Associated British Foods, Anglo Asian and Brady

“Equities opened sharply lower following heavy losses on Wall Street at the end of last week with traders anticipating a US rate hike,” says AJ Bell Investment Director Russ Mould.

The fall in sterling since the Brexit vote is having a bitter-sweet effect on Associated British Foods. Annual earnings per share for this year will be slightly ahead of last time due to a better-than-expected second half and the fall in the pound since the referendum. But while a weaker pound will have a positive impact on margins for the group’s British Sugar business next year it will have the opposite effect on Primark, which is the jewel in the group’s crown.

The company’s shares had started to rally recently, perhaps encouraged by the latest UK consumer confidence and retail sales figures, which suggested that the referendum vote hadn’t stopped shoppers in their tracks. But much of those gains were wiped out this morning with the group’s shares down by more than 4% in early trading.

Azerbaijan-focused Anglo Asian Mining swung back into the black in the first half following record copper and silver output. Revenues fell due to lower gold bullion sales but the group has slashed cash operating costs by 26% and reduced capital expenditure from $9.1m to $6.6m creating a foundation for increased profitability and cash generation.

Trading and risk management solutions provider Brady’s first half earnings jumped by 72% with recurring revenues increasing from 55% to 60% of the total. Brady began a cost reduction programme at the end of last year which has achieved significant results. The focus now is on pursuing further opportunities to drive effectiveness and efficiency across the group.

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