Marks & Spencer Seen Entering Growth Cycle

Marks & Spencer Seen Entering Growth Cycle

1003 GMT - Marks & Spencer's unscheduled update showed a strong sales growth ahead of 2Q forecasts, Morgan Stanley analyst Izabel Dobreva and research associate Pierre Carbonaro say in a note. Adding to that, growth isn't coming at the expense of lower margins despite continued investments in price, they highlight. "The results offer evidence of strong strategic steer under new management, with M&S having entered a virtuous cycle of growth and compounding market share," they add. Morgan Stanley lifts its FY 2024 pretax profit expectations to GBP555 million from GBP503 million, being 14% ahead of market views. Price target on the stock is also upgraded to 244 pence from 230 pence. ([e-mail])

COMPANIES NEWS:

Marks & Spencer Sees Full-Year Profit Rising After Early FY 2024 Shows Good Progress

Marks & Spencer Group said that the first 19 weeks of fiscal 2024 have seen continued market share growth in both its Clothing & Home and Food businesses, and it expects full-year profit growth.

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Legal & General Operating Profit, Solvency Ratio Beats Views

Legal & General Group beat expectations as it reported operating profit and a solvency ratio ahead of views for the first half of 2023 and backed its mid-term targets.

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Bunzl Reports Acquisitions in Spain, Brazil, Canada and the Netherlands

Bunzl said it acquired three businesses and signed an agreement to acquire a further business across a range of sectors in Spain, Brazil, the Netherlands and Canada.

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Victoria PLC to Report Record Revenue, Underlying Earnings

Victoria PLC expects to report record revenue and underlying earnings for fiscal 2023 as it completes major integration projects, the company said Tuesday.

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Just Group Sees 2023 Beat After Swing to Pretax Profit in 1H

Just Group expects to comfortably exceed its underlying operating profit target for the year as it swung to pretax profit for the first half of 2023.

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Up Global Sourcing's Revenue Rose on Online Division Growth

Up Global Sourcing Holdings said revenue rose for fiscal 2023, driven by exceptional growth at its online division and an improved sales mix, and that its performance in fiscal 2024 was in line with market expectations.

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888 Holdings Swung to 1H Pretax Loss on Costs But Revenue Rose; Backs Full-Year Outlook

888 Holdings said it swung to a pretax loss on higher costs and expenses, though revenue and earnings significantly increased and it is on track to meet full-year expectations.

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Kenmare Resources to Return GBP23.6 Mln to Shareholders via Tender Offer

Kenmare Resources plans to return up to 23.6 million pounds ($29.9 million) to shareholders via a tender offer as part of its policy to supplement shareholder returns when sufficient capital is available.

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Castings Says Strong Demand Has Continued in Year to Date

Castings said the strong demand in the commercial vehicle sector previously reported in June has continued in the year to date and as a result, original equipment manufacturers have restricted the number of new orders being accepted.

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Instem Sees 2023 Performance In Line With Its Views After 1H Revenue Growth

Instem sees its full-year results in line with its views as it expects to report higher revenue for the first half of 2023.

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Velocity Composites Investor to Subscribe for GBP190,000 in Fundraise

Velocity Composites said it has received additional demand from a strategic investor to invest 190,000 pounds ($241,053) via a conditional subscription related to the previously announced GBP6.2 million placing.

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Gelion Sees Revenue, Adjusted Loss Ahead of Guidance

Gelion expects its revenue and adjusted loss for fiscal 2023 to beat its guidance and said it signed research and development agreements for its zinc hybrid cell.

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PHSC Shares Rise on Buyback Plan

Shares of PHSC rose 22% in opening trade after the company said it plans to start a new share buyback program as part of its strategy to deliver returns to shareholders.

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MTI Wireless Edge Pretax Profit Rose as Defense Sales Increased

MTI Wireless Edge said pretax profit rose for the first half as the antenna division benefited from increased defense sales, and that its performance in the period positioned it well for the remainder of the year.

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X5 Retail Net Profit Slips on Higher Costs, Weaker Margin; Revenue Rose

X5 Retail Group said that net profit slipped in the second quarter on higher costs and a weaker margin, though earnings and revenue rose.

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Genuit Sees 2023 Profit At Top End of View Despite Lower 1H Results

Genuit Group said that it sees its underlying operating profit for 2023 coming at the top end of expectations given the benefits of its self-help measures, and that its pretax profit slipped over the first half on higher finance costs.

MARKET TALK:

Up Global Sourcing Seen Offering Scope for Additional Shareholder Returns

1041 GMT - Up Global Sourcing's FY 2023 revenue grew 8% as it achieved record results again, Canaccord Genuity analyst Mark Photiades says in a note. This is seen as an exceptional performance for a consumer products business given the challenging macro backdrop, Photiades says. The company said its FY 2024 performance is in line with market expectations of year-on-year revenue growth of around 6% to GBP175.8 million based on FY 2023's outcome, he says. "Today's positive update further reinforces our belief that UPGS offers investors a compelling combination of growth and income, whilst balance sheet strength and future free cashflow generation offer the potential for further brand investment and development as well as scope for additional shareholder returns," he says. Canaccord rates the stock buy. ([e-mail])

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Bunzl's Dealflow Trend Expected to Continue

1018 GMT - Bunzl announced two acquisitions in the food-service sector and two in cleaning and hygiene, which brings the year-to-date total dealflow--the rate at which business proposals and investment pitches are received--to 10 transactions, Goodbody analyst Gerry Hennigan says in a note. The distribution-and-outsourcing company's comments continue to reference an active pipeline of dealflow with prior guidance that around two-thirds of its revenue growth over the past 10 years derived from dealflow, Hennigan says. "A trend that we would expect to continue, given the breadth of opportunities apparently at its disposal, with today's announcement suggesting that it is on track to match the quantum of dealflow in 2022--13--and 2021--14," Hennigan says. Goodbody has a hold recommendation on the stock and a 2,795 pence closing price. ([e-mail])

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Legal & General Looks Well-Placed in Pensions

1011 GMT - Legal & General Group looks well-placed to expand its pension business, Panmure Gordon says, despite a downbeat market reaction to the pension, insurance and investment-management firm's first-half results. They showed operating profit beating consensus estimates but down slightly year-on-year, with strong trading in the company's pension risk-transfer business and L&G Capital partially offset by L&G Investment Management, where rising yields and net outflows negatively affected assets under management, Panmure says. "The balance sheet remains strongly capitalized, which positions the group well to write another record amount of PRT business, where we expect the market to expand further in 2023," Panmure analyst Abid Hussain writes, reiterating the brokerage's buy rating. Still, shares top the FTSE 100 fallers, down 3.7%. ([e-mail])

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Marks & Spencer's Cost Control Could Provide Margin Tailwind Ahead

0952 GMT - Marks & Spencer's guidance upgrade provides further evidence of progress, AJ Bell investment director Russ Mould says in a note. Despite the British retailer's food business generally performing well over several years, the big transformation is happening in clothing, he says. The group has also been benefiting from a steady increase in market share while competitors suffered or even collapsed over recent years, Mould adds. "Marks has made meaningful progress on operating costs, which could provide an ongoing tailwind to margins for some time to come. Current CEO Stuart Machin and his immediate predecessor Steve Rowe deserve credit for succeeding where others singularly failed," he adds. ([e-mail])

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Marks & Spencer Outlook Seems Brighter Than For a While

0951 GMT - Marks & Spencer Group shares rise 7% after the U.K. clothing and food retailer reported higher sales in the first 19 weeks of the year and forecast better-than-expected first-half results. The trading update shows the U.K. consumer is still spending and that the company is making progress with plans launched last year to improve brand perception and designs, reduce discounting, improve online ranges, cut costs and instil a more entrepreneurial culture, non-advisory brokerage Wealth Club says. "M&S cautions there are still 'considerable uncertainties about the economic outlook'," Wealth Club portfolio manager Charlie Huggins writes. "Nevertheless, there are more reasons for optimism now than there have been for some time." ([e-mail])

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FTSE 100 Falls As UK Jobs Data Suggest Interest Rates Will Rise Further

0948 GMT - The FTSE 100 falls 1.2% to 7417.33 points as investors digest the U.K. labor market report and weak trade data from Germany and France. U.K. data show average wage growth excluding bonuses in the three months ending in June rose 7.8%, more than expected and raising the prospect of at least one more interest-rate increase. The unemployment rate rose to 4.2%, however, potentially increasing concerns about the impact of higher rates on the economy. Investment company Abrdn is the biggest loser, down 2.5% as it extends Monday's losses, while insurer Prudential is down 2.4%. Mining company Fresnillo rises 0.1% after declining on Monday. ([e-mail])

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