Three things you need to know in the financial markets today from investment writer, Tony Cross.
#1. Pennon in-line but wet weather hits environmental performance
Pennon Group LON:PNN published a 12 month trading update ahead of the year-end on 31st March, noting that financial performance remains in line with management expectations. However heavier than expected rainfall in recent months has impacted the “waste water operational performance” which is long-hand for pumping untreated sewerage overflow directly into watercourses.
Some 78 interventions are underway by the company that will improve water quality at 49 beaches by next year – but that’s from a total cohort of 151. The company adds that it’s making record levels of investment, but it’s long overdue and the wider sector must surely be in the political crosshairs, especially if there’s a change of Westminster administration later in the year.
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#2. Stubborn staffing and energy costs take toll at Kingfisher
Full year numbers from Kingfisher LON:KGF are out today, with sales down 0.6% and despite a 10 basis point uptick in margins, operating profits are down by a fifth. That being driven by higher staffing and energy costs, but efficiency gains of £120m are expected to be delivered in the year ahead.
On a geographic basis, UK & Ireland sales are outperforming but a more challenging consumer outlook is hampering France and Poland. The outlook sets modest expectations for FY25 with pre-tax profits set to come in below the £568m posted today.
#3. Virgin Wines inventory liquidation offers investors news to cheer
Virgin Wines LON:VINO has interim numbers out, with total revenue up by just 2% although a 24% reduction in inventory makes for a far better set of numbers elsewhere. EBITDA is 122% higher and a new warehousing system has reduced fulfilment costs by 25%, with gross margins improving fractionally to 37.2%. Conversion and reactivation rates are up and full year profits are set to be in line with market expectations, too.
