Three things you need to know in the financial markets today from investment writer, Tony Cross.
#1. Greggs sales buoyed, tax burden weighs on profits
Interims from Greggs LON:GRG covering the 26 weeks to 2nd July have been released this morning. Total sales are up by around a quarter but profits are flat. The assumption here may be that this is a result of the company absorbing inflation increases but the note shows it’s the reversal of VAT and business rate breaks which is at play here. Whilst some price rises are being passed on to customers, management note this doesn’t seem to be impacting transaction numbers. Cost inflation for the year is now forecast to be around 9%.
#2. Dominos: growing customer base offers confident outlook
Dominos Pizza Group (LON:DOM) also has its half year results out, running up to 26th June. System sales are down a little and that’s impacting profitability which has fallen by more than 15%, but the company adds that order count is increasing as the customer base grows. Marketing efforts can also be increased as a result of the resolution reached with franchise holders and the company is confident that the full year picture will be in line with previously offered guidance.
#3. Barr’s: strong H1 revenue growth as post COVID recovery continues
And to round out, what better way is there to wash down that sausage roll and 12” pepperoni pizza than with a can of Irn Bru? Soft drinks maker AG Barr’s LON:BAG issued its latest trading update this morning showing a strong first half performance which was in line with expectations. Revenues are up 19% on a like for like basis, with the company continuing to benefit from the post-pandemic recovery, but there’s an air of caution over the outlook. Rising inflation and worsening discretionary spending by consumers need to be contended with, but the company’s recent resilience and flexibility should leave it well positioned. Management are confident that the full year will be ahead of FY21 and in line with expectations.
