Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

<< Back to Market PROGnosis archive

September 7, 2023

£ lower as BoE hint at rate plateau

Macro & Overnight

The $ strengthened overnight as survey data revealed an acceleration in US services, reaching a six-month high in August, which heightened concerns about inflation and the possibility of interest rate hikes.

Meanwhile, Governor Bailey was much more dovish about the prospects for UK rates when talking to MPS in Westminster yesterday.

Unsurprisingly, the value of £ fell to a recent low.

UK Company News

Energean H1 production was nearly triple that of H1 2022 as its FPSO achieved 97% uptime in August. It said that its key growth projects are on track. It lowered production guidance to 120 – 130 kboed (from 125 – 140 kboed) but repeated its near-term targets of 200 kboed, $2.5 billion revenues, $1.75 billion EBITDAX and leverage  c.1.5x in H2 2024.

Funding Circle reported income of £76.6m ahead of H2 2022 (£73.2m). Loan returns remain robust. The guidance provided in March 2023 is unchanged.

Genus reported revenue rose by 10%, operating profit was up by 3% and R&D investment increased by 19%. The China porcine market will continue to be volatile, reflecting continued disease outbreaks. It expects to continue to perform in line with expectations apart from a currency translation headwind of approximately £5-6m in the year and increased finance costs of £2m.  

Inspecs H1 revenue increased by 6.1%, and operating profit increased by 25.1%. H2 trading has met with expectations, and its order books remain good.

Jet2 is on track to exceed current market expectations. Summer 2024 is already on sale with growth in seat capacity of approximately 11%, and average load factors at this very early stage are slightly ahead of Summer 2023 at the same point.

Melrose reported that its H1 restructuring and repricing was progressing well, combined with improved quality and arrears reduction. It upgraded guidance. 

MPAC said its order intake of £62.4m (2022: £32.8m) contributed to a closing order book of £77.5m. Revenue was £52.8m, up 4%. Guidance remains unchanged

Safestore Q3  reported revenue for the quarter up 2.9%, with closing occupancy at 81.8% (2022: 85.3%). It will deliver profits towards the lower end of analysts’ forecasts. 

Prognosticator 

This communication is provided for information purposes only, and is not a solicitation or inducement to buy, sell, subscribe, or underwrite securities or units. Investors should seek advice from an Independent Financial Adviser or regulated stockbroker before making any investment decisions. Progressive Equity Research Ltd (“PERL”) does not make investment recommendations.

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.

Any prices quoted in our research are as at the previous day’s close.