UK Sping Budget Announcements Unlikely to Affect -2-

1144 GMT - Markets expect the U.K. Debt Management Office's gilt issuance in fiscal year 2023-2024 to be between GBP170 billion and GBP260 billion, with the median consensus around GBP230 billion, up from GBP169.5 billion in gilt sales in FY 2022-23, say Mizuho rates strategist Evelyne Gomez-Liechti and head of research Helen Rodriguez in a note. "Market consensus on the 2023/24 gilt remit is wide, between GBP170-260 billion," they say. ([e-mail])

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JD Sports Expansion Plans Likely to Benefit From Sector Trends

1121 GMT - JD Sports' strong market position and growth outlook is reassuring amid positive sector trends, RBC Capital Markets Richard Chamberlain and Manjari Dhar say in a note following an investor call on Tuesday afternoon. The online retailer seems to be accelerating its store expansion program for the core JD brand in most markets, they say. Given that it only has a double-digit share in three markets--the U.K., Ireland and Australia--there is plenty of runway ahead, the analysts add. "We believe that footwear supply levels have improved in the U.S. and we estimate topline trends have continued in line with our expectations for the early weeks of FY 2024," they add. ([e-mail])

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UK Budget Needs Business Energy Support to Incubate Growth

1121 GMT - The U.K. government unsurprisingly confirmed it will extend the energy price guarantee ahead of the spring budget later Wednesday--a big relief for households facing another energy cost jump from April--but additional business support has gone largely unmentioned, AJ Bell says. Keeping more money in people's pockets should mean they have more to spend on other things which will help beleaguered businesses, but they will be hoping Treasury chief Jeremy Hunt has kept his powder dry when it comes to additional support for non-domestic users, AJ Bell's head of financial analysis Danni Hewson says in a market comment. "This budget might have been touted as one to stimulate growth but without extending help for business as well as households, growth might be difficult to incubate," Hewson says. ([e-mail])

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Severfield's VSCH Acquisition Offers Scope to Grow in Europe

1036 GMT - Severfield's acquisition of Voortman Steel Construction Holding is accretive and strategically sensible and should provide scope to grow, Liberum analysts write. The deal will provide greater access to a growing European market, growth opportunities through access to new European clients, and a platform to offer a wider range of services to existing clients, they say. Liberum expects 9% revenue growth in FY 2024 and 6% in FY 2025, amounting to revenue of GBP70 million and GBP73 million, respectively. The deal offers growth opportunity in the Netherlands and neighboring countries. The Dutch market has an addressable value of EUR1.3 billion per year, which is expected to expand, and VSCH has 5% of the market against the market leader with 10%, Liberum says. ([e-mail])

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Bloomsbury Continues to Benefit From Uptick in Reading During Pandemic

1029 GMT - Bloomsbury Publishing has benefited as people rediscovered the joys of reading during the Covid-19 pandemic, and unlike other pandemic winners, the company has continued to enjoy success as we return to something closer to normality, AJ Bell investment director Russ Mould says in a note. "Bloomsbury's argument, and it's a fair one, is reading is a very affordable form of escapism from the troubles of everyday life and this provides some reassurance that sales can hold up despite cost-of-living pressures," he says. The publisher's exposure to professional and academic publications and children's books are significant as these areas can prove more resilient in a downturn, Mould says. Shares are up 6.0% at 445.00 pence. ([e-mail])

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Balfour Beatty's 2022 Outperforms Market Expectations

1027 GMT - Balfour Beatty's 2022 results exceeded expectations with particular strength in Support Services, Liberum says. The construction company's balance sheet strength is a source of competitive advantage and the U.K. infrastructure outlook remains positive despite delays in road and high-speed railway HS2 projects, Liberum analysts Joe Brent and Alex O'Hanlon say in a research note. "We increase our fiscal 2023 earnings per share estimate by 6% [to 34.28 pence] due to higher interest receivable [and] inflation, shortages, and the remaining London problem contracts remain manageable within consensus," the brokerage says. Liberum retains its buy rating and 475 pence price target on the stock. Shares are up 2.8% at 350.2 pence. ([e-mail])

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Prudential, Financial Stocks Fall as SVB, China Weigh

1023 GMT - Prudential shares fall 8% and other financial stocks lose ground amid concerns about China and the potential for more banking-sector problems. The Pru's new business profit fell 7% short of expectations driven mainly by a lower Hong Kong margin, Citigroup says. While the Asia-focused insurer's numbers contained positives, the collapse of U.S. tech-lender SVB is causing investors to treat financial stocks with suspicion, AJ Bell says. "In the short-term, there are concerns about China both from a political and economic perspective as it continues to clamp down on internal opposition," Bell's investment director Russ Mould writes. "Questions have been raised about the free movement of money in and out of the country and because Beijing set an underwhelming growth target for 2023." ([e-mail])

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UK Budget May Lead to Better Sterling Performance

1016 GMT - The U.K. government's upcoming spring budget probably won't materially move sterling initially but could benefit the currency in the longer run, MUFG Bank says. The budget is likely to largely focus on trying to expand U.K. economic growth including capital allowances to encourage business investment, MUFG analyst Derek Halpenny says in a note. "The budget is unlikely to be a market-mover (unless there are some growth-positive surprises) but today could serve as a reminder that the high and sustained level of uncertainty and pessimism linked to the U.K. in recent years has passed and that certainly points to the potential for better GBP performance ahead." The budget is expected to be unveiled at 1230 GMT. ([e-mail])

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Future PLC Seen as a Digital Marketing Force

1014 GMT - Future PLC is a force in digital marketing and has scaled rapidly via earnings accretive M&A, Jefferies analysts say in a note. However, the U.S. bank is cautious on the U.K. digital-media group's outlook due to the CEO transition and limited visibility on the ad-spend cycle and organic growth. Although incoming CEO Jon Steinberg is a good fit going forward, "it's hard to see a re-rating ahead of hearing his strategic priorities and an update on M&A," the analysts say. Jefferies starts its coverage of the stock with a hold rating and a target price of 1,300.00 pence. Shares trade down 2.7% at 1,140.00 pence. ([e-mail])

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Prudential's Results Reaction Dampened by SVB-Influenced Sentiment

1010 GMT - Prudential's results may well have gotten a better hearing a week ago before the collapse of SVB, says AJ Bell in a market comment as the insurance-and-investment business's shares shed 7% after it posted a higher 2022 operating profit and dividend and flagged the benefit from China's economic reopening. "Right now investors are treating financial stocks with the same suspicion as something they've found on their shoe," says investment director Russ Mould. He adds that set against the current backdrop and short-term concerns on China's clamp down on internal opposition and free movement in and out of the country, along with its underwhelming 2023 growth target, the group has seen meaningful growth in the first two months of the year. More of this could help address any market scepticism, Mould says. ([e-mail])

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Trainline's 2H Trends to Continue Into FY 2024

0957 GMT - Despite a slight miss on net ticket sales, Trainline's FY 2023 revenue met expectations, analysts at Peel Hunt say in a note. For the online tickets operator the year was significantly better as revenue hit the middle of guidance range due to international inbound travel and revenue optimization initiatives, they say. Net ticket sales in Europe reached EUR1 billion for the first time, driven by growing share in Spain where there are four rail carriers between Madrid and Barcelona and more available routes from the capital to Seville, Malaga and Alicante over the coming months, analysts say. "We believe some of the trends in 2H, like international inbound and online, will continue intoFY 24," they say. Peel Hunt rates the stock buy. ([e-mail])

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MBDA Posts Record Orders in FY, But Ukraine War Impact Marginal

0953 GMT - European missile giant MBDA posts record orders for full year 2022 of 9 billion euros with an order backlog of 22.3 billion euros, but says the impact from war in Ukraine is so far "extremely marginal." Remarks from the unlisted company, owned by BAE Systems PLC, Airbus SA and Leanardo S.p.A, underscore how Ukraine's effect on defence order books has yet to happen. "We see a surge of demand increasing, we see declarations from the governments, so it would be logical that in 2023 there will be an impact. But now the proof (will be) in the eating of the pudding," said CEO Eric Beranger. Overall, revenues in 2022 were EUR4.2 billion, consistent with 2021's record level. ([e-mail] @macdonaldajm)

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Sterling's Link to Risk Sentiment May be Fading

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03-15-23 0831ET