Good morning from Paul & Graham! All done for today, see you tomorrow!
Agenda
Paul's Section:
As usual for this time of year, I'm going to focus on the first retailer trading updates, which are mid caps - this is to test the water, and give us something to benchmark the smaller companies against, when they report. So today I'll be reporting here on -
Next (LON:NXT) - an excellent update, with strong sales over Christmas (helped by cold weather driving demand for outerwear). Profit guidance is raised, but higher corporation tax takes a hefty bite out of guidance for FY 1/2024. Inflationary pressures beginning to ease for H2 of calendar 2023 has positive read-across for many sectors. Lots of interesting stuff in here, so I go through it in a fair bit of detail below. Thumbs up for a great quality business, although forward PER of 13.2 is probably a fair valuation right now, given that it's a mature business.
Greggs (LON:GRG) - in line with expectations update for FY 12/2022. But within the detail, there's a lot of positive stuff. It's coping with inflationary pressures, and clearly gaining market share, with very strong LFL sales growth. I'll give it a thumbs up for the quality of the business, and good growth potential, although the valuation is looking stretched after a strong recent run. More detail below.
B&M European Value Retail SA (LON:BME) - a positive Q3 (Oct-Dec 2022) update, and FY 3/2023 EBITDA guidance is raised. I continue to like this share, which seems reasonably priced, and has a particularly strong 8.3% dividend yield, when you include special divis. Thumbs up from me. More detail below.
This is in addition to our reporting on small caps, not instead of!
Dignity (LON:DTY) - bid approach is announced, almost 3 months after discussions started, which is an outrage I think, and has resulted in a false market in the shares, causing losses to sellers who were not told that takeover talks were underway. The regulations on disclosures of takeover approaches are appalling, in my view - we need to press for regulatory changes. More detail below.
Angle (LON:AGL) - profit warning, shares down 31%. I run through the detail below, but whilst it sounds an interesting project, the timescales are now extended out even further, and the cash pile…