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Markets Today: Next and Future smash expectations, Netflix falters, Retail investor boom continues & more

Catch up with the morning business news
Markets Today: Next and Future smash expectations, Netflix falters, Retail investor boom continues & more
  • Retail investor market continues to boom 
  • Future's profits ahead of expectations 
  • Netflix struggles to maintain momentum 

Retail investor market continues to boom

The UK’s retail investors are preparing themselves to increase the size of their portfolios in the coming months, even as the lifting of lockdown invites a boom in spending. A poll of 2000 people by Barclays Smart Investor found that the average UK investor is planning to increase the amount they invest by 19 per cent each month, with half planning to cut back on spending to continue investing, and only 6% planning to cut back on their investing as lockdown ends.

Lockdown investing has led to bumper profits for the likes of AJ Bell, Hargreaves Lansdown, and interactive investor. This latest research suggests that the inflows enjoyed during lockdown were not just a by-product of boredom and extra savings, but the mark of a long-term shift in the way Brits think about their money. 

But the big platform providers don’t have the new retail investors all to themselves. Investment apps which charge very little for sharedealing are growing in number and popularity. Indeed, Freetrade was voted the most popular platform by Investors Chronicle readers back in March. While traditional trading platforms including IG and CMC are expanding in the retail space. 

As the retail investor space continues to boom in the UK, all players must keep a wary eye on the emerging competition. 

New to investing? Check out our guide to getting started in the markets here and our new investor portfolio here. 

Future’s profits materially ahead of expectations

Shares in Future (FUTR) bounced by 8 per cent in early trading, after the publisher said that full year profitability will be materially ahead of the market’s current expectations. In a brief update this morning, management said that robust digital ad sales and ongoing ecommerce product affiliate revenue growth had boosted its performance. The group noted that the integration of price comparison website GoCo is on track to achieve £15m in synergies. LA

The addition of GoCo provides an interesting new revenue model for Future. The company has all but abandoned its subscription division in favour of a transactional model which seeks to monetise its massive reader-base with click-through revenues. 

Read more: E-commerce driving bright new Future

Next booms post-Covid

Trading at Next (NXT) has been so good in the last eleven weeks that management couldn’t wait to tell the markets about it. Full priced sales were up 18 per cent compared to two years ago (comparison with last year is not worth it because of the disruption caused by Covid-19).

Like Burberry (BRBY) - which announced similar numbers at the end of last week - the company has retained the strength of its online operation as in-store numbers have returned to positive territory. Read our full analysis here. 

Netflix loses 430,000 subs in North America

Netflix (US:NFLX) shares dropped by as much as 3 per cent in after-hours trading, as the streaming giant revealed last night that it had lost 430,000 subscribers in the US and Canada in its second quarter. 

Management forecast that it would add 3.5m subscribers in the current period, which is weaker than what the market had expected. But overall the group added 1.5m subscribers in the second quarter, beating Wall Street forecasts of 1.1m. That, combined with interest over Netflix’s plans to produce video games, helped the stock to regain some of its losses. Shares are currently down 0.2 per cent in pre-market trading. 

There are concerns over Netflix’s ability to protect its dominant market share, as competition from the likes of  Walt Disney (US:DIS), Amazon (US:AMZN) and Discovery (US:DSCA) heats up. But management said that while its rivals are growing and combining to create even bigger platforms, it has no acquisition plans. 

“We don’t view any assets as ‘must-have’ and we haven’t yet found any large scale ones to be sufficiently compelling to act upon,” the company said in its letter to shareholders. LA