Three things you need to know in the financial markets today from investment writer, Tony Cross.
#1. Deliveroo: worsening economic outlook reduces revenue forecasts
Deliveroo (LON:ROO) has published a Q2 trading update and revised full year guidance this morning. Gross transaction value (GTV) was 4% ahead, or 2% on a constant currency basis and this, combined with the more cautious economic outlook, has resulted in the company downgrading its full year guidance. Expectations are now that GTV will increase by 4-12%, down from the 15-25% noted previously. EBITDA margin guidance remains unchanged.
#2. Direct Line Group: claim inflation sees premiums rise
There’s a trading update out from insurer Direct Line Group (LON:DLG), highlighting ‘claims inflation’ on the motor side of the business, which is set to lift the combined operating ratio for the full year to between 96% and 98%. That’s meaningfully ahead of the mid-term target of 93%-95% which remains an ambition of the company, with the obvious outcome here being higher premiums all round. The company also notes that it won’t be proceeding with the second tranche of a planned share buy back in order to maintain sufficient headroom on solvency requirements which have been squeezed by performance in the underlying market, but an interim dividend of 7.6p per share remains in the forecasts.
#3. Fevertree: director snaps up shares after Friday’s sell off
Shares in Fevertree (LON:FEVR) drinks took a bashing last week in the wake of earnings news, so investors may find some solace in the fact that one of the non-exec directors snapped up more than $150,000 worth of the stock on Friday on the US OTC market, even though profit forecasts are now materially lower.
