European Stocks Mostly Drop as Markets Stay Wary

0913 GMT - European stocks mostly edge lower as investors stay cautious following comments from the U.S. Federal Reserve Tuesday. The Stoxx Europe 600 is down 0.1% and the DAX and CAC 40 drop 0.3%, though the FTSE ticks up 0.2%. The price of a barrel of Brent crude increases 1% to $74.79 and base and precious metals all rise, boosting oil and mining stocks. The Dow Jones closed 0.2% higher. "The Fed chairman managed to reassure the market about the transitory effect of rising prices in the U.S. economy following last week's hawkish shift," says ActivTrades analyst Pierre Veyret. "Investors are increasingly accepting the longer-term outlook of tightening monetary policies." (philip.waller@wsj.com)

 
Companies News: 

Anglo American: De Beers Diamond Sales Rise in Fifth Cycle

Anglo American PLC on Wednesday reported De Beers rough diamond sales of $470 million for the fifth cycle of 2021.

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Berkeley Group FY 2021 Profit Rose, Proposes Additional Shareholder Return

Berkeley Group Holdings PLC said Wednesday that profit and revenue rose for fiscal 2021 and proposed an additional shareholder return of surplus cash.

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Anexo Group Gets GBP174 Mln Cash Offer Approach from DBAY Advisors

Anexo Group PLC said Wednesday that it has received a 174 million pound ($242.7 million) possible cash offer approach from DBAY Advisors Ltd., and has granted it due diligence access.

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Joules FY 2021 Revenue Rose, Adjusted Profit to Exceed Market Expectations

Joules Group PLC said Wednesday that its fiscal 2021 revenue rose 4% despite the coronavirus pandemic and adjusted profit before taxes and exceptional items is expected to slightly exceed market expectations.

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1Spatial Says Order Levels Rose in FY 2022 to Date

1Spatial PLC said Wednesday that order levels for new sales in the fiscal 2022 to date are higher than in the prior year, and that it is confident in a successful outcome to the year.

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Vertu Motors Upgrades Guidance Given Strength of Used-Car Market

Vertu Motors PLC said Wednesday that it expects full-year adjusted earnings to exceed expectations amid an exceptional used-car market environment.

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Liontrust FY 2021 Pretax Profit Rose

Liontrust Asset Management PLC said Wednesday that fiscal 2021 pretax profit and revenue rose, and that it has a strong momentum and is well positioned to continue growing.

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Vector Capital Raises GBP1.5 Mln to Increase Lending Power

Vector Capital PLC said Wednesday that it has raised 1.5 million pounds ($2.1 million) via a share placing which will increase the company's lending power to meet demand for the group's loans.

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Amala Foods to Extend Loan; Sees Performance Indicators on Target

Amala Foods PLC said Wednesday that it has agreed to extend a loan to the first quarter of 2022 and that performance indicators remain on target, as the company nears completion of research and development of several plant-based products.

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Harbour Energy Sees 2021 Production at Lower End of Guidance Range

Harbour Energy PLC said Wednesday that it expects full-year production at the lower end of its guidance range, reflecting maintenance programs and unplanned outages.

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Capital Ltd. Founder Brian Rudd to Sell 3 Mln Shares

Capital Ltd. said Wednesday that founder and Executive Director Brian Rudd is selling three million shares of the company via a bookbuild program.

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TouchStar Says Performance to Date Has Been Better Than Expected

TouchStar PLC said Wednesday that its performance in the year to date has exceeded its expectations, thanks to rising revenue, an increase in margins and tight management of costs.

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Directa Plus Sees Revenue Growth Persist Through 1H

Directa Plus PLC said Wednesday that a strong revenue rise in early 2021 has persisted throughout the first half, and it is trading in line with market expectations.

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Plaza Centers to Halt London, Tel Aviv Listings; Shares Drop

Shares in Plaza Centers NV plunged on Wednesday morning after the company said that its London and Tel Aviv listings will be halted from June 25.

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Marlowe Swings to FY 2021 Pretax Loss on Higher Costs

Marlowe PLC said Wednesday that it swung to a pretax loss for fiscal 2021 after booking higher costs, but that it has had a strong start to fiscal 2022.

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Workspace Appoints Paul Hewlett as Executive Director

Workspace Group PLC said Wednesday that it has appointed Paul Hewlett as executive director of strategy and corporate development.

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Manolete Partners Profit Fell in FY 2021; Appoints New Chairman

Manolete Partners PLC on Wednesday reported a drop in profit for fiscal 2021 and appointed Howard Leigh as chairman designate.

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Synthomer Appoints Michael Willome as CEO

Synthomer PLC said Wednesday that it has appointed Michael Willome as its next chief executive officer, succeeding Calum MacLean with effect from Nov. 1.

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Investment Company Literacy Capital PLC Plans London Float

Investment company Literacy Capital PLC said Wednesday that it plans to float on the main market of the London Stock Exchange, with admission expected to take place on Friday.

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Transglobe Energy 2Q Production Rose on Quarter

Transglobe Energy Corp. said Wednesday that second-quarter production rose on quarter due to well-optimization activities in Egypt, full oil production from the lower Bahariya reservoir, Egypt, and a return to production in Canada.

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Dignity Says 21-Week Underlying Profit Fell on Year

Dignity PLC said Wednesday that underlying profit for the 21 weeks ended May 21 was slightly lower than in the same period of the previous year.

 
Market Talk: 

Market Seen Overlooking Strengths of UK Networking, Communications Stocks

0936 GMT - Spirent Communications, dotDigital Group and Centralnic Group hold top positions in niche and highly technical markets, but are often overlooked by the market, Berenberg says. Test, assurance, and analytics services provider Spirent has become much less cyclical over the 2015-20 period, marketing-automation software company dotDigital is set to benefit from continuing tailwinds and internet domain-name supplier Centralnic can accelerate revenue growth thanks to its online marketing businesses, the brokerage says. "We think all three stocks are often overlooked because they are viewed as cyclical, too expensive or too small," Berenberg says, starting coverage on all three stocks with buy recommendations. (adria.calatayud@dowjones.com)

Anglo American Cycle 5 Sales Exceeded Expectations

0918 GMT - Anglo American shares rise 1.6% after reporting De Beers rough diamond sales for the fifth cycle of the year. The diamond company achieved sales of $470 million between June 7-June 22, up from Citi's expectations of $450 million. "The increase reflects improving market fundamentals and restocking-led demand," the bank says. Cumulative sales of $2.5 billion in the first five cycles of 2021 is more than double that of the first half of 2020, and is within the $2.5 billion-$3.0 billion range seen in 2017-19 for the period, Citi notes. (jaime.llinares@wsj.com)

UK Business Activity Growth Keeps Strong Momentum in June

0853 GMT - The U.K.'s private sector continued to expand at a robust pace in June as demand increased amid the continued reopening of the economy, according to data from IHS Markit. The preliminary composite PMI stood at 61.7 in June down from May's record high of 62.9. Both manufacturing and service sector activity growth eased somewhat compared with the prior month, but remained at strong levels. "There are some signs that the rate of expansion appears to have peaked, as both output and new order growth cooled slightly from May's record performances, but full order books and a further loosening of virus-fighting restrictions should nevertheless help ensure growth remains strong as we head through the summer," Chris Williamson, chief business economist at IHS Markit, says. (xavier.fontdegloria@wsj.com)

Liontrust Management Fee Outperformance Looks Set to Continue

0842 GMT - Liontrust Asset Management's management fee profits came in above expectations on lower costs, with an EBIT margin of 41% for fiscal 2021, Numis says. While this result was artificially skewed upwards, the U.K. brokerage expects higher management fee operating margin to continue. "We nonetheless think that some of the higher-than-expected management fee operating margin will persist versus our prior expectation, likely in the very high 30s percentage versus a high 30s previously, reflective of operational efficiency," it says. Numis has an add rating on the stock with a 1,900 pence target price. (anthony.orunagoriainoff@dowjones.com)

Joules's Future Looks Bright as It Continues to Evolve

0829 GMT - British clothing-and-homeware company Joules has a very positive outlook as it continues to embed its omnichannel model, diversifying and growing its revenue streams and evolving into a true lifestyle brand, Liberum says. Joules appears particularly well-placed in the short term given its family focus and lifestyle locations in light of the "staycation" trend playing out this summer, the brokerage says. Long-term, the company's position has been encouragingly strengthened over the last few years, driven through its enhanced digital platform and capabilities and its evolution into a premium brand supported by strong growth in its online marketplace and recent acquisitions, Liberum says. Liberum reiterates its buy rating and target price of 400.0 pence on the stock. (joseph.hoppe@wsj.com)

BOE Could Acknowledge Inflation Risks

0816 GMT - The Bank of England is fully expected to leave policy unchanged when it announces a decision Thursday, though bank officials could admit that consumer price data have overshot estimates, says Jefferies. "The Monetary Policy Committee could well acknowledge the fact that the most recent inflation prints had surpassed expectations, something that will be taken into account when the new economic forecasts are published in August," it says. Official U.K. data indicate that the economy is on track to record strong growth over the summer months, despite the recently announced delay in the lifting of social restriction measures, it adds. (lorena.ruibal@wsj.com)

Vertu Motors Margins Benefit From Tight Used-Car Market

0816 GMT - Used car prices are rising in the U.K., Liberum says. According to cap hpi, an industry consultancy, prices rose 6.7% in May, the highest increase since April 2009, the brokerage notes. Vertu Motors, which this morning upgraded profit guidance for the fiscal year by 15%, is one of the companies set to benefit from higher used car prices. "Demand for used cars to date has been strong with supply also under pressure and this has led to used car prices rising and higher gross profit per unit," Liberum says. Shares in Vertu rise 2.0% to 46.8 pence. Liberum has a buy rating on the car retailer with a 80.0 pence target price. (jaime.llinares@wsj.com)

Berkeley's London Exposure Seems to Hold Back Shares

0812 GMT - House builder Berkeley's heavy exposure to London has been a blessing and a curse, although the company remains convinced of recovery in the capital, Interactive Investor says. "While the share price has added 5% over the last year, this is a shadow of the rally which many other housebuilders have enjoyed given the generally supportive environment, and compares with a hike of 12% over the period for the wider FTSE 100," the investment platform says. That said, the market consensus of a hold rating on the stock could be subject to upgrades given Berkeley's upbeat outlook, particularly over the longer-term, as gross margins ready for strong improvements alongside improving shareholder returns, Interactive Investor says. Shares fall 0.7% to 4,609 pence. (joseph.hoppe@wsj.com)

Berkeley's Back-End Loaded Pipeline Won't Change Short-Term Consensus

0733 GMT - House builder Berkeley's fiscal 2021 results were reassuring but don't expect significant changes to consensus on the back of the update, Citi analyst Ami Galla says. Berkeley's management has noted the bulk of the delivery pipeline is back-end loaded, so pretax profit for fiscal 2022 and fiscal 2023 is likely to be limited to levels similar to the latest year's, the bank says. Berkeley has 23 of its 29 complex sites in production and expects GBP700 million of net investments over the next three years, allowing for a 50% increase in delivery by the end of 2025 compared with 2019, Citi says. Citi retains its neutral rating on the stock and target price of 4,601 pence. Shares are down 2.5% at 4,523 pence. (joseph.hoppe@wsj.com)

Berkeley's Guidance Needs More Detail But Is Generally Reassuring

0719 GMT - House builder Berkeley's pretax profit of GBP518.1 million came in slightly ahead of market consensus, but its guidance of "similar" figures for the next two years needs more detail, Jefferies says. That said, the consensus for Berkeley is rising in fiscal 2023 and the company has reiterated its six-year pretax profit target to fiscal 2025 of GBP3 billion, the U.S. bank says. "Cash due on forward sales of GBP1.7 billion is flat on the last update, although commentary that 'enquiry levels in London are now ahead of pre-pandemic levels' will likely reassure," Jefferies says, retaining its buy rating and 6,059 pence target price. Shares are down 0.3% at 4,624 pence. (joseph.hoppe@wsj.com)

Shrinkflation: Coming to a Store Near You?

0707 GMT - Consumers might end up paying the same for less in a post-pandemic world, as retailers unwilling to cause sticker shock choose instead to raise prices more discreetly, says DBS chief economist Taimur Baig. He cites as an example the decision by ice cream maker Tillamook to reduce its carton size to 48 oz from 56 oz on sharply higher costs of berries and other ingredients. Shrinkflation tends to happen when there is a high degree of competition in the market and consumer-goods makers lack pricing power amid low inflation, Baig says. The phenomenon isn't new, but it could become more common as raw-material costs rise globally. Consumers will probably witness shrinkflation not just among small retailers in developing countries but in big-box retailers in developed markets, he says. (farah.elias@wsj.com)

 

Contact: London NewsPlus, Dow Jones Newswires; +44-20-7842-931

(END) Dow Jones Newswires

June 23, 2021 06:07 ET (10:07 GMT)

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