Thursday, 1 March: With respect to global equities, February was one to forget, especially after recent highs for global markets. And, despite the start of a new month, it could do little to reverse the gradual global equity sell-off we have been witnessing over the past few weeks, earlier hawkish comments from the Fed being the main culprit for dragging stocks lower. Asian shares began the day with a mixed session, the Nikkei sinking by over 1.5% again, whilst the Hang Seng managed to close 0.62% higher, on a day where few markets closed in green territory. At the European open markets headed lower, and were unable to reverse this throughout the day, leaving the FTSE -0.78% for March already. It was a fairly heavy day for corporate results in London, and there was little middle ground, results were being taken one of two ways by investors.
Beginning with Carpetright which was one of the main stories from the day, shares suffered a 22.5% drop after they issued their second profit warning of the year. Again citing issues with consumer confidence, but as we have seen the high street is survival of the fittest at the moment. They’re now expecting a small pre-tax loss for this year, and are in talks with their banks in order to ensure their financial health. Accelerating the turnaround will likely mean closing more stores, but the firm are in dire need of this turnaround now, shares are over 80% lower than this time two years ago.
Another firm that issued less than pleasing results was WPP group, leaving them adrift at the bottom of the FTSE 100 bar Rentokil, but more on them soon. The marketing firm has received a small boost from digital advertising revenue streams but overall their outlook remains gloomy for the upcoming year. Shares closed the day over 8% lower. On a related note to advertising, STV published results today, following ITV’s, showing that profit declined from yet more weak advertising, stemming from economic uncertainty here in the UK. Previously mentioned Rentokil, the only shares falling more than WPP, dropped 9% despite trebling pre-tax profits and giving a fairly optimistic outlook for 2018. So yeh, no share is safe.
More positive stories came from the FTSE 250, helping it outperform its larger brother. Howden Joinery, who posted strong growth in 2017 said they expect more to come, leaving shares +8.15%. Cobham shares also jumped on the index +10% on the after they also recorded strong financials and expect further growth in the near term. Merlin Entertainment, owner of theme parks like Alton Towers saw record visitors last year and this helped revenue growth but pre-tax profit declined. Shares closed almost 9.5% higher.