Here are three things you need to know in the financial markets this morning from investment writer, Tony Cross.
#1. Next increases full year profit guidance
There are half-year results out from Next [LON:NXT] this morning – in a weighty 77 page document. Sales for the six months to July were up 8% on the 2019 figure, whilst just looking at the last eight weeks – so after non-essential retail restrictions were lifted – the growth was 20%. That’s materially ahead of the previously forecast 6% growth. Full year profit guidance has been upped by £36m to £800m and net debt also continues to slide, although the company is quick to admit that a post-lockdown boom and skewed consumer spending have been kind to the numbers. Squeezes on the cost of living along with labour shortages could moderate demand in the months ahead.
#2. SSP Group anticipates a return to profitability
SSP Group [LON:SSPG] has published a pre-close trading update ahead of tomorrow’s end to the financial year. The operator of F&B outlets in travel locations continues to see a gradual recovery, although notes that this is concentrated in domestic and leisure, with international and business travel still lagging. 60% of venues are now open, up from 30% in H1 and the company anticipates a return to EBITDA profitability for the next financial year, subject to a number of factors including further government support and cost inflation.
#3. Comptoir Group sees a range of pressures looming
AIM-listed restaurant operator Comptoir Group [LON:COM] has issued interims today, covering the six months to 4th July. Revenues are down 7% on the 2020 figure, although since the last restrictions were lifted on July 19th, the Chief Exec notes that the company has been comfortably outperforming forecasts. However a range of pressures now loom, including normalisation of VAT, labour shortages and supply chain issues. They note stakeholders have been supportive, but the casual dining sector now faces a true shake out in the coming months.