Market report

Bailey’s rates alert | Mulberry | Moonpig | Simec Atlantis Energy


5pm: Bank hints at larger rate hike

A larger rate hike is “on the table” at the Bank of England’s next meeting on 4 August, its governor said today.

Speaking on a panel at the European Central Bank’s (ECB) forum on central banking in Sintra, Portugal, Andrew Bailey did not rule out a steeper rate rise, possibly by 50 basis points, saying “there will be circumstances in which we will have to do more”.

The FTSE 100 closed slightly lower at 7,312.32, down 11.09 points.

Betting companies bucked a market fall on hopes of a better-than-expected outcome to changes in UK gambling regulation.

In the FTSE 250, shares in online betting and gaming firm 888 Holdings rose 5.5% ahead of a White Paper into gambling reform in coming weeks.

Flutter Entertainment was the best performer, and Entain, owner of Ladbrokes-Coral, was also up.

After energy regulator Ofgem unveiled a £20.9bn package of required investment to boost grid capacity – lower than the £25.2bn expected – National GridSSE and Drax Group climbed.

New evidence emerged of inflationary pressures in the UK. Shop price inflation rose to 3.1% in June, according to the British Retail Consortium. This was up from 2.8% and marks a 13 year high. Food inflation hit 5.6%, the highest in a decade.

7am: Mulberry sales surge


Luxury fashion brand Mulberry reported a surge in profit and revenue following a strong recovery from the Covid-19 pandemic.

Profit before tax came in at £21.3m (2021: £4.6m), which includes a one-off profit on disposal of Paris lease of £5.7m.

Group revenue was up 32% to £152.4m (2021: £115.0m). UK retail sales increased 36% to £89.8m (2021: £66.2m) while China retail sales soared 59%.

The board is proposing a final dividend of 3p (2021: nil).

Thierrhy Andretta, CEO, said: “Whilst the economic and geo-political outlook remains uncertain, we are an iconic international brand with a clear strategy for future profitable, cash-generative growth. We remain well placed to continue to deliver sustainable returns to the benefit of all our stakeholders.” 

Group revenue for the first 12 weeks of the new financial year is 5% ahead of last year. Omni-channel (retail and digital) revenue is down 1%, largely as a result of COVID-19 restrictions in mainland China, including the closure of the majority of stores and the Shanghai distribution centre.

7am: Moonpig confident despite revenue slump


Gift card company Moonpig said adjusted pre-tax profit for the year to 30 April was down 30.9% from £74.7m to £51.5m while group revenue was 17.3% lower at £304.3m as the online sales surge during the pandemic faded.

On a two-year basis revenue grew 75.8%. Adjusted pre-tax profit over the same period is up 55.2% to £51.5m.

The company said it is pleased with the start to the new financial year and remains confident in its existing expectations for trading in FY23.

“Based on the anticipated completion of the acquisition of Buyagift [post period] by the end of July 2022, we expect revenue for the enlarged Moonpig Group in FY23 to be approximately £350m,” it said.

Nickyl Raithatha, CEO, commented: “Our first full year as a listed company has been another transformational period for Moonpig Group – financially, operationally and strategically.

“We have significantly outperformed the targets set out at IPO, and recently announced the proposed acquisition of Buyagift, which will accelerate our journey to becoming the ultimate gifting companion.”

7am: B&M sales down

Discount retailer B&M reported a dip in first-quarter group sales, reflecting a tough comparison with a year-ago period when consumers stocked up during lockdowns.

The FTSE 100-listed firm said its group revenue dropped to £1.16 billion in the first quarter ended 25 June, down from £1.19bn a year ago.

B&M said there were no changes to its outlook, with fiscal 2023 group adjusted EBITDA expected to be in the range of £550m to £600m.

7am: Simec Atlantis Energy

Overall Group losses for the year to the end of December were £74.1 million (2020: £19.4m) as the company admitted to a challenging period that prompted some difficult decisions.

The increased loss is mainly a result of £32m of impairment losses at Uskmouth Power station following the decision in April 2022 not to proceed with the power station conversion.

The MeyGen project generated revenues of £1.6m from the sale of power and Renewable Obligation Certificates.

Green Highland Renewables was sold during the year, providing £3.5m of necessary liquidity.

On 29 September, the company announced a placing which raised gross proceeds of £2.6m through the issue of 104m new shares.

Duncan Black, chairman, commented: “The last 12 months have been a very challenging period for the group in which we have had to make a number of very difficult decisions, however, it has also been a period in which we have been successful in identifying and securing a number of new and exciting opportunities.

“I believe that we end the period with a clear path forward for the group, a significantly streamlined business, and a number of exciting projects under development that will deliver value to shareholders.

Graham Reid, chief executive, added: “We have been presented with many significant challenges, but I am incredibly proud that we’ve overcome most of these and I know we have the team, skills and assets in place to deliver long-term, sustainable growth for our business and you, our shareholders.

“2021 saw the company make some difficult but important decisions. While these have had short-term impacts on the business and our financial statements, I am convinced they are the right decisions which will ultimately deliver value to shareholders in the medium to long term.”

Global markets

US stocks fell for a second day in a row as markets failed to build on last week’s strong rebound from 2022 lows, with investors once again selling off shares amid looming recession fears and new economic data showing that consumer confidence plunged to a 16-month low.

The Dow Jones Industrial Average fell 1.6%, nearly 500 points, while the S&P 500 lost 2% and the tech-heavy Nasdaq Composite 3%.

The Conference Board said that U.S. consumer confidence sank 4.5 points to 98.7 in June, reaching its lowest level since February 2021, indicating slower growth for the second quarter and an increasing risk of recession by the end of the year.

Consumer and tech stocks led the market’s declines, while energy stocks were the only positive sector in the S&P 500.

In Asia, the Japan’s Nikkei 225 index was down 1.0%. In China, the Shanghai Composite was down 0.9%, while the Hang Seng index in Hong Kong was down 1.8%. The S&P/ASX 200 in Sydney was down 0.8%.

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