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 6, 2023

Have we reached peak energy complacency?

Macro & Overnight

German factory orders were down 11.7% in July, which sounds like a lot.

US services PMI data will be released later today. It will be interesting to see any clues about further US slowdown suggested by the unemployment data last week.

Oil prices have strengthened further, with Brent crude above $90. Our continued fossil fuel dependency is starkly illustrated by a 1-2% supply reduction from OPEC+, leading to a c 25% price increase over the last month. Have we reached peak energy complacency?

UK Company News

Beeks updated that in H2, it achieved a positive free cash flow position in line with strategy. It had net cash of £4.41m at the period end (H1 23: net cash of 3.35m; FY 22: net cash of 7.86m). Exchange Cloud remains a potentially transformational opportunity for Beeks, with significant traction with existing and new customers, albeit contracts of this size will take time to convert. Note here

React Group announced a two-year contract to provide regular window and signage cleaning services to an established, fast-growing variety store chain covering c.700 national retail outlets based in high streets, retail parks and shopping centres throughout the United Kingdom. The contract begins in October and has a total life value of approximately £500k, with potential for growth from additional services and new store openings. 

Restaraunt Group reported H1 revenue of +10%, EBITDA1 of +15% with costs in line with previous expectations and medium-term cost outlook improving. It also announced a moderate increase in management’s FY23 Adjusted EBITDA expectations for FY23. Net debt is expected to be between £180m and £190m.

Severfield‘s updated financial performance in the first five months of the year aligns with prior expectations, and its cash and balance sheet position remains strong. Current trading conditions remain challenging, but it expects to deliver further progress and results for 2024, which aligns with expectations. Note here.

Solid State is confident in meeting the recently upgraded FY forecasts. It is confident that it can manage supply chain and input cost risks, which remain stubborn, whilst also being mindful of the current macroeconomic risks.

WH Smith updated in line with the upgraded expectations, which followed the third quarter trading update on 31 May 2023. Travel businesses continued to benefit from the recovery in passenger numbers across all key travel markets, albeit it also reflects the strength of Sterling. It continues to win significant US and international market share. 


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