UKX FTSE 100 Index

BOE Rate Rise of More Than 25Bps Looks Unlikely

1238 GMT - The Bank of England is not expected to raise interest rates by more than 25 basis points and instead is likely to have one final 25bps rate increase in June, say Morgan Stanley Research analysts in a note. A bigger rate rise is unlikely due to concerns about the impact of high rates on the mortgage market, the analysts say. "The market is now looking for a terminal rate of above 5%, and we think the BOE is still mindful of the U.K. mortgage market vulnerabilities," they say, "With the Bank Rate already deeply in restrictive territory, small steps seem like the optimal plan." (miriam.mukuru@wsj.com)

COMPANIES NEWS:

United Utilities FY 2023 Profit Fell on Lower Consumption, Inflation

United Utilities Group said Thursday that pretax profit fell for the year ended March 31, reflecting lower consumption, inflation and operational incidents.

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Intermediate Capital Group FY 2023 Pretax Profit, Revenue Beat Expectations

Intermediate Capital Group on Thursday posted a better-than-expected fall in its pretax profit and revenue for fiscal 2023 and backed its medium-term guidance.

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UK Watchdog Clears Way for EDF Acquisition of GE Nuclear Operations

The U.K. Competition and Markets Authority said Thursday that it won't refer Electricite de France's proposed acquisition of General Electric's nuclear steam-power business to an in-depth investigation, clearing the way for the deal.

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Tate & Lyle Pretax Profit Jumped on Food & Beverage Solutions Growth

Tate & Lyle said Thursday that its pretax profit more than tripled in fiscal 2023 thanks to a jump in revenue driven by its food and beverages solutions.

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Cineworld's Proposed Restructure Now Backed by Most Lenders

Cineworld said Thursday that its proposed restructuring has the backing of lenders controlling almost all of its legacy credit lines and most of the outstanding debt under its debtor-in-possession facility.

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London Stock Exchange Group CFO Anna Manz to Step Down

London Stock Exchange Group said Thursday that Chief Financial Officer Anna Manz is stepping down to move on to another CFO role outside the financial services industry.

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Johnson Matthey FY 2023 Pretax Rose But Missed Consensus

Johnson Matthey said Thursday that pretax profit rose for fiscal 2023 after it booked lower impairment and restructuring charges, but that it missed consensus.

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QinetiQ FY 2023 Pretax Profit Rose on Record Orders; Backs Current Year Outlook

QinetiQ Group said Thursday that pretax profit for fiscal 2023 rose as revenue increased 20% on record orders, and backed its outlook for fiscal 2024.

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Workspace Group Swung to FY 2023 Loss on Valuation Declines; Revenue Rose

Workspace Group said Thursday that it swung to a pretax loss for fiscal 2023 as property values declined on higher interest rates, though revenue rose and it hiked its dividend.

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Pets at Home FY 2023 Pretax Profit Fell on Investments, Costs

Pets at Home said Thursday that its pretax profit fell in fiscal 2023, dragged by costs related to its new distribution centre and higher investments that offset an increase in revenue.

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Fevertree Drinks Reports Good Start to Year, Backs 2023 Guidance

Fevertree Drinks PLC said Thursday that it has had a good start to 2023 and expects to deliver revenue for the year at the top end of its guidance range and for Ebitda to be in line with guidance provided in March.

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AJ Bell Sees FY 2023 Revenue Margin at 1H Levels After First-Half Earnings Rose

AJ Bell on Thursday said it sees revenue margins for fiscal 2023 at a similar level to the half-year as it reported an on-year earnings rise for the six-month period and raised its dividend.

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Hill & Smith Confirms Alan Giddins Executive Chair for 12-18 Months; Updates Views

Hill & Smith said Thursday that Alan Giddins formally assumed the role of executive chair for an expected period of 12 to 18 months, and that it forecasts operating profit for the year to be modestly ahead of the top end of analyst expectations.

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Henry Boot Says 2023 Started Well; Currently Meeting Pretax Profit Market Views

Henry Boot said Thursday that it has begun 2023 well and it continues to perform in line with full-year pretax profit market expectations.

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Sabre Insurance Four-Month Gross Written Premiums Slip; Backs 2023 Guidance

Sabre Insurance Group on Thursday reported a slight fall in gross written premiums for the first four months of the year due to a drop in the motorcycle segment, but backed its full year guidance.

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Young & Co.'s Brewery FY 2023 Pretax Profit Fell on Impairment

Young & Co.'s Brewery said Thursday that fiscal 2023 pretax profit fell, mainly due to a property revaluation impairment, but revenue grew 19%.

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Capital & Regional Four-Month Footfall and Occupancy Rose

Capital & Regional said Thursday that its footfall for the first four months of 2023 rose and continues to recover toward prepandemic levels, and occupancy increased.

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Vanquis Banking Says 1Q Trading Was in Line With Its Views

Vanquis Banking Group on Thursday said it continued to trade in line with management's expectations over the first quarter of 2023.

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Headlam Shares Fall Amid Lower Volumes, Gross Margins Reduction In Jan-April

Shares in Headlam Group fell Thursday after the company said its gross margins in the first four months of the year have been reduced on falling volumes in the residential sector market due to current economic environment and weakened consumer confidence.

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S&U 1Q Motor Net Receivables Growth Slowed Down; Profit, Turnover Up

S&U said Thursday that although it has seen a hiatus in the rapid growth of its motor net receivables seen in the last quarter of fiscal 2023, profit, turnover, debt quality and collections for the first quarter of fiscal 2024 were ahead of the year-prior period.

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Alliance Pharma Four-Month Sales Rose on Year, But Sees Full-Year FX Hit

Alliance Pharma said Thursday that sales for the first four months of 2023 were higher than in the year-earlier period, but warned that adjusted pretax profit for the full year will be marginally lower than expected due foreign-exchange moves and rising interest rates.

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RA International Shares Fall on 2023 Earnings Guidance; 2022 Loss Narrowed

Shares in RA International Group fell Thursday after the company said it expects to remain broadly break-even at the 2023 earnings level, though its 2022 pretax loss narrowed and revenue rose.

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Gamma Communications Appoints Martin Hellawell as New Chairman

Gamma Communications said Thursday that Softcat's Martin Hellawell will be appointed as its new board chairman, replacing Richard Last with effect from July 1.

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Scirocco Energy Extends Long-Stop Date for Ruvuma Sale

Scirocco Energy said Thursday that it has pushed back the long-stop date for the sale of its 25% interest in the Ruvuma gas project in Tanzania as the process has taken longer than expected.

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Round Hill Music Royalty Fund 1Q Combined Net Publisher, Label Share Almost Doubled

Round Hill Music Royalty Fund said Thursday that combined net publisher share and net label share in the first quarter rose 91%, or by $10.1 million, on the year-prior period.

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Destiny Pharma CEO Steps Down; Debra Barker Named as Interim Replacement

Destiny Pharma said Thursday that Chief Executive Officer Neil Clark has stepped now with immediate effect to pursue new challenges, and named nonexecutive director Debra Barker as interim CEO.

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Ocean Harvest Technology CFO to Leave in Early June; Andy Cox Named Interim CFO

Ocean Harvest Technology said Thursday that Chief Financial Officer Adrian Crockett intends to leave the company on June 9 to pursue other opportunities, and named Andy Cox as interim CFO.

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Pathfinder Minerals Shares Fall on Risk of Non-Completion of Disposal

Shares in Pathfinder Minerals fell on Thursday after the company said its board has doubts on the company's ability to continue if the sale of its subsidiary IM Minerals isn't completed.

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Pharos Energy Production in Four Months to April Fell; Backs Guidance

Pharos Energy said Thursday that group working interest production for the four months to the end of April fell, and backed its guidance for the year.

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Revolution Beauty Names Derek Zissman as Nonexecutive Chairman

Revolution Beauty said Thursday that it has appointed Senior Nonexecutive Director Derek Zissman as nonexecutive chairman, replacing Tom Allsworth, who is resigning as a director with immediate effect.

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NAHL Group Confirms Guidance for 2023

NAHL Group said Thursday that it is on pace to scale its businesses and confirmed its outlook for 2023.

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Cohort Sees FY 2023 Slightly Above Views, Continuing Demand in FY 2024

Cohort on Thursday said it expects a fiscal 2023 performance slightly above market views, thanks to higher revenue and order intake, and that it expects organic growth to continue in the year ahead due to demand driven by the war in Ukraine and geopolitical tensions.

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Pets at Home Launches GBP50 Mln Buyback Program

Pets at Home said Thursday that it will launch a 50 million pound ($61.8 million) share buyback program for the current fiscal year.

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Belluscura to Raise up to GBP3.5 Mln to For Portable Oxygen Device Finalization, Launch

Belluscura said Thursday that it has conditionally raised 3.0 million pounds ($3.7 million) through a placing and subscriptions, and will raise up to a further GBP500,000 in a separate retail offer, to be used for its DISCOV-R portable oxygen concentrator.

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From Abrdn to Jupiter: How ESG is bolstering boss bonuses among biggest fund groups -- Financial News

Bosses at Abrdn, Jupiter and Schroders bagged big bonuses despite weaker profits and AUM in 2022

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Old Mutual 1Q Gross Written Premiums Rose

Old Mutual on Thursday posted an increase in gross written premiums for the first quarter of 2023 and that while its Life annual premium equivalent sales were almost stable, its activity in China weighed.

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Alliance Pharma Dividend, Directors' Re-Election Get Low Support at AGM

Alliance Pharma said Thursday that resolutions related to its final dividend and the re-election of three directors were approved with low shareholder support at its annual general meeting.

MARKET TALK:

Pets at Home Drops After FY Profit Falls; But Revenue, Dividend Rise

1312 GMT - Pets at Home Group shares drop 3% to 356 pence after the U.K. pet-goods retailer reported lower annual statutory pretax profit due to one-off items, but said revenue rose and raised its dividend. Underlying pretax profit in the year to the end of March was modestly ahead of guidance and supported by strong fourth-quarter momentum, Numis Securities says. "FY24 PBT has been guided in line with consensus and underpinned by robust current trading," Numis analyst Simon Bowler says in a note, reiterating the brokerage's buy rating and increasing its price target on the shares to 475p from 450p. (philip.waller@wsj.com)

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Tate & Lyle Shares Could Get Boost After Upbeat FY Results

1239 GMT - Tate & Lyle rises 2% after the food-ingredient group reported higher revenue and adjusted earnings in the year to the end of March. The company's second-half adjusted pretax earnings before interest and earnings per share were better than the market expected, Citigroup says, adding Tate's FY24 profit outlook was also ahead of consensus. That implies that consensus forecasts for adjusted EBITDA could rise in mid-single digits in percentage terms and should boost the shares, Citi says. "Furthermore, there are clear signposts of progress against its strategy," Citi analysts say in a note. (philip.waller@wsj.com)

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Soaring Gilt Yields Unsettling For Pound, Says Rabobank

1232 GMT - The rise in U.K. government bonds yields to levels reached since "disastrous" fiscal plans were unveiled under former Prime Minister Liz Truss last September is unsettling for investors and sterling, Rabobank says. Sterling failed to hold initial gains after Wednesday's higher-than-expected U.K. inflation data despite the market raising Bank of England interest rate expectations as "memories of poor U.K. fiscal management seeped back into the investor' consciousness," Rabobank forex strategist Jane Foley says in a note. "The government's position has altered significantly since September, but many of the underlying weakness in U.K. fundamentals remain." GBP/USD could drop to 1.22 in three months from 1.2371 currently, Foley says. (renae.dyer@wsj.com)

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Pets at Home Sets Medium-Term Targets Ahead of Views

1230 GMT - Pets at Home's FY 2023 results didn't surprise following its recent positive performance, supported by market leadership, positive indicators such as costumer growth and the low-ticket nature of its products, Liberum analysts say in a note. The U.K. pet-care company has set its medium-term targets with the ambition to grow sales 7% per year, modestly ahead of Liberum's current estimate of around 5%, the analysts add. Liberum has a hold rating on the stock and a target price 390.0 pence. (michael.susin@wsj.com)

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Johnson Matthey Drops After Earnings Guidance Falls Short

1202 GMT - Johnson Matthey shares drop 2% after the catalytic-converter maker's earnings outlook disappointed investors. While adjusted pretax earnings before interest in the second half came in 3% above Jefferies expectations and 5% ahead of consensus forecasts, the company's guidance for adjusted EBIT in 2023-24 was about 8% below consensus expectations, Jefferies says. "We expect a small negative share-price reaction on the result," Jefferies analysts say in a note. (philip.waller@wsj.com)

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Gilt Yields' Rise Could Hurt UK Financial Sector

1147 GMT - The sharp rise in U.K. gilt yields following Wednesday's higher-than-expected inflation data could hurt the U.K. financial sector "as it happened during Truss' mini budget," says Saxo strategy team in a note. The mini budget last autumn by former prime minister Liz Truss proposed large, unfunded tax cuts and caused a steep rise in gilt yields. Saxo expects U.K. 10-year yields could rise to 4.59% and 2-year gilt yields could rise to 4.68%. "The BOE will need to step into rescue, limiting rates' upside," the team says. Since Wednesday's inflation data, the U.K. 10-year gilt yield has risen around 14 basis points to last trade at 4.312% while U.K. 2-year gilt yield is up around 30bps at 4.442%, Tradeweb data show. (miriam.mukuru@wsj.com)

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QinetiQ's Growth Driven By Long-Term Orders in US, UK, Australia, CEO Says

1139 GMT - QinetiQ PLC reports above-consensus FY23 results and record orders. CEO Steve Wadey says in an interview that growth has been driven by long-term orders in U.S., U.K., Australia. Wadey says the company's revenues have doubled in size in the last 7 years. Still, while Ukraine didn't drive the current order book, "it is reinforcing long-term strategy as a company," he says. "Our customers are saying the threat is prevalent, it is changing, so we need a sovereign defense industry" and investment in research and development. (Alistair.MacDonald@wsj.com)

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QinetiQ's Guidance Upgrade Should Help Shares

1131 GMT - QinetiQ's strong FY 2023 results, which saw the defense company upgrade its revenue guidance to FY 2027 to GBP3 billion from GBP2.3 billion, are slightly above views, Berenberg analysts George McWhirter and Philip Buller say in a note. The company's target implies a margin of 11%-12% through a combination of high-single-digit organic growth and M&A, they say. Meeting guidance on an organic basis would offer a 10% upside to FY 2027's revenue guidance and a 5% upgrade to its EBIT estimates, the German bank's analysts say. "We think that the shares should react positively to this update," the analysts say. Berenberg rates the stock buy and has a 450 pence target price. Shares are up 1.2% at 374.60 pence. (anthony.orunagoriainoff@dowjones.com)

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BOE Bank Rate Could Peak at 5.25%, Deutsche Bank Says

1117 GMT - The Bank of England is expected to raise rates from the current 4.50% to a peak of 5.25% in September due to stronger-than-expected U.K. price and wage inflation, says Deutsche Bank Research senior economist Sanjay Raja in a note. "Price persistence remains a dominant theme in the U.K. - perhaps more so than any other G7 economy," he says, "Risk management considerations will, we think, force the monetary policy committee to push rates higher and further than previously intended," Raja says. (miriam.mukuru@wsj.com)

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QinetiQ's Guidance Upgrade Should Help Shares

1116 GMT - QinetiQ's strong FY 2023 results, which saw the defense company upgrade revenue guidance to FY 2027 to GBP3 billion from GBP2.3 billion, are slightly above views, Berenberg analysts George McWhirter and Philip Buller say in a note. The company's target implies a margin of 11%-12% through a combination of high-single-digit organic growth and M&A, they say. Meeting guidance on an organic basis would offer a 10% upside to FY 2027's revenue guidance and a 5% upgrade to its EBIT estimates, the analysts say. "We think that the shares should react positively to this update," the analysts say. Berenberg rates the stock buy and has a 450 pence target price. Shares are up 1.1% at 374.20 pence.(anthony.orunagoriainoff@dowjones.com)

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Fevertree Drinks Backed Guidance is Positive Given Past Turbulence

1110 GMT - Fevertree Drinks' FY 2023 guidance reiteration is not surprising due to the robust start of the year, however it is welcome news given the turbulence that the group has been through in the last few years, RBC Capital Markets analysts Emma Letheren and James Edwardes Jones say in a note. "We do note Fevertree also reiterated guidance this time last year before a July profit warning, so we don't feel completely relaxed as of yet," they add. The London-listed mixer maker is also indicating a stronger off-trade--the premises where the beverages aren't consumed right away such as stores and supermarkets--in 2H for the U.K. and rest of the world, the analysts add. (michael.susin@wsj.com)

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Expected South Africa Rate Rise May Provide Limited Support to Rand

1100 GMT - The South African Reserve Bank could raise interest rates by 50 basis points to 8.25% and leave the door open to further rises at Thursday's meeting but this will only benefit the rand in the short term at best, Commerzbank says. "A lot seems to have been priced in already," Commerzbank currency analyst Elisabeth Andreae says in a note. "If it does not meet these expectations the rand might face further losses in our view, which the SARB is unlikely to risk though." Meanwhile, the rand is suffering due to risk aversion and persistent home-grown problems including the energy crisis and poor growth outlook, Andreae says. USD/ZAR rises 0.3% to 19.2963. The rate decision is at 1300 GMT. (renae.dyer@wsj.com)

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Workspace Group's Risks are Already Priced Into Shares

1044 GMT - Workspace Group's fiscal 2023 results were 2% to 6% above market expectations, with higher levels of rate growth offsetting a small decline in occupancy--though there weren't any major surprises, RBC Capital Markets says. The office-rental company's short lease lengths, small-to-medium-enterprise tenant skew and the economic sensitivity of office markets in general mean its near-term earnings are likely to be more hit by a recession, RBC analysts say in a research note. "However, we believe that this is more than reflected in a share price 60% below its prepandemic levels, given the structural growth in demand for more flexible office space and Workspace's strong position within this broad based sub-market," the Canadian bank says. RBC retains its outperform rating and 625 pence price target on the stock. Shares are up 4.9% at 502.0 pence. (joseph.hoppe@wsj.com)

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AJ Bell's Weaker FY 2024 Margin Outlook Could Weigh 1H Beat, Peers

1019 GMT - AJ Bell's first-half positives could be offset by the weaker margin outlook it issued for fiscal 2024, Citi says in a note after the U.K. investment platform's results for the first half of fiscal 2023 improved on year and it said revenue margins for the next year are seen in line with this half-year's. "The margin outlook for FY 2024 is modestly weaker than consensus, driven by anticipated falling cash balances and cuts to fees (there should be a related volume benefit-in our view). This may offset the positives from the H1 beat and has negative read-across to Hargreaves Lansdown," analyst Andrew Lowe says. AJ Bell shares edge up 0.8% at 315.6 pence while peer Hargreaves Lansdown slip 1.2% at 790.4 pence. (elena.vardon@wsj.com)

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

May 25, 2023 09:42 ET (13:42 GMT)

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