Burberry's 1Q Update Provides Strong Base, But Questions Still Linger

Burberry's 1Q Update Provides Strong Base, But Questions Still Linger

0753 GMT - Burberry has a strong base for the year following the 1Q update, driven by the twin boost of China reopening and the return of tourism, but the pace of growth will be keenly watched by investors, Interactive Investor's head of markets Richard Hunter writes in a market comment. The British luxury-goods company's 1Q store sales showed an increase of 18%, driven by a 46% rise in mainland China, although the recovery hasn't been as strong as expected, creating an overhang on the shares of late, Hunter says. "For the moment, the signs are encouraging but the clouds need to clear, with the market consensus of the shares as a hold reflecting some lingering uncertainty on prospects," he says. Shares are up 0.2% at 2,109.00 pence. ([e-mail])

COMPANIES NEWS:

ITV No Longer Exploring Acquisition of Production Company All3Media

ITV said Friday that although it continued to monitor, it has decided to stop actively exploring the possible acquisition of film production company All3Media.

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Ninety One Assets Under Management Fall

Ninety One said Friday that its assets under management at June 30 has fallen compared with both the same date last year and the earlier quarter.

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Burberry Backs Full-Year Guidance as 1Q Retail Sales Met Views

Burberry Group on Friday backed its full-year guidance after first-quarter comparable store sales rose 18%, matching market views, while revenue also grew in the quarter.

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Ashmore Group 4Q Assets Under Management Fell on Macro Uncertainty

Ashmore Group said Friday that assets under management fell in the fourth quarter to $55.9 billion from $57.7 billion the previous quarter as global macro uncertainty persists, with some investors reducing risk during the period.

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Liontrust 1Q Assets Under Management Fell

Liontrust Asset Management said Friday that assets under management and advice fell in the first quarter of fiscal 2024, but that its business is in robust shape despite the current market environment.

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Premier Miton 3Q Assets Under Management Fell

Premier Miton Group said Friday that assets under management declined in the third quarter of fiscal 2023 as investors reduced spending amid higher inflation, higher interest rates and continuing market uncertainty.

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Johnson Service Group Backs 2023 View After 1H Revenue Rose

Johnson Service Group on Friday backed its full-year guidance after revenue rose in the first half, driven by growth in both its workwear and its hotel, restaurant and catering businesses.

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MGC Pharmaceuticals Raises GBP650,000 via Heavily Discounted Placing, Subscription

MGC Pharmaceuticals said Friday that it has raised 650,000 pounds ($853,905) via a heavily discounted share placing and subscription, providing it with working capital for its short-term financing commitments.

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TheWorks.co.uk Expects FY 2023 Earnings to Meet Guidance; Accounts Delayed

TheWorks.co.uk said Friday that it expects to report fiscal 2023 earnings in-line with guidance, though its auditor has requested more time to complete their process, delaying publication.

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Versarien to Raise GBP650,000 in Discounted Placing

Versarien said Friday it will raise 650,000 pounds ($853,905) via a discounted share placing and that it will use the funds for working capital purposes and as bridge finance ahead of any asset sales.

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ZOO Digital 1Q Revenue Falling; Expects Growth to Return in 2H

ZOO Digital Group said Friday that it is seeing a fall in revenue in the first quarter of fiscal 2024, though growth is expected to return in the second half.

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Uncertainty weighs on UK managers as Liontrust, Premier Miton, Ashmore, NinetyOne all bleed assets -- Financial News

Listed fund houses are leaking billions as investors remain cautious over geopolitics and monetary policy

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Dr. Martens to Buy Back Up to GBP50 Mln Shares to Reduce Share Capital

Dr. Martens said Friday that it will buy back up to 50 million pounds ($65.7 million) of shares in order to reduce its share capital.

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Savannah Resources Raises GBP300,000 More Than Expected

Savannah Resources said Friday that it raised 6.1 million pounds ($8 million) in a share placing and subscription, which is GBP300,000 more than initially anticipated.

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XPS Pensions Agrees XPS Pensions (Nexus) Sale for Up to GBP42.5 Mln

XPS Pensions Group said Friday that it has agreed the sale of its XPS Pensions (Nexus) unit to SEI Master Trust for up to 42.5 million pounds ($55.8 million) cash, and that net proceeds will be used to repay debt.

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Ex-Goldman Sachs bankers' boutique sees revenue drop 30% amid deal drought -- Financial News

Five London partners shared a pay pot of $14m, down nearly $10m

MARKET TALK:

ITV's Decision Not to Acquire All3Media Seen as Sensible

0738 GMT - Although ITV hasn't given a reason for not wanting to pursue the acquisition of film production company All3Media further, it is a sensible decision, Citi analysts Thomas A. Singlehurst and Praveen Shetty say in a note. Although a deal would have brought a set of complementary content production assets, ultimately moving ITV toward diversification and away from traditional linear TV, there were issues around the broadcaster's ability to afford the deal, with a cash deal pushing leverage uncomfortably up, the analysts say. There were also questions about just how unique the asset was to warrant taking this risk, the U.S. bank says."To put it bluntly, there are plenty of other fish in the sea," the analysts say. Citi rates the stock buy. ([e-mail])

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Burberry's Full-Year Earnings Target Seen as Ambitious

0728 GMT - Burberry's full-year EBIT guidance remains fairly ambitious, while the $4 billion revenue target looks feasible, RBC Capital Markets analysts Piral Dadhania and Richard Chamberlain write in a research note. "From here, we believe the strategy needs to deliver on sustainable earnings growth which has ultimately proved inconsistent in the past," they say. However, the British luxury-goods company should see momentum supported by an arguably easier base of comparison versus peers, while a leaner cost base offers the potential for better-than-expected margin targets in the long term, the analysts add. RBC rates the stock at sector perform with a 2,200.00 pence price target. ([e-mail])

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GBP/USD Likely to Extend Gains Toward 1.3335, Charts Show

0704 GMT - GBP/USD is likely to extend gains toward 1.3335, based on technical charts, says Quek Ser Leang, markets strategist of UOB's Global Economics & Markets Research, in a research report. With the currency pair surging beyond UOB's objective of 1.3100 on Thursday, the strong boost in momentum suggests GBP/USD is unlikely to retreat, the strategist says. Instead, the currency pair will probably continue to rise toward the top of the weekly exponential moving average envelope, which is presently at 1.3335, the strategist says. To sustain the momentum, GBP/USD shouldn't fall below the "breakout" level of 1.2850 over the next month or so, the strategist adds. GBP/USD is down 0.2% at 1.3106. ([e-mail])

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Burberry Could Struggle to Capture Demand Tailwinds

0656 GMT - Burberry and its peers seems to be driven by high-end consumers, and this isn't putting the British luxury-good company in the most ideal position to capture the current demand tailwinds, Bernstein analysts write in a research note. In addition, duty-free restrictions in the U.K. are possibly limiting the tourist inflows benefit for the brand over the summer, they say. Burberry posted an in-line 1Q, with comparable store sales rising 18%, on par with company-compiled consensus, although the strong recovery in mainland China in the quarter was 14 percentage points lower than expectations, the analysts say. Bernstein has a market perform rating and a 2,267.00 pence price target on the stock. ([e-mail])

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

07-14-23 0428ET