Pound May Extend Gains Vs Euro if UK Inflation Data Exceed Forecasts

Sterling may extend its gains versus the euro if Wednesday's U.K. inflation data exceed expectations, Commerzbank says. If inflation continues to rise and the risk of a wage-price spiral increases, the Bank of England could raise interest rates more aggressively, Commerzbank says in a note. "As a result, the inflation data due for publication tomorrow morning might well have the ability to move sterling considerably," it says. A higher-than-expected reading would bolster the market's BOE rate-rise expectations, allowing sterling to recover further versus the euro, she says. EUR/GBP falls to a nearly two-week low of 0.8343, according to FactSet. 


 
Companies News:

Capita Chairman Ian Powell to Step Down; David Lowden Named as Replacement

Capita PLC said on Tuesday that Chairman Ian Powell won't seek reelection at the company's annual general meeting in May, and that he will be succeeded in the role by David Lowden.

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Polymetal International Names Riccardo Orcel as Chairman

Polymetal International PLC on Tuesday said it has appointed Riccardo Orcel as nonexecutive director and board chairman, effective Monday.

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Auto Trader to Buy Autorama (UK) for GBP200 Mln to Expand Leasing Business

Auto Trader Group PLC said Tuesday that it has agreed to buy Autorama (UK) Ltd. for 200 million pounds ($263.4 million) in a deal that will expand its leasing business.

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Kingfisher FY22 Pretax Profit Above Views; Warns of Hit to 1Q, FY23 Performance

Kingfisher PLC on Tuesday reported a significant rise in pretax profit and revenue for fiscal 2022, which came in above market expectations, and said like-for-like sales declined in the first quarter of the current year among geopolitical uncertainty and inflation.

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Sabre Insurance 2021 Pretax Profit Fell; Sees Material Growth in 2022 on New Businesses

Sabre Insurance Group PLC said Tuesday that its pretax profit for 2021 fell as the company faced pressure on premium income due to the lack of new drivers and slow car sales.

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ZOO Digital Sees FY 2022 Revenue, Profit Ahead of Expectations Thanks to Organic Growth

ZOO Digital Group PLC said Tuesday that it expects to report revenue and profit for fiscal 2022 that are materially ahead of expectations after the continued rollout of existing streaming services and increased market share in new service offerings.

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MP Evans Says Total Crop Processed in First Two Months of 2022 Fell 10%, 2021 Pretax Profit Rose

M.P. Evans Group PLC said Tuesday that the total palm-oil crop processed in the first two months of 2022 was 10% lower than last year, mostly due to crop seasonality, as it reported a rise in 2021 pretax profit on increased revenue.

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ScS Group Swung to 1H Pretax Loss After Booking Higher Costs; Hopes for Profitable 2H

ScS Group PLC on Tuesday reported a swing to a pretax loss for the first half of fiscal 2022 as a result of higher costs linked to investments, and said it is on track to deliver a full-year pretax profit in line with market expectations.

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THG PLC Names Charles Allen as Its New Nonexecutive Chairman

THG PLC said Tuesday that it has appointed Charles Allen as its new nonexecutive chairman with immediate effect as part of the company's plan to split the chairman and chief executive roles. 


 
Market Talk:

UK Government Measures to Ease Household Income Squeeze Likely to Be Modest

0942 GMT - U.K. Chancellor Rishi Sunak isn't likely to announce game-changing measures to ease the cost of living crisis that is hitting households in his spring statement, Berenberg says. There is a chance he will announce only modest measures to ease the burden for low-income households, but these policies would marginally limit the hit to short-term economic growth, the German bank says. "While many observers are calling for broad-based support measures... Sunak is likely to be wary about adding to demand and worsening the inflation problem," Berenberg says. Moreover, the Chancellor is apparently committed to reducing the public deficit and debt, it says. Sunak will give his spring statement to the House of Commons on Wednesday at around noon.

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Knights Group Profit Warning Could be Whole Sector Issue

0938 GMT - Knights Group Holdings disappointed with a 2022 forecast downgrade below market expectations, mainly due to the Omicron-related impact on staff absences in 2H, and was the first profit warning for the sector in the year, Shore Capital says. The legal-and-professional-services provider expects to deliver adjusted pretax profit of GBP18 million and revenue of GBP126 million, while market expectations were of GBP23.4 million and GBP130 million, respectively. The U.K. investment group notes that the sector's profit is historically 2H weighted, and more companies could have been hurt by the same forces. However, it adds that long-term market opportunity remains unchanged. Shares nearly halved, down 47%, at 195.0 pence.

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THG PLC's New Chairman Seen Bolstering Governance, Diversity

0914 GMT - THG PLC's newly appointed non-executive chairman Charles Allen will refresh the company's board and further strengthen governance and diversity, Liberum says. The new chairman of the U.K.-listed online retailer--known as The Hut Group--will also refine the group's strategy while it addresses concerns related to diversity on the board, the U.K. brokerage adds. Liberum, which has a target price of 700 pence a share, adds that the 90% share price decline from its peak is excessive, as "the fundamentals of the group are better than at the time of the initial public offering." Shares are up 0.9% at 89.75 pence.

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Kingfisher's Outlook Was Mixed, But Hoped Market-Share Growth Seen as Positive

0910 GMT - Kingfisher recorded a record set of results for fiscal 2022, even though its outlook was mixed amid a decline in like-for-like sales for the first quarter of fiscal 2023, Interactive Investor says. The home-improvement retailer's comments on its outlook for fiscal 2023 were largely positive, hoping to continue its momentum with further market growth, expansion of 'own exclusive brand' products and cost control, the investment platform says. "Kingfisher is confident that the transformation plan is ahead of schedule and of its further progress," Interactive Investor adds, noting that the final piece of the success of its transformation might be stable share price appreciation. Shares are up 0.3% at 292.30 pence.

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More Pain Seen in Store for Government Bonds Due to Inflation

0906 GMT - BlackRock Investment Institute expects more pain ahead for long-term government bonds even with the yield jump since the start of the year, it says. Investors will demand more compensation for the risk of holding government bonds due to higher inflation, the asset manager says, holding to its view of underweight nominal government bonds on both tactical and strategic horizons. "Inflation expectations could de-anchor and spiral upward as markets and consumers lose faith that central banks can keep a lid on prices," BlackRock says. Markets' hawkish re-pricing in short-term rates is overdone, the asset manager says, and it prefers short-maturity bonds over long-term ones.

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Higher UK Debt Servicing Costs Expected to Weaken Treasury's Position

0854 GMT - Around half the money the U.K. government is borrowing is being used to service its debt, which is a precarious position for any Treasury, AJ Bell says. "So far this fiscal year interest payments on government debt have rocketed from GBP37.5 billion to GBP67 billion, partly as a result of higher coupons being paid on the GBP500 billion of inflation-linked gilts it has issued," the investment broker says. Higher debt interest payments are likely to scale back the size of the windfall Treasury chief Rishi Sunak has to play with at Wednesday's spring statement, AJ Bell says. Government borrowing so far this year is GBP25.9 billion below the last official Office for Budget Responsibility forecast, it says.

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Kingfisher's Outlook, Strategy Seen as Reassuring and Improving Amid Current Backdrop

0844 GMT - Kingfisher's outlook for fiscal 2023 is reassuring in the current environment, and also given its exposure to Poland amid Russia's invasion of neighbor Ukraine, RBC Capital Markets says. The U.K.-listed home-improvement retailer's sales were broadly in line with RBC's forecasts, it says, adding that, even though LFL sales for 1Q of fiscal 2023 were down, they are still up on a two-year basis. "We rate Kingfisher outperform...the outlook for home improvement has improved structurally," the Canadian bank says. Kingfisher's management team has a more effective business strategy, with a stronger digital offer, lower inventory and better cost control, it adds. RBC has a target price of 400 pence. Shares fall 1.8% to 286.20 pence.


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

(END) Dow Jones Newswires

03-22-22 0603ET