whiskey Society, has launched a new subsidiary in Taiwan, the third-largest market for Ultra-Premium Scotch Whisky. 

Frasers has increased its holding in ASOS to 16%.

Cake Box updated that franchisee like-for-like sales grew by 6.8% for the first 17 weeks. It saw some improvements in input costs, with fresh cream prices decreasing. But mindful of inflationary pressures on its franchisees and customers, it has passed on part of this cost reduction. The Group trades out of 212 franchise stores and is on track to deliver growth aligned with market expectations. Cake Box also announced that its non-executive chairman is stepping down, and it will hold an investor CMD event later in the year. 

Over the last year, Cake Box has seen an almost complete overhaul of its senior management team. It is now starting to present itself as a professional operator more suited to PLC life following the growing pains that emerged last year. Founder CEO Sukh Chamdal has overseen this positive adaptation. Listen to episodes 2 and 18 of In the Company of Mavericks podcast series for more background on Sukh and Cake Box.    

 Eagle Eye has added the Canadian department store chain Hudson Bay Company to its roster of North American customers. 

Frenkel Topping said its client retention rate was 99%, but challenging markets will moderately impact AUM growth and its expected recurring revenue.

Wood Group reported revenue and adjusted EBITDA ahead of expectations from its trading update on 13 July, with revenue up 16% and EBITDA up 9%. Growth should continue in H2, albeit at a lower rate. Profits are now expected to be ahead of previous guidance but within the medium-term target of mid to high single-digit growth. 

Stronger than expected performance from Wood indicates that the PE interest from earlier in the year likely faded due to rising rates rather than Wood-specific issues. Oil services remain attractive for growth as hydrocarbon consumption levels continue to grow and investment in exploration and production has largely failed to keep up. 

Prognosticator

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