Three things you need to know as the UK financial markets open, from Tony Cross.
#1. Sales jump at AO World, outlook positive
Interim numbers are out from the electrical retailer AO World LON:AO. this morning, with total revenues up by 6%, adjusted pre-tax profits some 30% ahead and another 90bps improvement in gross margins. That’s resulted in the business upgrading its full year profit guidance to between £39m and £44m, £3m higher than previously forecast. Management add that the second half – including the peak Christmas sales period – has started well, with customers responding to the current round of Black Friday deals.
#2. Topps Tiles sales and profits slump, concern over rising wage costs
Topps Tiles LON:TPT issued full year numbers this morning with sales down more than 9% and operating profits falling by a third. That’s despite outperforming the wider market by the update notes that on a sector-wide basis sales have been below pre-pandemic levels, whilst macroeconomic trends are doing little to inspire confidence, either. The cost headwinds from higher wage bills starting next April are also flagged with these set to add £4m to costs, so no surprise that dividends remain down as with the half year figure.
#3. Full year numbers from Compass paint confident picture
Compass Group LON:CPG published full year numbers this morning with revenues up 10%, operating profits 16% ahead and shareholders are being rewarded with a 13.7% increase in the dividend. High single-digit profit growth is expected next year and ongoing margin progression. Further acquisition plans should fuel growth.
