RS Group, formerly know as Electrocomponets, released their trading statement for the fourth quarter ended March 2023 on Wednesday. The update revealed slowing revenue growth across the group, but the company were confident profit for the year would exceed expectations.

RS Group has a broad product range including electrical and testing equipment, and lines of semiconductors and microprocessors.

All three of their geographies experienced slowing revenue growth in Q4 with sales contracting in the Americas (-4%) and Asia Pacific (-15%) regions. EMEA like-for-like revenue growth slowed to 6% from 12% in Q3. Group revenue grew just 1% in Q4.

RS attributed the poor performance in Asia to Chinese lockdowns and ongoing geopolitical issues, as well as problems in the semi conductor supply chain.

Despite slowing revenue figures, RS Group said they expected operating profit for the year to be ahead of expectations as margin improved slightly.

“Effective execution and the ongoing hard work, enthusiasm and passion of our people has led to a very strong performance in 2022/23 and we anticipate full year adjusted operating profit to be slightly ahead of consensus expectations,” said David Ega, RS Group Chief Financial Officer.

Investors did not share their enthusiasm and passion on Wednesday and shares in the group were down over 4% at the time of writing.

Saga’s IPO at a £2.1 billion valuation seemed a long time ago on Tuesday morning as the company shed another 10% following the release of the group\s preliminary results for the year ending 31st January 2023.

Losses before tax accelerated to £254m from £24m a year prior as a £269m impairment charge to their insurance business destroyed modest underlying profit before tax.

Although, revenue for the year increased to £581.1m from £377.2m as a result of travel bookings bouncing back, concerns about the economic backdrop and insurance business did little to spark optimism among investors.

“Over the past year, through what continued to be a particularly challenging external backdrop, Saga made progress against its strategy while achieving significant revenue growth and returning to underlying profit,” said Euan Sutherland, Saga’s Group Chief Executive Officer.

Underlying profit before tax rose to £21.5m from a £6.7m loss last year.

“The longer the market had to look at Saga’s results this morning the less it liked about them. Yes, in theory the group returned to ‘profit’. But this was an adjusted profit and on a statutory basis losses widened thanks to impairments on its insurance business,” said Danni Hewson, head of financial analysis at AJ Bell.

Hewson continued to explain two big problem’s at Saga – lower cash flow and a big debt pile.

“And cash flow, the one metric which is difficult to massage, was materially lower year-on-year with only a modest reduction in the company’s onerous debt pile.

“Guidance for the insurance business was gloomy and Saga has very little credit in the bank with long-suffering shareholders as it looks to turn around the business.

“In theory Saga’s proposition makes sense. The over-50s are a growing and relatively wealthy demographic who, if they own their homes outright, are less exposed to the recent increases in interest rates.”

Hewson concluded with a damning assessment of Saga time as a listed company:

“However, Saga has never delivered on the promise which accompanied its market listing nine years ago. A series of operational failures have tripped the company up and damaged its credibility.”

The positive impact on the FTSE 100 from a higher oil price started to diminish on Tuesday as attention began to shift back to the wider economy and the next move by central banks.

Yesterday, a surprise OPEC production cut lifted shares in heavy weights BP and Shell. A repeat of those gains was absent on Tuesday and the FTSE 100 underperformed Europe.

The FTSE 100 gave up early gains to trade just 0.1% higher at the time of writing, while the German Dax gained 0.8% and French CAC added 0.5%.

Markets are faced with the decision to either focus on recent robust earnings and relatively healthy economic data, or attempt to predict the next move by central banks. There is also the threat of a US recession.

“The surprise production cut from OPEC+ continues to stoke concerns around inflation, with brent crude trading over $85 a barrel. There are some outside concerns this could encroach on the $100 mark once more, which would have legitimate ramifications for monetary policy and has already led to a reduction in short positions in oil,” said

From a technical perspective, broad equity indices have rebounded from oversold territory following the banking crisis saga and the opportunity to pick up bargains is dwindling.

The completion of this short-term mean reversion trade adds to the lack of clarity on UK stocks’ next move.

This was evident in FTSE 100 stocks on Tuesday with 86 of the 100 constituents moving less than 1% at the time of writing.

Vodafone was the FTSE 100’s top faller as the telecoms group fell 1.4% and hit the lowest levels since mid-February.

Glencore was the top gainer, up 2.2%, after it had its attempt to takeover Teck Resources rejected yesterday. Glencore had offered a 20% premium to Teck’s shares.

“The prospect of mega deals in the mining space has got investors excited, bringing a new lease of life to the sector which had previously been suffering from fears about weaker economic activity feeding through to reduced commodities demand,” said Danni Hewson, head of financial analysis at AJ Bell.

“Glencore led the FTSE 100 higher on Tuesday following its $23 million move on Canada’s Teck at the start of the week. While its business combination proposal was rejected, Glencore is likely to be persistent in its pursuit for greater things which means one cannot rule out a higher offer.

“Teck’s board said it wasn’t contemplating a sale of the business at this time, yet there is a price for everything and so it all boils down to how much Glencore is prepared to pay.”