Pound eases back on news of Northern Ireland Brexit deal, Travis Perkins’ caution adds to the property market’s problems and Ocado results disappoint

“Rishi Sunak’s new Brexit deal for Northern Ireland breathed some life back into the pound yesterday, yet the currency gave back some of these gains on Tuesday as markets took time to digest the information. While the deal may provide a reset for UK/EU relations and be good for the UK economy, reports suggest some in the DUP are not fully satisfied by what’s on the table,” says Russ Mould, Investment Director at AJ Bell.

“The FTSE 100 slipped 0.4% to 7,902, pulled down by poorly received results from Ocado and Croda, and housebuilders falling in response to Travis Perkins’ cautious outlook in its latest figures. The builders’ merchant said it was preparing for ‘more challenged’ private domestic new-build and repair, maintenance and improvement markets.

“The cracks in the property sector are becoming more like the ones you see with subsidence than hairline gaps in plaster. Sellers are slashing asking prices, transaction volumes have fallen on a seasonally adjusted basis, and companies serving the UK property market are bracing themselves for a tougher climate this year.

“Croda warned that its 2023 performance would be more reliant on the second-half period than in the prior year. Investors hate hearing that phrase as it raises the chances of a profit warning if that six-month period doesn’t live up to expectations.”

Ocado

“Ocado: so much promise and so little joy. Three years ago, it was on the cusp on a significant shift in consumer behaviour. The pandemic forced people to buy their groceries online, meaning any company that didn’t have a robust set-up to pack and deliver food and drink to households had to think fast to gain this capability.

“Ocado had the best moment in its existence to sell its technology platform to grocers around the world. Sadly, the deals have been few and far between, leaving investors wondering when it will ever make a sustainable profit.

“The latest results are as appetising as a bucket of sick. Revenue growth has ground to a halt, pre-tax losses are getting worse and net debt has ballooned.

“The retail joint venture with Marks & Spencer looks stuck in the mud. Consumers are pulling back from doing big shops which is problematic for Ocado. It’s more cost and time efficient to fill a van with a big customer order than lots of little ones, so the shift in shopping behaviour creates a headwind.

“Ocado has long argued that it needs to spend money to make money, but patience is wearing thin for the long-suffering shareholders.”

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

“Rishi Sunak’s new Brexit deal for Northern Ireland breathed some life back into the pound yesterday, yet the currency gave back some of these gains on Tuesday as markets took time to digest the information. While the deal may provide a reset for UK/EU relations and be good for the UK economy, reports suggest some in the DUP are not fully satisfied by what’s on the table,” says Russ Mould, Investment Director at AJ Bell.

“The FTSE 100 slipped 0.4% to 7,902, pulled down by poorly received results from Ocado and Croda, and housebuilders falling in response to Travis Perkins’ cautious outlook in its latest figures. The builders’ merchant said it was preparing for ‘more challenged’ private domestic new-build and repair, maintenance and improvement markets.

“The cracks in the property sector are becoming more like the ones you see with subsidence than hairline gaps in plaster. Sellers are slashing asking prices, transaction volumes have fallen on a seasonally adjusted basis, and companies serving the UK property market are bracing themselves for a tougher climate this year.

“Croda warned that its 2023 performance would be more reliant on the second-half period than in the prior year. Investors hate hearing that phrase as it raises the chances of a profit warning if that six-month period doesn’t live up to expectations.”

Ocado

“Ocado: so much promise and so little joy. Three years ago, it was on the cusp on a significant shift in consumer behaviour. The pandemic forced people to buy their groceries online, meaning any company that didn’t have a robust set-up to pack and deliver food and drink to households had to think fast to gain this capability.

“Ocado had the best moment in its existence to sell its technology platform to grocers around the world. Sadly, the deals have been few and far between, leaving investors wondering when it will ever make a sustainable profit.

“The latest results are as appetising as a bucket of sick. Revenue growth has ground to a halt, pre-tax losses are getting worse and net debt has ballooned.

“The retail joint venture with Marks & Spencer looks stuck in the mud. Consumers are pulling back from doing big shops which is problematic for Ocado. It’s more cost and time efficient to fill a van with a big customer order than lots of little ones, so the shift in shopping behaviour creates a headwind.

“Ocado has long argued that it needs to spend money to make money, but patience is wearing thin for the long-suffering shareholders.”

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