UK Wage Growth Likely to Force Further BOE Hikes -2-

0949 GMT - Zinc Media Group's update shows total revenue due to be recognized in 2023 had increased to GBP31 million from GBP29 million in May's update, Shore Capital analyst Roddy Davidson says in a note. This represents its best 1H performance for over a decade and is ahead of the GBP30.1 million of revenue generated in 2022, Davidson says. FactSet consensus estimates suggest 2023 revenue of GBP35.7 million and 2024 revenue and Ebitda of GBP39.1 million and GBP2.1 million, respectively, he says. "We remain of the view that Zinc's strong trading and operational momentum, strategic delivery and pure play status are notable positives in a market where we expect further consolidation," he says. Shares are up 6.9% at 92.50 pence. ([e-mail])

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Windward Has Multiple Potential Growth Drivers Ahead

0948 GMT - Windward's announced partnership with LSE Group won't be immediately revenue accretive, but still carries multiple benefits for the company, such as being great branding opportunity and potentially creating new sales leads, Canaccord Genuity analysts write in a research note. Additionally, Windward's AI-based compliance platform seems well-positioned to capture additional demand to comply with the recently approved sanctions on Russia that require ship and cargo owners to prove they are able to screen ships used to transport cargo into EU ports, the analysts say. Canaccord rates the maritime AI company's stock a buy and keeps a 115 pence price target, with upside potential of 165 pence. Shares are up 4.4% at 60 pence. ([e-mail])

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Mattioli Woods Revenue Margin Seen Rising

0935 GMT - Mattioli Woods is on track to beat mid-term profit expectations, Shore Capital says in a note after the wealth and asset management business said its profit for fiscal 2023 is expected to be in line with market views. The company also said it reviewed the investment management options it offers clients and identified areas where it can realize revenue synergies while reducing clients' costs. "We would expect this revenue margin expansion to combine with the growth in the number of revenue-generating consultants and the tech-driven reduction in admin costs to drive profits beyond current medium-term expectations," analyst Ben Williams writes. Shares trade flat at 620 pence and have lost 13% of their value over the past 12 months. ([e-mail])

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Air Cargo Demand Should Improve in 2H, IATA Says

0932 GMT - Data released by the International Air Transport Association show that air cargo demand was weak in May, but the industry trade group says there should be improvements in the second half of the year. Global demand, measured in cargo tonne-kilometers, slipped 5.2% compared to May 2022, IATA says. "The second half of the year, however, should bring some improvements," says Willie Walsh, IATA's Director General, pointing out that central bank rate hikes should subside as inflation moderates. "This should help stimulate economic activity with a positive impact on demand for air cargo," he says. ([e-mail]; @MauroOrru94)

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Supreme's FY 2024 Revised Expectations Prompt Upgrades

0925 GMT - Supreme upgrades FY 2024 expectations after a FY 2023 mostly in line with its previous update, Berenberg analysts Michael Benedict and Matthew Chadwick say in a note. The consumer-goods distributor made a strong start to the year with existing business performance contributing to an increase in adjusted Ebitda of at least GBP1 million relative to previous expectations, the analysts say. Moreover its selection as master distributor for two vaping brands is expected to generate further revenue of GBP25 million to GBP30 million and around GBP2 million of incremental adjusted Ebitda in FY 2024, analysts say. Berenberg raises its FY 2024 and FY 2025 adjusted Ebitda forecasts by 13% and 10% respectively. Berenberg raises its target price to 190 pence from 170 pence. ([e-mail])

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AO World's Strategy Shift is Showing Progress

0918 GMT - AO World's FY 2023 earnings showed that decisive recent actions are bringing positive results, head of markets at Interactive Investor Richard Hunter says in a note. The electrical retailer's decision to leave the German business, to abandon its non-core channels and loss-making sales were difficult but necessary actions to be taken, Hunter adds. The company also implemented delivery charges on orders, increasing service revenue by 11.7%, along with staff cuts and cost-control program, he says. "AO World has now done much of the heavy lifting which was required to revitalize the business, and the next phase is one where the company will be concentrating on growth, cash generation and profit," Hunter adds. ([e-mail])

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Baltic Classifieds Group Shares are Undervalued

0917 GMT - Baltic Classifieds Group has continued to deliver resilient growth despite the challenging market backdrop since its IPO, and its shares are undervalued, Peel Hunt analysts Jessica Pok and Melanie Yang write in a research note. The online classifieds group shares are trading close to a 13% discount to peers despite prospects of delivering a compound 2-year annual EPS growth rate of 25% higher, the analysts say. "We remind investors why the BCG investment case is so attractive with multi-years of growth runway together with the prospects of margins maintained at circa 70%," they say. Peel Hunt lifts the stock's price target to 220 pence from 190 pence, while keeping a buy rating. Shares are down 0.6% at 195 pence. ([e-mail])

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ConvaTec Investor Concerns of Disappointing EPS Look Overblown

0913 GMT - ConvaTec shares have underperformed due to investor frustration over disappointing EPS growth, but the niggles are overblown, Numis analysts Kane Slutzkin and Paul Cuddon write in a research note. Downward revisions to consensus EPS estimates look to have plateaued, and with organic sales growth looking sustainable above 5%, the medical products and technologies company should look forward to improved EPS from FY24, the analysts say. Numis now forecasts around 9% in compound annual growth rate to EPS to 2025. "We think shares reflect good value for defensive, non-discretionary Medtech products, with risk-reward skewed to the upside," they say. Numis has lowered the price target to 270 pence from 300 pence, while rating the stock a buy. ([e-mail])

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SIG's Update Is Likely to Drag Down Market Expectations

0855 GMT - SIG's business update for the first half has noted more challenging market conditions, particularly in the last two months, and Goodbody expects to see low double-digit percentage declines to market consensus expectations as a result, analyst Shane Carberry says. The building-materials supplier still expects to deliver an operating profit within the current range of market forecasts but toward the lower end of the range, Carberry says in a note. "However, given that our operating forecast is already the lowest in the consensus range, we expect to make limited changes to forecasts," the Irish brokerage says. Goodbody retains its buy recommendation on the stock. Shares are down 10% at 30.95 pence. ([e-mail])

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SIG's Lower Volumes Hit Profits But Material Upside Lies Ahead

0853 GMT - SIG's unscheduled business update showed slower volumes in May and June, which lowers profit expectations for the year materially, Peel Hunt says. The building-materials supplier's tougher market backdrop is clearly unhelpful for near-term profits, but the journey back to being a better-run merchant continues with productivity improvements starting to filter through, Peel Hunt analysts say in a research note. "We still believe there is material upside to the margin to come through over time," the brokerage says. Peel Hunt retains its buy rating but cuts its price target on the stock to 49 pence from 55 pence. Shares are down 11% at 30.75 pence. ([e-mail])

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Keller's 1H Update Prompts Outlook Upgrades

0849 GMT - Keller Group's 1H update points to a record start to the year, with underlying EBIT expected to be materially ahead of market views, analysts at Numis say in a note. The Geotechnical specialist contractor's upgrade is mostly driven by margin recovery in North America, amid operational improvements in the foundations business and better-than-expected margins in the Suncoast business more than offsetting lower volumes, Numis says. The U.K. brokerage raises its 2023 pretax profit forecast for the company by 9% to GBP106.7 million, and to GBP115.0 million for 2024. "This update points to actions taken by management to derisk and simplify the group over the past few years taking effect," Numis says. ([e-mail])

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(END) Dow Jones Newswires

07-05-23 0703ET