Pound's Modest Reaction to Inflation Data Suggests Strong Reading Was Expected

February's strong U.K. inflation print showing annual CPI rising to 6.2% was expected judging by the pound's limited reaction to the data, IG says. The acceleration in inflation highlights the U.K.'s cost of living issue and some of the caution in sterling probably reflects investors waiting to see whether U.K. Treasury chief Rishi Sunak offers support to households in his new spending plans, IG analyst Chris Beauchamp says in a note. Sunak unveils his spring statement at 1230 GMT alongside the Office for Budget Responsibility's new growth forecasts. "Growth forecasts are likely to be conservative, providing little reason to chase the recent bounce in the pound," Beauchamp says. GBP/USD falls 0.2% to 1.3239 but EUR/GBP is flat at 0.8317. 


 
Companies News:

Ultra Electronics 2021 Revenue, Pretax Profit Fell on Str74onger Pound, One-Off Loss

Ultra Electronics Holdings PLC said Wednesday that revenue and pretax profit fell in 2021 due to a stronger pound against the dollar and a one-off loss on the disposal of two small loss-making noncore businesses.

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Saga Says FY 2022 Pretax Loss Narrowed Despite Covid-19 Backdrop

Saga PLC reported on Wednesday a significantly narrowed pretax loss and a material increase in revenue for fiscal 2022, and said it continued to apply its turnaround strategy amid a challenging Covid-19 backdrop.

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Petrofac 2021 Pretax Loss Widened on Drop in Revenue

Petrofac Ltd. said Wednesday that its pretax loss widened in 2021 on a fall in revenue.

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Dignity Swung to 2021 Pretax Profit; Says New Strategy Means Lower Short-Term Profits

Dignity PLC said Wednesday that it swung to 2021 pretax profit after booking lower costs, and that its new strategy will lead to lower profits in the short term.

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Halma Sees FY 2022 Profit in Line With Market Expectations, Strong Sterling Could Hurt Profit

Halma PLC said Wednesday that fiscal 2022 adjusted pretax profit is expected to be in line with market expectations due to increased demand across the group, but warned that a strong sterling could have a negative impact on its profit.

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RWS Holdings Expects FY 2022 Results in Lower End of Range of Expectations

RWS Holdings PLC said Wednesday that it expects fiscal 2022 results to be around the lower end of the range of current market expectations.

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James Cropper to Miss FY 2022 Adjusted Pretax Profit Market Forecasts

James Cropper PLC said Wednesday that it will miss adjusted pretax profit market expectations for fiscal 2022 due to the rise in wholesale gas prices over the latest quarter, which has hurt its paper unit.

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Pendragon Swung to 2021 Pretax Profit, Sees Potential Disruption From Ukraine Conflict

Pendragon PLC said Wednesday that it swung to a pretax profit on increased revenue in 2021 after booking strong performance in all parts of the business, but warned that the Ukraine conflict may hit new vehicle supply.

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Henry Boot 2021 Pretax Profit More Than Doubled

Henry Boot PLC said Wednesday that 2021 pretax profit more than doubled on a strong performance from residential land sales, industrial development, investment property revaluation gains and returns from joint ventures.

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AB Dynamics's 1H Performance Was in Line With Views; FY 2022's Forecasts Unchanged

AB Dynamics PLC said Wednesday that its performance for the first half of fiscal 2022 is in line with management expectations, adding that it has been able to mitigate the effects of inflationary cost pressures by rising its prices for new orders.

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Quartix Technologies Sees 1Q Performance in Line With Market Views

Quartix Technologies PLC said Wednesday that it expects first-quarter performance to meet market expectations, with a 25% on-year increase in new installations and a gain in annualized recurring revenue that was significantly ahead of the growth rate a year earlier. 


 
Market Talk:

Halma Gains After 'Robust' FY Trading Update

1018 GMT - Shares in Halma rise 0.9% after the FTSE 100-listed safety-equipment supplier forecast 2021/22 adjusted pretax profit in line with market expectations due to increased demand, but warned that strong sterling could weigh. The trading update for the year to the end of March was robust, Jefferies says. Lack of detailed guidance for the year ahead may disappoint investors, though the company said orders have continued to track ahead of revenue and ahead of last year, the brokerage says. "One item of interest for us is the drop-off in M&A to GBP55 million in 2H22 from GBP111m in 1H22, though the company does say the pipeline remains 'healthy'," Jefferies says.

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Auto Trader Should Be Able to Grow Autorama

1017 GMT - Auto Trader should be able to grow the market share of its recent acquisition Autorama and do so at a lower operating cost base, Jefferies says. "The extent to which leasing takes a greater share of overall car ownership is up for debate, but as a platform that's systematic to car buying in the U.K., it's obvious to us that Auto Trader would want to position itself for inevitable secular changes as we move deeper into the transactional era," it says. Jefferies has a buy rating on the car-listing publisher's stock, with a price target of 870 pence.

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Trustpilot Growth Seems to Be Coming at a Significant Cost

1012 GMT - Trustpilot's new 2022 guidance to accelerate bookings growth on increased costs made its shares drop 17% on Tuesday, bringing its year-to-date fall to 60%, Berenberg says. The German brokerage expects the company to be Ebitda-loss-making in 2022-24 and says it sees the path to profit as uncertain. While it sees that higher costs will be affecting its 2022 margins, it said booking trends seems robust and Trustpilot's core economics are strong. Berenberg reiterates a buy rating on the stock, but reduces its price target to 200 pence from 440 pence. Shares are up 3.4% at 142.5 pence.

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Pendragon Shows Clear Evidence of Strategic Progress, Jefferies Says

0944 GMT - Pendragon's 2021 was a record year for profit and there is clear evidence of strategic progress being made, Jefferies says. Scaled omni-channel operators are looking increasingly relevant to the U.K. motor industry, the U.S. bank says, adding that, notwithstanding industry tailwinds, Pendragon's strategic agenda is clearly being executed--operating costs now being GBP110 million lower than in 2019. Although margins for new and used cars should normalize in 2022, growth in the latter category should broadly offset this impact, it says. Jefferies has a buy rating on the stock with a target price of 33 pence.

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KRM22 Is Well-Placed for Future Growth

0928 GMT - KRM22's 2021 results met forecasts, but more importantly demonstrated the opportunity for future growth, finnCap says. The U.K. technology and software investment company's suite of tools are well-placed to offer capital markets risk visualization, prioritization and remediation support, according to finnCap. KRM22's reinforced balance sheet at year-end, with gross cash up to GBP5.4 million from GBP2.0 million in 2020, will be used to invest in marketing, sales, and development to exploit the expanding demand for regulatory risk management tools, especially given current volatile macroeconomic circumstances, the U.K. investment bank says. "The story remains as powerful as ever, and enthusiasm will derive from proof of execution," finnCap says. Shares are up 2.1% at 48.0 pence.

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Petrofac's Contract Award Pipeline Seen as Underwhelming

0926 GMT - Petrofac's 2021 results brought no particular surprises other than confirming how few contracts have been awarded since its last update, Jefferies says. The provider of services to the energy industry reported a backlog of $4.0 billion, unchanged from November 2021, the U.S. bank says. The $37 billion 2022 award pipeline is also down 8% on the $40 billion in the last update, Jefferies says. Petrofac has also said that revenue and margins will inevitably remain subdued in the near-term, though it is confident it will start to rebuild the backlog in 2022 and deliver strong growth thereafter, Jefferies says, retaining its buy rating and price target of 130.0 pence on the stock. Shares are down 2.1% at 115.8 pence.

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Futura Medical's Erectile-Disfunction Treatment Set for Deals in Europe

0918 GMT - After securing distribution deals in major parts of Asia, Latin America and the Middle East, including with Menarini's South Korean subsidiary, Futura Medical's erectile-disfunction treatment looks set for more sales in Europe, Liberum says. The U.K. brokerage expects more deals in the coming months, as Europe has already approved the treatment, while it is in final studies in the U.S. "According to IQVIA South Korea is the 9th largest erectile dysfunction market by value, similar in size to the U.K. market," it adds. Liberum has a buy recommendation on the stock and a target price of 102.1 price. Shares are up 12% at 27.6 pence.


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

(END) Dow Jones Newswires

03-23-22 0637ET