Today’s Markets: Energy fears continue to dominate

Companies

ABF profit warning sends stocks lower

Associated British Foods (ABF) Shares fell 8 percent in morning trading after the food processor and owner of Primark said it expects profits to fall next year and will be hit by a stronger US dollar and cost shocks. of life.

In a business update for the year to September 17, the company said that for fiscal 2023 it “now expects[s] Adjusted Operating Income and Adjusted Earnings Per Share are lower than this year.

But ABF maintained its forecasts for this year. He said comparable UK sales at Primark were almost at pre-pandemic levels in the fourth quarter, but the retailer’s operating profit margin weakened to 8 per cent in the second half and European sales were lower. than expected. On the food side of the business, higher prices fueled growth in the fourth quarter and the Ingredients division should deliver a better-than-expected operating profit. California

Melrose to separate the automobile arm

engineering group Melrose (MRO) it said it would split its automotive and aerospace businesses into two separate listed entities.

The company will merge the shares into a new holding company, DemergerCo, which will house the assets of the auto business. Melrose Industries will continue to lead the aerospace arm. Both divisions were acquired through Melrose’s £8.3bn hostile takeover of GKN Engineering in 2018.

Company recovery efforts at GKN have been hampered by Covid-19, which has hit both sectors hard. However, Melrose’s restructuring of the auto arm is now largely complete, and the aerospace business review is likely to take place next year.

Spinning off the auto business will allow it to pursue other opportunities, including “targeted mergers and acquisitions,” the company said.

Investec put a preliminary valuation of around £4.9bn on the automotive arm and £5.1bn on the aerospace unit. FM

Thoma Bravo cancels the agreement with Darktrace

US private equity group Thoma Bravo has decided not to bid for the cyber security company Darktrace (DARK). Darktrace’s share price is down 31 percent this morning despite the release of some positive results for the full year.

The company added 1,808 net new customers and increased average contract ARR by 7.9 percent. So in addition to adding more customers, they are also getting their customers to pay more. Both good signs. But not attractive enough.

“Initial discussions were held with Thoma Bravo about a possible offer for the company, but no agreement could be reached on the terms of a firm offer,” Darktrace said in a statement. WHAT

Outgoing Grafton boss to lead GIS insulation firm

insulation supplier GIS (SHI) is hiring outgoing Grafton (GFTU) boss Gavin Slark as its new CEO.

Slark will replace outgoing CEO Steve Richards, who has been in the role for three years, starting next February. Richards will continue to work as a consultant until the end of April next year to complete an orderly delivery, the firm said.

SIG president Andrew Allner said that Richards had joined SIG “at a time of great uncertainty” in 2020 and had not only managed to stabilize the ship, but also return growth.

Slark had already announced his decision to leave Grafton at the end of this year after leading the firm for 11 years. FM

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