Here are three things you need to know in the financial markets this morning from investment writer, Tony Cross.
#1. Solid margins and healthy profits at housebuilder Vistry
Homebuilder Vistry [LON:VTY] has published a trading update this morning for the year to 31st December. The company expects to deliver profits of £345m for the full year, in line with previous guidance and up from £144m in 2020. The company is however battling price inflation which despite working closely with suppliers it says will likely come in around 5% for the year ahead. There’s an acknowledgement of the government’s plans to ensure that leaseholders aren’t left to foot the cost of the cladding crisis, but the note stops well short of giving any guidance as to how much this might cost the company. However with forward sales of almost £2billion and a gross margin target for the coming year of 23%, this is par for the course for the sector – and is a landscape that provides rich pickings for any legislative plans to put things right for flat owners.
#2. Increase in physical shopping for no.1 soft furnishings retailer Dunelm
There’s a Q2 update out from Dunelm Group [LON:DNLM] this morning with the company posting yet another record quarter of sales. Some £407m worth of revenue was achieved, up £46m from FY21 and £84m up from FY20. Weekly third party data shows the company continues to outperform the market and whilst online sales are representing a slightly smaller proportion of the total, this is unlikely to offer any cause for concern, instead reflecting the desire for more shoppers to get into stores. The strong sales performance is driving half year profit expectations higher, with this now expected to come in at £140m, up from £112m last year and despite macroeconomic uncertainties, there’s confidence that the company can continue to grow its market share.
#3. Promise of capital returns for DFS shareholders as orders flood in
Furniture retailer DFS Furniture [LON:DFS] has published an interim trading update today, noting strong order intake for the 26 weeks to 26th December and gross sales 10% higher than the comparable pre-pandemic number, although some 2% lower than the corresponding figure of last year. In terms of outlook, manufacturing and logistics are flagged as carrying a degree of risk, but the strength of the order book is providing management with some confidence over the outlook. A broader investor event planned for 15th March will follow the release of half year results and shareholders will also receive details of future investments and the special capital returns plans.