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 9, 2023

Doing well over there

UK Company News

Today was a quiet reporting day, but two UK-listed companies demonstrated the importance of US exposure as Hill & Smith and 4imprint updated on performances trending above expectations. 4imprint continues to disrupt the fragmented promotional products market while Hill & Smith is reaping benefits from increased US infrastructure spending with programmes like the Inflation Reduction Act. 

4imprint announced an H1 dividend increase of 63%, saying its strategic direction is uncomplicated and has not changed. It aims to grow organic revenue by increasing its share in the fragmented yet substantial markets that it serves. It guides that 2023 Group revenue will now be slightly above $1.3bn, with a profit of at least $125m.

Bellway updated that it managed completions in H1 of 10,945 homes (2022 – 11,198) at an average selling price of £310,000 (2022 – £314,399). Its operating margin should be 16% (2022 – 18.5%), and its reservation rate was 28.4% lower with an increased cancellation rate. The increase in mortgage rates through June and July has resulted in a weaker trading environment. Its legal completions are materially lower, but it could not further update the market regarding its outlook until the Preliminary Results on 17 October 2023.

Hill & Smith H1 revenue was up 9%, operating profit was up 20%, with margins increasing by 240bps to 14.9% and a dividend up 15%. With a heavier weighting towards faster growing US end markets, which accounted for 73% of Group operating profit in the period, operating profit will be modestly ahead of current market expectations.

Impact Healthcare, the care home landlord, declared a Q2 dividend of 1.6925p, in line with the 3.5% increase targeted for this year of 6.77p. It is 122% covered by EPRA EPS and 109% by adjusted EPS. It reported a 32.% increase in NAV per share to 113.64p. Impact has a 28.5% gross LTV with an average term of its debt facilities of 6.8 years. 

Prognosticator 

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