Three things you need to know as the UK financial markets open, from Tony Cross.
#1. Ashtead profit forecasts downgraded, US listing plans confirmed
Interim numbers are out from Ashtead LON:AHT this morning, showing revenues up 2%, operating profits as good as flat and a notable uptick in the half year dividend, although that does account for the fact that the split with the full year payment has been rebalanced to a degree. However, the note adds that given current market dynamics, full year forecasts see revenue growth in the 3%-5% range, which in turn means profit will be lower than had been expected.
Management do offer the lure of greater shareholder returns with the business expected to throw off more cash in the medium term, but perhaps the most critical piece of news is that the company confirms it intends to seek a primary listing in the US. This won’t be a quick process, but could be transformative in terms of valuation.
#2. Naked Wines cash balances up but customers on the wane
Interims from Naked Wines LON:WINE this morning saw revenues continuing to track lower, down a further 15%, although a marked reduction in inventories – down by a quarter – has helped bolster the cash position. However with active membership continuing to decline – it’s down by almost 100,000 over the last 12 months – the challenges remain real. Early peak season trading is seen as solid and full year performance remains on track with expectations, but a performance review is underway in a bid to ensure shareholder value.
#3. Despite macro headwinds, higher margin sales boost Moonpig
Interims from the gift and greeting card company Moonpig LON:MOON are out today and might give investors something to cheer. Revenues are up 3.8%, gross profits are 5.1% higher and the margin is up 70 basis points. Despite ongoing macroeconomic headwinds, full year revenue forecasts remain unchanged whilst the growth of high margin revenue streams also means that medium term expectations for EBITDA margin have been revised up fractionally.
