Tue. Oct 19th, 2021

ut Group shares came under more pressure today, despite the e-commerce business led by Matt Moulding insisting there was no notifiable reason for the recent stock market pummelling. Shares closed 35% lower last night on the back of Moulding’s presentation to City analysts and were down again today.

The FTSE 100 index was also lower, with mining stocks among those under pressure ahead of the release of US inflation figures and the start of the third quarter earnings season on Wall Street.

Apple shares will also be closely watched later after it was reported that it is unlikely to meet near-term production goals for its new iPhone due to global electronic chip shortages.

Live updates


THG shares swing wildly

THG shares have been gyrating today as investors try to make up their mind on what to do after yesterday’s collapse.

The stock opened up 8% before dropping lower and then jumping between gains and losses. It’s currently down another 4.5%.

“The equity tells you that management have lost the trust of the market,” said Roland French, an analyst at stockbroker Davy who attended yesterday’s meeting.


Housebuilders surge

Investors were camped in the housebuilding sector today after a bullish update from one of the industry’s biggest players banished recent fears over supply chain disruption and faltering demand.

The AGM statement by Barratt Developments sent its shares up by 5% and helped rivals including Taylor Wimpey and Persimmon to improve by around 3%.

Analysts at Liberum described the update as “surprisingly good” as Barratt reported growth in its forward sales position and average selling price in the period up to the weekend.

The progress offset fears that the tapering of Help to Buy support and the end of the stamp duty holiday might signal the passing of the industry’s post-pandemic boom.

Barratt offered further encouragement when it said that build cost inflation is still expected to be in the region of 4%-5%, with no significant disruption to its work programme due to supply chain issues.

Shares reversed some of their 10% fall of the past month to stand 31.2p higher at 673p, with Liberum believing there’s the potential to reach 830p. Peel Hunt has a target of 800p as it changed its recommendation to “buy” from “add”.

The sector’s performance was one of few highlights in a session when weakness for commodity-focused stocks left the FTSE 100 index 15.94 points lower at 7,114.29.

As well as 2% falls for Rio Tinto and BP, there was a further deterioration in the share price of BT Group, which dropped 2.55p to 142.7p amid pressure across the telecoms sector.

Corporate events business Informa led the fallers board after analysts at UBS downgraded to “sell” on expectations that the recovery in international corporate travel will be slower than the market currently thinks. Shares fell 4% or 20.8p to 552.2p.

The mood in the FTSE 250 index was much more positive, with the UK-focused benchmark getting a confidence boost from better-than-expected GDP figures and the Barratt update to improve 1% or 213.09 points to 22,683.74.

Kitchen supplier Howden Joinery was among the beneficiaries after adding 31.2p to 864.4p, while property agent Savills lifted 39p to 1336p. Marks & Spencer also continues to rally in the wake of last week’s capital markets day at its Waterside House HQ.

Shares surged 7.07p to 183.77p and are now up 7% since the presentation.


Just Eat slides on slow US growth

A Just Eat delivery driver in London

/ Just Eat – PR handout

A SLOWDOWN in US sales growth put the skids under Just Eat Takeaway.com today despite a 51% surge in orders from hungry Brits.

Shares in the dual-listed company fell 5.8% in Amsterdam and 4.4% in London to hit an 18-month low this morning, down by around a third this year.

The loss of appetite among investors took the shine off an upbeat performance in the UK, its biggest market, where 200 million meal orders so far this year have taken total deliveries since its 2001 launch above one billion.

A strong third-quarter performance across other key European markets was not enough to offset the blow from the US, where sales rose just 3% dragging overall growth to 25% with 266 million orders processed worldwide in the three months to October.

The sector’s preferred measure of success – gross transaction value – rose 23% to £5.8 billion.

CEO Jitse Groen said the performance “remained strong” but analysts countered that it fell short of market expectations.

The company’s expansion into the US has not been smooth: New York City slapped a 15% cap on commissions two months after its $7.3 billion acquisition of rival GrubHub in June. Last week its founder Matt Maloney quit the board.

Addressing the US performance, Just Eat Takeaway said it has: “started to implement an improvement programme re-focusing the company on Grubhub’s strongholds”.

Bosses added that full-year order growth is expected to be above 45% year on year, with global gross transaction values of between £24 billion and £25.5 billion.


Marston’s toasts improved Q4 sales

Pub group Marston’s has reported improved sales

/ Marstons

Fourth quarter pub sales edged up ahead of pre-pandemic levels and Christmas party bookings in London are “slightly” ahead of expectations, the new chief executive of Marston’s has said.

Andrew Andrea, who took the top job earlier this month and was previously finance chief, said he has been “encouraged by the trading momentum” since lockdowns started to ease for the hospitality sector in April.

Read the full story HERE.


Miners drive FTSE 100 lower

The FTSE 100 index has fallen 0.5% to 7,090, driven lower by weakness among mining stocks.

Rio Tinto and Anglo American fell 2% and there was also fresh pressure on BT shares following a decline of 3% or 4.3p to 140.95p.

The risers board was led by Barratt Developments, which improved 22.4p to 664.2p on the back of a reassauring trading update. Shares in Taylor Wimpey and Persimmon also benefited, lifting 2%.

The FTSE 250 index held firm at 22,486. Hedge fund group Man improved 6% but Centrica shares were 2% lower after it cancelled next month’s capital markets day.

THG shares suffered a fresh slide of 11%, despite the e-commerce company saying it knew of no reason for yesterday’s 35% slump.


Centrica pulls City meeting

A big City briefing due to be held by Centrica next month has been postponed so the British Gas supplier can focus on dealing with the UK’s energy crisis.

The capital markets day, when the company provides more details on its long-term strategy, had been due to be held on 16 November.

Centrica stressed there had been no change in its trading performance since July and that it is well hedged for the coming winter and beyond.

Shares have risen 17% since early September as the company benefits from the removal of competition after soaring wholesale prices forced smaller rivals out of business.

Chief executive Chris O’Shea said: “In this current unprecedented commodity price environment we remain focused on looking after our residential and business customers, whilst working as part of wider industry efforts in the UK to support the customers of failed suppliers and drive the regulatory reforms which are urgently required to make sure this situation never recurs.

“Unfortunately, that has meant taking the decision to postpone our planned capital markets event in November.”


Analysts slam THG

Analysts have this morning stuck the boot in at THG, slamming the company after its disappointing capital markets day on Tuesday.

Analysts at JPMorgan today said THG “failed to address current investor concerns” at yesterday’s meeting and concluded: “We are left with several questions for management.”

Numis today set a target price of 230p for the company – firmly below the float price and less than half the target price it had guided a month ago.

Concerns center around THG’s plans to spin out its cash cow online beauty business and instead focus on Ingenuity, its e-commerce platform. Ingenuity lets companies set up e-commerce businesses for their brands and works with the likes of Purina cat food and Toblerone. The platform handles everything from sales to fulfilment.

However, the business is small at the moment and the City has concerns about growth prospects and a lack of information on its performance.

“Ingenuity is critical in many ways, but feels increasingly nascent, opaque and lacking sufficient proof points to justify a significant valuation,” Numis analyst Simon Bowler said.

“We worry enthusiasm for Ingenuity is likely to wane, whilst stalling momentum and concerns over the margin structure of the trading businesses offer only limited support.”


THG fights back after share price collapse

Shares closed 151.8p lower at 285p yesterday after a disasterous capital markets day. CEO and founder Matt Moulding hosted a meeting with analysts and investors that was meant to explain the company’s Ingenuity sales platform and soothe investor concerns about the business. The City was left disappointed and shares crashed shortly after the meeting.

THG, which sells nutrition, vitamins and beauty products and licenses out its e-commerce technology, responded with an early statement meant to reassure the market. The company said there was “no notifiable reason for the material share price movement, and no material new information was disclosed at the event”.

THG, previously called The Hut Group, said it “has consistently delivered ahead of its targets set at the time of IPO and recently reported a strong first half performance across all divisions”. It added that it also has a very strong liquidity position, with £700 million in available cash. The company floated at 500p in September last year in one of the biggest tech floats of the year.


Chip shortage set to hit Apple target

Apple shares were more than 1% lower in after-hours trading on Wall Street last night after Bloomberg reported that the company planned to revise down its iPhone13 production targets for 2021 by 10 million units.

The new figure of 80 million reflects the global electronic chip shortage as Apple’s suppliers battle to keep up with demand. Apple launched four new iPhone models last month.

However, chief executive Tim Cook warned in the summer that supply chain constraints were likely to have a bigger impact on the company in the current quarter than previously.


Steady start for FTSE 100

Nerves brought on by the start of Wall Street’s third quarter earnings season and release of US inflation figures later today mean London investors are set to remain on the sidelines.

The consumer prices number will be used by the Federal Reserve at its next policy meeting in three weeks’ time, when there could be an announcement on tapering asset purchases.

However, the inflation figure for September is already a little backward looking after Deutsche Bank noted that West Texas oil prices are up 7.5% so far in October.

Brent crude remained at a three-year high of $83.50 a barrel today, while WTI crude futures in the US were also little changed at $80.62.

Ahead of US inflation and today’s Q3 results from JP Morgan Chase, the S&P 500 closed slightly lower in New York as investors awaited the next catalyst. Defensive sectors such as real estate and utilities provided the best performances.

Asia markets were helped overnight by trade numbers in China, which were slightly better than expected considering factory power outages and a spike in Covid-19 cases. Exports jumped 28% year-on-year to a record of $305 billion, better than the 25.6% rise in August.

The FTSE 100 index, meanwhile, is poised to open unchanged at 7130 although it may only be a brief respite amid concern over rising prices and prospect of higher interest rates.

Oanda senior market analyst Jeffrey Halley said: “With equities so heavily priced towards a linear post-pandemic recovery, and with the Fed looking increasingly likely to withdraw the easy money punch bowl, we can expect a lot more two-way volatility in equity markets in Q4.”


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