Market report

Vodafone guides lower | Artisanal warehouse progressing


5pm: London closes lower

The FTSE 100‘s overseas earners struggled with a stronger pound and the index closed 15.73 points lower at 7,369.44.

Sterling rose to $1.1891 in later afternoon trade from $1.1714 late Monday.

Vodafone was also a drag after it lowered its full-year outlook for adjusted EBITDA (see below). It shares fell 7.7%.

Going the other way was Card Factory which jumped 15% after upping annual profit guidance on a better-than-expected second half so far. Speedy Hire shares fell 7.5% as the tools hire services firm reported that its profit had fallen in the first half of the year due to inflationary pressures on its cost base.

7am: Vodafone

Vodafone said annual earnings will come it at the lower end of guidance after posting a 2.6% fall in interim core profits to €7.2bn on a 2% rise in revenue to €23bn.

Lower profits were blamed on underperformance in Germany, its biggest market, and a one-off legal settlement in Italy last year.

Vodafone added that free cash flow would be €200m lower at €5.1bn, while adjusted core earnings would be €15-15.2bn, down from €15-15.5bn.

“We are taking a number of steps to mitigate the economic backdrop of high energy costs and rising inflation.

“These include taking pricing action across Europe, whilst at the same time supporting our most vulnerable customers and driving energy efficiency measures across the business,” said chief executive Nick Read.

“We are also announcing today a new cost savings target of €1+ billion focused on streamlining and further simplifying the group.”

7am: Vacancies hold back recovery

The UK unemployment rate edged up to 3.6% in the three months to September, from 3.5% in August and job vacancies remain at record highs, prompting a business leader to warn that it is hindering recovery.

Full story here

7am: Artisanal Spirits Company

The owner of the Scotch Malt Whisky Society said it is making good progress on construction of its multi-purpose supply chain facility at Masterton Bond, near Glasgow. 

Progressing to schedule and on budget, the site has completed its construction phase and moved to the commissioning phase, and has now commenced initial bottling operations.

The plan is for phased development over the coming months and it is anticipated that the facility will be fully operational during Q1 2023 as planned, providing production, cask storage, fulfilment and distribution of ASC’s whisky and other spirit stock. 

It is anticipated that, once fully operational, this facility will improve operating margins by c.2%, with the initial benefits expected to be gained early in FY23.

Global markets

The US markets fell after China reported slower-than-expected growth in factory output and retail sales for October, as a surge in Covid cases and a deepening property slump weighed on the world’s second largest economy.

At the close the Dow Jones Industrial Average was down 0.63%, the S&P 500 fell 0.89%, and the Nasdaq Composite dropped 1.1%.

Shares in tech giant, Amazon dropped 2% as The New York Times reported it was set to axe 10,000 jobs becoming the latest tech giant to cull its workforce.

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