FTSE bucks positive trend for global stocks to make downbeat start, Vistry hikes expectations and Parsley Box losses mount

“The FTSE 100 was the odd one out and not in a good way on Tuesday as it made a lacklustre start despite strong trading in Asia, a decent start in Europe and US futures implying gains as trading resumes after the Labor Day holiday,” says AJ Bell Investment Director Russ Mould.

“Not helping sentiment was some data overnight from the British Retail Consortium showing retail sales growth slowed in August as some of the pent-up demand during lockdown ebbed away.

“After a weak US jobs report last Friday prompted speculation the Federal Reserve would hold off on tapering support for the economy, attention will switch to the European Central Bank this week as it unveils its latest decision on monetary policy on Thursday.”

Vistry

“The good times keep coming for housebuilder and regeneration group Vistry. In common with much of its peer group, surging house prices are making up for any increase in costs driven by rising raw material prices and labour shortages.

“The key question facing the business is whether this can continue when the Government’s stamp duty holiday is brought to a close, taking away one of the catalysts for runaway house prices.

“The other driver could be longer lasting as a shift to hybrid working patterns coming out of the pandemic for office workers leads to demand for more space to work from home.

“Vistry benefits from exposure to regeneration activities through its Partnerships division and this is typically higher margin than the other parts of the business. Vistry has big ambitions for this unit, reflected in a £1 billion 2022 revenue target.

“The regeneration side was picked up as part of its acquisition in early 2020 of assets from construction firm Galliford Try and today’s update revealed further cost savings associated with this combination.

“Due to this deal the company does not have the same large cash balances as its rivals but the amount of money in the bank is rising and forecast to increase further, giving Vistry scope to accelerate dividend growth and providing a buffer to guard against any future downturn in the housing market.”

Parsley Box

“Direct-to-consumer ready meals group Parsley Box may be ‘encouraged’ by its first half performance but investors don’t seem to be as its losses widened in the six months to the end of June.

“Parsley Box delivers ready meals that don’t need to be stored in a fridge or freezer direct to the ‘Baby Boomer+’ demographic, so people aged 60 and over.

“It’s an area with lots of existing competition and it is unclear exactly what marks the Parsley Box proposition out from other options.

“The company also saw the rate of new customer additions slow as pandemic restrictions were eased and its target market felt more confident about going out to eat.

“While Parsley Box is pleased with the response to its launch of chilled ready meals it is questionable whether this will really move the dial and there is a risk that as it looks to shift to higher price points it loses customer who are turned off by the increased cost.

“With the shares having nearly halved on the 200p at which they floated in March, Parsley Box has a lot to do to generate investor appetite for its story.”

These articles are for information purposes only and are not a personal recommendation or advice.