Risk of Correction in BOE Rate-Rise Bets Could -2-

Bodycote's Update is Positive, But Outlook Mixed

1102 GMT - Bodycote shares edge 0.3% lower after the industrial heat-treatment company reported trading in the first four months of the year modestly above its expectations, but said chief executive Stephen Harris was retiring next year. The trading update was positive, with the stronger-than-expected performance reinforcing confidence in FY consensus estimates, RBC Capital Markets says. News of the CEO's departure wasn't unexpected given his long tenure, RBC says. "Bodycote's end-market mix has meant its recovery has been somewhat slower and bumpier than others in our coverage to date," RBC analysts write, reiterating their sector-perform rating on the stock. "At present, its aero exposure is favorable, though the auto and general industrial exposure is less certain." ([e-mail])

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Hollywood Bowl's Refurbishment Strategy, Product Innovation to Keep It Rolling in FY 2023

1039 GMT - Bowling operator Hollywood Bowl's strong U.K. customer demand in 1H was supported by its continuing refurbishment strategy and product innovation as it maintains its value-for-money price point, Liberum analysts Anna Barnfather and Nishant Dahad write in a note. Liberum slightly upgrades its forecasts for FY 2023 with revenue expectations of GBP200 million, up from GBP199.2 million, and adjusted pretax profit of GBP41.9 million, up from GBP41.1 million. Liberum also forecasts capital expenditure of GBP28.7 million, down from a previous forecast of GBP36.7 million, which improves expectations of full-year net cash excluding leases. "Comparatives get tougher into the second half, but our slightly raised forecasts remain highly prudent allowing for a like-for-like pull back in 2H," the analysts say. Liberum rates the stock buy. ([e-mail])

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Savannah Energy's New Agreement Should Be Important Growth Source

1027 GMT - Savannah Energy's new purchase agreement should provide an important source of growth for its already strong-performing subsidiary Accugas going forward, Shore Capital analyst Craig Howie writes in a research note. Although the London-listed Africa-focused oil-and-gas company didn't disclose financial details, the analyst notes that 20 million cubic feet per day of gas is a significant level of throughput, and will materially add to the third-party oil volumes. "[We] will look forward to assessing the overall revenue impact on the group. These will certainly be high margin third-party volumes requiring minimal incremental expenditure by Savannah," Howie says. Savannah shares are currently suspended due to the acquisition process for oil and gas assets in South Sudan. ([e-mail])

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Ab InBev's US Backlash Goes Beyond Bud Light

1006 GMT - Ab InBev beer volumes declined 17% in the four weeks to May 20, worse than April's drop of 8.7%, indicating that the backslash caused by the Bud Light promotion with a transgender influencer is generating a broader impact, Bank of America Global Research says. Bud Light volumes dropped 28% in the month while Budweiser fell 16%, Michelob Ultra volumes were down 10% and Busch slipped 11%, analysts Andrea Pistacchi and Victor Beltran-Segarra say in a note on the back of the latest Nielsen U.S. beer report. However, the world's largest brewer's prepared cocktails segments continues to grow strongly, with the vodka and soda drink NUTRL increasing 270% and Cutwater volumes up 41%, they add. ([e-mail])

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SSP's 1H Results Prompt Estimate Upgrades

1007 GMT - SSP Group reported first-half results with sales above prepandemic levels for the period as well as for the most recent six weeks, helped by pricing and expansion, Liberum analysts Anna Barnfather and Nishant Dahad say in a note. The travel location food-and-beverage company's recovery continues to be led by leisure demand--with business demand recovering more slowly--as it continues to drive a recovery in revenue while securing new business wins for the future and expanding through acquisitions, the analysts say. Liberum upgrades its adjusted pretax profit estimates for fiscal 2023 to GBP139.9 million from GBP125.5 million, and sales to GBP3 billion from GBP2.96 billion. Liberum rates the stock buy and has a 330 pence target price. Shares are up 0.3% at 265.20 pence. ([e-mail])

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WH Smith Gains After Strong Update, Better Outlook

0950 GMT - WH Smith shares rise 1% after the U.K. newsagent, travel goods and convenience-food retailer reported continued robust trading in its travel business and said its full-year expectations had modestly improved. Barclays described the update for the 13 weeks to May 27 as strong and noted the better full-year outlook. "Accordingly, we upgrade our FY23 pretax profit by GBP2 million, all within U.K. travel, given the strong performance in 3Q vs our 2H expectations," Barclays analysts say in a note. "This is a 1.3% increase to FY23 PBT and a 1.5% increase to FY23 EPS." ([e-mail])

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Ithaca Energy Booked 1Q Beat Across the Board

0943 GMT - Ithaca Energy beat 1Q forecasts for net profit and production, Jefferies analysts Mark Wilson and Ruben Dewa write in a research note. The U.S. bank had seen Ithaca's 1Q net profit at $70 million, which was significantly less than the oil-and-gas company's $158 million, although this was largely driven by the more than $50.8 million settlement relating to an acquisition. However, Ithaca also topped production expectations with 75,300 barrels of oil a day, against Jefferies estimate of 71,000 barrels, the analysts notes. Jefferies has a buy rating on the stock. ([e-mail])

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WH Smith Should Dispose of Weaker Business Given Poor Performance

0940 GMT - WH Smith's quarterly update showed positive progress, with its ambition to be the bookseller to the world firmly on track, IG Group chief market analyst Chris Beauchamp says in a note. However, the dull performance of retailer's high-street division might have investors wondering how long it is before WH Smith spins off the weaker business, Beauchamp notes. Shares are up 1.0% at 1,543 pence. ([e-mail])

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Bodycote's CEO Stepping Down Likely to Surprise Investors

0932 GMT - Heat-treatment and thermal-processing services provider Bodycote has enjoyed a healthy start to the year, with broad-based growth across divisions, end markets as well as processes and technologies, Jefferies analysts say in a note. With year-to-date performance ahead of management's previous expectations, the company has partly derisked its second half with the only surprise being the announcement of CEO Stephen Harris' intention to depart in 2024, the analysts say. "Plenty of notice has been given, and a thorough search will commence, with both internal and external candidates considered. We suspect this will be a surprise for investors," the analysts say. Jefferies rates the stock buy and has an 880 pence target price. ([e-mail])

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(END) Dow Jones Newswires

05-31-23 0927ET