Marshalls revenues slide on weak demand, Spirax maintains guidance

Stocks to watch

Landscaping and building products supplier Marshalls said revenues fell 10% in the four months to April 30 as weak demand in the housing and maintenance market continued, adding that it still expected flat profits for 2024. Revenue came in at £199m for the period, down from £227 a year earlier. Marshalls stuck to its forecast of a modest recovery in the second half of the year “predicated on a progressive improvement in the macro-economic environment”.

Engineering firm Spirax Group has maintained its guidance for organic sales growth this year despite ongoing weakness in the wider market, though foreign exchange headwinds will impact profits more than previously thought. Spirax said currency headwinds are expected to persist during 2024, with an impact of around 3% to sales and 6% to adjusted operating profit. The sales impact was downgraded from 5% at the time of its full-year results in March. However, the company is still guiding to mid to high-single-digit organic growth in revenues, and modest progress in the adjusted operating profit margin from 20.7% last year.

Compass Group reported an 11.2% rise in first-half revenue on Wednesday, to $20.9bn, and operating profit ahead 18.7% to $1.47bn, resulting in an operating margin increase of 50 basis points to 7.1%. The company said it experienced double-digit organic revenue growth across all regions, leading to it raising its 2024 underlying operating profit growth guidance. Strategic initiatives included investments in growth, portfolio refinement, and returning surplus capital to shareholders, with the firm now anticipating underlying operating profit growth towards 15% and organic revenue growth towards 10% for 2024.

Newspaper round-up

Lorries carrying perishable food and plants from the EU are being held for up to 20 hours at the UK’s busiest Brexit border post as failures with the government’s IT systems delay imports entering Britain. Businesses have described the government’s new border control checks as a “disaster” after IT outages led to lorries carrying meat, cheese and cut flowers being held for long periods, reducing the shelf life of their goods and prompting retailers to reject some orders. – Guardian

Boeing has violated a settlement that allowed the company to avoid criminal prosecution after two deadly crashes involving its 737 Max aircraft, the US justice department told a federal judge on Tuesday. It is now up to the justice department to decide whether to file charges against the aircraft maker amid increasing scrutiny over the safety of its planes. Prosecutors will tell the court no later than 7 July how they plan to proceed, the justice department said. – Guardian

The owner of Vauxhall is to sell cheap Chinese electric cars in Britain as it hit out at a decision by Joe Biden to impose tariffs on cars imported from China to the US. As part of a joint venture with Chinese carmaker Leapmotor, Stellantis will launch the Leapmotor T03 supermini and the C10 SUV in mainland Europe from September and in the UK from March next year. – Telegraph

About 1,650 British jobs are hanging in the balance after Anglo American’s decision to drastically curtail and delay the completion of its ambitious Woodsmith fertiliser mine under the North York Moors. While Duncan Wanblad, Anglo’s chief executive, insisted that it was still going to be a “stonking business” one day, he has slashed capital spending on the project from a planned $3 billion over the next three years to only $1 billion. – The Times

Taxpayers spent a total of almost 800 years last year waiting on the phone to speak to HM Revenue & Customs amid a “declining spiral” of customer service, according to the government’s spending watchdog. In a damning report, it said that HMRC failed to answer up to 45 per cent of calls to its tax helpline. People who did manage to speak to an adviser waited 23 minutes on average, up from five minutes in 2019. – The Times

US close

US stocks finished the day with moderate gains despite more hawkish comments from the head of Federal Reserve and rising concerns about sticky inflation, with the Nasdaq reaching another record high.

After trading more or less flat for most of the session, a late rally sent the Dow up 0.3%, the S&P 500 up 0.5% and the Nasdaq up 0.8% to a new closing high of 16,511.18 – its seventh record close of the year so far.

Wall Street opened in a subdued fashion following stronger-than-expected wholesale inflation data and comments from Federal Reserve chair Jerome Powell, who reinforced the central bank's approach to wait and see regarding incoming economic indicators before making any changes to interest rates.

Regarding stronger-than-expected inflation readings in the first quarter, Powell said: "We did not expect this to be a smooth road, but these were higher than I think anybody expected."

He said the central bank would "need to be patient and let restrictive policy do its work".