UK follows US inflation lower
Macro & Overnight
UK inflation numbers came in below last period, below last year and lower than expected.
The chart shows how closely correlated UK is to US CPI, currently running with about a three month lag.
In anticipation, UK 10 yr gilt yield was already 40 bps lower in the previous ten days. Yields are lower again today.
All eyes are on the BoE for their next move on UK policy rates.
Sterling has weakened amidst signs of some US$ recovery.
UK Compnay News
Mining services company Capital reported operational difficulties in Sudan but said it is on track to meet previous FY revenue guidance. Adding two long-term drilling contracts and the mining services contract in Ivindo, Gabon, will all contribute. MSALABS will continue its multi-year laboratory roll-out, mainly focused on Chrysos PhotonAssay units MSALABS has completed a $10 million equity raise, and Capital’s shareholding in MSALABS has increased from 77.76% to 81.79%.
Cohort, the defence services provider, reported a record FY profit of £19.1m (2022: £15.5m) on record revenue of £182.7m (2022: £137.8m) and robust cash generation. A strong order intake of £220.9m (2022: £186.4m) led to a record closing order book of £329.1m (2022: £291.0m). Expectations for the FY are unchanged.
Gooch & Housego has acquired Artemis Optical Holdings for up to £8.9 million. It is a thin-film coating company renowned for its expertise in various cutting-edge applications. Its customers are primarily in Aerospace & Defence and the Industrial and Life Sciences markets. The deal should be marginally earnings-enhancing in G&H’s first full financial year of ownership.
Restaurant Group issued a strong update with expectations unchanged, signalling disposals under consideration.
Yellow Cake, the investment vehicle that buys and owns uranium, was unsurprisingly bullish about the energy source’s prospects. It said in its FY results that although the price of uranium has risen, it is still below the levels at which it is economically viable for new development projects. Sentiment around nuclear energy continues to improve as it becomes widely accepted as the key to achieving net zero targets. China’s five-year plan means a 40 per cent increase in their nuclear capacity by 2025, while grid problems worldwide highlight the need for a reliable and low-carbon baseload power source.
Springfield Properties also updated; see note here.
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