Market report

Boohoo shares plummet | FanDuel drives Flutter growth


5pm: Stock market sell-off

Ahead of the Federal Reserve’s expected confirmation of interest rate hikes, Danni Hewson, AJ Bell financial analyst, said the decision may drive more investors to switch out of stock markets.

“Today it’s felt like investors were waiting for the other shoe to drop. No one expects any surprises from the Fed in terms of the scale of today’s imminent rate hike announcement but that’s not stopped the itch that’s led to sell-offs of many growth stocks where growth appears to have simply stalled and concern about those businesses chasing after a consumer increasingly unable or reluctant to spend.

“After a couple of years when stock markets seemed to be the only game in town the rules are changing and some investors will look to funnel money back into cash savings, a liquid cushion to protect against the rising cost of living.”

The FTSE 100 closed down 67.88 points at 7,493.45.

Retailers were dumped at the bottom of the index, with DIY retailer Kingfisher falling 5% and leisurewear firm JD Sports down 4.7%, after the latest British Retail Consortium-NielsenIQ tracker showed UK shop price growth accelerated in April.

Shop prices rose 2.7% annually in April. Growth quickened from 2.1% in March. April’s climb was also above the six-month average rise of 1.5%, the BRC noted.

Sports Direct owner Frasers fell 5.3%.

In the FTSE 250, online retailer boohoo saw its shares drop 12% after it posted a sharp annual profit plunge driven by high item return rates, subdued consumer confidence and international woes.

Joules tumbled 25% after it reported a slump in profit over Easter and said its chief executive is set to exit the company.

Luxury car maker Aston Martin raced ahead by 6.7% after reporting a first-quarter performance in line with expectations, with growth in revenue on strong pricing but a widened loss through higher expenses.

11.45am: Economy grew faster

Revised GDP estimates for the fourth quarter of 2021 show the Scottish economy grew by 1.6% in the fourth quarter against the previous estimate of 1.3%.

Economy Secretary Kate Forbes said: “These updated statistics for quarter 4 2021 demonstrate the resilience of Scottish businesses and the wider economy.”

Full story here

11am: Boohoo shares fall as profits plummet


Shares in fast fashion retailer Boohoo Group plunged after it reported a sharp decline in annual profits and warned of a difficult year ahead.

Revenues rose 14% in the year to 28 February, to £1.98bn. But adjusted earnings before interest, tax, depreciation and amortisation fell 28% to £125.1m, while pre-tax profits tumbled 94% to £7.8m.

The online retailer, which owns the Debenhams brand, said it had been hit by higher-than-expected return rates in the second half, subdued consumer demand during lockdowns and supply chain challenges, including extended delivery times and higher inbound freight costs.

Boohoo added that it expected these pandemic-related external factors to continue into the current year.

Shares were down 14% at 68.5p.

11am: FanDuel drives Flutter

FanDuel logo

Fantasy sports betting firm FanDuel continues to drive growth for gambling giant Flutter Entertainment.

Revenue for the group, which also owns Paddy Power and Betfair, rose 6% in the first quarter although it was down by 8% in the UK and Ireland.

Chief executive Peter Jackson said: “In the US we had another exciting quarter as FanDuel continued to deliver unparalleled scale, with the US accounting for over half of all stakes for the Flutter Group in Q1.”

The US remains a strong market for the gambling company as the ban on online betting there was lifted in 2018 following long battles between legislators and the original management of FanDuel which was established in Edinburgh and retains significant development offices in Scotland.

Flutter retained its leading position in the market with a 37% share, however, this has dropped from 40% share at the end of 2021.

7am: Aston Martin boss departs


Aston Martin CEO Tobias Moers is leaving the company “by mutual agreement” with immediate effect after just two years at the helm and has been replaced by ex-Ferrari CEO Amedeo Felisa, 76, who has been a non-executive director at the company for the past year.

The company has also appointed the experienced engineer Roberto Fedeli  as chief technical officer.

In the three months to the end of March, the company said retail customer demand continues to run ahead of wholesales, with GT/Sports sold out for the year.

Full story here

7am: Joules CEO leaves

Chief executive Nick Jones is to leave high street chain Joules during the first half of the group’s next financial year.

The company, which also issued a profits warning, said that during Mr Jones’ tenure it has achieved several key strategic milestones, including the launch and expansion of Friends of Joules.

In an update on trading, it said the group has continued to deliver strong revenue growth, of approximately 20% for the 13 weeks to 1 May. However, market conditions have become more challenging during and following the Easter period as consumer confidence has been impacted by the rising cost of living.

“Joules has not been immune to these sector-wide pressures, which have led the group’s profit performance to fall below management’s expectations.”

7am: Wetherspoon returns to profitability

Pubs group JD Wetherspoon has returned to profitability and to a positive cash flow, and is cautiously optimistic about the prospect of a return to relative normality in FY23, said chairman Tim Martin.

For the 13 weeks to 24 April like-for-like sales fell by 4%, in comparison with the same period in FY19. Year-to-date like-for-like sales were 6.2% lower.

6am: Mixed picture on optimism

Overall business sentiment remained positive in Scotland in the first quarter, with all core indicators, except export activity, remaining optimistic. However, there are a number of worrying headwinds.

Full story here

Global markets

US markets were up for a second day following a brutal April and ahead of the US Federal Reserve’s monetary policy commentary today.

The S&P 500 closed 0.48% up, the Dow Jones Industrial Average added 0.2% while the Nasdaq Composite edged 0.22% higher.

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