Morocco-based potash project developer Emmerson (LON: EML) has extended bank mandates for a further 12 months until the end of 2024. Emmerson is still waiting for government approval of its Environmental and Social Impact Study for the Khemisset potash mine. Emmerson has been assured that there are no further significant issues. The share price declined in the previous week, but that was more than made up for by a 54.5% increase to 2.24p.

Armstrong Investments has reduced its stake in Rosslyn Data Technologies (LON: RDT) from 7.1% to 4.6% following recent share price strength. The stake was increased to 7.1% at the end of October 2023 when the share price was around two-thirds of the price at the end of the week, which was up 43.5% to 20.3p.

Great Western Mining (LON: GWMO) says its 50/50 joint venture Western Mining has completed construction of a mill in Nevada, which will begin processing at 35t/day and ramp up to 200t/day. This will process pre-mined gold and silver material. A study of geochemical signatures of granites is being conducted at the porphyry target at the Huntoon Valley. The share price is two-fifths ahead at 0.0525p.

Plant monitoring technology developer Light Science Technologies (LON: LST) published a positive 2023 trading statement. Cost savings have helped to halve the pre-tax loss of £1.3m on revenues rising from £8.2m to £9.3m. Contract electronic manufacturing remains the largest sales contributor, although controlled environment agriculture products are growing in importance. The share price improved 23.4% to 2.9p – just below the high for the year so far.

FALLERS

Mercantile Ports and Logistics (LON: MPL) says some trading activity was deferred last December. Cavendish reduced its 2023 revenues forecast from £6.9m to £5.4m. Coal import to the Karanja port were lower because of destocking. The loss will be higher. Management hopes to replace the current debt facilities with a new facility with lower interest charges. Buying by directors did not help the share price. Non-exec John Fitzgerald acquired 624,419 shares at 1.5725p each and Dmitri Tsvetkov bought 617,360 shares at 1.62p each. The share price slumped 45.7% to 1.52p. The June 2023 fundraising was at 3p.

Oil and gas producer Nostra Terra Oil & Gas (LON: NTOG) is raising £300,000 at 0.12p/share and using the cash to fund drilling opportunities at Pine Mills in East Texas, where previous wells have made a good return. There are plans to add to acreage in the region. The share price fell 40.6% to 0.1025p.

UK Oil & Gas (LON: UKOG) has raised £750,000 at 0.02p/share. The company intends to submit an application in the first hydrogen storage allocation round for its hydrogen storage project in Portland, Dorset. The cash will also fund oil and gas exploration in UK and Turkey. The share price slipped 29.6% to 0.019p.

Touch sensors manufacturer Zytronic (LON: ZYT) reports a 30% decline in full year revenues to £8.6m and it fell back into loss. Gross margins were hit by higher raw material costs and product mix. Sales continue to decline this year. There are signs that there could be improvement in the second half. Net cash is £4.7m. The share price declined 28.1% to 57.5p.

The FTSE 100 reversed some of yesterday’s losses after hotter-than-expected US CPI data raised questions about the timing of the Federal Reserve’s first rate hike.

European stocks finished yesterday’s session deep in the red, but a late rally in US stocks from their worst levels boosted sentiment on Friday. Comments on inflation by the European Central Bank’s President also helped ease concerns about interest rates.

“Wall Street managed to avoid a big sell-off despite hotter than expected US inflation figures reducing the chances of interest rates being cut as soon as March,” said Russ Mould, investment director at AJ Bell.

“European shares raced ahead at the end of the week as investors focused on comments from European Central Bank (ECB) President Christine Lagarde who implied the worst was over with inflation in Europe, stoking hopes for rate cuts from the ECB.”

Oil jumps

Although UK GDP growth for November came in better than expected at 0.3% compared to estimates of 0.2%, the real driver of the FTSE 100 on Friday was higher oil prices and gains for oil majors Shell and BP.

The two added a substantial number of points to the FTSE 100 index as Brent oil jumped over 3% to $80.29. The UK and US launched a wave of attacks on the Houthis in Yemen, sending oil prices soaring higher on concerns about supply disruption in the region.

“Iran has captured an oil tanker off the coast of Oman in response to sanctions, according to reports. Air strikes on Houthi targets in Yemen have also increased anxiety,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

Burberry

Burberry was the FTSE 100’s biggest casualty on Friday after the luxury brand released disappointing sales numbers for the 13 weeks to 30th December 2023. Sales in the Americas and EMEA were abysmal, and Burberry’s reported revenue fell 7% amid a broader decline in luxury demand.

Burberry shares were down 8% at the time of writing.

JD Sports was the top riser, gaining 3%, with shares at 110p proving too attractive for bargain hunters. JD Sports is still the worst performer of 2024, declining 31%, after issuing a warning on profits last week.

Housebuilder Vistry shares slipped on Friday despite an upgrade to their guidance and revealing completion rates that placed them at the top of the FTSE 100 housebuilder sector.

This week has seen several strong performing shares be subject to a wave of profit taking despite reasonably good trading updates.

On Friday, it was Vistry’s investors turn to book profits after a bumper Q4 share price performance.

“Better than expected economic growth during November in the UK gave support to the FTSE 250 index as approximately half of its constituents are seen as domestic plays. Housebuilders and real estate groups led the way with the biggest contributor to the FTSE 250 in terms of index points being Vistry,” said Russ Mould, investment director at AJ Bell.

“Previously known as Bovis Homes, Vistry came across as more upbeat than most of its peers in a trading update and said 2023 pre-tax profit would beat previous guidance.”

Vistry said full-year performance would be ahead of prior guidance for FY2023 and will be in line with FY2022’s £418.4m profit before tax.

Completions for the fell 5.4% to 16,124 units, this compares to Persimmon’s 33% drop in completions.

“The Group had a strong run into the year end and I’m pleased to report that adjusted profit before tax for FY23 is anticipated to be ahead of guidance.  Our FY23 performance has demonstrated the resilience of Vistry’s unique Partnerships model,” said Greg Fitzgerald, Chief Executive of Vistry.

“Our forward sales of £4.5 billion is up 12.4% on prior year and positions us well to deliver a step-up in total completions in FY24 and make progress towards our medium-term targets and the return of £1bn of capital to shareholders.”

Burberry shares sank on Friday after the luxury retailer cut profit guidance after a poor end of year trading period.

Falling sales in the Americas and EMEA culminated in a 7% drop in reported revenue.

Investors will be concerned whether falling sales are primarily a result of a general slowdown in the luxury sector or if Burberry’s brand is losing its appeal. Today’s announcement doesn’t provide enough information to determine the factors behind falling sales and upcoming results will be poured over for comparisons against their peers.

Nonetheless, the drop in sales meant the group revised its operating profit guidance for the year down to £410m to £460m. The fashion brand has set itself a £4bn full-year revenue target which looks a long way off after today’s update.

Burberry shares sank over 10% to 1,221p in mid-morning trade on Friday.

“So much for the roaring twenties. The idea that wealthier individuals would completely brush off inflation and the cost-of-living crisis has been thrown in the bin. No sector is entirely immune from such pressures and over the past six months or so we’ve seen cracks appearing in the luxury goods sector as demand wanes,” said Russ Mould, investment director at AJ Bell.

“Burberry already flagged problems two months ago and now it says trading has seen further deceleration, meaning full-year results will miss expectations. The Americas and South Korea are the biggest problem areas for the group, judging by store sales trends.

“So, what can it do? Unlike your average fashion retailer, it is simply not the Burberry way to slash prices and hope bargains lure in shoppers. The luxury goods scene is about trying to make consumers want to have something exquisite and premium priced to give the illusion that it is only available to the elite. Discounting would tarnish the brand. Therefore, Burberry has no choice but to ride out the storm until the wealthier are feeling confident enough to splash the cash once more.”

The FTSE 100 fell on Thursday as traders digested US CPI inflation data that dampened hopes of a Federal Reserve interest rate cut in March.

The FTSE 100 had been substantially higher earlier in the session before the rally faded and gains turned to losses. London’s leading index was around 0.5% lower shortly after US cash equity trade began on Thursday.

US CPI for December came in at 3.4% compared to expectations of 3.2% and higher than the 3.1% November reading.

“US CPI came in higher than expected on both a headline and core basis. These latest figures could give fuel to the hawks and reinforce both the USD strength and rise in US yields we’ve seen so far in 2024,” said Ryan Brandham, Head of Global Capital Markets, North America, at Validus Risk Management.

There was little movement in both UK and US equity markets after the data hit the wires, suggesting that although hotter than expected reduced the chances of a rate cut in March, it didn’t completely rule it out. However, as US trade got underway, stocks on both sides of the pond sank.

“Markets had all but declared the battle with inflation over in the final few months of 2023, but these readings add weight to the argument that the final efforts to get inflation down to target may be trickier than expected. The inflation figures are compounded by stronger than expected initial jobless claim figures, coming in at 202k for December, compared to expectations of 210k,” said Dan Boardman-Weston, Chief Executive at BRI Wealth Management.

“It is still likely that the Federal Reserve will start cutting rates in the coming months, in the face of a slowing economy and further progress on inflation, but markets may need to readjust their assumptions as to the timing and quantum of interest rate cuts during 2024.”

FTSE 100 movers

Marks & Spencer was the FTSE 100’s top faller after the group said food sales rose 10% during the festive trading period but held off increasing profit guidance for the full year.

Marks & Spencer investors took the cautious tone as an opportunity to book profits after a strong run, and shares were down more than 4% on Thursday.

“Shares in Marks & Spencer rallied in the days before the results as investors looked at strong updates from Aldi and Lidl, plus a resilient showing from Next, and concluded that M&S could also do well,” said Russ Mould, investment director at AJ Bell.

“The shares have given back some of those gains on the trading update as investors with a ‘better to travel than arrive’ mindset bank some profits. There are also enough words of caution in the update to stall momentum in the share price.”

Tesco also released a solid set of results on Thursday and followed the ‘buy the rumour, sell the fact’ playbook with minor losses.

Whitbread was the top gainer after releasing stellar Q3 results and saying accommodation sales were now 39% ahead of pre-pandemic levels. Whitbread shares were 3% higher.

“The owner of the UK’s largest hotel chain has plenty to celebrate as it heads towards the end of its financial year. In the UK Premier Inn’s rooms on average generated 9% more in the third quarter than they did in the comparable period, some 39% ahead of pre-pandemic levels,” said Derren Nathan, head of equity research at Hargreaves Lansdown.

Whitbread shares jumped on Thursday despite a slight dip in quarter-on-quarter occupancy to 84.9% as the UK’s largest hotel business’s income rose 39% above pre-pandemic levels in Q3.

Whitbread’s shares were up 3% at the time of writing on Thursday.

Whitbread’s Premier Inn achieved an 11% surge in total accommodation sales, driven by robust demand in both London and the regions.

The total revenue per available room exhibited 9% growth and an outstanding 39% increase compared to FY20, marked by high occupancy rates and robust pricing.

“But there were a few signs that Whitbread is having to work a little harder to keep its room full. Quarter-on-quarter occupancy fell over a percentage point to 84.9%. And whilst London room rates only nudged down a fraction, compared to the second quarter, they dropped by 11% in the UK regions. In Europe, expansion of the German business is continuing to plan, and Germany’s expected to hit the break-even point at some point in 2024,” said Derren Nathan, head of equity research at Hargreaves Lansdown.

Nevertheless, “Whitbread looks to be well on track to meet forecasted operating profit growth of nearly 25% in the current financial year, but going forward, the comparatives will be a lot tougher,” added Nathan.

Meanwhile, in Germany, total accommodation sales soared by an impressive 61% compared to FY23, aligning with Whitbread’s guidance of a pre-tax loss between £30 million and £40 million for FY24.

“Our teams have delivered another strong set of results,” said Dominic Paul, Chief Executive of Whitbread. “In the UK, we continued to see robust demand for our hotels, driving high levels of occupancy and strong pricing. Our focus on delivering a high-quality proposition at a great price has meant that Premier Inn UK has continued to outperform the M&E market. In Germany, we performed well in what is an important trading period with a large number of leisure and business events; we remain on course to break even on a run-rate basis during the calendar year 2024.”

“We continue to execute against our strategic priorities at pace, and given the structural shift in UK hotel supply, positive current trading, a clear commercial plan, and our ongoing focus on driving cost efficiencies, we remain confident in the outlook,” Paul added.

Looking ahead, “cost growth guidance of between 3 and 4% for next year doesn’t provide too much cause for concern and should allow some flexibility in pricing. A slowing economy may present some challenges,” said Derren Nathan.

“But Whitbread is a best-in-class operator with the financial strength to take advantage of growth opportunities while supporting dividend payments and the current share buyback plan,” he added.