ii view monthly round-up: September 2024

Markets started September poorly then moved sideways for the rest of the month. The FTSE All Share index, despite some volatility, ended down 0.3%. 

Luxury retailer Watches of Switzerland Group (LSE:WOSG) flagged demand across its key UK and US markets remained strong. The operator of brands including Mappin & Webb and Goldsmiths, continues to expect 9-12% growth in revenues year-over-year. Shares in the specialist retailer are down by close to a third year-to-date. 

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Insurer Direct Line Insurance Group (LSE:DLG) reported a return to profit, aided by increased premiums and management’s renewed focus on underwriting discipline. 

Reduced sugar prices and poor summer weather hindered performance at Primark owner Associated British Foods (LSE:ABF). AIM listed Fevertree Drinks (LSE:FEVR) also failed to impress, cutting its full-year sales growth forecasts to 4-5% from a previous 10%. Like AB Foods, poor summer weather dampened performance. 

Vistry Group (LSE:VTY) remained a standout performer in the housebuilding sector. A 9% increase in first-half build completions to 7,792 helped fuel a 7% improvement in interim profit to £186 million. Vistry today focuses on affordable housing, partnering with local authorities and housing associations to develop mixed tenure shared ownership housing.

Ladbrokes and Coral owner Entain (LSE:ENT) flagged a return to growth at its UK and Irish online betting business, buoyed by the Euro 2024 football tournament in Germany. 

Pest control and hygiene provider Rentokil Initial (LSE:RTO) issued a profit warning, hindered by weak summer trading in North America and integration disruption following its $6.7 billion 2022 US acquisition of Terminix. Rentokil shares are down 13% year-to-date compared to a 7% gain for the FTSE 100. 

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Life assurer and big dividend payer Phoenix Group Holdings (LSE:PHNX) scrapped its previously planned sale of SunLife, citing uncertainties in the protection market for the change of plan. The FTSE 100 company, which largely trades under the ‘Standard Life’ brand, currently offers a forecast dividend yield of 9.6%. 

Online supermarket Ocado Group (LSE:OCDO) reported better-than-expected sales at its 50:50 joint venture with M&S, enabling it to upgrade sales forecasts. Ocado shares have halved in 2024, with slow progress at its Tech Solutions business selling automated warehouse and delivery solutions to grocers worldwide. 

Engineering and defence contractor Babcock International Group (LSE:BAB) detailed positive trading, spearheaded by demand for civil and naval nuclear capabilities. 

Owner of B&Q and Screwfix Kingfisher (LSE:KGF) offered greater confidence in profits, raising its minimum expected full-year profit forecast to £510 million from £490 million. So did clothing and homewares retailer Next (LSE:NXT). It now forecasts annual profit of around £995 million compared to £980 million previously. Overseas sales to places such as India, Europe and the Americas climbed 23% for the first half to late July to £433 million.

Health and safety product maker Halma (LSE:HLMA) pointed towards another year of expected growth. Revenues stripped of acquisitions year-to-date outpaced those seen in H1 2023, with the adjusted profit margin expected to be modestly higher. The FTSE 100 company has 21 years of consecutive record annual profits under its belt. 

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High yielder Pennon Group (LSE:PNN)continued to navigate challenges. Exceptional costs during this fiscal year are expected to include £16 million in relation to a now resolved water parasite outbreak this summer in Devon. Shares in the water company have about halved over the last five years. An important regulatory announcement is due 19 December. 

Finally, specialist engineer Smiths Group (LSE:SMIN) offered a cautious outlook for two of its four businesses. Relatively new CEO Roland Carter is now pursing a performance improvement plan including expected cost cuts.