Market Report

Financials flat | B&M bucks dull retail | Hays | Mattioli Woods


Glasgow IFSD

Recruitment firms and asset managers led 0.13% dip in the FTSE 100 to 7,683.96 points with some disappointing economic figures adding to investors’ concerns.

The fourth quarter of 2023 saw financial services business volumes contract for the first time since June 2020, according to the latest CBI Financial Services Survey. Volumes are expected to be broadly flat over the next three months.  

The survey, conducted between 21 November and 15 December, also showed that optimism and profitability were both flat across the quarter, with profitability set to fall in the three months to March. Headcount growth accelerated over the quarter and is expected to remain quick in the months ahead.  

There was a mixed picture for investment intentions, with firms expecting to increase investment in IT and vehicles, plant & machinery, while cutting back on capital expenditure in land & buildings. Notably, this was the first survey since December 2014 in which FS firms expect to increase investment in vehicles, plant & machinery. 


B&M bucks dull Christmas

B&M

Value chain B&M closed back in the red by the close, finishing down 0.43% despite posting a 5% increase in group revenue to £1.645 billion in its golden quarter as shoppers switched to bargain stores in the run up to Christmas.

In the 13 weeks to 23 December, sales at B&M and Heron Foods in the UK rose by 3.7% and 11.7% respectively. In addition, B&M UK like-for-like revenue grew by 1.2% in the 14-week period to 30 December to mark a strong performance given prior year comparatives.

The retail sector as a whole finished 2023 on the back foot, industry data showed, despite a modest uptick in demand in the week leading up to Christmas.

According to the latest BRC-KPMG Retail Sales Monitor, UK total sales increased by just 1.7% in the five weeks to 30 December, compared to a 6.9% rise a year previously.

Total retail sales in Scotland increased by 1.9% compared with December 2022, when they had grown 11.3%. Adjusted for inflation, there was a 2.4% year-on-year decline. The 2022 figure was inflated by consumers returning to shops as lockdown measures ended.

David Lonsdale, director of the Scottish Retail Consortium, said: “There was little Christmas cheer for Scotland’s retailers as the value of retail sales in real terms dwindled in December.

“The shine came off the ‘golden quarter’ of trading in the final three months of 2023 as once again what growth there was in sales was outpaced by rising shop prices.

“Despite a surge in last minute festive purchases and discounting by retailers, overall shoppers continued to pare back spending as concerns lingered over the cost of living and higher mortgages.”


Hays

Recruitment company Hays slid 7.61% after it issued a profit warning, citing a slowdown in hiring activities.

It is forecasting a first-half pre-exceptional operating profit of about £60 million, below market expectations, as hiring slowed down at the end of the December quarter.

In an update it said UK & Ireland fees were down 17%, with Temp down 13% and Perm slowing through the quarter, down 21%.

“Given increased uncertainties and reduced client and candidate confidence, our New Year ‘return to work’ will be particularly important in FY24, and we are closely monitoring activity levels,” it said.

“It is too early to say if December’s weakness reflects a more sustained market slowdown, or shorter-term deferrals of client and candidate decision-making.

“However, we expect near-term market conditions to remain challenging. Consequently, we accelerated our cost reduction and efficiency programmes, while focusing on increased operational performance and rigour.”


Mattioli Woods

Specialist wealth and asset manager Mattioli Woods, which owns Glasgow-based Maven Capital Partners, closed 5p (0.83%) higher at 590p after saying revenue for the six months ended 30 November 2023 was up 8% to £59.1m (1H23: £54.9m).

In a trading update it said performance was resilient against a challenging macroeconomic backdrop. Organic revenue grew 4%, with a robust new business pipeline. The firm acquired 374 clients with an asset value of £82.2m.

Total client assets of the Group remained stable at £15.2bn (2023: £15.3bn) with a reduction in assets driven by £155m in downward market movements.

Mattioli Woods will announce its interim results on 6 February.


GSK acquisition

GlaxoSmithKline has acquired San Francisco based Aiolos Bio, a clinical-stage biopharmaceutical company focused on addressing respiratory and inflammatory conditions. The deal involves a $1 billion upfront payment and up to $400 million in certain success-based regulatory milestone payments. Shares closed 1.67% higher.



Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.