Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
There’s a trading and operational update out from car dealers Lookers Group [LON:LOOK] this morning. Most of the detail here is recapping on commitments already made, but a couple of interesting financial updates are included, too. First half revenues are expected to be £1.6bn, down from £2.6bn last year, numbers which will leave the company with a material pre-tax loss for the period. The company does however note that trading in June and July has been better than expected, with momentum continuing well ahead of the new number plates which will be released in September. The company notes ‘healthy signs of recovery’ which is good for them but perhaps is something that can also provide a degree of confidence over the longer-term outlook for the wider economy.
AO World [LON:AO] has published a trading update for the four months to July 31st, with the online white goods specialist seeing strong demand. UK sales jumped almost 60% whilst the German division saw sales grow by more than 90% over the period. The company notes that demand has been sustained even after the physical stores of competitors reopened so further investment in capacity is being made, although there is a degree of caution over what may happen to consumer demand in the wake of Brexit.
Frasers Group [LON:FRAS] – the company formerly known as Sports Direct – has published full year results this morning, covering the period to April 28th. Revenues rose by almost 7% thanks to acquisitions – store numbers grew by more than 50% – but gross margins are down a shade from 42.8% to 42%. There’s a lot of detail in the note, but one stand out is the line that the company would support a 1% increase in corporation tax, on the basis that the money goes in full to the NHS. Intentions are to continue investing in the company’s digital strategy with over £100m earmarked here and there’s an expectation that EBTDA can be improved by between 10% and 30% in the coming financial year.
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