Mixed start to markets, more FTSE 350 female CEOs, and bid rumours lift THG and Peloton

“European equity markets kicked off the new week with a mixed performance. The FTSE 100 moved 0.3% higher while the Dax initially fared even better with a 0.8% gain although most of those gains quickly faded away. The joy was not shared in parts of Asia where the BSE Sensex slumped 2% and the Nikkei 225% fell 0.7%,” says Russ Mould, Investment Director at AJ Bell.

“There are plenty of reasons for investors to be cautious. Strong US jobs data last week might suggest the Fed pushes up rates faster and harder than currently expected. Ongoing tensions between Ukraine and Moscow also hang over markets like clouds waiting to unleash a fury of rain.

“The reaction to corporate earnings in the US has been somewhat volatile with extreme movements either up or down. Labour cost pressures remain a worry, and inflationary pressures are certainly darkening the outlook for both consumer and business spending.

“On the UK market, miners were in demand as an ongoing inflationary environment should be positive for metal prices.”

Female CEOs: Pets at Home / Taylor Wimpey

“There has long been an under-representation of females running FTSE 350 companies, so it is positive to see two appointments that help address this problem.

“Lyssa McGowan looks like a great hire for Pets at Home, bringing expertise in data and digital channels for a consumer audience. The pet products retailer has been enjoying recent success with its VIP club which is helping to strengthen customer loyalty and give more insight into spending habits.

“McGowan’s experience in a top consumer role at Sky could help take Pets at Home’s analytical capabilities to the next level. Understanding the customer and how they might spend more money is an important goal for retailers.

“Jennie Daly is an internal promotion at Taylor Wimpey and one that brings nearly 30 years’ experience in the housebuilding and land planning industries. She should know the sector inside out and should be a safe pair of hands in making sure the company is run smoothly.

“Daly becomes the fourth CEO change for a FTSE 100 company in 2022, following appointments at Johnson Matthey, Burberry and Anglo American.

“There are currently eight FTSE 100 companies with a female CEO, not including the forthcoming changes at Taylor Wimpey. The relevant companies are Admiral, Aviva, GlaxoSmithKline, Entain, ITV, NatWest, Severn Trent and Whitbread.

“Liv Garfield at Severn Trent is the longest running FTSE 100 female CEO, having been in charge since April 2014. She’s a member of the 30% Club which is a campaign to increase gender diversity at board and executive-committee levels.

“The 30% Club says: ‘Time and again research shows diverse companies outperform their less diverse peers’. It’s therefore encouraging to see the percentage of FTSE companies with female leadership start to move up, but there is clearly a lot more to be done.”

THG/Peloton

“We are beginning to see one of the after-effects of the recent market correction feed through. Those businesses which have been particularly badly beaten up are now looking vulnerable to opportunistic bids and the speculation is starting to mount.

“Two names apparently in the firing line are fancy exercise bike maker Peloton and e-commerce play THG.

“While the initial hype around these businesses may have added too much to their respective share prices as perceived beneficiaries of lockdown, now that froth has cleared there could be some substance to talk of bid interest.

“Peloton may be unprofitable, but it is still a strong brand in an emerging world where exercise and tech are likely to be ever more closely linked and it also has a potentially attractive subscription-based model. You could see it as a logical fit for its two rumoured bidders Nike and Amazon.

“Nike is looking to move beyond footwear and sports attire and Amazon continues to spread its tentacles into more areas of people’s lives.

“Peloton’s founder John Foley, who has attracted the ire of activist investors on governance grounds, might be an obstacle to any deal given the veto power he enjoys under the firm’s dual share class structure.

“THG also has a powerful founder in the form of Matt Moulding, and he may resist private equity predators and potentially even take the business private as he has reportedly threatened to do in recent months.

“Moulding has not reacted well to the slings and arrows that most people would accept are the price of being a public company – with an investor day which went down about as well as a bucket of cold sick last year, prompting him to indulge in claims of conspiracy.

“The market has grown increasingly sceptical about the prospects for its Ingenuity platform which was initially perceived as the big growth engine of the group, selling e-commerce solutions to third parties.

“However, THG still has a valuable collection of its own nutrition and beauty product sites which are clearly interesting enough in their own right to suitors.”

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