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 1, 2023

Is Metro Bank finally challenging?

UK Company News

Coats, the industrial thread and footwear components manufacturer, reported revenue down 19%, reflecting the continuation of the widespread industry destocking in Apparel and Footwear. It warned that full-year trading would align with market expectations, albeit towards the lower end of the analyst forecast range.

Digitalbox is to acquire the digital assets of 99 Problems, Student Problems and The Life Network Shopping from Media Chain Group Limited for $800,000, which is expected to be immediately earnings enhancing.

Dominos Pizza H1 system sales were up 9.7%, with Q2 up 8.6%, revenue up 19.6%, EBITDA +8.2% and free cash flow of £56.2m. There is a new £70m buyback programme following the disposal of its German associate. Net Debt is £171.4m with a leverage ratio of 1.33x. As a result of the solid first-half performance and current momentum, it now expects to deliver FY23 Underlying EBITDA in a range of £132m – 138m, above previous guidance. 

Greggs H1 sales are up 21.5%, earnings growth of 4.5%, and cash position of £139m, with trading momentum of the first half continuing into the year’s second half. It said that cost inflation has started to ease, and it expects this trend to continue through the second half. It has an unchanged outlook.

Metro Bank said its H1 revenue was up 21% YoY, albeit flat HoH. Profit before tax of £16.1m was its third consecutive quarter of underlying profitability. Its operating expenses were reduced by 3%, and it believes it has built a stable business foundation by fixing past issues whilst positioning itself for the future. 

Thirteen years after it was founded, is Metro Bank about to become an overnight success? It is starting to perform how a challenger bank should do. But has it left it too late? Is being a bank worth the effort or cost? 

Ricardo continued to trade in line with the Board’s expectations delivering a solid full-year performance.  

At Robert Walters, interim recruitment has outperformed permanent net fee income, with gross profit down 4% and net cash of £69.8m. Overall trading remains in line with expectations.  

Saietta said that its ConMet agreement had been restructured, resulting in a net payment to Saietta of approximately €3.3 million plus potential licensing payments in future. 

Prognosticator 

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