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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February 7, 2023

Morgan highlights cost of cyber attacks

Macro & Overnight

Oil prices move up from the recent $80 floor.

UK government reshuffle signalled for today following the departure of the party chairman.

 

UK Company News

Morgan Advanced Materials’ update highlights the problems associated with cyber attacks when running advanced manufacturing processes. 

BP‘s full-year profit was $27.7 bn, compared with $13 bn last year. Overall the combined profits reported by the biggest Western oil companies, including Exxon Mobil, Chevron and Shell, total more than $159bn. A sum large enough to get the windfall tax campaigners out in full voice. 

Ascential, the B2B media company, updated on its investment in Hudsom MX. The company has completed a new financing round, a capital restructuring. Ascential has received US$30m in cash and now holds 36.5% of the equity. 

East Imperial, the ultra-premium mixers, announces a pre-close trading update showing that 2022 revenue increased 15.5% to approximately £3.2m. In the US, case sales were up 68% as the new distribution agreement began to bear fruit. As the Chinese market reopens, East Imperial is well placed to continue to capitalise on demand. However, market conditions will continue to impact margins. The pressure has eased in the last quarter due to a softening of freight charges, and this margin improvement has continued into 2023. Bold initiatives are underway to reduce manufacturing costs.

Frenkel Topping, the financial and professional services firm operating within the personal injury and clinical negligence marketplace, expects to report revenues in line with expectations. Expectations for the year to FY2023 remain unchanged.

Mattioli Woods, the specialist wealth and asset management business, announced H1 revenue growth of 2.2% and PBT up 45.5% to £4.8m. Adjusted EPS was 21.2p, down from 23.8p last year. Recent acquisitions continue to integrate well, and the outlook for the current year remains in line with expectations.

Specialist materials producer Morgan Advanced Materials updated that its FY2022 trading performance is expected to be slightly ahead of market expectations. While 2023 demand remains strong, production inefficiencies from the recent cyber attack are expected to impact FY2023 profit by 10% to 15%. Although manufacturing sites are operational, some continue to use manual transaction processes as work continues to restore their systems. Some systems have proven irrecoverable, so it is accelerating the implementation of a new cloud-based ERP solution at the affected sites. Exceptional costs associated with the incident could amount to approximately £8m to £12m, comprising specialist professional fees and expenses related to recovering several systems across the Morgan Group. The company has a strong balance sheet and does not expect the incident to have a long-term impact.

Broker Numis updated on its first four months of the financial year and have seen a continuation of the challenging market conditions experienced throughout FY22, with very subdued levels of equity issuance and corporate activity. Capital market volumes remain at cyclical lows, and the timing of any meaningful recovery in market activity is uncertain. However, recent market performance has improved institutional appetite for both primary and secondary offerings.

Sanderson Design, the luxury interior design and furnishings supplier, expects FY sales of approximately £112.0 m. Underlying profits for the financial year ended 31 January 2023 are in line with Board expectations. See note here. 

Prognosticator

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