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

October 3, 2023

More tears at Boohoo

Macro & Overnight

Although US big tech was up, oil prices and equity markets were weaker as central bankers were out messaging the outlook for further multiple rate hikes.

The HK stock exchange lifted China Evergrande shares out of suspension, and they rose 42%. However, the shares remain 99% down from their peak in 2018.

The trial of Sam Bankman-Fired starts today.

Some UK Company News

Boohoo reported H1 Revenue of £729.1m, down 17%, with gross margins of 53.4%, up 90bps. Inventory has significantly reduced, down £94m or 35%. It spent £36.3m on infrastructure CAPEX. However, despite a stable margin outlook, it warned of slower volume recovery than previously anticipated. 

Online fast fashion continues to struggle to turn itself around. Meanwhile, Frasers has been stakebuilding in both Boohoo and ASOS. Fundamentally, it still looks too early, but these companies could become vulnerable to a bid at any time.   

Logistics provider DX reported FY results. Revenue was up 10%, and the outlook for trading is in line with expectations. Its agreement to take over 15 former Tuffnells depots and establish new customer relationships has been significantly beneficial. 

PE bidder HIG Capital runs DD on DX and has conditionally offered 48p per share. Given this performance, this now seems rather like a low bid.  

Greggs updated that its sales were up 20.8% for the 13 weeks to 30 September. It continued to grow its market share and saw some easing in cost inflation. Its FY outcome should be in line with previous expectations.

Greggs and Wetherspoon enjoy the lowest-cost producer status in their respective markets as consumers trade down in difficult times. Growth allows scale economies to be shared, driving footfall and lowering costs by meeting volume targets with suppliers.


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.