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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December 13, 2023

UK GDP weaker, UK rates to fall & another UK small-cap bid

Macro & Overnight

The UK economy contracted in October, although year-on-year measures remain in positive territory.

Following weakening employment data, rate hikes must now be firmly off the table, and it is a matter of when, not if, rates head down next year, which is good news for UK risk assets, such as equities.

Later today, we get US producer price inflation data, followed by the Fed’s interest rate decision this evening.

UK Company News

Recruitment company Impellam has recommended a PE offer at a 66% premium over yesterday’s price and a 150% premium to the price back in April before the offer period, valuing the business at £483m. The primary beneficiary is Lord Ashcroft and his family interests, but the trend is clear: the UK stock market values companies substantially below that of PE, trade and strategic acquirers. This trend is becoming all too obvious.  

Defence electronics supplier Cohort reported revenue up 22%, driven by higher UK MOD sales. It had a record closing order book extending to 2033, with increased defence spending in all regions. 

Revolution Beauty has resolved certain historical matters regarding related party transactions with co-founder and 15% shareholder Tom Allsworth. Additionally, the former Boohoo CFO is to become Revolution’s CFO. 

With the historical results now filed and the listing restored, Revolution Beauty is being cleaned up, a process one might ultimately expect to result in its acquisition. Boohoo owns 27% and the two co-founders 15% each. Watch this space.     

Scottish housebuilder Springfield Properties updated that trading in H1 2024 has been in line with management expectations, stable but subdued. Land sales have helped reduce debt. It reported that cost inflation continues to decline, and there are early indications of a return in homebuyer confidence. It expects to meet market expectations for the full year. 

See here for the Progressive note. 

Prognosticator 

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