Here are three things you need to know in the financial markets this morning from investment writer, Tony Cross.
#1. Despite cost of living crisis, sales at Primark boom for Associated British Foods
Associated British Foods LON:ABF has published interim results today for the 24 weeks to 5th March. Group revenues are up 25%, driving significant growth in profitability and the interim dividend payment. A particularly strong rebound in sales at Primark has been recorded – up 59% – although this would have been against soft comparatives owing to COVID related restrictions. The company also notes that inflationary pressures are such that price increases are inevitable, singling out Primark. Given the political environment however, they’re going to have to tread a fine line especially with the food business if they’re returning bumper dividends to shareholders.
#2. Loungers full year profits upgraded
Bar and restaurant group Loungers LON:LGRS posted a full year trading update today, noting like for like sales are up 22% against pre-COVID levels, although stripping out the VAT benefits that falls to 14%. However a strong Christmas performance means the group now expects profitability for the full year to be slightly ahead of expectations.
#3. Novacyt NHS dispute goes to the next round
AIM-listed Novacyt [LON:NCYT] has provided an update on the ongoing dispute it is in with the DHSC over COVID test kits. Yesterday, the DHSC issued a claim against Novacyt for what is essentially the full value of the disputed revenue. This clearly has some distance still to run with the government unwilling to back down whilst looking for a sacrificial lamb in a bid to show they have delivered value to taxpayers, yet with the disputed amount broadly similar to the company’s market cap, there’s an awful lot at stake for shareholders here, too.
