The FTSE 100 rose on Wednesday after a a strong session in the US overnight driven by central bank expectations.

The FTSE 100 had edged up 0.2% to 7,786 at the time of writing.

Nervousness earlier in the week has been replaced by mild optimism the Federal Reserve and Bank of England would soon start to slow the pace of their rates hikes, and could even cut rates towards the end of the year.

The prospect of easier monetary policy buoyed US stocks overnight where the S&P 500 closed up over 1%.

“The FTSE 100 moved higher on Wednesday morning, with today’s trading session in London sandwiched by strong gains on Wall Street overnight and the US Federal Reserve’s decision on interest rates later,” said AJ Bell investment director Russ Mould.

“A lot is riding on the Fed dialling back the pace of rate hikes to 25 basis points and there will also be plenty of attention on the surrounding messaging from chair Jerome Powell and his colleagues. Helping the market’s mood on Tuesday was data that revealed slowing US wage growth, another signal that inflationary pressures have peaked.”

GSK

GSK, formerly known as GlaxoSmithKline, dipped slightly on Wednesday after the pharma giant reported strong sales growth for 2022. GSK shares had been bid up over the last week and the numbers proved to be lacking the punch to keep the rally going through the trend line in a downtrend started in December.

“GSK, or Glaxo as market greybeards still know it as, reported underlying sales growth of 13% for the year just ended. Currency moves pushed the reported numbers up even higher,” said Steve Clayton, head of equity funds at Hargreaves Lansdown.

“Growth was driven by specialty medicines, up 29% and HIV treatments, 12% higher. The rest of the portfolio saw strong gains also from oncology and immuno-inflammation treatments.  Blockbuster shingles vaccine, Shingrix was the star of the show, delivering £3bn of sales, up 72%. The group currently has a pipeline of 69 treatments, 19 of which are in late-stage trials. Underlying earnings jumped by 18% to 110.8p.”

Entain

Entain was among the best performers on Wednesday following a record fourth quarter helped by growth in their US business and the World Cup.

The company also completed a number of European acquisitions which promise top line growth in 2022.

The news that in the last few weeks Made Tech Group (LON:MTEC) has been awarded a massive £27m of new contracts by the Government, emphasises its potential to create sizeable profits in the coming year.

The £40m capitalised group is a specialist provider of digital, data and technology services to the UK public sector, enabling central government, healthcare and local government organisations to digitally transform.

The new contract wins are with the DVLA for £14m, the Department for Levelling Up, Housing and Communities for £8m and finally with the Cabinet Office for £5m.

Interim results due in next few weeks

Ahead of announcing its interims on Thursday 23 February the group issued a Trading Update declaring a strong first-half performance for the six months to end November 2022.

Group revenue was up 76% at £20.6m (£11.7m) while adjusted EBITDA was £0.5m (£1.2m), due to delayed bid submissions and ongoing project work.

The group had a net cash position of £9m, while its contracted order backlog at the period end was 53% up at a record £47.8m (£31.3m).

Going forward the group’s Board has confidence in its growth prospects, having right-sized its headcount, having reduced contractor numbers by 10% and improved cost controls.

CEO Rory MacDonald stated that:

 “We are delighted to have delivered another period of strong growth. It is pleasing to note that our contract sizes continue to grow as we become more established in the market. 

These wins, together with the new Home Office contract announced in November 2022, demonstrate Made Tech’s ability to deliver digital technology successfully, and highlight the strength of our reputation in this growing market. 

As a result, the Group remains on track to meet market expectations for the full year and deliver value to shareholders over the long term.”

Analyst Opinion – the most important indicators are flashing green

Analysts at Singer Capital Markets rate the shares as a Buy, looking for 76p a share.

Their estimates for the current year to end May are for £43.0m (£29.3m) revenues, with adjusted pre-tax profits rising to £3.4m (£2.3m), generating 3.4p (2.3p) per share of earnings.

For the next year they go for £50.0m sales, £4.1m profits and 2.6p earnings.

Conclusion – 40p for 2023 an easy objective

With its shares now trading around the 27p price level they are offering attractive upside, with 40p being an easy 2023 objective.

The World Cup helped drive a record fourth quarter for betting company Entain. Gaming revenue jumped 11% in the period as punters turned to their betting apps during the unusual winter football competition.

The company also pursued global expansion with acquisitions in Croatia and the Netherlands, and the continued roll out across the United States.

“Entain saw record fourth quarter gaming revenue and a spike in active customers as the winter World Cup gave punters plenty to sink their teeth in to. It’s no real surprise to see annual figures heavily biased toward the retail division growth, as performance laps times when betting shops were shut due to lockdowns,” said Matt Britzman, equity analyst at Hargreaves Lansdown.

“There were always concerns that the lockdown-induced boom for online betting would simply shift back to physical stores, but that doesn’t seem to be the case – online revenue is down a touch but remains well ahead of pre-pandemic levels.”

Britzman highlighted the importance of Entain’s US business and their joint venture with MGM.

“BetMGM, the joint venture with MGM in the US, remains a shining star. Recent performance beat expectations and cash profit should start to flow as we move into the second half of the year. The real question here is how long this will remain a joint venture, it seems unlikely both parties will want to continue their US gambling exposure in its current form indefinitely. If we had to put money on it, a bid from MGM to take full control looks the most likely outcome – time will tell.” Britzman said.

CLIQ Digital, the streaming services and digital marketing company, have achieved record sales and earning in 2022 as their memberships hit an all-time high.

CLIQ’s 2022 preliminary results exceeded both the management’s outlook and market expectations.

The streaming company’s FY 2022 sales surged 84% to €276m and helped EBITDA grow to €44m, up from €27m last year. The robust financials were driven by a 45% increase in members to 1.9 million.

“2022 was another fantastic year for CLIQ with record memberships, sales and earnings as well as the introduction of cliq.de – our new and most advanced streaming service tailored to the German market,” said Luc Voncken, CEO.

CLIQ Digital employs direct to consumer performance marketing campaigns to cost effectively win new members. Paying testament to CLIQ’s prowess in securing new customers efficiently, 2022’s marketing spend more than doubled to €112m, and CLIQ still produced record high sales and earnings.

CLIQ believes their marketing model will continue to produce strong results in 2023 and expects sales to exceed €345m with further increases in EBITDA.

CLIQ Digital dividends

CLIQ’s success has translated into bumper distributions for shareholders. CLIQ doubled their distributions to shareholders through dividends in 2022 and currently yields around 3.2%.

Despite paying sharply higher dividends, the company has increased their cash position which will allow for further investment in growth going forward.

“CLIQ concluded the year with the highest net cash position in the Group’s history, whilst also having paid record dividends. Despite macroeconomic headwinds, we continue to see a strong market for our streaming services,” said Ben Bos, member of the Management Board. 

Tekcapital shares rose in early trade on Tuesday after their portfolio company MicroSalt announced their low-sodium salt shakers will be stocked in additional stores in the US.

MicroSalt will partner with Giant Foods who operates 160 stores across the Delaware, Washington DC, Maryland, and Virginia. Giant Foods’ current product mix is aligned with MicroSalt’s mission to provide healthy low-sodium salt shakers that can help fight cardiovascular disease.

The Giant Food’s partnership adds to a recent commercial agreement with Prestly Foods and expands their footprint across US retail outlets. MicroSalt are stocked in over 2,000 Kroger supermarkets in the US.

Tekcapital shares jumped 5% to 18.8p following the announcement on Tuesday.

“We are extremely excited that Giant has joined with us to provide low sodium solutions to its customers. This is a tremendous step in our march toward reducing excess sodium consumption. Our MicroSalt shakers empower consumers to salt their food to taste with less sodium,” said Rick Guiney, CEO of MicroSalt.

MicroSalt are gearing up for an IPO this year after appointing Zeus Capital as their NOMAD for an AIM listing.