Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
There’s a Q3 trading update out from Dunelm [LON:DNLM] this morning, covering the period from 27th December to 27th March. Stores have been shuttered throughout, hampering sales but driving a 70% increase in online revenues. Against Q3 last year, sales are down more than 16%, but the year to date figures paint a rather more upbeat picture. The company has lost ground against some competitors in the homewares market who have been designated as “essential” so allowed to remain open, but there’s little to suggest that the longer-term model will be impacted. Sales ought to rebound as re-openings take place in the weeks ahead.
Online fashion retailers ASOS [LON:ASC] continue to see the good times roll, with half year results to the end of February showing revenues up 24% and gross profits 19% higher, although margins have slipped 2%. The active customer base continues to grow and this is likely to be driven further by the successful integration of TopShop in recent weeks. In terms of outlook, the company notes it is mindful of the near term economic risks surrounding the pandemic, but it believes the momentum built can be maintained. There is however no mention of the competing demand for discretionary spend which will be seen as leisure venues start to reopen or indeed the fact that the remaining bricks and mortar retailers may themselves have an added draw as people look to escape the confines of home.
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A quick note from SEGRO [LON:SGRO] on rent collections, which is up to date as of yesterday. 97% of Q1 monies have now been received, whilst the equivalent figure for Q2 is 89%. That compares with a Q2 ’20 figure on April 7th 2020 of just 71%, illustrating the resilience of SEGRO customers in the current economic climate. Caution probably needs to be taken when it comes to reading across to other commercial property landlords or indeed the wider economy, as the company’s focus on warehousing sits well with the boom in online shopping over the last year.
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