Readers would have noticed a slight lull in the outflow of half-year reports ahead of the usual pick-up towards the end of August. Chances are they would have also noticed the contribution that sterling’s post-referendum decline has had on the top line of top-tier constituents. However, the FTSE 100 followed a number of European indexes into the red on Thursday trading, albeit marginally. A slight retracement in the value of sterling was partly responsible as the bulk of benchmark constituents have sizable earnings in non-sterling denominated currencies. A number of stocks were also marked ex-dividend on the day.
The retail sector has been generating plenty of comment during results season, with the health of the UK high street brought into question as we may well have passed the high-water mark in terms of unsecured lending. So it was slightly surprising that retail sales (excluding fuel) were up 0.3 per cent in July. Though flat on the downwardly revised figure for June, the figure was better than analysts had feared with food sales providing the strongest driver through the month.
On the results front, net premiums were up 16 per cent at insurer Admiral (ADM), though near-term prospects for the business are bound-up with regulatory change. The UK insurance division saw a slight rise in pre-tax profits, though they have been held in check by changes to the formula for payouts on personal injury claims: the so-called Ogden discount rate. About two-thirds of estimated cost of the change to the Ogden rate change were taken in the 2016 accounts, with the remainder recognised in the form of “lower reserve releases and profit commission” through 2017. Click here to read whether Jonas Crosland thinks Admiral is charting a prudential course in light of the changes.
A week ago, Hill & Smith (HILS) said that “the increased threat of terrorism in the UK has intensified the demand for deployment of [its] range of hostile vehicle mitigation products”. The same scenario is likely to play-out for Marshalls (MSLH) as its range of paving stones, kerbs and street furniture such as benches and bollards provide a visually unobtrusive method of thwarting the use of vehicles as weapons that we’ve seen in the UK and throughout Europe over the past couple of years.
The group’s latest half-year figures were warmly greeted by the market, providing confidence that the group is well on its way to achieve the targets set down in its 2020 corporate strategy. Jonas Crosland believes that “operational gearing is the name of the game” where Marshalls is concerned. Click here to see if our man buys into management’s 2020 vision.
Jonas has also been assessing whether half-year figures for Balfour Beatty (BBY) show that the construction group’s restructuring measures are feeding through into improved performance metrics. There was certainly a turnaround evident in UK construction: click here to find out our man’s verdict on the group result.
The share price of Hochschild Mining (HOC) tanked after the silver miner announced a 10 per cent hike in all-in sustaining costs. Reported revenue was flat from the 2016 interim, but Alex Newman has been digging below the figures to find out what's really undermining the share price. Click here to find out if our mining expert thinks the sell-off was overdone.
