UKX

UK Gilt Yields Fall as Signs Emerge of Easing Inflationary Pressure

1324 GMT - The latest U.K. flash PMI data shows input and output cost across manufacturing and services sector declined in March indicating easing inflationary pressure, say Barclays analysts Mark Cus Babic and Abbas Khan in a note. "Price indexes show a welcome decline, in both input and output indexes across manufacturing and services," they say. U.K. gilt yields extend falls in the wake of the data, with the 10-year gilt yield down 15 basis points at 3.209% while the 2-year gilt yield is down 22bps at 3.080%, Tradeweb data show. (miriam.mukuru@wsj.com)

COMPANIES NEWS:

Games Workshop Declares Dividend

Games Workshop Group PLC said Friday that it has declared a dividend payout and that trading in the three months to the end of February has been in line with expectations.

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Smiths Group 1H Pretax Profit Rose as Revenue Beat Consensus, Lifts Full-Year Guidance Again

Smiths Group PLC said Friday that first-half fiscal 2023 pretax profit rose as revenue beat consensus, and again raised its revenue-growth guidance for the year.

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JD Wetherspoon Swung to 1H Pretax Profit as Sales Rose Above Prepandemic Levels

J.D. Wetherspoon PLC reported on Friday a swing to pretax profit for the first half of fiscal 2023 on the back of sales that were ahead of prepandemic levels.

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James Fisher & Sons to Report 2022 Revenue Rose, But Results Delayed to April

James Fisher & Sons PLC said Friday that it expects to report a rise in revenue for 2022, but that its results would be delayed a month and published April 28 instead of March 28.

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Tribal Group 2022 Pretax Profit Fell on Contract Delay; Cuts Dividend

Tribal Group PLC on Friday cut its final dividend on the back of lower profits due mainly to the delays and subsequent cancellation of its Nanyang Technological University contract in Singapore, and despite higher revenue.

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Quartix Technologies Starts 2023 in Line With Market Views

Quartix Technologies PLC said Friday that its performance in the first two months of 2023 has been in line with market views for the year.

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Warpaint Lifts Expectations After Strong 1Q Sales

Warpaint London PLC said Friday that it has lifted its expectations for 2023 as sales increased in the first quarter of the year.

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Caledonia Mining to Raise Up to $13 Mln to Fund Projects; Reports In-Line 2022 Earnings

Caledonia Mining Corp. said Friday that it plans to raise up to $13 million via share placings and will use the money to provide working capital to accelerate the planned work at three new gold projects in Zimbabwe.

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Ocean Wilsons 2022 Pretax Profit Fell on Decline in Value of Investment Portfolio

Ocean Wilsons Holdings Ltd. said Friday that 2022 pretax profit fell due to a decline in the valuation of its investment portfolio, and that in terms of uncertainty, the first quarter of 2023 was reminiscent of the year-prior period.

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San Leon Energy Expects to Complete Refinancing in Near Term

San Leon Energy PLC said Friday that it expects to complete its refinancing in the near term although the process has taken more than expected.

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Phoenix Copper Shares Fall as It Seeks to Issue Copper-Price-Linked Bonds, Secures $2 Mln Facility

Phoenix Copper Ltd. shares fell on Friday after it said that it is finalizing discussions regarding the placing of up to $80 million of corporate bonds linked to the copper price and that it has secured dollar working capital through a credit facility.

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Ceres Power 2022 Pretax Loss Widened on Higher Costs and Delayed Fees From China JV

Ceres Power Holdings PLC said Friday that its pretax loss widened in 2022 due to increasing operating costs, as revenue fell on a delay in incoming fees from its Chinese joint venture.

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Holders Technology Swung to Pretax Loss in FY 2022 on Investments

Holders Technology PLC said Friday that it swung to a pretax loss in fiscal 2022 as it invested more in the lighting control solutions business.

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IG Design Interim COO Lance Burn to Step Down

IG Design Group PLC said Friday that Lance Burn will step down from his role as interim chief operating officer and executive director on March 31.

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Supply@Me Capital Says Two Directors Resign, Intend to Buy Back TradeFlow Subsidiary

Supply@Me Capital PLC said Friday that directors Thomas James and John Collis tendered their resignation Thursday and that they intend to exercise their right to buy back 100% of the share capital of subsidiary TradeFlow, which was acquired in 2021.

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System1 Group Calls General Meeting for April 21 as Requested; Says to Vote Against Proposals

System1 Group PLC said Friday that it has called a general shareholder meeting for April 21 as requested by former Chief Executive Stefan Barden and former Chief Financial Officer James Geddes earlier this month.

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Accsys Taps Steven Salo as new CFO

Accsys Technologies PLC said Friday that it has appointed Steven Salo as chief financial officer and a member of the board with effect from April 1.

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Beacon Energy to List on London's AIM in April

Beacon Energy PLC said Friday that it intends to float on the London Stock Exchange's AIM as a result of a reverse takeover, and that it expects to raise 6.04 million pounds ($7.4 million) for drilling a development well and general capital requirements.

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Gemfields Group 2022 Boosted by Strong Postpandemic Demand

Gemfields Group Ltd. on Friday reported a 12% rise in net profit for 2022 on record revenue that was boosted by strong postpandemic demand and high prices, but warned that macro uncertainty could drag growth in 2023.

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GSK Disagrees With Court Ruling to Allow Plaintiff-Expert Testimony in Goetz Case

GSK PLC said Friday that it disagrees with a ruling in the Goetz case by the California state court late Thursday to allow the plaintiff's experts to testify, and said there is no consistent or reliable evidence that ranitidine increases the risk of any cancer.

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Microsoft-Activision Merger Won't Substantially Harm Gaming Consoles Competition in UK, Watchdog Says

The U.K. Competition and Markets Authority said Friday that new evidence provisionally alleviates its previous concerns over the supply of gaming consoles in the U.K. and it has therefore narrowed the scope of its investigation into Microsoft Corp.'s planned $75 billion acquisition of Activision Blizzard Inc.

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In the Style Shares Fall After Business Sale Approved

In The Style Group PLC shares fell on Friday after the company said shareholders had approved the sale of its operating business at its annual general meeting, but that the resolution to cancel its shares didn't pass.

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Caledonia Mining Raises $10.6 Mln via Share Placing, More Than Planned

Caledonia Mining Corp. said Friday that it has raised $10.6 million via the share placing first announced this morning, more than initially planned due to strong investor support.

MARKET TALK:

Microsoft Deal to Buy Activision Still Faces Obstacles

0851 ET - Microsoft's proposed $75B takeover of gaming giant Activision still faces challenges, despite some progress with British regulators. The UK's Competition and Markets Authority is leaving the door open to challenge the deal on the basis of concerns over how the merger will affect competition in the cloud-gaming space. Outside the UK, the US Federal Trade Commission has sued to block the deal, and the European Union's competition watchdog is still investigating the deal. (will.feuer@wsj.com; @WillFOIA)

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British Regulators Still Have Concerns Over Microsoft-Activision Deal

0848 ET - British antitrust regulators say their concerns over how Microsoft's proposed acquisition Activision Blizzard will impact the console-based gaming market have been alleviated, but the regulators still have concerns about how the deal could impact the burgeoning cloud-based gaming market. The UK's Competition and Markets Authority says Friday that its initial concerns about the impact on the cloud-gaming market are not affected by today's announcement. The regulators say they are on track to conclude their investigation by the end of next month. Shares of Activision rise 6% in premarket trading. (Will.Feuer@wsj.com; @WillFOIA)

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European Car Makers Behind in Race For a $30,000 Electric Vehicle

1217 GMT - Affordability will power the next big wave of growth in the battery-electric vehicle industry, and European car makers aren't nearly as well positioned as their nimbler competitors, UBS says in a research note. The EV legacies of traditional mass-market brands seem increasingly at risk as price competition intensifies, UBS says. Volkswagen and Renault are among companies who are behind on building a $30,000 battery-powered EV at a good profit, making them vulnerable to competition from BYD and Tesla in China and at home, where fewer political protections open the door to rivals, analysts say. High-end makers like Mercedes-Benz and BMW are shielded by their niche market, analysts say, while Stellantis has little Chinese exposure and shows promise in the U.S. market. (david.sachs@wsj.com)

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Hunting's Share-Price Fall Offers Opportunity

1158 GMT - Hunting's shares look attractive after a fall, JPMorgan says, increasing its recommendation on the FTSE 250-listed oil-industry equipment supplier to over-weight from neutral. While U.S. rig activity has declined so far this year, a drop in Hunting's shares on an unchanged outlook presents an opportunity, JPM says. "We upgrade to over-weight as margins and working capital improve through 2023," JPM analyst James Thompson writes. Still, shares in France's Technip Energies are trading close to JPM's updated target price and merit a pause, Thompson says, downgrading the stock to neutral from over-weight. Hunting shares, worth about 333 pence at the start of 2023, fall 1.9% to 234p. Technip's stock drops 8.6% to EUR18.91. (philip.waller@wsj.com)

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UK's Interest Rates Could Stay Elevated Due to Persistently High Inflation

1150 GMT - The Bank of England is likely to keep interest rates elevated to tame high inflation as the U.K.'s cost of goods and services is expected to remain persistently high, say Bank of America Securities analysts in a note. "We continue to think the U.K. faces a persistent inflation problem," they say. "Therefore we think BOE will be slow to cut interest rates after reaching the terminal rate," BofA says. (miriam.mukuru@wsj.com)

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European Banking Shares Slump as Fears Linger

1129 GMT - Shares of major European banks are in decline in early afternoon trading as fears linger in the aftermath of Credit Suisse's troubles and weeks after the collapse of Silicon Valley Bank. Germany's Deutsche Bank is suffering the steepest fall, with shares down more than 13%. Commerzbank's shares are down 8.5%. In Switzerland, Credit Suisse shares are down 8%, while UBS is down 7.7%. Shares of France's BNP Paribas are down 7%, while Italy's Intesa Sanpaolo trades 4.4% lower. Austria's Raiffeisen Bank International is down 8.2%, and Spain's Banco de Sabadell is down 7.3%. The STOXX Europe 600 Banks index is down more than 5%. (mauro.orru@wsj.com; @MauroOrru94)

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UK PMIs Suggest Resilient Activity

1101 GMT - U.K. flash PMIs suggest the economy's strong start to the year was sustained in March, with prices continuing to fall and few signs that a fall in sentiment due to the turmoil in the banking sector crept into the survey, Ruth Gregory, deputy chief U.K. economist at Capital Economics says in a note. The index's services output price index dropped to 59.7 from 62.7, suggesting the Bank of England's closely watched measure of inflation persistence could fall sharply to just more than 5% in the coming months from 6.8% in February, Gregory says. But with the full drag from high interest rates yet to be felt, the economy still looks like it will enter a recession later this year, she says. (edward.frankl@wsj.com)

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UK Retail Sales Came in Strong But Storm Clouds Lie Ahead

1033 GMT - The U.K.'s 1.2% rise in February retail sales is much better than forecast, suggesting that recent resilience in activity hasn't yet faded--even if it's too soon to conclude it will be sustained--Ashley Webb, U.K. economist at Capital Economics says in a note. Together with January's rise, February's increase reversed the large fall in December, though it still leaves sales volumes 3.5% below their level last February, he says. Indeed, with household finances under pressure, it's possible that any improvement in will be just be met by a softening in nonretail spending, such as restaurants, Webb says. With the full drag from higher interest rates yet to be felt, the coming months may still be a struggle for retailers as the economy tips into a likely recession, he adds. (edward.frankl@wsj.com)

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Wetherspoon's Earnings Point to Easing Pressures

1026 GMT - J.D. Wetherspoon's 1H performance shows signs of easing pressures on the sector, IG Group chief market analyst Chris Beauchamp says in a note. "With trading doing better at the start of the year there is finally some hope that a real recovery for the embattled pubco is on the cards," he adds. Shares are up 7.6% to 625.5 pence. (michael.susin@wsj.com)

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Warpaint's Strong 1Q Sales Drives 2023 Upgrades

1020 GMT - Warpaint is laying the foundations for attractive growth as strong sales looks to continue, Shore Capital analysts Darren Shirley and Clive Black write in a research note. Warpaint reported strong sales so far in 1Q, and as a result, Shore Capital upgrades it 2023 and 2024 pretax profit forecasts by 11% and 15%, respectively, taking the 2023 forecast to GBP11.0 million. "We view Warpaint as an attractive growth company, which remains in the foothills of its U.K. and international growth prospects and ambitions," the analysts say. Warpaint is house stock of Shore Capital and as such the brokerage doesn't provide recommendations. Shares are up 5.1% at 207.5 pence. (christian.moess@wsj.com)

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Pound Rises Vs Euro But Falls Vs Dollar After UK Data, Bailey Remarks

1007 GMT - Sterling rises versus the euro but falls against the dollar as traders digest the latest U.K. retail sales and purchasing managers' index data along with remarks from Bank of England Governor Andrew Bailey. U.K. retail sales rose 1.2% month-on-month in February, more than the 0.3% increase expected by analysts in a WSJ survey. However, the S&P U.K. composite PMI, which measures services and manufacturing activity, dropped to 52.2 in March from 53.1 in February against an expected 52.6. Meanwhile, Bailey told the BBC's Today program that interest rates will rise further if firms raise prices. GBP/USD falls 0.5% to 1.2214 but EUR/GBP declines 0.3% to 0.8786. (renae.dyer@wsj.com)

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Hostelworld Set for Earnings Upgrades if Momentum Sustained

1002 GMT - Hostelworld's 2022 results demonstrate the company's transformation since the lows of the pandemic, Peel Hunt analysts say in a note. This year has also started strong, with year-to-date performance up 115% compared with 2019 levels, they say, adding that if this persists, Ebitda upgrades could follow. Share recovery still has way to go to reach prepandemic highs of more than 400 pence a share, the analysts note. However, current pricing doesn't account for the progress made in the last few years, they add. "The company that went into the Covid-19 looks very different to the one that has emerged," the analysts say. Peel hunt reiterates a buy rating and target price of 200 pence on the stock. Shares are currently trading at 140 pence.(don.forbes@wsj.com)

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Smiths Group's Margins Below Targets, But Headed in Right Direction

0958 GMT - Smiths Group had another strong half-year as it reported record revenue growth and lifted its full-year outlook, eToro analyst Mark Crouch says in a note. Although the engineering company's 63% 1H operating cash conversion is down on last year's 93%, it says this was down to investment in inventory--to power growth--and that it will return to normal levels in the medium-term, Crouch says. Margins are also below its medium-term targets but they are getting fatter and therefore heading in the right direction, he says. "The firm has a strong order book and will register decent growth in its full-year results, but it's difficult to get carried away when there remains so much geopolitical and economic uncertainty," Crouch says.(anthony.orunagoriainoff@dowjones.com)

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Bellway's Outlook to Be Scrutinized as Shares Struggle

0955 GMT - Bellway's share price is attempting to recover from autumn lows, but the rally is unconvincing and shares still languish at less than half of their prepandemic peak of early 2020--and they now seem to be losing momentum, AJ Bell says. The house builder's shares have dipped 6.4% in the last month despite anecdotal evidence of improved mortgage availability, as mortgage approvals stand at multi-year lows, interest rates rise further, consumer confidence remains low and inflation persists, AJ Bell analysts say in a research note. Bellway's first-half results on Tuesday will be scrutinized by analysts and shareholders for the 2023 outlook and beyond, particularly concerning reservation rates, completions, pricing and operating profit, the brokerage says. Shares are down 0.8% at 2,018 pence. (joseph.hoppe@wsj.com)

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

March 24, 2023 09:42 ET (13:42 GMT)

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