ii view monthly round-up: December 2024
Equity analyst Keith Bowman looks at company events over the past month.
31st December 2024 10:46
by Keith Bowman from interactive investor
Monthly round-up for December
December saw UK larger-cap companies lose ground. The FTSE 350 index retreated 2%, giving back November gains and leaving the index up around 5% year-to-date.
Rental equipment hire company Ashtead flagged a likely move for its primary stock market listing to the US, as well as lowering full-year profit guidance given weak local construction activity. North America generated 98% of its operating profit during its last financial year. Shareholders will be asked to vote on the move. Ashtead Group (LSE:AHT) shares are down almost 22% during December.
Housebuilder Vistry Group (LSE:VTY) issued a third profit warning since October. The downgrade followed a combination of delayed transactions and completions and a reassessment of commercial terms on some deals with partners such as housing associations. Shares for the FTSE 250 company fell below £6 having hit over £14 earlier this year.
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Shares for defence equipment maker Chemring Group (LSE:CHG) retreated 7% over the month. Despite announcing a record annual order book in mid-December, the rate of new orders received slowed. Chemring products include countermeasures fired by military aircraft to fool ground-to-air missiles, as well as items to aid with electronic warfare.
Distribution company Bunzl (LSE:BNZL) detailed steady customer volume demand but with higher-than-expected pricing pressures impacting. The seller and distributor of items including hygiene tissue rolls and cleaning products expects pricing pressures to have a slight impact on full-year adjusted operating profit, driven by Continental Europe. Bunzl shares fell 7% in December.
Elsewhere, specialist retailer Watches of Switzerland Group (LSE:WOSG) flagged improving sales as well as a strong start to third-quarter festive holiday trading. A 24% jump in second-quarter US sales fuelled an overall group increase of 11%, up from a 2% decline during the first quarter. The FTSE 250 company operates 217 stores across the UK, US and Europe via brands including Mappin & Webb, Goldsmiths and Mayors in the US.
Government services provider Serco Group (LSE:SRP) offered 2025 optimism, pushed by contract ramp-ups and growth in US defence services. Revenues for the year ahead are expected to prove unchanged from 2024 at £4.8 billion, with adjusted operating profit retreating to £260 million from 2024’s expected £270 million, hindered by increased costs following recent UK Budget tax hikes.
Cruise ship operator Carnival (LSE:CCL) detailed record annual revenues pushed by passenger numbers of 13.5 million, up from 12.5 million in 2023. Cumulative advanced bookings for the 2025 year ahead sit at a record high for both price paid and occupancy, with management predicting an 8% improvement in 2025 adjusted profit to $6.6 billion (£5.2 billion). Shares for the FTSE 250 and S&P 500 company have gained by more than a third during 2024.
In the US, Nike Inc Class B (NYSE:NKE) outlined a change of direction under new head Elliott Hill. The sports goods maker blamed a prior reliance on promotions for falling sales and profits. Former Nike executive Mr Hill wants to take Nike back to a focus on “sport”, upping product innovation, pushing its selling focus back towards wholesale, and reducing product discounting. Shares for the Dow Jones 30 company are down 31% during 2024.
To the upside, shares for database software and cloud-data hosting provider Oracle Corp (NYSE:ORCL) rose 58% during 2024. In December, Oracle flagged expected current third-quarter sales growth to the end of February 2025 of 8% year-over-year to $14.3 billion. That’s expected to be pushed by cloud data centre-related demand for AI software hosting. Oracle sells database software and hardware to data-centre providers and companies across the world, as well as having more than 160 of its own data centres in operation or under construction.
Finally, membership-required warehouse retailer Costco Wholesale Corp (NASDAQ:COST) reported sales and earnings beating Wall Street expectations, aided by growth in e-commerce sales. Costco operators 897 warehouses globally, including 617 in the US and 29 in the UK. Demand for products including jewellery and home furnishings fuelled first-quarter e-commerce sales growth of 13% year-over-year, taking overall revenues up 7.5% to $62.15 billion. Costco shares gained by more than a third during 2024.
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