Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Halfords
Good news from Halfords LON:HFD in a trading update this morning. The company has upped profit expectations off the back of continued strong demand from its cycling operations, sales from which are up by 46% for the five weeks to September 25th. Growth is also returning to motoring, although the company cautions over the risk of uncertainty as COVID cases rise again. They do add however that the business is well capitalised. Interim results will be announced on November 18th.
Smith & Nephew
There’s a Q3 trading update out from Smith & Nephew [LON:SN]. The company struggled in Q2 as hospitals cancelled many elective surgeries to keep beds clear for COVID cases. That resulted in a close on 30% drop in sales, so the comparatively impressive 4% decline for the third quarter offers something to cheer, although the assumption would be that there’s also some kind of backlog here. Fuller numbers for Q3 will be published at the end of the month.
Rolls Royce
Struggling engineering firm Rolls Royce [LON:RR] has this morning published plans for its proposed recapitalisation. The plan is a £2 billion rights issue and a £1 billion bond offer, alongside a further £2 billion extension to liquidity through other channels. The company’s aviation business remains badly impacted by the COVID-driven shut down of air travel, but defence sales are proving resilient. Power supply has also struggled in places owing to end market disruption. The rights issue is fully underwritten but given the company only has a £2.5bn market cap, the scale of the cash injection is worthy of note.
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