AO World joined a number of UK retail companies releasing reasonably positive trading updates ahead of the Easter weekend.

The group said revenues for FY2024 would be £1.04bn – roughly 10% lower than 2023 but in line with the group’s guidance provided in late 2023.

AO World said it saw adjusted profit before tax at the top end of the previously guided £28-£33m range.

“I’m pleased with the clear progress that we’re making after pivoting our focus to profit and cash generation during the 2023 financial year. As we expected at our half year results, we returned to revenue growth in our core business during Q4 and, as a result, we’re entering the new financial year with good momentum,” said John Roberts, CEO and Founder of AO World.

“With net funds on our balance sheet and a clear plan, we remain confident in our ability to deliver on our ambition for 10-20% revenue growth in the year ahead and medium-term profit guidance of 5% adjusted PBT margin.”

JD Sports has released an upbeat FY2024 trading update confirming strong growth in North America, Europe, and Asia helped by new store openings.

The company said FY24 Profit before Tax and Adjusted Items would fall within the previously guided range of £915-935m. Total FY24 sales grew 3.6% to £10.5bn and JD maintained robust gross margins at 47.3%.

JD Sports opened a total of 215 stores globally in the period boosting organic growth across all geographical segments.

The company saw North American organic sales grow 9.3% over the full year while like-for-like sales increased 2.1% in Q4.

Q4 wasn’t great for the UK and Ireland with like-for-like sales down 3.2%. Organic sales grew 1.5% in the full year.

Trading in southern Europe was strong, helping offset weakness in northern Europe as organic sales surged 15.3% higher over the full-year period.

“In our FY24 financial year, we outperformed the sportswear market, reflecting the strength of our business. We achieved like-for-like sales growth of over 4%, organic growth of over 8% and our athleisure fascias achieved organic growth of over 10%,” said Régis Schultz, CEO of JD Sports Fashion.

“We made good strategic progress, opening 215 new JD stores, and focusing our effort on developing JD and enhancing EPS through taking full control of ISRG and MIG. We expect profit before tax for the year to be in line with the guided range given in January.”

JD Sports has previously missed a self-set £1bn profit before tax target and investors will be disappointment to see group guide for £900-980m profit before tax in 2025.

That said, any form of sales growth in the year ahead given the downbeat economic projections in key markets will be welcomed by investors after years of remarkable growth.

Donald Trump’s Truth Social made a rip-roaring start to life as a publicly traded company under the name The Trump Media & Technology Group yesterday.

The stock traded as high as $79.38, valuing it at around $10bn. It closed the day at $58.

It is being likened to a meme stock in as far as fanatic Trump supporters are clubbing together to buy the stock out of their love for Trump as opposed to the prospect of shareholder returns.

The fundamental argument for shorting The Trump Media & Technology Group is compelling. The company only generated $3.3m in revenue in the first nine months of 2023 and lost $50m.

Last night’s closing price gives Trump’s social media company a price-to-sales ratio of around 2,400x. This is eye-wateringly high compared to another recent social media listing, Reddit.

As Hargreaves Lansdown’s Susannah Streeter details below, there is a monumental disparity between the two in terms of valuation on both an earnings basis and per user.

“There is likely to be significant volatility ahead as a share buying frenzy among his supporters may wane, and investors dig deeper into the fundamentals. Truth Social now has a market cap of just shy of $8 billion with around 5 million active web and mobile users,” Streeter said.

“By contrast Reddit, which went public last week now has a market cap of $10.3 billion but has 73 million active users, a number that’s steadily increased over the years. The floatation will mean $300 million can be poured into the platform, which is set to serve as a pulpit and willing audience for his electoral sermons but it’s hard to see where growth will come to justify this price tag.”

Trump is locked in for six months. One would think that as this date approaches, traders and investors would sell the stock in anticipation of Trump doing the same at his first opportunity.

But this is the United States we’re talking about. Technology stocks thrive with little attention paid to short-term earnings-based valuations. US markets have the ability to look past any short-term losses to the long-term growth story.

However, the disconnect between Truth Social’s valuation and its peers and the wider market isn’t likely to last for long as traders dive in on the opportunity to short the stocks and take it back down to a more sensible valuation.

In addition, the general operating environment for a new social media platform is challenging given the loyalty users have for existing platforms and the lack of innovation Trust Social offers.

“The site will have its work cut out to compete against more established platforms which keep attracting eyes on screen due to the network effect of already having high numbers of users,” Susannah Streeter said.

The Lloyds share price has had a good run but now poses a problem for investors as it resides around the key resistance level of 50p.

Lloyds shares have consistently failed in the 50p region over the past two years, with only a brief foray to 54p back in early 2022.

The 50p level for Lloyds is reminiscent of the Lord of the Rings scene in which the grey wizard Gandalf fights off a fire-breathing monster declaring ‘You Shall Not Pass’.

Yet, the stock has broken through the 50p mark and trades at the dizzy heights of 51.6p. From a technical perspective, the bulls will want to see a retest of the psychological 50p mark before concluding Lloyds shares can continue to trend higher.

Lloyds is entrenched in a trading range between 40p and 50p and it’s going to take an awful lot to see it break convincingly in either direction. 

The direction of Lloyds—and other UK banks—will be dictated by the wider macro environment. As both a direct facilitator and beneficiary of the UK economy, the ongoing resilience of the UK property market, inflation, and consumer strength will decide whether Lloyds will touch 60p or 40p next.

The Lloyds dividend is a huge attraction that prevents it from breaking below 40p and the lingering fears of a soft UK economy caps the Lloyds share price at 50p.

The macroeconomic picture isn’t on Lloyd’s side. Although it has navigated the cost-of-living crisis largely unscathed, its profit growth has been enhanced by the higher interest rate environment, which will end this year. 

Lloyds profits won’t fall off a cliff because rates won’t go back to near zero, but lower rates will act as a significant headwind. Ultimately, it will come down to the timing of interest rate cuts and the state of the UK economy at that point.

In reality, Lloyds has become a trader’s dream, and those inclined to seek out shorting opportunities will be licking their lips at the prospect of opening a position in the 50p region.

That said, a major break above 50p and a successful retest of that level could open up the doors to 60p.

As the Bank of England reminds us, they are data-dependent. The economic data the BoE relies on for its interest rate decisions will determine Lloyds’ share price performance and must be watched closely.

The FTSE 100 was trading almost flat in mid-afternoon trade in London as fresh concerns about US-Chinese relations hit sentiment.

Investors held back from launching an attack at the FTSE 100’s record highs above 8,000 after news broke of a Chinese cyber hacking campaign that targeted millions of US citizens. The index traded at 7,924 shortly after 2pm.

“The wait and see mood on the markets is continuing with recent exuberance fading, as investors look ahead to key consumer inflation data stateside, while they assess the implications of the latest ‘chip wars’ between the US and China,” said Susannah Streeter head of money and markets, Hargreaves Lansdown.

While the cyber attack, in isolation, has little direct economic consequence, the geopolitical implications will be a concern after China said it would not permit US chips in its government’s systems.

“Shares in a number of semi-conductor specialist Advanced Micro Devices and Intel slipped after Beijing signalled that foreign company chips would be phased out of government computers and services and replaced with home produced versions,” Streeter said.

“This latest chip skirmish isn’t not going to stop the AI juggernaut in its tracks, but it highlights one of the risks ahead for demand in the world’s second largest economy.”

Concerns about Chinese demand inevitably hit the FTSE 100 and the China-centric mining sector.

“Mining stocks were helping to clip the wings of the UK market amid growing tensions between major commodities consumer China and the West over hacking by Chinese spies,” said AJ Bell investment director Russ Mould.

Kingfisher was the FTSE 100’s top gainer as the DIY retailer continued yesterday’s rally on hopes the worst of the falling revenue is behind them.

Ocado was 2.5% higher after the company announced positive sales in its retail partnership with Marks & Spencer.

Autotrader fell 5% and was the FTSE 100’s top faller after Goldman Sachs cut its price target.