Next lifts guidance again, Halma flags good underlying growth

Stocks to watch

UK fashion retailer Next on Thursday lifted full-year guidance for the third time in four months after better-than-expected summer sales and said inflationary pressures should ease next year. Pre-tax profits are now forecast to come at £875m from previous guidance of £845m, with brand full price sales growth increased to 2.6% from 1.8%. Total group sales were up 5.4% to £2.63bn.

Safety equipment group Halma said it expects to deliver good underlying growth in the first half, as it maintained full-year guidance. The company reported on Thursday that it has made "further progress [...] despite varied market conditions" in the six months to 30 September. Halma, which offers a range of services including hazard detection, water analysis and medical devices, is sticking with its forecasts made in June at the time of its full-year results, which indicated "good" organic revenue growth at constant currencies and a return on sales of 20%.

Travel caterer SSP Group is set to finish the financial year at the upper end of its previously stated revenue and EBITDA ranges. For the last 16 weeks of the financial year, SSP was expecting revenue to be 116% of 2019 levels, driven by a recovery in passenger numbers, particularly in the air sector, and improvements in their customer and digital offers. The group's revenue for the entire year is projected to be £3.0bn, marking a 37% growth year-on-year, with expectations for the next financial year's EBITDA to fall between £325m and £375m.

Newspaper round-up

Wilko’s administrators are to question majority shareholder Lisa Wilkinson on the £77 million in dividends paid out to investors in the decade before the retailer’s collapse, as calls grow for the Wilkinson family to plug a £56 million hole in workers’ pension pots. The Times understands that PwC will conduct a review into the dividends paid out to the Wilkinson family and the retailer’s other directors as part of a wider investigation into company transactions in the years building up to the administration. - The Times

Around 60 miles off the east coast, wind turbines more than twice as tall as Big Ben are ready to be powered up within weeks. Dogger Bank, the world’s largest wind farm with the ability to power 6m homes, will finally be switched on, eight years after it was first granted planning permission. But across the UK, hundreds more projects viewed as vital in helping the Government hit net zero ambitions, are currently being held up by bureaucracy and delays. - Telegraph

Competition among financial firms for a slice of the nation’s savings is intensifying, with Nationwide launching an account paying a “market-leading” 8% interest. A string of Bank of England interest rate rises have pushed up savings rates across the board, and many experts expect another one on Thursday. - Guardian

The Bank of England’s decision on whether to push ahead with another interest rate rise today or hit pause was on a knife-edge after a cooldown in inflation in August surprised the City. Expectation that the monetary policy committee (MPC) would impose another 25 basis-point rise, lifting the base rate to a 15-year high of 5.5 per cent, fell from a near-certainty to odds of 50-50 within minutes of yesterday’s unexpected data from the Office for National Statistics (ONS). - The Times

Jeremy Hunt should copy the Danish benefits system to encourage people to switch jobs more often, according to a new report. The Resolution Foundation has urged the Chancellor to offer people who lose their jobs more generous benefits to encourage them to take more risks with their careers. This would help tackle Britain’s productivity crisis by making the jobs market more dynamic and boost overall growth at a relatively modest cost, the Resolution Foundation argued. - Telegraph

Almost 2,000 more British independent stores were left empty in the first half of this year, as small businesses struggled to cope with rising inflation and the cost of living crisis. The biggest rise in vacancies in at least eight years marks a reversal in fortunes for independent outlets after two years of growth. Small firms had thrived from a shift towards local shopping prompted by the pandemic and were also helped by government Covid support on rent and business rates. - Guardian

US close

Stocks on Wall Street finished Wednesday's session in the red after Federal Reserve policymakers revealed that an interest-rate hike was probable at one of its next two meetings.

The news came at the conclusion of the two-day Federal Open Market Committee meeting, where the central bank chose to leave interest rates unchanged from the 5.25-5.5% range, as was widely expected by the market. This was the second time this year where its rate-hiking cycle has been paused.

However, 12 of the 19 voting FOMC members said they expect to raise rates once more this year, at one of the two remaining meetings in November or December.

Furthermore, looking further forward, the committee indicated that interest rates would only be lowered to around 5% by the end of 2024, indicating that they remain committed to a "higher for longer" strategy.

At a press conference following the meeting, chair Jerome Powell said he still needed to see "convincing evidence" that higher interest rates are having the desired effect on inflation before the FOMC can begin to loosen monetary policy.

The comments pushed stocks lower just before the closing bell, following a broadly positive start. The Dow Jones Industrial Average was down 0.2% by the close at 34,441, the S&P 500 declined 0.9% to 4,402, while the Nasdaq dropped 1.5% to 13,469.