UK 2022-23 Net Gilt Supply Seen Lower Even Without BOE QE Purchases

U.K. net supply of government bonds for the fiscal year 2022-23 is likely to be reduced substantially compared to previous years even without bond purchases by the Bank of England, says HSBC. "We forecast net supply of only GBP25bn - even lower than the last two years when quantitative easing was taking place," the U.K.-based bank says. The U.K. Debt Management Office announced Wednesday that it expects gross gilt sales of GBP124.7 billion for the upcoming fiscal year, substantially below this year's gross gilt supply of GBP194.8 billion. 


 
Companies News:

Games Workshop Raises Dividend; Sees Performance In Line

Games Workshop Group PLC said Thursday that business in the three months to the end of February met its expectations, and declared a dividend of 70 pence (92.4 cents) a share.

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Arbuthnot Banking Swung to 2021 Pretax Profit; Resumes Dividend

Arbuthnot Banking Group PLC on Thursday reported a swing to a pretax profit in 2021 on the back of lower costs after the integration of Asset Alliance, and declared a dividend payout.

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Next Says FY 2022 Pretax Profit Rose Ahead of Views But Lowers Guidance

Next PLC reported Thursday a rise in pretax profit for fiscal 2022 ahead of management views, said it has lowered its sales and profit guidance for fiscal 2023 due to the effects of Russia's invasion of Ukraine.

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Kin & Carta 1H Pretax Loss Narrowed, Revenue Rose on Strong Demand

Kin & Carta PLC said Thursday that pretax loss for the first half of fiscal 2022 narrowed on year while revenue rose on strong demand and increasing spending from clients.

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EnQuest Swung to 2021 Pretax Profit on Revenue Rise Amid Higher Oil Prices

EnQuest PLC said Thursday that it swung to a pretax profit on increase revenue as oil prices rose, which was partially offset by lower production.

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Bridgepoint Group 2021 Pretax Profit Rose, Declares Dividend

Bridgepoint Group PLC said Thursday that 2021 pretax profit and revenue rose, increased driven by its core businesses of private equity and private debt.

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International Public Partnerships 2021 Profit Rose on Covid-19 Recovery

International Public Partnerships Ltd. said Thursday that its 2021 profit and revenue rose due to a recovery from coronavirus pandemic-driven disruption, and declared an increased dividend.

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Playtech Swung to 2021 Pretax Profit, Higher Revenue on Strong Performance From Snaitech, B2B Online

Playtech PLC said Thursday that it swung to a pretax profit on increased revenue, driven by Snaitech and B2B online, particularly in Latin America.

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Next Lowers FY 2023 Sales, Profit Guidance on War and Inflation Effects

Next PLC reported Thursday a rise in pretax profit for fiscal 2022 ahead of management views, but said it has lowered its sales and profit guidance for fiscal 2023 due to the effects of Russia's invasion of Ukraine and general inflation.

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CVS Group 1H Pretax Profit Rose; FY 2022 Expected to Be In Line With Views

CVS Group PLC on Thursday reported a rise in pretax profit for the first half of fiscal 2022 and said that it expects to close the year with full-year earnings in line with management views.

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Eve Sleep 2021 Pretax Loss Widened, Shares Fall

Eve Sleep PLC shares fell on Thursday after the company reported a widened pretax loss for 2021 as the group booked more expenses.

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Robinson Swung to 2021 Pretax Loss on Higher Costs; Volatility to Continue in 2022

Robinson PLC said Thursday that it swung to a 2021 pretax loss after booking higher costs, and that the substantial uncertainty and volatility it experienced last year is likely to continue through 2022.

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Tungsten Shares Rise After Pagero Says It Is Mulling Takeover, Trumping Kofax

Shares in Tungsten Corp. jumped 19% on Thursday after Pagero Group AB said that it is considering a potential 56.9 million pound ($75.1 million) offer for the London-listed digital financial-management company, trumping an agreed takeover by Kofax Parent Ltd.

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Big Technologies 2021 Pretax Profit, Revenue Rose on New Contracts, Expanded Deals With Existing Customers

Big Technologies PLC said Thursday that 2021 revenue and pretax profit rose as it booked new contract wins and an increase in revenue from existing customers. 


 
Market Talk:

Airlines Could Avoid Energy Costs Hurting Profit Depending on Their Pass-Through Ability

1239 GMT - Although airlines look highly exposed to energy costs, they are hedged at 55% to 80% of 2022 fuel budgets, Stifel says. If current fuel prices prevail, the direct 2022 EBIT impact is 5% to 35% versus pre-war estimates, however, the ultimate profit hit depends on the ability to pass on higher fuel costs to customers, Stifel says. Strong post-pandemic demand will make it relatively easy for airlines to pass-through higher energy costs--net of hedging--without choking off demand. Shares have recovered from initial losses when the Ukraine-Russia war broke out, and Stifel analysts expect airlines to be able to regulate prices and benefit from the sector's recovery and pent-up demand. Stifel's top picks are IAG and Jet2, both rated buy.

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Drax Valuation Seen to Have Balanced After Rally

1203 GMT - Shares in Drax have risen 80% since the onset of the current gas crisis and therefore the stock now offers a more balanced risk-reward, especially as affordability issues may bring spotlight on generation companies and limit further power price upside, Jefferies says as it downgrades the stock to hold from buy. While there is no specific measure right now, Jefferies says that profiting from the current energy price situation is likely to come under increasing scrutiny. Still, the bank forecasts that Drax's Ebitda will rise from GBP398 million in 2021 to GBP736 million in 2023 and GBP923 million in 2025 under its medium-case scenario--which assumes a 2025 power price of GBP72 a megawatt hour.

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Robinson Expected to Return to Underlying Growth, Restore Margins

1142 GMT - Although Robinson's 2021 results were in line with finnCap analysts' expectations, underlying volumes fell 5% as 2020 had excess demand relating to hand sanitizer, disinfectant and other coronavirus-driven sources. The plastic and paperboard packaging manufacturer's gross margins fell, affected by rising costs relating to energy, labor and resin, the U.K. brokerage says. The company is expected to return to underlying growth and begin to restore margins as the Schela Plast acquisition builds momentum, new orders come through and resin price rises are increasingly passed through to customers, the broker says. "We are reintroducing a target price of 125 pence a share, implying a 50%+ upside," finnCap says.

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Market Pricing of UK Interest Rates May Be Excessive

1138 GMT - The market continues to price in a steeper path of interest-rate rises in the U.K. than the Bank of England is likely to deliver, says Morgan Stanley. Given the scale of the near-term inflation overshoot, the U.S. investment bank expects the BOE to lift the base rate to 1% in May and focus on engaging in active sales of the bonds it holds, it says, adding that a rate rise in August is also likely. Details of bond sales could be announced in August and start in the second half of this year, when economic growth is likely to slow, prompting a deceleration of the tightening cycle, it says.

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Energean's Flagship Karish Gas Field to Fund Sector-Leading Dividends

1130 GMT - Shares in Energean rise 3.8% after it said it expects to start dividend payments no later than the fourth quarter, following first gas production from its flagship Karish field in Israel. Initially, the energy company will pay $50 million a quarter, which will rise to $100 million as production increases. This is well ahead of market expectations of $155 million a year, and the 15% annualized yield is at the upper end of the sector, Berenberg says. "In our view, this is [a] strong update from Energean which should be taken well. The dividend is ahead of consensus and significantly ahead of the peer group, and will be underpinned by cash flow from Karish," the bank says.

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Lower Gross Gilt Issuance May Open Door to Active Quantitative Tightening

1117 GMT - A lower-than-expected gross gilt issuance projection for the fiscal year 2022-23 may open the door to earlier active sales of the Bank of England's bond holdings, says Morgan Stanley. The U.K. Debt Management Office announced Wednesday that it expects gross gilt issuance for the upcoming fiscal year of GBP124.7bn, undershooting market expectations. "The volume of supply to be absorbed by the market in 2022-23 should decline vs 2021-22, potentially opening the door to earlier active quantitative tightening," the U.S. investment bank says. "We maintain a modest bearish bias on gilts as we look for 10-year yield fair value to increase," it says.


Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

03-24-22 0938ET