Today's Markets: Stocks fall, Bitcoin hits fresh lows, spec tech wreckage

Today’s Markets: Stocks Fall, Bitcoin Reaches New Lows, Technical Specs Shatter


BT turns away from sports and cuts its pension deficit

BT (BT) It is moving ahead with investment in Openreach fiber optic network and its 5G service. To reduce distractions, the carrier has turned BT Sport into a joint venture with Warner Bros Discovery – which will combine BT Sport and Eurosport.

The introduction of optical fibers is going well. The total annual cost savings is now £1.5 billion and the target has been increased to £2.5 billion by the end of 2025. This cost reduction helped raise EBITDA by 2 per cent despite a 2 per cent drop in revenue.

The decline in revenue was attributed to lower sales of the Corporate division and the Global division, which were down 5 and 10 percent, respectively. Management blamed this on “known market challenges”. Amid these challenges, it is gratifying to see Openreach improve revenue by 4 percent and cash dividend adjustment by 8 percent.

Another upside – and a direct positive result from “market challenges” – is the significant reduction in the pension deficit. The pension deficit has fallen from £5.1 billion to £1.1 billion in large part thanks to interest rate increases implemented to tackle inflation. It’s always great when there’s a silver lining. Like

Salmonella discovery drags down Cranswick stock

Kranswick Airport (CWK) Shares fell more than 5 percent after the company revealed that it had temporarily closed its facilities in Hull due to the discovery of salmonella in some cooked chicken products.

In a statement on its website, the Poultry and Pig Handler said that “routine internal inspections have identified the presence of salmonella in a limited number of cooked chicken products prepared at the Hull poultry facility.”

Kranswick advised his customers to remove products containing ready-to-eat chicken, which retailers and fast food retailers sell, and said they are working with the Food Standards Agency to deal with the situation.
Peel Hunt analysts said the stock price reaction “was completely out of proportion to the scale of the problem” and that this type of food safety event is usually resolved in less than a week. California

Rolls-Royce benefits from a return to the skies

Rolls-Royce (RR.) It reported a rebound in the number of hours its planes were in the air as passenger demand increased on routes where travel restrictions were lifted.

Long-Term Service Agreement (LTSA) flight hours in the first four months of 2022 rose 42 percent over the same period last year, as air travel in Europe and the United States rebounded even as much of China remained disrupted. The company also said 12 Trent XWB-97 engines will be used by Qantas in its Project Sunrise initiative to offer direct flights from Australia to London and New York. Public trading remains “in line” with guidance, and margins in the defense business are likely to be lower as it invests more to support gains in long-term programs. The company also said that its SMR work in designing small nuclear reactors has begun a “multi-year” design evaluation process. The company’s shares were flat amid a broad sell-off on Thursday,

Rolls-Royce expects to sell the €1.7 billion (£1.45 billion) sale of ITP Aero to complete it by the end of June, with the proceeds used to pay down debt. A strong balance sheet and an expected return of positive cash flow by the end of the year and good long-term prospects for the company’s end markets are the main drivers behind our buy recommendation. mf

Landsec agrees to sell Strand Building

Landsec has agreed to sell a building in the Strand area of ​​London to a Singaporean developer for £195 million. The sale of the mixed-use office and retail asset at 32-50 Strand is expected to be completed next month. Shares in Landsec continued to fall this morning — down another 2 percent after falling 10 percent so far this year.

The cash from the sale will fund long-term growth and new acquisitions to generate returns for shareholders, CEO Mark Allan said. The news comes after the company yesterday launched a renovation business that it said will “create value through impact renovation”.

The Strand Asset, renovated in 2012, consists of 139,000 square feet of retail and office space above the basement, ground, and eight upper floors. It is located at the western end of the Strand, near Charing Cross Station. ML

Ferguson heads the US side

Plumbing wholesaler Ferguson (Verg) It completed its conversion to the United States, with its primary listing shifting to the New York Stock Exchange. Its premium listing on the London Stock Exchange has now been delisted, although it will maintain a record listing.

Shareholders voted overwhelmingly in favor of the move at a meeting in March. After selling the Woleseley UK arm last year, the company operates only in North America, and chairman Jeff Drabble said it now has “the right listing structure for Ferguson to continue growing”.

Analysts from Credit Suisse said Ferguson’s shares could face some “short-term technical pressure”, given that about 10 per cent of its current share base is made up of passive funds that track UK indices and that it would not immediately qualify for a US S&P inclusion.

Although Ferguson shares are currently worth less than their US peers, the bank lowered its target price for the company’s shares based on more cautious medium-term growth assumptions. However, the target price of £103.65 still represents a rise of more than 10 per cent from the current valuation. mf

Superdry test “premium” regeneration

The road to recovery for Super Dry (SDRY) It can be long. Shares of the fake Japanese fashion brand fell another 4 percent Thursday, extending its decline by 44 percent year-to-date, after it said it remained “cautious” about the impact of inflation next year.

Superdry’s total sales are up 8 per cent to £600m in the year to April 23, as in-store sales have rebounded after Covid. Online sales fell 24 per cent to £153.4m after falling due to lower promotional activity compared to the previous year.

CEO Julian Dunkerton said he expects “a strong improvement in fiscal year 22 gross margin” as the brand cuts discounts in favor of full-priced apparel sales and raises prices 2 percent to counter inflation.

Superdry’s ‘premium’ revamp, announced after the brand’s £12.6m loss last year, could prove more difficult as consumers face mounting cost-of-living pressures. “As we approach fiscal year 23, we remain cautious about the macroeconomic outlook and the impact of inflation, but we are confident that our strategy positions the brand for future success,” Dunkerton said. MT.

Private equity returns to the UK

The recent crash in share prices and a weaker pound are making British companies more vulnerable to bids for private equity, a manager said. SDL UK Buffettology Fund (GB00BF0LDZ31) careful.

Keith Ashworth-Lord has seen investors bid for two companies owned by the £1.2 billion fund in recent weeks. RWS Holdings (RWS) It was announced in April that Baring Private Equity Asia was considering a takeover offer, while HomeServe (HSV) He held talks with Brookfield Infrastructure after receiving “a number of offers” from the company.

Ashworth Lord warned that while much of his portfolio has held up well operationally amid the recent uncertainty, sharp declines in share prices and recent weakness in the British pound against the US dollar could drive more British companies out of the market. The pound is trading at its lowest level since early 2020.

“We see companies doing well,” he said. “The thing that caused the pain was a little relief and multiple pressure. It’s a matter of concern then to go in private equity and pick it up.”

He added that three other companies are supported by the team, NCC Group (NCC)And RM (RM.) And Paypoint (PAY)appeared to be more vulnerable to potential bids on the back of the severe weakness in the share price.

“It’s the three who look like ducks and the guns are pointed at them,” he said. “I am afraid they will end up in P2P (public-private) trade and be cheated out of our ownership. I think these things could have doubled their share price in two or three years. They will steal from me.”

UK companies have already seen private equity firms shift to acquisitions in the past year or so, while already showing signs of that continuing into 2022. Activity in the RIT listed space has raised eyebrows, for example. DB

Hargreaves Lansdowne Asset Falls

Shares of Hargreaves Lansdown fell 7 per cent when markets opened as the investment platform reported AUMs fell to 132.3 billion pounds at the end of April, from 141.2 billion pounds at the end of last year.

Assets in group funds saw the biggest drop, falling by £6.1 billion from the end of December to the end of April, while assets in listed securities fell by £4.5 billion. Net new business for the first four months of the year was £2.5 billion for the trading period, compared to an average estimate of £3.03 billion for analysts surveyed by Bloomberg.

“The challenging backdrop driven by unprecedented macroeconomic and geopolitical events has affected markets and investor confidence,” said Chris Hill, chief investment officer at Hargreaves Lansdown. millimeter

Softbank’s vision becomes blurry

Investors in Japan’s Softbank are likely to owe an apology after massive cuts to its controversial “Vision” fund led to the company’s total pre-tax quarterly loss of 2.1 trillion yen – its biggest ever. The Vision fund alone has announced a $27 billion (£22 billion) writedown on the value of its technology investments. The main culprits seem to be Chinese tech companies that have a taxi-parking app Didi (Diddy)And Coupang (CPNG) And GRAB (GRAB) They all suffer losses. Management blamed it on accumulating fears and regulatory tightening, as well as investors’ lack of appetite for high-growth technology stocks at a time of rising interest rates. JH

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