Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
News publishers Reach [LON:RCH] have issued a trading statement for the four month period to April 25th this morning. The company continues in its quest to make money from news, something which presents significant challenges in a market that is dominated by free information. Over the period. Digital revenues grew by 35% but traditional print sales fell by 10.4%, leading to a total revenue reduction of 3.1%. Management admit the growth here is flattered by some weak comparatives but they are confident that the move to a digital business is well underway with revenues from the channel now being the dominant stream.
There’s a trading statement from clothing retailer Next [LON:NXT] covering the 13 weeks to May 1st which is likely to impress the market. Guidance assumed that sales would be down 10% for the quarter but this has instead come in just 1.5% lower. That equates to a £75m revenue surplus and had allowed the company to upgrade its full year profit forecast by £20m. There are some interesting observations in the note relating to a switch in the sales mix over the reporting period, so although revenues are close to static, that hasn’t been a case of people switching from physical to digital channels. Instead, it’s been homeware, third party brands, childrenswear and overseas sales which have replaced lost business from physical stores.
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Rounding out with a trading update from housebuilders Barratt Developments [LON:BDEV], covering January 1st to May 2nd. They have now increased forecasts as to how many properties they intend to complete for the full year, pushing the financial outlook modestly higher, too. The company notes that completions have been accelerated in recent months to allow customers to take advantage of government support initiatives and although build cost inflation has hit 3%, expectations are for this to ease back to the 1%-2% range across the year.
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