BOE's Policy Guidance Seen as Key For Sterling

BOE's Policy Guidance Seen as Key For Sterling

1003 GMT - The Bank of England may deliver a widely-expected interest-rate rise of 25 basis points to 4.5% on Thursday but its guidance about future policy will determine sterling's direction, Bank of America says. "With markets pricing rate hikes that extend beyond the upcoming BOE meeting, the GBP focus will likely be on the BOE communication--whether the BOE agrees with market pricing, or how strongly it pushes against it," BofA analysts say in a note. The BOE may reiterate that it could raise rates further on any signs of inflation persistence but it's likely to finish lifting rates after Thursday given concerns about the effect of past rises, potentially weighing on sterling along with risk aversion in coming months, they say. ([e-mail])

 
Companies News: 

Harbour Energy Backs 2023 Guidance After Strong Start to Year

Harbour Energy on Wednesday reiterated its production, cost and capital expenditure guidance for 2023 following a strong start to the year.

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Compass Group Raises FY 2023 Guidance After 1H Profit Rose; Announces GBP750M Buyback

Compass Group PLC said Wednesday that it is upgrading its guidance for fiscal 2023 after first-half pretax profit rose and that it plans an up to 750 million pounds ($946.6 million) share buyback program.

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Smiths Group Appoints Steve Williams Chair; George Buckley to Retire

Smiths Group said Wednesday that Steve Williams will be appointed chair of the board and that George Buckley will retire from the board at the conclusion of the annual general meeting in November.

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Capita Says Cyberattack Could Cost It Up to GBP20 Mln

Capita PLC said Wednesday that some data was taken from less than 0.1% of its servers in a cyberattack on March 31, which it expects to incur exceptional costs of 15 million to 20 million pounds ($18.9 million-$25.2 million).

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Spirax-Sarco January-April Sales Growth in Line; Sees Double-Digit Sales Growth in 2023

Spirax-Sarco Engineering said Wednesday that organic sales growth in the four months to the end of April was in line with expectations, and that it expects double-digit sales growth in 2023.

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Polymetal 1Q Revenue Rose; Plans to Redomicile to Kazakhstan

Polymetal International PLC said Wednesday that first-quarter revenue rose despite a fall in production and that it was proposing to redomicile to the Astana International Financial Centre in Kazakhstan.

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Live Company Sells Two Underperforming Tours for GBP350,000

Live Company Group said Wednesday that it has sold two underperforming tours--Mythical Beasts and Outer Space-- for 350,000 pounds ($441,735) in staged payments.

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ASOS 1H Pretax Loss Widened on Exceptional Costs, Revenue Fell

ASOS said Wednesday that pretax loss for the first half of fiscal 2023 significantly widened after booking exceptional costs related to its right-sizing plan, and that revenue fell.

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Melrose Industries Revenue for First Four Months of 2023 Rose as Performance Beat Expectations

Melrose Industries said Wednesday that revenue for the four months ended April 30 rose as its performance was materially ahead of expectations, and issued guidance for the year.

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JD Wetherspoon 3Q Sales Rose on Year; Sees FY 2023 Profit at Top End of Views

J.D. Wetherspoon said Wednesday that sales increased on year in its third quarter and that it expects profits for the year to be toward the top of market expectations.

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Union Jack Oil's Wressle Project Surpasses $15 Mln in Revenue

Union Jack Oil said Wednesday that more than $15 million in revenue has been generated at the Wressle hydrocarbon development in Lincolnshire, England, since the restart of production in August 2021.

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Vertu Motors FY 2023 Pretax Profit Fell Despite Revenue Rise

Vertu Motors said Wednesday that pretax profit fell in fiscal 2023, despite revenue rising.

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Cenkos Says 2023 Revenue Holding Up So Far Despite Lower Market Activity

Cenkos Securities on Wednesday said its revenue for the year to date continues to track ahead of the average run rate for the second half of the previous year despite low levels of capital-markets activity.

 
Market Talk: 

ASOS Margins Likely to Improve in 2H

1034 GMT - ASOS reported a worse-than-expected performance in 1H, with U.K. retail sales reporting the largest declines, Shore Capital analysts Eleonora Dani and Clive Black say in a note. However, investors will be eyeing 2H performance as the online fashion retailer will keep its focus on profitable sales and drive efforts to achieve a cleaner inventory position, they add. Expectations include a low double-digit decline in sales, but an increase of approximately 200 basis points in adjusted gross margin, and a 20% year-on-year reduction in inventory, the analysts say. Shore has a sell rating on the stock. ([e-mail])

Compass Group Benefiting From Boosted Catering Outsourcing; Postpandemic Revival

1034 GMT - Compass Group has benefited from the restoration of economic normality following the Covid-19 pandemic and food-service demand has sharply increased thanks to an events revival as well as the return to offices and universities, Interactive Investor's Head of Investment Victoria Scholar says in a research note. Furthermore, the U.K. catering contractor is a beneficiary of increasing outsourcing of catering needs, allowing companies to keep costs low and remain nimble in case of further economic pressures, boosting demand for Compass's outsourced services, she says. Shares in Compass trade up 1.9% at 2,104.00 pence.([e-mail])

Direct Line's 1Q Concerns Look Priced In

1023 GMT - Direct Line still has reasons for optimism, Jefferies says after the car and home insurer's first-quarter results. "Adverse 1Q claims were caused by a spike in severity to clear the existing backlog, which should reduce the strain on damage inflation going forward," analysts at the brokerage say, adding that average renewal premiums rose by almost a fifth on year which indicates it is past the bottom of the cycle, while capital tailwinds also remain. With shares trading at 6 times 2024 forward earnings, the bad news looks largely priced in, they say. Shares are down 29% year to date. ([e-mail])

Direct Line Is Still in the Doldrums

1017 GMT - Direct Line is still in a very difficult trading period with solvency remaining a key risk, meaning investors can't fully discount the risk of a capital raise, Berenberg says after the car and home insurer posted first-quarter results. "Solvency came in below expectations and the lack of an exact figure raises some red flags, in our view. Direct Line has a habit of highlighting things that do not materialise," analyst Thomas Bateman says. The group's warning on damage claims in retail and commercial motor is a worrying signal that means pricing must continue to rise, he adds, calculating a 20% price hike is needed to catch up with inflation. Berenberg rates the stock hold. ([e-mail])

ASOS Transformation Showing First Hints of Progress

1006 GMT - ASOS's first half showed that the group has navigated a challenging backdrop, with revenues down by 8% amid a shift in costumer preferences for physical stores, Interactive Investor Head of Markets Richard Hunter says in a note as shares fall 13%. However, he highlights that the online fashion retailer's transformation program is starting to show some early signs of progress. ASOS identified that it had become inefficient in some regions while some costumers, brands, partnerships and indeed geographies were becoming untenable. "The group has therefore battened down the hatches to drive towards a more sustainable model, with the current priority being profitability over growth," Hunter notes.([e-mail])

JD Wetherspoon Shares on the Up as Pandemic Drifts Away

0953 GMT - J.D. Wetherspoon shares are up more than 70% year-to-date as the coronavirus drifts into the rear-view mirror, its disposals generate cash, and thanks to growing hopes that inflation will finally start to ease, Interactive Investor's head of investment Victoria Scholar says in a research note. The London-listed pub operator has been focusing on streamlining its trading estate, with 21 pub disposals and a further 30 pubs on the market, as it battled a softening consumer environment and rising costs amid the backdrop of labor, energy and food inflation, she says. Shares in the company trade up 4.6% at 779.00 pence. ([e-mail])

Contact: London NewsPlus; [e-mail]

(END) Dow Jones Newswires

05-10-23 0652ET