Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Preliminary full year results have been published by Fevertree [LON:FEVR] this morning, the makers of premium carbonated drinks. Revenues jumped 10% last year, although margins were squeezed, contributing to a modest fall in profits. The company however maintains its market leading position in the UK and continues to grow elsewhere. COVID-19 has disrupted sales through licensed premises but has simultaneously boosted demand through the off-trade channels and the company notes it has not been required to use the government furlough scheme. The business remains debt free and is in a strong cash position, so is proposing that total dividends are lifted by 4% for the year.
Some interesting observations have been published in an update from Unite [LON:UTG], the student accommodation provider, which has been giving tenants the option of cancelling rooms for the summer term. This is going to knock revenues by 16-20% for the academic year, whilst the business is also bracing itself for a delayed start to the Autumn term by up to 4 weeks. The company has already made some cost saving measures and deferred progress on two new properties which were due to come on stream. The company has a cash buffer in excess of £250m, but the uncertainty over when teaching will resume and how that might impact student arrivals from overseas, still lingers.
Full year results from online fashion retailer Boohoo [LON:BOO] are out this morning, showing a 44% jump in revenues and a 54% increase in pre-tax profits. Covering a period up to end of February, these numbers weren’t impacted by the COVID-19 crisis and the business notes that its continuity planning has worked well. However trading since the middle of March is described as ‘mixed’, but sales are now picking up after some initial uncertainty. Caution over the outlook is however leaving the company reserved on what the future holds, but they note a cash buffer of £241m and a low burn rate should keep the business in a strong position. As with last year, no dividend is being proposed in order to conserve cash for capital expenditure.
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