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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June 25, 2024

Chapel Down considers its funding options

UK Company News

Gear4Music reported revenues in line with market expectations, reflecting the prioritisation of increasing gross margins and cost base reductions to improve profitability, confident that the Group’s customer proposition, operational infrastructure and balance sheet will enable the Group to achieve its long-term business objectives. (See note). 

Despite ongoing macroeconomic challenges, IG Design’s FY24 results have confirmed another year of significant progress in the second year of its three-year turnaround journey. This resilience sets the stage for a transition to top-line revenue growth, further bolstering profitability and margins. The relaunch of the Group’s purpose, vision, and mission statements underscores the commitment to execute the growth strategy launched this year. (See note). 

Vertu Motors anticipates full-year results for FY25 will align with current market expectations. The Zero Emission Mandate to force the uptake of zero-emission vehicles sold in the UK can potentially create volatility in the new car market. This may include a reduced supply of new petrol and diesel cars in the coming periods and would strengthen the values of petrol and diesel used cars. The focus remains on operational excellence and delivering the Group’s strategic objectives. Several growth opportunities are being evaluated against the Group’s capital allocation metrics.  The franchised retail market remains fragmented, with the Group representing only around 5% of the sector. (See note). 

Wynnstay, the agri-supply business, reported trading in April and May was ahead of the prior year and further weather-deferred sales are expected to come through in H2. The Group also has favourable forward positions in grain and a strong order book in fertiliser. Some margin pressures remain. The outlook for farmgate prices, especially for milk, is more favourable. The Group remains positioned to deliver a full-year performance in line with current market expectations, with a more significant second-half weighting than last year.

ChapelDown has announced a strategic review. Its growth strategy includes:

  • Investing in new vineyards.
  • A new purpose-built winery.
  • Developing its brand.

Considering the timeline of these investments, the Board believes it is now appropriate to review the full range of long-term funding options supporting this plan. As part of the review, the Board will consider all alternatives, including investment from existing shareholders, new shareholders, a sale of the Company, and other relevant transactions.

Funding Circle has agreed to sell its US business for cash consideration of £33m, exiting the US and focusing on profitable growth in the UK business.

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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.

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