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Three things you need to know in the financial markets this morning from investment writer, Tony Cross.

B&M

There’s a trading update out from discount retailer B&M [LON:BME] this morning, illustrating both the company’s performance in Q4 up to the end of March and also the following eight-week period to last weekend. The financial year ended on an upbeat tone with an exceptionally strong performance in the grocery sector being noted, however like for like sales during the COVID-19 pandemic have soared, driven by gardening and DIY sales. The company looks to have had essential retailer status in the UK with around 90% of stores being open throughout, providing an admittedly diminished number of consumers with access to home and garden improvement resources. Operating costs are higher owing to social distancing implications, but with rates holidays too, it seems as if there’s plenty of upside for the company.

Safestay

Full year results from the AIM listed hostel operator Safestay [LON:SSTY] are out today, showing a bumper 2019 but uncertainty over what lies ahead. An almost 50% expansion in bed numbers last year drove a 26% increase in revenues and helped almost halve losses on a per share basis. More importantly however is the outlook and with the focus now on a staggered reopening, questions will be asked over the sustainability of the new model. Domestic tourism will be targeted first, whilst common areas will be closed and rooms no longer sold on a shared basis. That’s a big shift from the traditional structure, although some commentators feel that younger travellers will spearhead the reopening of the sector – one to watch.

Young & Co’s Brewery

A quick financing update from brewers and pub operators Young’s [LON:YNGA], which highlights the outcome of negotiations with lenders. Covenants won’t be tested again until next summer and additional liquidity has been secured, but dividend payments have been suspended, in part to facilitate some of the extra liquidity. The longer term horizon here is interesting, given we have seen some in the leisure sector making updates of just a few weeks. Hopefully this offers sufficient headroom to allow the company to navigate through the uncertainty.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Tony Cross

Tony Cross

Tony Cross is a market commentator with over 15 years of experience, producing compelling, insightful copy for journalists and investors alike. Focusing on macroeconomics, UK blue chip equities and inter market analysis, Cross's commentary is well regarded for its clarity and ability to cut through the waffle. He has been quoted in publications as diverse as The Financial Times, The Times, The Guardian and The Sun. He has also been a regular guest on both Share Radio and TipTV.

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