Wednesday’s Master Investor Market Report, featuring TUI Travel, Galliford Try, SAB Miller and Vertu Motors

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Wednesday’s Master Investor Market Report, featuring TUI Travel, Galliford Try, SAB Miller and Vertu Motors
    • Unemployment in the UK hit a 7 year low after new figures from the Office for National Statistics showed 1.83 million people were out of work at the end of March. Average pay also rose by 1.9% relative to the same period of the prior year, meaning that real wage growth is at its fastest rate in 4 years. The Institute of Directors said it believes this trend will continue, commenting that “now that the economy is growing, employees are naturally looking for real terms increases in their salaries” and that stronger corporate results make such rises sustainable.
    • The Bank of England said that inflation stayed at 0% in March and also cut its 2015 UK growth forecast to an annual rate of 2.5% from 2.9% as part of Governor Mark Carney’s quarterly report. The Bank pinned the blame for low inflation on falling energy and food prices as well as the recent strength of the pound, but Mr Carney said that these factors would be short-lived and that price growth should return to its 2% target rate within the next 2 years.
    • The FTSE 100 grew by 15.83 points to 6,949.63 points; the FTSE 250 rose by 172.30 points to 17,861.53; the FTSE All Share increased by 13.24 points to 3,769.69 points; and the FTSE AIM All Share finished the day up by 2.97 points at 759.91 points.

TUI AG (TUI) saw revenues for the 6 months ended 31st March rise by almost €0.5 billion to €6.94 billion leading the company to issue new guidance of at least 10% annual growth for each of the next 3 financial years. Integration following the merger of the UK and German operations last year is proceeding faster than had been expected and summer trading for 2015 has filled a larger portion of capacity than in 2014. Shares in the business dropped by 46p to 1,207p.

Housebuilder Galliford Try (GFRD) has contracted sales and reservations worth £982 million in the year to date, slightly below the £1 billion recorded for the same period of 2014. Management said that cash performance and market conditions remained strong and that the total order book expanded to £3.3 billion. The board have committed to what it views as a sustainable growth strategy for the period through to 2018 and believes that the acquisition of Miller Construction has improved the firm’s position. The shares grew by 24p to 1,510p.

Brewer SAB Miller (SAB) saw revenues decline by 1% to $22.1 billion (£14 billion) over the year ended 31st March despite an improvement in lager volumes throughout African and Latin American markets. American sales continued to flag and Chinese demand was initially weak but returned to growth in the final quarter. However, analysts from Numis said that the firm’s prospects for the current year are “relatively lacklustre” due to “a backdrop of increased competition and difficult trading conditions in the key Latin America market and trading conditions in North America and Europe remain tough”. The shares rose by 73.5p to 3,576p.

Car dealership chain Vertu Motors (VTU) recorded a 23.2% increase in revenues for the year ended 28th February as the firm earned £2.07 billion, with the rise being driven by strong growth in the demand for new vehicles and the numbers of outlets rising by 10 over the course of the period. Management said that demand has remained strong in the two months since the close of its financial year and that they believe the recent acquisition of additional Land Rover and Jaguar dealerships will allow for further margin improvements. The shares climbed by 2.5p to 60p.

Thursday’s news today

Old Mutual (OML), Aggreko (AGK) and Mitchells & Butlers (MAB) are among the firms that will publish results and statements tomorrow.

The latest RICS Housing market survey will be released, as will US employment news.

 

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