Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
WM Morrison Supermarkets
Full year results are out from WM Morrison [LON:MRW], the supermarket operator, this morning. Headline figures show sales excluding fuel up by 8.6%, with Q4 growth of 9%. Profits have however been hit by COVID costs, with the company noting a fall of 50% here. Had government rate relief not been repaid, pre-tax profits before exceptional items would have been up 5%. Expectations for the coming year are for improved profitability, suggesting that many of the costs incurred in managing the COVID response aren’t set to be repeated.
It’s been a turbulent year for Rolls Royce [LON:RR] and that’s laid bare in today’s full year numbers. Revenues fell by around a third, tipping the company from a £942m gross profit last year to a £210m loss. A global aerospace market which has been in a state of catharsis is the key driver here, although the company does benefit from a degree of diversification. That said, the note sees a downgrade of the recovery, with a base case expectation of an 80% recovery in aircraft flying hours by 2022, down from previous forecasts of 90%. Cost reduction measures have however been deployed and a series of disposals are planned to bolster the cash position in the medium term.
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BATM Advance Communications
There’s an interesting note out from BATM Advance Communications [LON:BVC] this morning. The company has been involved in COVID testing but has today announced a no-swab saliva based test against the virus. It works on the basis of being an RT-PCR rather than lateral flow test which also serves to improve the accuracy of the result, whilst overcoming the risk of the wrong part of the nose/mouth being swabbed in a conventional test. The results do however still need to be analysed in a lab, although this can be mobile and the company notes cruise lines may be a specific area of interest here.
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