UK Housing Market Still Flagging Despite Volume Gains

UK Housing Market Still Flagging Despite Volume Gains

1240 GMT - The U.K. housing market is still showing signs of a slowdown despite higher property sales volumes in November, Interactive Investor says. Volumes rose 4% month-on-month in November, according to HMRC property transaction data cited by Interactive. That doesn't mean the housing market got a second wind following mortgage-market chaos following the ill-fated mini-Budget in late September, Interactive says. "The housing market is still exhibiting the hallmarks of a slowdown as inflation concerns, rising mortgage rates and an impending recession weigh on the property market," Interactive's senior personal finance analyst, Myron Jobson, writes. Still, FTSE 100 housing stocks make modest gains, with Taylor Wimpey the sector's biggest top-flight riser, up 1.4%. ([e-mail])

Companies News: 

Bunzl Sees 2022 Revenue Rising on Inflation-Driven Growth, Acquisitions

Bunzl PLC said Wednesday that it expects 2022 underlying revenue to show strong growth on year and 2023 revenue to rise at constant exchange rates.

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4Global Swung to 1H Pretax Loss, Is Confident of Meeting Market Views for Year

4Global PLC said Wednesday that it swung to a pretax loss for the first half of fiscal 2023 after booking higher costs, and that management is confident of meeting market expectations for the year.

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Scotgold Resources FY 2022 Pretax Loss Widened on Higher Costs

Scotgold Resources Ltd. said Wednesday its pretax loss for fiscal 2022 doubled, as it prepares for full production at its Cononish gold mine in Scotland.

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Infrastructure India Warns That It Can't Continue as Going Concern

Infrastructure India PLC said Wednesday that it can't continue as a going concern given a swing to net liabilities in its first-half accounts.

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Pensana Agrees $4 Mln Investment From Shareholder for UK, Angola Projects

Pensana PLC said Wednesday that shareholder M&G Investment Management will invest $4 million in the company, supporting its financing and the start of main construction of two projects in the first quarter of 2023.

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Gama Aviation Says 2H Has Been Strong; Sees Adjusted EBIT Meeting Management Views

Gama Aviation PLC said Wednesday that performance has been solid in the second half of 2022, and the company sees adjusted earnings before interest and taxation in line with management views.

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SkinBioTherapeutics Raises GBP2.6 Mln in Placing, Retail Offer

SkinBioTherapeutics PLC said Wednesday that it has raised total gross proceeds of 2.6 million pounds ($3.2 million) in a placing and retail offer to fund product rollouts and for working capital purposes.

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TwentyFour Income Fund Swung to 1H Loss

TwentyFour Income Fund Ltd. said Wednesday that it swung to a loss in its fiscal first half as higher interest income was wiped out by foreign currency losses and losses on financial assets.

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Zephyr Energy Makes Two Acquisitions, Secures $8 Mln Line of Credit

Zephyr Energy PLC said Wednesday that it has made two acquisitions, partly funding one with an $8 million asset-backed bridge line of credit.

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Intuitive Investments Swung to Pretax Loss in FY 2022 on Portfolio Losses

Intuitive Investments Group PLC said Wednesday that it swung to a pretax loss for fiscal 2022 hit by losses from investments its portfolio of small cap healthcare companies.

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Plaza Centers Extends Long-Stop Date for Casa Radio Sale

Plaza Centers NV said Wednesday that it has agreed to extend the long-stop date for the sale of its interest in the Casa Radio Project to AFI Europe NV.

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Corcel Makes Good Progress in Reducing Debt; Shares Rise

Shares in Corcel PLC rose Wednesday after the company said that it has made good progress reducing its debt balance and that it is looking into other opportunities which would clear the debt completely.

 
Market Talk: 

Sterling Faces Challenging Outlook in 2023

0942 GMT - Sterling may remain near current levels against the dollar over the Christmas period but looks set to fall in 2023 as the outlook looks challenging, ING says. "We continue to see mostly downside risks for the pound in the new year, as a recessionary environment and sensitivity to market instability may cause a return to the 1.15-1.18 range in cable [GBP/USD]," ING analyst Francesco Pesole says in a note. "For this festive season, GBP/USD may hold around 1.2100-1.2250." GBP/USD last trades down 0.3% at 1.2143. ([e-mail])

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European Stocks Rise Ahead of Likely US Gains

1046 GMT - European stocks rise after mixed Asia trading and ahead of an expected higher U.S. open. The Stoxx Europe 600 gains 0.8%, the CAC 40 climbs 1%, the DAX advances 0.7% and the FTSE 100 is up 0.5%. Brent crude increases 1.3% to $81.04 a barrel. Markets in Australia and Hong Kong rose, but stocks in mainland China and Japan fell. IG futures data show the Dow opening at 33082, versus Tuesday's close of 32849. "Canadian CPI and U.S. existing home sales, along with weekly crude inventories, are the notable events on today's calendar," IG analysts write. ([e-mail])

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Bunzl Underwhelms Market with 2023 Earnings Outlook

1107 GMT - Bunzl failed to muster any enthusiasm from investors despite reporting very strong growth for 2022 in its business update, AJ Bell investment director Russ Mould says. The international distribution and services company expects group revenue in 2022 to rise on year by around 17% at actual exchange rates, while at constant exchange rates it forecasts a rise of around 10%. "While [Bunzl] has shown to be resilient during inflationary times, markets no doubt don't like the news that next year's earnings per share will be moderately lower than 2022's because of higher interest and tax rates," Bell says in a market comment. Shares are down 1.3% at 2,783.0 pence. ([e-mail])

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Bunzl Sees Resilient Performance Going Into 2023

1117 GMT - Bunzl has indicated continued resilience in its 2022 update, driven by its ability to pass on product cost inflation and a steady stream of deals, though Walmart negotiations are still underway, Goodbody says. The international distribution and services company's update is likely to lead to further upgrades to market consensus estimates for earnings before interest, taxation and amortization of GBP867 million and GBP872 million in 2022 and 2023, respectively, Goodbody analyst Gerry Hennigan says in a note. "That said, with Walmart contributing 9% to group sales, albeit at a low single-digit Ebita margin, a resolution to protracted negotiations will likely have a bearing on forecasts in 2023," the Irish brokerage says. Goodbody retains its hold rating on Bunzl's stock. Shares are down 1.0% at 2,792.0 pence. ([e-mail])

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Bunzl Drops After Forecasting Slightly Lower 2023 EPS

1129 GMT - Bunzl shares drop 1% to 2790 pence after the distribution company forecast adjusted earnings per share in 2023 moderately lower than in 2022 on higher interest rates and an increased effective tax rate. The trading statement for the year to the end of December was "resilient", Jefferies says, reiterating its hold recommendation and 2900p price target. "In our view, consensus FY22 EPS may drift up by low single digits today, driven by slightly stronger revenue growth and EBITA margins, but FY23 expectations are likely to remain unchanged," Jefferies analyst Kean Marden says in a note. ([e-mail])

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Petrofac's Potential 1H Contracts Would Ease Concerns After Disappointing 2022

1137 GMT - The performance of Petrofac's engineering and construction division in 2022 is disappointing as it booked no new orders but cost overruns, Peel Hunt analysts Alexander Paterson and John Gilbert say in a note. The encouraging performance of its asset solutions and integrated-energy services divisions isn't enough to mitigate the engineering and construction unit's lack of contracts, which means further covenant waivers and repayment extensions on loans of $230 million, say the analysts. "We expect at least two large contracts to be awarded in 1H 2023, and their announcement would alleviate a lot of concerns and remove the financial distress overhanging the stock," they say. Peel Hunt rates Petrofac's stock buy but cuts its target price to 100 pence from 125 pence. ([e-mail])

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Drax Set to Benefit from Exceptional Cost Allowance in UK's Electricity Generator Windfall Tax

1204 GMT - Drax could potentially pay around GBP200 million less in windfall tax due to the exceptional costs allowance outlined in the U.K. government's draft legislation on its Electricity Generator Levy published on Tuesday, Jefferies says. This would represent about 8% of Drax's market cap assuming a one-year impact all else equal, the brokerage calculates, based on a 10TWh of Renewables Obligation Certificates output for 2023. It takes into account a scenario with GBP110/MWh biomass cost in 2023, which would give Drax a benefit of GBP20/MWh. The allowance could also have positive read-across for peer Centrica's nuclear generation, the broker adds. Jefferies has a buy rating on both stocks. ([e-mail])

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Drax's Windfall Tax Reduction Supports Investment Case, RBC Says

1228 GMT - Drax's windfall tax amount is materially reduced due to the exceptional costs allowance outlined in the U.K. government's draft legislation on its Electricity Generator Levy published Tuesday, RBC Capital Markets says. The Canadian bank quantifies this reduction at around GBP450 million as the tax threshold adjusts upward from the existing GBP75/MWh to GBP105/MWh. "Whilst there is an offset from the higher biomass cost, this is a positive for Drax and provides further certainty in the investment case," analyst Alexander Wheeler says. RBC has an outperform rating on the stock. ([e-mail])

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Sterling Falls as SocGen Says Sentiment Remains Dire

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12-21-22 0800ET