Market Prognosis

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

January 26, 2023

We continue to spend on holidays & pets

Macro & Overnight

The Bank of Canada has become the first central bank to announce that rates are now high enough. Given that the BoC led the upward charge in rates, it was the only central bank that did a 100 bp rise in 2022; this could be significant.

US GDP data is later, providing ammo for the FOMC to follow their Northern neighbours, perhaps.

 

UK Company News

Updates today from CVS and Jet2 further indicate that we continue spending on holidays and looking after our pets.

Animalcare, the animal health business, anticipates its results to be approximately in line with market expectations. The rationalisation of its portfolio, which has concentrated the Group’s attention on higher quality, larger-selling products, is materially complete and continues to benefit the sales mix and gross margins. Strong cash conversion in the second half helped maintain the Group’s healthy balance sheet. 

Elsewhere in animal health, vet owner CVS updated with revenue up 8.2% vs H1 2022. Margin continues to stay in line with the prior year, benefiting from operating leverage and strong revenue growth. Operating cash conversion remains strong, and its Pet Club has seen a further increase in membership, up 4.3% to 481,000. Its current trading remains in line with market expectations for the year. 

Aquis Exchange, the creator and facilitator of next-generation financial markets, and owner of the AQSE, expects to report performance for FY22 in line with market expectations. 

BOTB, the provider of online competitions to win cars and other prizes, said the attrition profile of the huge cohort of customers acquired during the pandemic has stabilised. The business says it is well-placed for a return to steady growth. It has a solid financial position, and trading has continued in line with expectations.

Tonic water supplier Fevertree updated that macroeconomic volatility and uncertainty remain elevated. However, as an increasingly diversified global business, it remains confident of delivering revenue growth. However, inflationary cost pressures remain, and the impact of elevated European energy costs in glass bottle pricing will be material in 2023. 80% of its sales are in glass bottles. It estimates that the direct energy component of glass manufacture alone represents £20m of additional cost. The cmpany has reduced guidance on its profitability. 

IDOX, the specialist information management software and solutions vendor, saw revenue increase by 6% margin improved to 34% in 2022. Operational improvements, acquisitions, and improved business mix drove these results. It also sees an encouraging start to FY23, trading in line with the Board’s expectations. 

Designer, manufacturer, and distributor of eyewear, Inspecs updated trading in line with revised expectations. It enters 2023 with a good order book and is confident it will enhance value for all stakeholders and expects efficiencies to deliver further benefits in 2023.

Holiday operator Jet2 updated that forward bookings have continued to strengthen. It expects to exceed current average market forecasts. 

Low-cost airline Wizz Air reports booking volumes ahead of 2022, which is in line with expectations seen load factors improve. 

Professional training supplier Learning Technologies said its performance is ahead of expectations, with margin improvements in line with previous guidance and cash performance resulting in continued swift deleveraging. 

The FX risk manager, Record, reported working hard to deliver new products and investment strategies, with more details at its Capital Markets Event on 9 February. Its average fee rates remained broadly unchanged from the previous quarter, with opportunities for added value for enhanced Passive Hedging mandates linked to increases in interest rate differentials.

Strix, the consumer products company, has achieved profits in line with previous guidance given at the trading update on 30 November 2022. It sees Chinese issues improving during 2023. 

Prognosticator

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