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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November 24, 2022

Eagerness to take holidays will remain high, Jet2

Macro & Overnight

The Fed minutes from the last FOMC meeting showed that policymakers expect a slower pace of rate hikes ahead. The US$ weakened further.

As a result, Sterling has broken back through the $1.20 barrier.
This move represents a c 15% £ appreciation from the lows recorded a few weeks ago. All this is helpful for importers, including energy users.

Oil prices were weaker, although European natural gas prices continued to rise.

Bond markets remained quiet.

UK Company News

NY listed Manchester United‘s share price was up 25% yesterday and over 40% this week. The Glazer family said they wanted to sell the club. Estimates for a deal range from $4bn to $7bn. The market cap is c $2.5bn, and with debt, the EV is c. $3bn. 

Banknote printer De La Rue is having a public spat with its auditor EY over a going concern statement. It shows that it is not just new digital crypto money operators having difficulties.  

Fintech investor Augmentum showed a stable NAV and £57m of cash, partly the proceeds from the sale of interactive investors. Grover, Tide and Zopa, the three most significant portfolio holdings, appear to be in good shape. Augmentum trades on a c 40% NAV discount, similar to other listed PE investors. 

Premium mixer supplier East Imperial has announced an important US bottling partnership.

Branded footwear supplier Dr Martens guided lower for 2023 expectations.  

Headlam, the UK’s leading flooring distributor, is seeing moderate softening revenues. Ongoing cost headwinds will impact both FY22 and FY23 profits. 

Model hobby supplier Hornby reported H1 shipments from suppliers 40% ahead of last year and strong order books. However, it cautioned that heading into the Christmas trading period, it is hard to tell the outcome for the full-year results.

Used car retailer Motorpoint said that consumer uncertainty and vehicle supply challenges significantly affect the used car market and will likely continue to impact financial performance in FY23. The Group expects to emerge as a leaner and more valuable business ready to seize its significant opportunity in a normalised market, whenever that is. 

The self-storage operator Safestore reported trading in the new financial year shows solid enquiry and new let growth compared to last year. 

Pensions consultants XPS Pensions continues to experience strong demand in a wide range of activities, particularly in Advisory. Against the backdrop of the significant changes in the financial markets, the company has made a solid start to H2. It is confident of achieving full-year results slightly ahead of previous expectations.

Testing services business Intertek is confident it will deliver robust LFL revenue growth but with lower margins than in 2021, reflecting the lockdown restrictions in China. 

Jet2 is on track to exceed current market expectations. The holiday operator has increased capacity for Summer 2023 by 5% but higher input costs, including fuel, carbon, a strengthened US dollar and wages, are all headwinds. The company concludes that margins may come under some pressure, but it remains confident that customers’ eagerness to take much-valued and anticipated holidays will remain high.


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