Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Rentokil Initial
Rentokil Initial LON:RTO has published Q1 numbers this morning. The company has been through a dynamic period as a result of the COVID pandemic, but group revenues are around 15% higher. Pest control revenues are starting to recover, whilst the core hygiene division saw income fall, although this is now going to come against some tough comparatives as demand jumped in the early stages of the health crisis. While there’s still uncertainty as the world tries to find its way back to a degree of normality, the outlook remains a confident one with this early momentum expected to extend through the year.
Ibstock
There’s a trading update out from brick manufacturers Ibstock LON:IBST ahead of their AGM today. The year has started well with trading modestly ahead of expectations and the board is confident that this pattern can be sustained despite the economic uncertainty that has been caused by COVID. The company is also investing in production lines with some £60m to be spent over the next three years in a project that will deliver incremental EBITDA of £12m p.a. and provide a RoCE in line with current company averages.
SEGRO
There’s a trading update from SEGRO LON:SGRO, the commercial property company that focuses on warehousing. We’ve flagged them before and this corner of the market has performed well through lockdown, thanks to the boom in online retail. One key point in the note is news that new headline rents on review and renewal are up by “more than 12 per cent on previous passing rent as ongoing asset management continued to capture reversionary potential from our existing portfolio”. Regardless of how you cut it, anyone seeing that sort of uplift in income is clearly onto something. The company also notes that it has 1.3m sq metres of space coming on stream which would add a further £87m of potential rental income.
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