Three things you need to know in the financial markets today from investment writer, Tony Cross.
#1. Diageo’s solid H1 organic growth paves way for good year
There’s a half year report out from Diageo LON:DGE this morning which will have investors raising a glass. Organic net sales grew 9% whilst the comparable profit metric was up 10%, delivering eps growth of 19.7% as a result. The interim dividend is being increased by 5p and whist management acknowledge the operating environment remains challenging, they are confident that this can be navigated. Medium term guidance remains unchanged – although arguably looks a little conservative given that H1 sales number.
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#2. Fever-Tree: rising cost of glass taking a toll
Fever-Tree LON:FEVR has its pre-close trading update out today, with total revenues adding 11%. The UK is the only region to post a decline, although the company retains its market leading position, with on-trade performing well but retail sales struggling against tough comparatives. There’s a confident mood, with FY revenue guidance of £390m-£405m being introduced, although the company notes the impact of European energy prices on the production of glass bottles, which could add as much as £20m to costs for the year. However this is seen as part of the premium format, so using alternative containers would risk damaging the proposition.
#3. Jet2 FY profit forecast upped
Leisure travel group Jet2 LON:JET2 has a trading update out ahead of the year end. Average load factors for the winter are now slightly ahead of pre-pandemic levels, whilst pricing and margins are both significantly higher. As a result, the company is upgrading profit forecasts from the current £317m to between £370m and £385m. Cost pressures are present and rising wage bills may squeeze margins but the company is confident in its proposition given the current economic climate.
