Weekly review

Equity view

Best of the Best shares plunged after it warned annual profit would be more than 60% less than expected after customers spent money elsewhere and the cost of attracting new players rose. The competitions company said revenue from established customers signed up before May 2020 was 6% lower in the 15 weeks to 8 August than in the 15 weeks to the end of April. These customers are taking advantage of the end of lockdown, major sporting events and travelling to spend money, the company said.

Avon Protection cut its revenue guidance for 2021 and 2022 because of delayed orders and supply chain disruption. The personal protection products company said it expected revenue to be in the range of $245m-$260m for the year to the end of September and reduced its guidance for 2022 revenue to $320m-$340m. Analysts had on average expected $282m revenue in 2021 and $357m in 2022.

Sportech has signed a deal with Connecticut Lottery Corporation that will allow the UK company to enter the state's retail sports betting market. The 10-year contract with CLC and its sports book provider, Rush Street Interactive, will allow Sportech to offer sports betting across its retail sites and will promote CLC's online and mobile channel.

Security and managed services supplier Westminster Group reported a 16% half-on-half improvement in group revenues in its first six months on to £3.5m, although that was a decline from £7m year-on-year. The AIM-traded firm said its gross margin increased to 45% for the six months ended 30 June, up from 40% in both the first and second halves of 2020.

Entain set a date for the likely restart of dividends as the sports betting company reported a sharp rise in first-half profit driven by online gambling. Earnings before interest, tax, depreciation and amortisation rose 12% to £401m in the six months to the end of June as revenue increased 12% to £1.77bn. Profit after tax rose to £90.9m from £22.4m.

Price comparison website operator Moneysupermarket said on Thursday that it has combined its TravelSupermarket brand and Icelolly.com to create the Ice Travel Group. Moneysupermarket stated that with the final condition for completion of the combination being met, completion of the merger was now expected to take place in early September.

Financial services firm Just Group said on Thursday that it had fallen to an interim pre-tax loss as rising interest rates offset growth in adjusted operating profits. Just Group posted a first-half pre-tax loss of £87.0m, compared to a £305.0m profit reported at the same point of the year in 2020.

Boohoo said it would create 5,000 jobs and invest more than £500m in the UK over the next half-decade to meet growing demand for its fast-fashion clothes. Boohoo's website says it employs more than 5,000 people worldwide and that at the end of January it had 3,476 direct employees with 3,426 in the UK. It has recruited 1,259 people over the past year.

US tobacco giant Philip Morris looks set to potentially clinch the deal for Vectura after rival suitor Carlyle said it would not be upping its offer for the London-listed inhaler maker. Private equity firm Carlyle said late on Tuesday that its latest offer of £958m, or 155p a share, was final.

UK life insurer Phoenix said it was on track to hit the upper end of its annual cash generation target range as it unveiled higher interim profits on Wednesday. The company said first-half operating profits rose 46% to £527m, but below forecasts of £539m, according to a company-compiled consensus poll.

Cybersecurity firm Avast - which has agreed to be bought by US rival NortonLifeLock in a £6.2bn deal - reported a jump in first-half adjusted earnings and revenue on Wednesday as it backed its full-year revenue guidance. In the six months to 30 June, adjusted earnings before interest, tax, depreciation and amortisation rose 11.9% to $270.2m on revenue of $471.3m, up 8.8% on the same period a year ago. Billings were 2.9% higher at $482.7m.

Deliveroo said on Wednesday that its first-half pre-tax losses narrowed as orders doubled despite the easing of Covid restrictions. In its first results since the IPO in March, the company said statutory pre-tax losses improved to £104.8m from £128.4m in the first half of last year, with gross transaction value up 102% to £3.4bn, "showing continued strength despite reopening effects and an increasingly tough comparison base".

FTSE 250 housebuilder Bellway reported a jump in housing revenue and completions on Tuesday amid strong demand. In an update for the year to the end of July 2021, the company said housing revenue rose 41% to £3.1bn - just 2.5% below the housing revenue generated in 2019 - with completions up 34.8% to 10,138.

InterContinental Hotels said on Tuesday that it swung to a profit in the first half as trading recovered after it took a hit from the pandemic. In the six months to 30 June, the Holiday Inn owner swung to an operating profit of $138m from a loss of $233m in the same period a year ago, with a "significant" improvement in demand over the course of the half, resulting in revenue per available room rising 20% versus 2020. However, compared to 2019, revenue was down 43%.

Online gambling software company Gamesys reported a rise in interim earnings and revenue on Tuesday amid record performances in the UK and Asia. In the six months to 30 June 2021, adjusted earnings before interest, tax, depreciation and amortisation increased 16% to £110.3m on revenue of £398.8m, up 17% on the same period a year ago.

IWG said demand was strong as the flexible office group swung to a first-half loss after the Covid-19 crisis hit trading early in the period. The FTSE 250 company swung to a £30.2m adjusted operating loss in the first six months of 2021 from a £43.3m profit a year earlier as revenue fell 15.3% to £1.07bn. Including adjusting items the loss narrowed to £79.8m from £98.2m.

Recruitment firm PageGroup said on Monday that it swung to an interim profit, having taken a hit in the previous year due to the pandemic, as it declared a special dividend. In the six months to the end of June 2021, the company swung to a pre-tax profit of £63.7m from a loss of £800,000 in the first half a year prior as revenue rose to £766.4m from £655m. Group operating profit was £64.3m, up from £400,000 the year before.

Shipping services group Clarksons reported a jump in interim profit and revenue on Monday as it hailed "strong" trading across all areas of the business. In the six months to the end of June 2021, reported pre-tax profit rose to £27.3m from £20.9m in the first half a year prior, on revenue of £190.1m, up from £180.4m.

TI Fluid Systems reported a 32.7% improvement in revenue at constant currency in its first half on Monday, to €1.52bn (£1.29bn), as its adjusted EBIT rose to €127.8m, from €27.6m. The FTSE 250 company said its margin for the six months ended 30 June was 8.4%, up from 2.3% in the first half of 2020.

AstraZeneca announced on Monday that ‘Forxiga’, or dapagliflozin, a sodium-glucose cotransporter-2 (SGLT2) inhibitor, has been approved in the European Union for the treatment of chronic kidney disease (CKD) in adults with and without type-2 diabetes. The FTSE 100 pharmaceuticals giant said the approval by the European Commission was based on positive results from the ‘DAPA-CKD’ phase 3 trial, and followed a recommendation for approval by the European Medicines Agency’s Committee for Medicinal Products for Human Use.

Economic news

The UK economy grew by 4.8% between April and June as lockdown restrictions eased, in line with expectations, according to figures released on Thursday by the Office for National Statistics. This was close to the 5% growth predicted by the Bank of England last week and left the economy 4.4% below its pre-pandemic peak.

The UK housing market cooled in July as the stamp duty holiday began to taper off though prices continued to rise, a survey showed. New buyer enquiries fell for the first time in four months and agreed sales dropped, according to the Royal Institution of Chartered Surveyors' monthly survey. Enquiries showed a net balance of -9% among RICS members, down from +10% in June and agreed sales came in at -21%.

Britain's used car market grew 108.6% in the second quarter of 2021, according to the Society of Motor Manufacturers and Traders, with 2.16m vehicles changing hands during the period. The figure marked a 6.6% improvement on 2019 pre-pandemic levels and was the best second-quarter performance on record and almost the best quarter ever for the used car market.

UK retail sales slowed during a wet July and more stores closed as the pandemic continued to damage the UK's high streets, industry figures showed. Total sales rose 6.4% compared with growth of 14.7% over the previous three months and 10.4% during the past year. Like-for-like sales rose 4.7% compared with a three-month average of 9.7% and 11.1% over the past year, the British Retail Consortium said.

International events

Chinese authorities closed the Meishan terminal at the Ningbo-Zhoushan container port overnight after a worker tested positive for Covid-19. The terminal accounted for roughly a quarter of container traffic at Ningbo-Zhoushan, the world's third-largest container port.

The price of goods purchased overseas rose by less than expected last month despite the higher cost of fuel imports. According to the US Department of Labor, in seasonally adjusted terms the US import price index increased at a month-on-month pace of 0.3% in July.

Israel has widened the eligibility criteria for a third shot of Pfizer's Covid-19 vaccine in order to help contain the fourth wave of the pandemic in the country. According to the Ministry of Health anyone 50 years of age or older is eligible for a so-called booster shot, together with certain potentially high-risk people such as healthcare workers.

One of the highest-ranking officials at the US central bank made the case on Wednesday for the Federal Reserve to start 'tapering' its asset purchases from October. The head of the Federal Reserve Bank of Dallas, Robert Kaplan, emphasised that while such purchases were great at stimulating demand, the current problems in the US economy had to do with supply.

Industrial production in the euro area fell well short of forecasts in June as supply side constraints dragged on growth, especially in Germany. According to Eurostat, in seasonally adjusted terms, Eurozone industrial output fell at a month-on-month pace of 0.3% (consensus: +0.2%).

Global demand for oil will be less than expected in 2021 as fresh Covid-19 restrictions to contain the Delta variant suppress oil use, the International Energy Agency said. The IEA said after a surge in demand for oil in June growth reversed in July as the Delta variant of Covid-19 spread across important markets. The agency trimmed its estimate for 2021 demand by 100,000 barrels a day to 5.4 million barrels per day with sharper declines predicted for the second half.

US producer prices rose more quickly than anticipated last month due to the higher cost of energy and transportation. According to the US Department of Labor, in seasonally adjusted terms, so-called final demand prices jumped at a month-on-month pace of 1.0% in July (consensus: 0.6%).

Moderna's Covid-19 vaccine offers nearly twice the protection against so-called breakthrough infections than Pfizer's, a new study found. According to the study from the Mayo Clinic, rates of infection between "matched individuals" across its health system in Minnesota, Wisconsin, Arizona, Florida, and Iowa, showed the Moderna jab "conferred a two-fold risk reduction against breakthrough infection compared to [Pfizer]".

The cost of living in the US edged past forecasts last month as food and energy prices continued advancing at a rapid clip. According to the Department of Labor, the consumer price index jumped 0.5% month-on-month, keeping the annual rate of gains at 5.4% (consensus: 5.3%), the same as in June.

A top US central bank official said that the Federal Reserve may need a few more months before it can reduce its monetary stimulus. In remarks to Reuters, Federal Reserve bank of Richmond president, Thomas Barkin, said the country's job market might take a few more months to recover enough for the Fed to be able to pare back policy accommodation.