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10-Year Gilt Yields to Hit 4.1% by End-2023, Credit Suisse Says

11/22/2022 | 07:13am EST

UK 10-Year Gilt Yields to Reach 4.10% by End-2023, Credit Suisse Says

1013 GMT - Yields on U.K. 10-year gilts are expected to rise to 4.10% by the end of 2023 as persistent inflation, and high energy prices put pressure on the Bank of England to raise interest rates, says Credit Suisse head of global investment strategy Philipp Lisibach in a webinar. "Real yields are still deeply negative in comparison to the level of inflation and therefore we see gilt yields grind higher," he says. Ten-year gilt yields currently trade at 3.188%, according to Tradeweb. (miriam.mukuru@wsj.com)

Companies News: 

CRH Nine-Month Sales Rose on Year on Resilient Demand, Strong Pricing

CRH PLC said Tuesday that sales rose on year for the first nine months of 2022 as it experienced resilient underlying demand, strong pricing and continued delivery from its integrated solution strategy.


Homeserve 1H Pretax Profit Rose; Brookfield's Takeover Nears Completion

Homeserve PLC on Tuesday reported a rise in pretax profit for the first half of fiscal 2023, driven by a robust performance across its businesses, and said that its acquisition by Brookfield is nearly completed.


Babcock International 1H Pretax Profit Hit by Higher Costs

Babcock International Group PLC on Tuesday reported a 13% fall in pretax profit for the first half of fiscal 2023 due to higher costs, and backed its guidance to be free cash flow positive in the second half of the year.


Severn Trent 1H Swung to Net Profit on Cost Controls, Rise in Turnover

Severn Trent PLC on Tuesday reported a swing to a net profit for the first half of the fiscal year, driven by strong cost control and an increase in turnover, reflecting an outperformance in its water business.


AO World 1H Pretax Loss Widened on Higher Costs

AO World PLC said Tuesday that pretax loss for the first half of fiscal 2023 widened amid higher costs and lower revenue, but added that it made a solid strategic progress to refocus the business on profit and cash generation.


M Winkworth Expects 2022 Revenue, Pretax Profit to Beat Forecasts

M Winkworth PLC said Tuesday that business conditions have remained strong and that it now expects full-year revenue to exceed management forecasts and profit to be beat market expectations.


Avon Protection Narrows FY 2022 Pretax Loss, Revenue Rose on Strong Demand

Avon Protection PLC said Tuesday that its fiscal 2022 pretax loss narrowed as revenue rose, reflecting a strong second-half financial performance with significant demand.


Softcat Has Performed Well in 1Q, in Line With FY 2023 Guidance

Softcat PLC said Tuesday that it has performed well in the first quarter of the new fiscal year, in line with management expectations and guidance provided last month.


Knights Group 1H Pretax Profit Rose; Sees FY 2023 Performance in Line With Views

Knights Group Holdings PLC said Tuesday that performance for the first half of fiscal 2023 is in line with full-year expectations as it continues to seek for further acquisitions.


Osirium Technologies Raises GBP1.5 Mln via Equity Issues; Makes Board Changes

Osirium Technologies PLC said Tuesday that it has raised 1.5 million pounds ($1.8 million) via a heavily discounted share placing and subscription, and will use the money for general working capital purposes.


Helical 1H Pretax Profit Fell on Revaluation Losses

Helical PLC said Tuesday that pretax profit for the first half of fiscal 2022 fell due to a swing to revaluation losses on its investment properties and direct costs.


Petershill Partners 3Q Assets Under Management Rose on Robust Fundraising

Petershill Partners PLC said Tuesday that third-quarter assets under management rose and that fee-paying assets were ahead of full-year expectations.


Restore Trading to Date Has Been Strong; 2H Revenue to Date Ahead

Restore PLC said Tuesday that trading for the year to date has been strong, with revenue for the second half so far ahead of the same period last year.


Severfield 1H Pretax Profit Rises on Higher Activity, Steel Prices

Severfield PLC said Tuesday that its first-half pretax profit and revenue rose, reflecting increased activity and steel prices.

Market Talk: 

CRH Outperforms Peers as Integrated Model Shines

1147 GMT - CRH has reiterated guidance for 2022 in-line with consensus in a resilient update, Goodbody says. The Irish building materials supplier's year-to-date margins are ahead 10 basis points on year, representing a material outperformance compared to peers driven by the integrated solutions strategy, Goodbody analyst David O'Brien says in a research note. "When we consider CRH's integrated model which offers comfort on managing the inflationary backdrop and the group's end market exposures, we believe the company is strategically well placed looking into 2023 with material balance sheet strength to continue capital returns and take advantage of growth opportunities," the Irish brokerage says. Goodbody retains its buy recommendation on the stock. Shares are down 1.5% at 3,295.0 pence. (joseph.hoppe@wsj.com)

Tatton Seen Well Placed to Weather Market Volatility

1146 GMT - Tatton's 1H performance was better than expected, with record inflows and strong growth despite the market volatility, RBC Capital Markets analyst Ben Bathurst says in a note. "We see Tatton as relatively better positioned than peers to weather those headwinds, given its leading position in the fastest growing asset pool in U.K. wealth, which makes the business less reliant on freshly invested cash than most," the analyst says. The asset manager's adjusted operating profit for the period was 19% above RBC's views, driven by stronger-than-expected revenue, Bathurst notes. Shares rise 6%. (michael.susin@wsj.com)

CRH Looks Competitive, Well-Positioned on Nine-Month Performance

1143 GMT - CRH's strong performance in the nine months of 2022--with 9% like-for-like Ebitda growth and margins up on 2021--adds authority to the view that its integrated-solutions offering is a source of competitive advantage, Davy Research says. The Irish building materials supplier continues to expect full-year Ebitda of around $5.5 billion, 10% growth in a market where earnings are generally flat-to-down, Davy analysts Ross Harvey and Andrea Collins say in a research note. "Into 2023, the group is well-positioned against an uncertain macro backdrop through its improved business mix and balance sheet strength, which we believe will act as an accelerant for value creation," the Irish research firm says. Davy retains its outperform rating on CRH's stock. Shares are down 1.4% at 3,298.5 pence. (joseph.hoppe@wsj.com)

Petrofac CEO Surprise Departure Seen as Negative Sign

1138 GMT - Petrofac's shock announcement that Chief Executive Sami Iskander is to leave the company at the end of March looks like a materially negative signal, Jefferies says. If the company's inability to return its engineering-and-construction business to awards growth has been the underlying drag on the investment case during Mr. Iskander's tenure, the CEO announcement suggests there are still significant challenges ahead, Jefferies analysts Mark Wilson and Jamie Franklin say in a research note. The energy-industry services provider's balance sheet will now come under renewed scrutiny, the U.S. bank says. Jefferies retains its buy rating and 160.0 pence price target on Petrofac's stock. Shares are down 7.6% at 109.7 pence. (joseph.hoppe@wsj.com)

Babcock International Cost-Inflation Mitigating Measures Look Encouraging

1133 GMT - Babcock International Group's first-half results show encouraging progress on cost inflation mitigation via efficiencies, savings and pricing, Jefferies analysts say in a research note. The engineering company posted interim Ebita around 5% ahead of expectations, with Marine and Land divisions both strong, but Nuclear and Aviation were both still weak, as expected, they say. With good visibility on contracted revenue, Jefferies maintains its financial expectations for the full year. Jefferies has a buy rating on the stock and a 450.00 price target. Shares trade up 7.2% at 310.80 pence. (kyle.morris@dowjones.com)

AO World Seen on Path to Profit Due to Pricing, Operations

1119 GMT - AO World's first-half performance shows the group is pivoting toward a more profitable trading stance, Jefferies analysts Andrew Wade and Grace Gilberg say in a research note. The online electrical-goods retailer managed to reduce overhead costs materially, abandon non-productive revenue streams, deliver operational efficiencies and make pricing more competitive, the analysts say. "AO remains overtly positive on its ability to reach [a] 5% EBITDA margin in FY 2024," they say. "Reflecting the growing visibility of the pathway to this level of profit, we raise our FY 2024 EBITDA estimate by around 10% to GBP50 million from GBP45 million." Jefferies has a buy recommendation on the stock. (michael.susin@wsj.com)

AO World Gains After Flagging Upbeat Outlook

1045 GMT - AO World shares surge 14% after the online consumer electronics retailer forecast annual profit around the top end of guidance, despite a bigger first-half pretax loss. While the results for the six months to Sept. 30 were "messy", management guidance for full-year earnings at the top end of expectations was robust, albeit largely driven by cost-cutting, AJ Bell says. "AO World was a pandemic winner whose fortunes have taken an alarming turn since, but these results hint that the company may have bottomed out and is ready to recover," AJ Bell investment director Russ Mould writes. "With the German assets sold off, it can now look to build on its large share of the U.K. market," he says. (philip.waller@wsj.com)

Contact: London NewsPlus; paul.larkins@wsj.com

(END) Dow Jones Newswires

11-22-22 0712ET

Stocks mentioned in the article
ChangeLast1st jan.
AO WORLD PLC 0.00% 62 Delayed Quote.19.23%
AVON PROTECTION PLC -0.49% 1009 Delayed Quote.-5.67%
BABCOCK INTERNATIONAL GROUP PLC 1.13% 304.8 Delayed Quote.6.80%
CRH PLC 0.08% 3733 Delayed Quote.13.06%
HELICAL PLC 0.14% 358.5 Delayed Quote.7.35%
HOMESERVE PLC 0.00% 1198 Delayed Quote.0.08%
KNIGHTS GROUP HOLDINGS PLC -3.16% 92 Delayed Quote.-11.22%
M WINKWORTH PLC 0.00% 170 Delayed Quote.7.94%
MINERAL RESOURCES LIMITED 0.42% 92.55 Delayed Quote.19.38%
OSIRIUM TECHNOLOGIES PLC -1.52% 3.25 Delayed Quote.24.53%
PETERSHILL PARTNERS PLC -2.76% 169.2 Delayed Quote.2.96%
PETROFAC LIMITED 1.95% 83.45 Delayed Quote.16.51%
RESTORE PLC -0.67% 297 Delayed Quote.-9.39%
SEVERFIELD PLC 0.96% 63 Delayed Quote.0.65%
SEVERN TRENT PLC 0.04% 2845 Delayed Quote.7.28%
SOFTCAT PLC 1.26% 1209 Delayed Quote.0.84%
UK 10Y CASH 0.00% 3.3406 Delayed Quote.-9.43%
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