Three things you need to know in the financial markets today from investment writer, Tony Cross.
#1. Marks and Spencer sales up, profits down, dividend remains on hold
Marks & Spencer LON:MKS has published a half year report this morning, showing food sales up 5.6% and clothing & home up by 14%, yet pre-tax profits have dropped by around a third. Expectations are for full year profits to be in line with previously forecast expectations and efforts are being increased to accelerate migration into growth channels of online and high performing modern stores as the company braces for turbulent times ahead. It notes that the balance sheet is strong and refinancing requirements are low, but any decision in dividend reinstatement will be left until nearer the year end. The company adds that it expects challenges to worsen in FY24 as higher costs and the cost of living squeeze combine to make something of a perfect storm.
#2. Limited data from Taylor Wimpey but sales rates slow
Taylor Wimpey LON:TW. is the latest housebuilder to issue a trading statement, noting that despite the challenging economic backdrop, the company is on track to deliver full year profits in line with market expectations. Sales rates are slowing whilst cancellations increase, accelerating into the second half of the year. Beyond this, information is limited but the company – perhaps understandably – is keen to project a confident image for the long term, once the cost of living crisis is navigated.
#3. Schroders increases stake in Music Magpie once again
Music Magpie LON:MMAG has again published a TR-1 showing further stake building by Schroders, who now own more than 11.25% of the company. Just last week, the investment giant advised it had increased its stake from 7.9%, serving up a significant boost for the stock. The market reaction to this latest update will be worth watching.
