Here are three things you need to know in the financial markets this morning from investment writer, Tony Cross.
#1. PurpleBricks identifies process issue from lettings business
An interesting note from PurpleBricks [LON:PURP] this morning, with the online estate agent stating that it is aware of a process issue regarding its lettings business. The wording is somewhat cryptic but previous media reports suggest this relates to a failure to register tenant deposits with a government approved scheme. The situation leaves the company exposed to a financial risk which could be in the £2m-£9m range as claims can be made against it under the Housing Act and is the latest in a string of challenges. Interim results due on Wednesday have been deferred and with the stock already 70% off since the start of the year, the question is how much more downside exposure is there?
#2. Eve Sleep on course to meet full year expectations
Sticking with the junior market, Eve Sleep [LON:EVE] has published a trading update ahead of its 31st December year-end. The company notes it saw a healthy Black Friday period along with a sound run up to Christmas. Supply chains appear robust and management note they remain on course to meet full year expectations and post a second consecutive year of revenue growth. It’s difficult to find fault in the report, but the stock has been out of favour since the start of the year. If investors were hoping for some festive sparkle at this point, they are likely going to be disappointed.
#3. SThree on target to deliver record profits
Specialist recruiter SThree [LON:STEM] has published its full year trading update this morning, showing strong growth on both a one and two year basis, given the impact of COVID in 2020. Group fees are up 19% on last year and 9% on the year before, putting it on target to deliver record profits for the full year, in line with consensus expectations which were materially upgraded in September 2021. The CEO’s departure has also been announced and despite coming against a set of robust numbers – including good visibility into the new year – the accelerated timing of this with his last day being December 31st, may limit upside potential for the share price.