Darktrace raises forecast as share price soars

Liam Roche
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Darktrace raises forecast as share price soars

Darktrace says cyber attacks drive consumer demand

Darktrace (LON:DARK) has increased its forecasts for the financial year as its user base and revenue levels continue to grow.

The cybersecurity firm confirmed robust sales coming out of the financial period before, including a strong performance in June, as the company was operating close to the upper end of its expectations over recent weeks.

Darktrace is expecting its revenue to grow by between 35% and 37% this year, up from 29-32% before.

Adjusted underlying earnings (EBITDA) margin is anticipated to arrive at 2-5%.

“At our first full-year earnings, we are very pleased to report robust financial and operational performance, and strong growth, during the period,” chief executive Poppy Gustafsson said.

“In this new era of cyber-threat, Darktrace is helping organizations from every industry sector, including providers of critical national infrastructure, to protect their digital assets, and avoid the serious disruption that cyber-attacks can cause.”

The Darktrace share price has added 8.55% on Wednesday morning.

Darktrace, a global leader in cyber security AI, delivers technology that protects over 5,600 customers worldwide from advanced threats, including ransomware and cloud and SaaS attacks.

Restaurant Groups reports underwhelming results

Liam Roche
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0
Restaurant Groups reports underwhelming results

The Restaurant Group’s trade was severely disrupted by lockdowns earlier in the year

The Restaurant Group has reported underwhelming results for H1, recording a statutory pre-tax loss of £58.8m.

The owner of Wagamama saw its sales fall by 4.5% to £216.8m when compared to the same time period in 2020.

The Restaurant Group saw a slight recovery in its EBITDA, which rose from a loss of £18.2m to a profit of £11.2m year-on-year.

The firm also confirmed its secured refinancing and recapitalisation, raising £500m from loans and a senior credit facility.

“Whilst there are some well documented sector challenges to navigate in the short-term, particularly around labour availability and supply chain, we believe the Group is well positioned for the long- term,” said Andy Hornby, Chief Executive Officer.

For the first six months of the year, trade was severely disrupted by restrictions on the hospitality industry, which was only able to do takeaways and deliveries for large periods.

Harry Barnick, Senior Analyst at Third Bridge, commented on the Restaurant Group’s results: “The casual dining sector has taken a Covid pummelling. Now as customers return the Restaurant Group is operating in a less competitive environment allowing for some breathing space during the recovery period.”

“That being said, we are hearing about aggressive expansion from smaller brands, such as Franca Manca, which could challenge The Restaurants Group’s dominant position in the market,” said Barnick.

“Given the reduction in operating costs during the pandemic, analysts will be hoping for improved margins post-Covid once trading normalises. This largely depends on how successful The Restaurant Group can be in reducing rental rates. However, testing labour and food shortages could drive up costs in the short-term which limits the margin upside potential.”

Inflation sees record jump in August

Liam Roche
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0
Inflation sees record jump in August

The rate has well exceeded the Bank of England’s target of 2%

Inflation increased to 3.2% in August, up from 2% in July, in what is the highest ever recorded increase according to the Office for National Statistics (ONS).

The consumer prices index (CPI) measure for last month was the highest it’s been since March 2012, although the ONS said much of the impact was likely only temporary.

The rate has again exceed the Bank of England’s target of 2%.

The ONS said the reason eating and drinking out was more expensive was because in August last year the Eat Out to Help Out Scheme was underway.

Additionally, businesses in the hospitality and tourism sectors benefitted from VAT discounts that were put in place to help some of the most severely impacted industries through the pandemic.

Jonathan Athow, deputy national statistician at the ONS, said: “August saw the largest rise in annual inflation month-on-month since the series was introduced almost a quarter of a century ago.

“However, much of this is likely to be temporary, as last year, restaurant and cafe prices fell substantially due to the Eat Out to Help Out scheme, while this year, prices rose.”

Martin Lawrence, director of investments at the Wesleyan Group, said: “Supply chain pressures have been one of the drivers behind this month’s spike in the rate of inflation to 3.2%, which is now well above the 0.7% rate recorded in January; however, the Bank of England still expects inflation to hit 4% by the end of the year.”

“Despite the headlines of wage growth, the climbing cost of living means that householders and savers are starting to feel the squeeze, which won’t be helped by the recently announced changes to National Insurance.”

“For those who have saved money during lockdown and are seeking to secure better returns on their savings, safeguarding their hard-earned cash is a must. With interest rates remaining at rock bottom, it’s essential that savers review all possible options to achieve real-term growth.”

Equals set for jump in profit

Andrew Hore
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Equals set for jump in profit

Launching Equals Solutions is accelerating growth at foreign exchange and financial services provider Equals Group (LON: EQLS) and this is part of the increasing focus on B2B business with larger companies.
Equals Solutions is a multi-currency collection account that is connected to SWIFT and other UK networks. This is a B2B-focused service. One company can have multiple accounts for a single log-in.
The interims included £300,000 of revenues from Equals Solutions, which was launched in June, and during the third quarter they have already reached £1.2m.
Finance
Costs have been reduced and comb...

Pace of US inflation slows in August

Liam Roche
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0
Pace of US inflation slows in August

CPI is up by 5.3% in August year-on-year

Consumer prices in the US rose at a slightly slower pace in August, as growing concerns over inflation remain on the agenda.

The consumer price index (CPI) is up by 5.3% in August year-on-year, the Bureau of Labor Statistics revealed.

The figure falls slightly below previous levels of 5.4% and is in line with economists’ expectations.

“Core” CPI, which discounts more volatile items including food and energy, also decelerated.

A number of the sectors that have seen higher prices this year have been more sensitive to supply chain disruptions caused by the pandemic.

With inflation levels are at multi-year highs, figures from July suggested that the rate of increase may be slowing down, suggesting that inflation may have peaked or be peaking.

However, others believe there are factors at play that could contribute to keeping annual inflation higher.

“If there is any relation between the real world and government data, we may start to see the enormous increase in home prices and rents filter into the CPI,” said David Donabedian, chief investment officer of CIBC Private Wealth US.

Morrisons pension trustees reach agreement with CD&R

Liam Roche
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0
Morrisons pension trustees reach agreement with CD&R

Clayton Dubilier & Rice (CD&R), the private equity firm that has agreed to takeover Morrisons for £7bn has reached a deal with the supermarket’s pension trustees.

Amid intense competition between CD&R and rival Fortress, the private equity company confirmed it has agreed a comprehensive package of measures to support the UK supermarket’s pension schemes, on the way to completing the buyout.

The Times reported that CD&R’s commitment to the schemes means that it would be among “the best funded and best supported in the UK”.

Pension funds responsible for the retirement benefits of 85,000 current and former Morrisons employees have recently warned that they would look for mitigating concessions from both prospective bidders.

Trustees for its two main pension funds said debt-financed bids would “worsen” the financial strength of Morrisons and therefore its ability to meet its pension promises.

After talks took place between CD&R and Morrisons’ pension trustees, a concession for “an appropriate release mechanism to allow for a gradual release of that security” has been made.

Morrisons consists of just under 500 stores and over 110,000 employees across the UK.

Morrisons first existed as a market stall in Bradford in 1899 owned by William Morrison. His son then took over the company and opened the first supermarket in the 1960s.

The Morrisons share price is up by 0.41% on Tuesday to 297.2p.

Virtual Growth becoming a Reality at VR Education Holdings

Jon Levinson
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Virtual Growth becoming a Reality at VR Education Holdings

This technology company is commercialising its Crossed Reality (XR) communications products and reported interims to June. It is virtually in line with expectations as revenue increased by 83% to €1.25m and the target €10m turnover by year-end 2023 implies a turnover doubling every six months. Its planned continued investment capabilities widen pre-tax loss to €1.3m (€1.1m), although EBITDA loss is flat at €1.0m. Gross margins are around 80% so increased turnover accelerates to profits. The price increased to 17.5p and the Mkt Cap is £51m.
In June 2021 £7.7m was raised at an over-subscribed ...

Post-Brexit controls on imports to be delayed amid pandemic and supply chain issues

Liam Roche
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0
Post-Brexit controls on imports to be delayed amid pandemic and supply chain issues

EU introduced import checks immediately after Brexit

The UK confirmed on Tuesday that it will delay post-Brexit controls on imports due to pressures caused by the pandemic and global supply chain issues.

It is now the second time that import controls have been pushed back.

Having left the EU single market at the end of 2020, the UK gradually introduced import checks, while the EU introduced theirs immediately.

“We want businesses to focus on their recovery from the pandemic rather than have to deal with new requirements at the border, which is why we’ve set out a pragmatic new timetable for introducing full border controls,” Brexit minister David Frost said.

“Businesses will now have more time to prepare for these controls which will be phased in throughout 2022.”

The NFU National Farmers Union has said that the new barriers to trade would not solve food shortages in the UK, which it said was down to a lack of lorry drivers.

While the Food and Drink Federation added that all major supermarkets importing fruit and vegetables from the EU were prepared for paperwork.

Mining companies drag on FTSE 100

Liam Roche
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0
Mining companies drag on FTSE 100

The FTSE 100 fell 0.3% to 7,046 on Tuesday morning and “metals and minerals are principally to blame”, says AJ Bell investment director Russ Mould.

It was “in part caused by concerns about Covid spreading across Asia again and how that might affect commodities demand. That worry was also behind share price weakness in luxury goods companies including Kering and LVMH, down between 3% and 4%.”

“If mining stocks are bellwether for the global economy, then investors need to sit up and take notice that the sector has been one of the worst performers in the past month,” Mould added.

The luxury goods sector enjoyed a strong run earlier this year as investors speculated that the wealthier got even richer during the pandemic as they were trapped at home, with no fancy trips or outings.

“As restrictions eased, luxury goods companies were expected to see a big surge in sales as wealthier individuals splashed their cash.”

FTSE 100 Top Movers

JD Sports (7.72%), Royal Mail (1.54%) and Bunzl (1.52%) are leading the way on the FTSE 100 on Tuesday.

At the other end, Ocado (-2.61%), IAG (-2.53%) and Burberry (-2.48%), make up the bottom three.

UK job vacancies at record high

Liam Roche
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0
UK job vacancies at record high

Furlough scheme to end this month

UK employers added a record 241,000 staff in August, bringing the total level of patrolled employees to just above pre-pandemic levels, data revealed on Tuesday.

The figures show a continued improvement in the UK job market as the government plans to bring the furlough scheme to a close at the end of September.

The rate of unemployment fell to 4.6% for the three months to July, according to the ONS. This was in line with economists’ forecasts.

Job vacancies in the UK are at a record high, above 1m for the first time.

Danni Hewson, financial analyst at AJ Bell, comments: “The UK jobs market has been stuck into a blender and whizzed up on high speed. Considering the incredible disruption caused by the double whammy of COVID and Brexit it is rather incredible the situation is looking as healthy as it is.”

“August payrolls delivered employee numbers marginally higher than pre-pandemic, unemployment is just 4.6% despite furlough tapering nowhere near the 10% that had initially been feared and pay has skyrocketed.”

Hewson added: “But some of those positives are masking huge issues. Recovery has been uneven and there are big questions about how all those jigsaw pieces, pieces which no longer fit in a changed puzzle, will be slotted back into place. Pay can’t be the only solution. Training will be crucial and some businesses are already considering candidates without the requisite skills, prepared to offer training because the other option is simply unworkable.”

However, just because people are without jobs doesn’t automatically mean they’ll fall neatly into those holes.

“Places like London and the South East have lagged behind and not everyone can relocate to find work. Those sectors that saw the greatest decreases have enjoyed the biggest monthly increase between July and August,” Hewson said.

“From hotels and restaurants to music venues and shops, the jobs in those sectors are coming back which is having a positive impact on employment levels in under 25’s. If you’ve set your heart on one career path it’s debilitating to find that path has been pulled out from under you and many young people will have chosen to go back to their studies rather than step into a world of work that doesn’t meet their needs.”

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