Cambridge Cognition Holdings shares gained 11.2% to 120.1p in late afternoon trading on Thursday after the company announced a 31% revenue growth to £5.9 million in HY1 2022 compared to £4.5 million in HY1 2021.
The brain health digital solutions firm reported a 44% climb in like-for-like sales to £7.2 million in HY1 against £8.6 million the last year.
Cambridge Cognition Holdings mentioned an increase in contracted order book of £1.5 million since the close of last year to £18.6 million.
The group also highlighted a profit in line with management expectations of £20,000 against £100,000 year-on-year.
The company noted continued growth in cash balances to £8.6 million compared to £6.8 million at 31 December 2021.
Cambridge Cognition Holdings said it had a growing pipeline of opportunities for HY2 2022, with trading conditions remaining positive and high levels of company engagement with existing and new clients.
The group reported an expected annual revenue climb, with its present cash position providing the business with a platform to make new investments as opportunities arise.
The FTSE 100 was down 0.3% to 7,240.4 in early afternoon trading on Thursday as the commodities-heavy index fell on miners and consumer goods, marking a downturn after the FTSE 100’s string of good luck last week.
“Overall, the FTSE 100 tried its best to push ahead at the market open, but momentum was quickly lost,” said AJ Bell investment director Russ Mould.
“Miners [and] consumer goods … dragged the market down, which is a shame after the progress made last week among large cap UK stocks.”
Ocado widens loss in HY1
Struggling online retailer Ocado saw its shares fall 3% to 750.9p after a widened interim loss and a decline in revenue was confirmed in its HY1 report.
Revenue in HY1 dropped 4.4% to £1.2 billion compared to £1.3 billion in HY1 2021, along with a pre-tax loss of £211.3 million against £27.9 million the year before.
“The significant increase in cost of living is having a significant impact on customer behaviour and will be an ongoing challenge for the remainder of the year,” said Ocado in a statement.
Oil falls
The price of oil fell as reports suggested lowered demand from US motorists at the height of summer driving season, as the cost of living continued to bite and petrol prices exceeded consumer tolerance.
Information released by the US administration on Wednesday revealed a rise in American gas inventories to 3.5 million, far in excess of the predicted 71,000 uptick.
Meanwhile, the Nord Stream 1 pipeline resumed gas exports from Russia, easing demand fears after warnings from the EU yesterday flagged concerns that Putin would withhold exports in a bid to “blackmail” Europe in response to its efforts against the war in Ukraine.
Benchmark Brent Crude oil was trading at $102 per barrel, while Shell and BP shares fell 1.4% to 2,021.2p and 1.6% to 381.9p, respectively.
Mining stocks slide
Mining stocks continued to drop as pessimism over China’s poor economic performance and recession fears led to increased worries over a lack of commodities demand.
“China is one of Asia’s key growth powerhouses,” AJ Bell financial analyst Danni Hewson told Capital.com.
“We already knew that growth expectations were being pared back, but the latest GDP figure is the sort of pedestrian number one might expect from a developed Western nation.”
“This doesn’t bode well as recession fears grow in many parts of the world, and it could fuel speculation that China’s commodities appetite may wane if economic activity is stalling.”
Anglo American shares fell 0.6% to 2,588.2p after the mining group announced weaker production in HY1, with a 17% fall in copper output to 273,000 tonnes compared to 330,000 tonnes year-on-year due to lower grades from its Los Bronces and El Solado operations.
Antofagasta shares dipped 0.1% to 1,047.2p, Endeavor slid 1.5% to 1,574.5p, Fresnillo dropped 3% to 640.7p, Glencore decreased 1.6% to 419.1p and Rio Tinto declined 0.3% to 4,676p.
Howden Joinery Group
Howden Joinery Group shares topped the FTSE 100 with a 3.8% climb to 653.4p following a reported pre-tax profit of 22% to £145 million in HY1 against the previous year.
The company’s revenue grew 16% to £913.1 million compared to £784.9 million, with the firm attributing its successful financial term to good management of economic headwinds and growth across its UK and international depots.
Financial groups rise
3i Group enjoyed a 3.8% climb to 1,242.5p after a successful Q1, including a 6.4% NAV increase to 1,406p and a total NAV return of 6.6%.
The investment group credited the strong performance of its Action holding for its positive Q1, and highlighted several key investments made over the period.
“3i has made a good start to its new financial year. Both portfolios are trading resiliently in the current environment and Action is continuing to grow at an impressive rate,” said 3i CEO Simon Borrows.
“We have already announced a number of new investments this year and executed realisations at significant premiums to their carrying values in recent months, underlining the quality of our portfolio.”
— UK Investor Magazine (@UKInvestorMAG) July 21, 2022
Intermediate Capital Group shares rose 2.8% to 1,456.2p on the back of a positive Q1 trading statement, with fundraising of $4.5 billion and a total AUM growth of 3% to $71.3 billion on a constant currency basis.
“The breadth of ICG’s strategies and our firm-wide focus on downside protection are powerful characteristics of our business, especially in the current environment,” said Intermediate Capital Group CEO Benoît Durteste.
Intermediate Capital Group reaches $4.5bn in fundraising over Q1, AUM increases 3%https://t.co/Fmyth5zPac
— UK Investor Magazine (@UKInvestorMAG) July 21, 2022
Dunelm Group shares gained 5.3% to 870.5p in early afternoon trading on Thursday after the company reported a 16% year-on-year increase in total sales to £1.5 billion in FY 2022.
The homewares retailer said digital sales made up 35% of total sales, representing an 11% slide against last year due to Covid-19 restrictions easing and physical stores reopening.
Dunelm confirmed its FY 2022 sales and pre-tax profits slightly exceeded market expectations, with an anticipated pre-tax profit of £207 million reflecting a strong HY1 after stores reopened, and a positive trading performance in HY2.
The group noted a gross margin rate for the financial year of 51.2%, 0.4% lower than FY 2021 due to high customer participation in the firm’s June 2022 Summer Sale Event.
Dunelm said it expected a gross margin return to a long run average in FY 2023.
“Dunelm is a much bigger and stronger business than before the pandemic, with sales over 40% higher, due in large part to the huge strides we have made to develop our digital capabilities,” said Dunelm CEO Nick Wilkinson.
“Our growth continues to be driven by increasing market share as our customer base further expands.”
Dunelm mentioned its macro-economic outlook remained unpredictable, and warned the cost of living crisis risked cutting into sales and profits in the coming year.
“The macro outlook remains uncertain and we cannot predict exactly how consumers will respond to the increasing pressures on their finances,” said Wilkinson.
“We are currently seeing customers adapt to this environment in their own ways, utilising the breadth of our offer and price points across homewares; value and choice has always been at the very core of Dunelm, and we are intensely focused on continuing to strengthen this for our customers.”
“The business has successfully navigated previous periods of consumer uncertainty. With the inherent strength of our business model and strong operational grip, we have never been more confident about our ability to make the right long-term decisions for all of our stakeholders and to continue to grow our market-leading position.”
Non-executive director appointment
Dunelm also announced the appointment of Alison Brittain as an independent non-executive director and chair designate.
Brittain is set to join the Dunelm board on 7 September 2022, and will succeed Andy Harrison as chair before the end of his nine-year term in September 2023.
The move follows Brittain’s announced resignation as CEO of leisure company Whitbread, which she is expected to leave in early 2023.
“Dunelm is a company I have long admired as a customer and I love that it’s an entrepreneurial, purpose-led business with strong values and lots of ambition,” said Brittain.
“The last two years have reinforced the importance of the home in all of our lives, and I am delighted to be joining a team with such a fabulous track record of focussing on delivering value for customers and a company with fantastic opportunity for future growth.”
“I look forward to working with the Board and building on Andy’s achievements as Chair.”
Frasers Group shares surged 20.6% to 904.5p in late morning trading on Thursday after the group announced a revenue climb of 30.9% to £4.7 billion in FY 2022 against £3.6 billion in FY 2021 in its FY trading update.
Frasers Group highlighted a UK sports retail revenue growth of 31.2% to £2.5 billion compared to £1.9 billion as a result of stores reopening after Covid-19 lockdowns, alongside a 43.6% rise in premium lifestyle revenue to £1 billon from £735.6 million linked to the group’s new FLANNELS stores and maintained online growth.
The company also confirmed a European retail revenue increase of 28.4% to £790.2 million against £615.2 million due to strong growth in Ireland and stores reopening after pandemic lockdowns.
In addition, the firm mentioned a rest of world retail revenue slide of 1.6% to £150.3 million compared to £152.7 million, along with a wholesale and licensing revenue rise of 9.7% to £168.1 million from £153.3 million.
The fashion company reported a pre-tax profit spike to £366.1 million from £8.5 million the last year, alongside a swing back to an adjusted pre-tax profit of £344.8 million compared to a loss of £39.9 million on the back of stores reopening, the launch of new FLANNELS outlets, operating efficiencies and continued growth in the lifestyle premium sector.
Frasers Group confirmed net assets of £1.3 million compared to £1.2 million year-on-year.
The retailer returned £193.2 million to shareholders through its share buyback programme over the period.
The group also noted its successful refinancing of its facility, which currently stands at £980 million.
“I am really proud of the record performance we’ve announced today. It’s clear that our elevation strategy is working and we are building incredible momentum with new store openings, digital capabilities and deeper brand partnerships across all of our divisions,” said Frasers Group CEO Michael Murray.
“We’ve got the right strategy, team and determination to keep driving our business from strength to strength.”
3i Group shares were up 1.8% to 1,219.5p in late morning trading on Thursday following a reported NAV per share growth to 1,406p in Q1 2023 compared to 1,321p in Q4 2022, along with a total return of 6.6% across the financial term.
3i Group announced 90% of its top 20 private equity companies by value increased their earnings to March 2022, with a resilient Q1 from its portfolio groups, including Action, Dynatect, nexeye, Tato and MAIT.
The group confirmed a sales climb for Action of 22% against 2021 and 70% above 2019 of €2,061 million, alongside an EBITDA rise of 29% for year-on-year for the period to €263 million, representing a 115% growth over Q1 2019.
The firm noted the return for Q1 included material reductions in the value of non-discount consumer companies Luqom and GartenHaus.
3i Group also reported the sale of Havea for expected returns of €540 million, representing a 50% uplift on the value announced on 31 March 2022.
The company further drew attention to the completed sale of Q Holding’s QSR division for £190 million.
The group said it signed three new private equity investments over Q1, and announced a fourth investment in July 2022, with all investments scheduled for completion by the end of Q2 2023.
The company recognised a £322 million gain (34p per share) on foreign exchange in Q1, net of hedging, as the Sterling weakened against the US dollar.
“3i has made a good start to its new financial year. Both portfolios are trading resiliently in the current environment and Action is continuing to grow at an impressive rate,” said 3i CEO Simon Borrows.
“We have already announced a number of new investments this year and executed realisations at significant premiums to their carrying values in recent months, underlining the quality of our portfolio.”
“We see broader economic conditions deteriorating over the rest of the year but remain confident in the composition of our portfolio. We continue to focus on actively managing our portfolio and making sensibly priced investments and bolt-on acquisitions. We will also pursue our realisation projects where conditions allow.”
Intermediate Capital Group (ICP) shares increased 0.4% to 1,422.5p in early morning trading on Thursday following a 3% increase in assets under management (AUM) to $71.3 billion over Q1 and a 19% rise over the past 12 months.
The company reported a third-party fee-earning AUM of $58.8 billion, representing a 5% growth over Q1 and a 27% climb over the past year on a constant currency basis.
Intermediate Capital highlighted its Europe VIII fund size, which is currently at €7.8 billion, exceeding its €7 billion aim and accounting for 1.8 times more third-party AUM than its Europe VII fund.
The firm added its fundraising was almost completed, with the final close expected by the end of July 2022.
The group also mentioned the final closes of its Strategic Equity IV with a total fund size of $4.2 billion, and its Asia Pacific IV with a total fund size of $1.1 billion.
“We remained active in the quarter. Fundraising was robust, including holding successful final closes for Strategic Equity IV and Asia Pacific IV,” said Intermediate Capital Group CEO and CIO Benoît Durteste.
“As anticipated, deployment and realisation levels across the market were lower than in previous quarters and in this context we continued to execute a number of transactions across all our asset classes.”
“Our pipeline remains constructive, particularly within direct lending (SDP) where we are seeing a growing set of future deployment opportunities.”
Intermediate Capital confirmed its fund valuations were in-line with 31 March 2022, which the company said reflected its focus on structuring transactions to provide downside protection and strong operational performance of underlying portfolio companies to offset valuation pressures.
“The breadth of ICG’s strategies and our firm-wide focus on downside protection are powerful characteristics of our business, especially in the current environment,” said Durteste.
“We focus on investing in resilient companies with strong market positions and are able to provide them with flexible capital in the form most appropriate to their needs, from full equity buyouts to senior debt.”
“In doing so, we help our clients achieve their investment objectives in private markets through economic cycles.”
The firm noted its balance sheet was in a strong position for the financial term, with a total available liquidity of £1.4 billion at 30 June 2022.
SSE shares were down 0.8% to 1,748p in early morning trading on Thursday after the company announced a performance that “slightly exceeded” expectations in its Q1 2023 trading update.
The energy group reiterated its guidance of an EPS of at least 120p per share for FY 2023, along with a projected adjusted capital expenditure and investment in excess of £2.5 billion.
SSE commented it expected first power from its Seagreen offshore wind farm by the end of July, with construction on Viking onshore wind farm and Dogger Bank A, B and C offshore wind farms reporting good progress.
The company also said progress was ongoing for its disposal of a 25% minority stake in SSEN Transmission, with the formal process underway and a targeted agreed sale by the end of 2023 after regulatory approvals.
“The strength of SSE’s integrated and balanced business model, combined with our commitment to positive engagement with key stakeholders, is serving us well through a period of market, political and regulatory complexity,” said SSE finance director Gregor Alexander.
“Meanwhile, CfD success at Viking, progress on our Southern European pipeline acquisition, the positive outlook for Transmission from the recent Holistic Network Design and new hydrogen options at Saltend all position us well for the long term.”
“We remain confident in our financial outlook for strong earnings growth this year and look forward to updating the market on performance in our interim results statement on 16 November 2022.”
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The FTSE 100 closed down 0.4% to 7,276 in on Wednesday as UK inflation hit a fresh record of 9.4%, dampening investor appetite for consumer-focused stocks and stoking recession fears. A warning from the EU that Russian gas could also be cut off also rattled markets.
Food and fuel were the largest contributors to inflation, with food inflation rising to 9.8% from 8.7% in May and petrol prices hitting a record price climb of 42.3% year-on-year.
“Another larger-than-expected increase in inflation is turning up the heat on the UK’s economy – and on the spending power of the nation,” said AJ Bell head of personal finance Laura Suter.
“It’s the same story as previous months: petrol, home energy bills, food prices and mortgage costs are all pushing up the inflation rate as they keep on heading upwards.”
UK inflation hits new 40-year record of 9.4% on higher food and fuel priceshttps://t.co/YLWhoMCllQ
— UK Investor Magazine (@UKInvestorMAG) July 20, 2022
Consumer stocks sank, with Associated British Foods sliding 0.4% despite a 6% growth in Q1 sales and a 4.2% rise in branded sales.
However, the foodstuffs group reported a climb in value meal sales as the cost of living crisis drove consumers to less costly products.
“We’ve made a strong start to this financial year, growing sales by 6% in the quarter and again increasing market share both instore and online, as we continue to apply the elements of our branded growth model,” said Premier Foods CEO Alex Whitehouse.
Premier Foods sales grow 6% in Q1, value meal sales rise on cost of living crisishttps://t.co/4TQeAezyj2
— UK Investor Magazine (@UKInvestorMAG) July 20, 2022
British American Tobacco shares fell 0.9% to 3,496p, Diageo dropped 0.2% to 3,665.7p, Reckitt Benckiser slid 0.9% to 6,364p, Unilever dipped 0.6% to 3,917.7p and Tesco declined 0.5% to 260.8p.
EU tells Europe to limit gas usage
The EU asked European countries to cut gas usage by 15% in response to potential threats from Vladimir Putin to not restart gas exports via the Nord Stream 1 pipeline on its scheduled reopening on Thursday.
EU Commission president Ursula Von Der Leyen asked European states to reduce gas demand between August and March.
The EU said the target was voluntary, however it could become mandatory if countries refuse to opt in and abide by the restrictions.
Von Der Leyen commented that Putin was using gas exports to Europe as a “weapon” against Europe as the war in Ukraine wages on.
Russia is using gas as a weapon.
We have to address our energy security at EU level.
We learnt from the pandemic that if we act in unity, we can address any crisis.
So let's act together to reduce gas use and provide a safety net for all EU countries. https://t.co/Or53o1Acer
