FTSE Gains, Greggs Success Shows Share Price Can Still Grow Further

10/05/2021 | 06:38am

Greggs Success Shows Share Price Can Still Grow Further

Greggs' no-nonsense, value approach has succeeded where others have struggled, despite broader pressures outside of its control, Interactive Investor says. The on-the-go food retailer's like-for-like sales rose 3.5% from pre-pandemic levels despite staffing and supply-chain disruption, with recent business still holding up, and return to form has been reflected in a share price that has more than doubled over the last year--outperforming a rise of 29% for the wider FTSE 250, the investment platform says. "Investors remain convinced that the company's growth still has far to go and the market consensus of the shares as a strong buy echoes this confidence in prospects," Interactive Investor says. Shares are up 4.7% at 3,009.0 pence.

Companies News: 

Wincanton's 1H 2022 Revenue Growth Remained Strong

Wincanton PLC said Tuesday that it has continued to deliver strong revenue growth throughout the first half of fiscal 2022, and that it is on track to deliver full-year profits in line with market expectations.


Marechale Capital Shares Rise on Share Subscription With Luke Johnson

Shares of Marechale Capital PLC rose as much as 38% in early trade Tuesday after the company said that it has raised 160,000 pounds ($217,728) via a share subscription which will provide it with working capital towards investment opportunities.


Marlowe Says Adam Councell Is Now CFO

Marlowe PLC said Tuesday that Adam Councell has now been appointed chief financial officer of the board, replacing Mark Adams as announced in February.


Altitude Group Appoints Graham Feltham as CFO

Altitude Group PLC said Tuesday that it has appointed Graham Feltham as chief financial officer.


FW Thorpe FY 2021 Pretax Profit Rose; Expects Disruption From Supply and Labor Shortages

FW Thorpe PLC on Tuesday reported a higher pretax profit for fiscal 2021, and said it expects disruptions in production this autumn due to supply-chain strains and labor shortages.


Coral Products FY 2021 Pretax Loss Narrowed on Higher Revenue

Coral Products PLC reported on Tuesday a narrowed pretax loss for fiscal 2021 as revenue increased.


Inspiration Healthcare 1H 2022 Pretax Profit Rose

Inspiration Healthcare Group PLC said Tuesday that pretax profit rose for the first half of fiscal 2022 as revenue increased, and that it will increase its interim dividend by 2.5%.


GSTechnologies to Acquire Angra Ltd. for GBP800,000, Shares Rise

Shares in GSTechnologies Ltd. rose on Tuesday after the company said that it has conditionally agreed to acquire Angra Ltd. from its director and sole shareholder Rodolfo Modesto Basilio for 800,000 pounds ($1.1 million) cash upon completion.


Great Portland Estates, BP Pension Fund Sell Central London Building for GBP181.5 Mln

Great Portland Estates PLC said Tuesday that it has sold its 160 Old Street property in central London to a fund advised by J.P. Morgan for 181.5 million pounds ($247 million).


Marks Electrical to Float on London's Junior AIM Late This Month

Marks Electrical Ltd. said Tuesday that it plans to float on London's junior AIM late this month.


Amte Power FY 2021 Pretax Loss Widened on Higher Costs

Amte Power PLC on Tuesday reported a widened pretax loss for fiscal 2021 on higher costs despite an increase in turnover.


Bens Creek Group to List on London's Junior AIM on Oct. 19

Bens Creek Group PLC said Tuesday that it plans to list on London's junior AIM on Oct. 19, and that it expects to raise 7.0 million pounds ($9.5 million) on admission.


Prospex Energy Shareholders Vote Against Removal of Board at General Meeting

Prospex Energy PLC said Tuesday that the resolutions presented at a general meeting requisitioned by shareholder Jarvis Investment Management Ltd. to remove the board were rejected, and that shareholders voted in favor to keep Mark Routh and Alasdair Buchanan as directors.

Market Talk: 

Hotel Chocolat's Strategy Should Drive Growth in FY 2022

1013 GMT - Hotel Chocolat's margins should improve as retail recovers and continuity revenue grows, Liberum says. The chocolatier has a track-record of achieving double-digit sales growth despite challenges such as Brexit, political uncertainty and pademic-related lockdowns, the U.K. brokerage says. The company has used this period to transform the business model into a multi-category, multi-geography and multi-channel platform, and with the reopening of stores going well, the second quarter of fiscal 2022 could be very strong, it says. "With a well-articulated and focused strategy across three main geographies, fiscal 2022 should deliver the step change in growth we confidently forecast," the brokerage says. Liberum rates the stock buy.


Natixis Cautious on UK as Brexit Bites, Doesn't Expect BOE Rate Rise

1008 GMT - Recent shortages in supply of fuel and food in the U.K. due to a lack of lorry drivers demonstrate that "Brexit is starting to bite," Nordine Naam, currency and EM strategist at Natixis, tells Dow Jones Newswires in an interview. "We remain very cautious on the UK," he says. Early this year, the U.K. outlook was strong due to its high vaccination rate, but the U.K. story has now turned negative, he says. Markets broadly expect the Bank of England to raise interest rates next year, but Natixis thinks these problems will mean rates stay stable. Naam says the impact on sterling should be limited, with EUR/GBP likely to stabilize around 0.86, from 0.8516 currently, although it could rise temporarily to 0.87.


UK Service Sector Recovery Held Back by Supply Constraints

0929 GMT - U.K. services activity in September grew at a faster rate than previously thought, but supply constraints held back the sector's recovery, the IHS Markit/CIPS survey of purchasing managers indicates. The U.K. services PMI for September was revised up to 55.4 from a previous estimate of 54.6. The index came in at 55.0 in August. A level above 50 indicates an expansion. However, supply constraints contributed to mounting inflationary pressures and the slowest rise in new orders since the end of the winter lockdown. "Domestic sales faltered and export orders were hit by Brexit restraints as the thrust of recovery in the last few months slowed again," CIPS director Duncan Brock says. GBP/USD and EUR/GBP are both little changed after the release of the data, at 1.3617 and 0.8519, respectively.


UK Services-Sector Expansion Held Up in September; Prices Growth Hits Record High

0903 GMT - A purchasing managers survey signaled that U.K. services-sector activity held up at strong levels in September, but severe supply constraints contributed to escalating inflationary pressures. IHS Markit's services PMI stood at 55.4 in September, up from 55.0 in August. Despite the solid reading, survey respondents widely noted that shortages of staff, raw materials and transport had resulted in lost business opportunities over the month. Rapid rises in fuel, energy and staff costs were passed on to customers, with prices for services accelerating at the fastest pace since the survey began in 1996, the report says. "Many businesses report more frequent reviews of pricing due to escalating cost increases by suppliers," IHS Markit's economics director Tim Moore says.


Melrose Could See Consensus Downside for 2021 on Auto Outlook

0857 GMT - Melrose Industries noted an uncertain outlook in its automotive division and although underlying demand is strong, supply chain effects have worsened, and the division could see a consensus downside of around 20% to 25% for 2021, Mark Fielding at RBC Capital Markets says. This is a reflection of the current supply chain disruption, and the impact on 2022 should be much smaller for the turnaround specialist, while the future margin potential is unchanged as volumes recover, Fielding says. "The comment on cash generation also suggests that it remains robust which is supportive--the market weakness could delay the timing on a potential further 15 pence cash return in 2022--but we still see it as likely during next year," he says.


Greggs's Momentum and Ambition Looks Under-Appreciated

0851 GMT - Greggs's share price has always been a little high for comfort but to management's credit it has handled expectations well and beaten guidance several times over, Shore Capital says. The on-the-go food retailer has signaled further upgrades and medium-term growth ambitions in its third-quarter results, along with a return to dividends, the investment group says. Shore said that it has under-estimated Greggs' momentum and the market's appreciation for its stock, and said it will place its "erroneously over-cautious" sell stance under review. "We will digest today's update and return with new medium-term forecasts, a refreshed investment thesis and whatever recommendation we deem appropriate," Shore says. Shares are up 4.4% at 2,998.0 pence.

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

10-05-21 0637ET

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