Three developing stories at the UK stock market open.
1. Shepherd Neame sees robust H1 performance, braces for turbulence as tax hikes hit
Kent-based brewer Shepherd Neame [AQSE:SHEP] published interim results this morning and given the battles being faced by the hospitality sector, these are worth a look. The company has seen like for like sales grow by 4.4%, weighted towards the London area, with underlying pre-tax profits up almost 10% and shareholders benefitting from a 3.6% uptick in interim dividends.
The business faces challenges ahead as the employment tax situation changes for the worse but management hope that the flexibility of the business model will enable them to continue to evolve, meeting the needs of shareholders and investors alike.
2. Ferrexpo sees production jump but writedowns hit profits
There are full year results out from the iron ore pellet manufacturer Ferrexpo LON:FXPO this morning. The numbers are challenged by the fact the company’s operating base is in Ukraine but there is some cause for optimism. Revenues are up by 43% thanks to being able to ramp up production by 66%, more than offsetting the decline in underlying prices. Impairment charges have pushed the company to a $50m loss for the full year and the net cash position remains around the $100m level.
3. Challenging market drags on Essentra, dividend cut
FTSE-250 listed plastic and fibre producer Essentra LON:ESNT issued full year results this morning with revenues down 4.4%, adjusted operating profits down 7.2%, free cashflow off by almost 40% and shareholders have been left with a 22% reduction in the dividend. It’s a common story of challenging macroeconomic factors and management are taking a cautious view when it comes to the speed of any recovery.
However margin improvement is being recorded, customer satisfaction remains strong and adjusting for currency headwinds does tip the adjusted operating profit figure into the black.
