Renishaw (RSW), Direct Line (DLG), Informa (INF), Boohoo (BOO), RWE (DE:RWE) and E.ON (DE:EOAN)
Renishaw (RSW) reported an uptick in activity in the first three months of this calendar year, with revenue up 4 per cent on the previous quarter to £172mn. The company reported “early signs of recovery in demand” for its encoders, which are used in the semiconductor industry.
However, it argued demand for metrology sensors for machine tools used by consumer electronics companies was weaker than it had been in previous quarters.
It narrowed estimates for the adjusted pre-tax profit it expects to make for the financial year ending in June to £122mn-£135mn, which is at the lower end of previous guidance. House broker Peel Hunt maintained its forecast of £124mn. The company’s shares fell by 3 per cent. M.F.
Find out why we’re bullish on Renishaw
Direct Line hunts for savings in turnaround plan
The UK’s second-largest motor and home insurer Direct Line (DLG) used its first quarter trading update to put the distraction of the failed bid from Belgian insurer Ageas behind it, as management walked investors through the plan to turn the company around.
Chief executive Adam Winslow, who took up the reins at the start of the quarter, targeted savings of £100mn by the end of 2025 as the key to lifting the company’s performance. He also announced a few new hires to the senior management team and a target for a net insurance margin of 13 per cent by 2026.
Operationally, the company delivered growth in grossly written premiums of 15 per cent to £706mn. The torrential rain the UK experienced over the winter led to adverse weather claims of £33mn, with event-driven claims of £24mn, compared with the £54mn the company assumes will happen annually. Direct Line will release more details on its turnaround plans at a capital markets day on July 10. J.H.
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Losses widen at Boohoo
Struggling fast fashion group Boohoo (BOO) disappointed investors this morning with a 17 per cent drop in revenue across the year to the end of February. Pre-tax losses were also up 69 per cent to £160mn, from just under £91mn in the prior year.
The online-only retailer has struggled since the end of the lockdowns, when its sales and shares saw a boost from cooperated-up consumers. Now it also faces stiff competition from the likes of Chinese rival Shein.
Compounding the group’s woes is its ballooning net debt figure, which grew to £95mn from almost £6mn of net cash last year. International revenues declined 20 per cent across its last financial year, with management stating that extended delivery times continued to “impact our customer proposition for most of the period.”
Boohoo has staked its future on growth outside of the UK market, opening a US distribution center in August. It now offers next day and express delivery options in the country, but whether it can make inroads there remains to be seen. For now, shareholders are skeptical, with the stock falling more than 3 per cent this morning. J.J.
