Yahoo Finance Trending tickers: Halfords, Taylor Wimpey, Reckitt Benckiser, Aston Martin
The latest investor updates on stocks that are trending on Wednesday
Halfords (HFD.L)
Halfords issued a profit warning on Wednesday, citing "unusually mild and very wet weather" for its weak performance.
The bike and car parts retailer said that bike promotions, lower footfall and reduced sales of winter tyres and car cleaning products were also to blame.
It added that the cycling market has become more challenging and competitive, amid consolidation in the sector, with more promotions and more customers buying on credit, leading to weaker profit margins.
Halfords now expects profits before tax to fall to between £35m ($44.2m) to £40m for the year to the end of March – this represents a downgrade of at least 17%.
It assumes the market will remain tough for the rest of its fourth quarter, including the peak Easter cycling period in March. In January, the firm estimated profits of between £48m and £53m.
Shares plummeted on the back of the news and are down 31% at the time of writing.
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Analysts at Liberum said: “This is clearly another disappointing update and we expect the shares to suffer today.
“The negative earnings momentum continues to reinforce our long-held view that the group’s medium-term pre-tax profit target of £90m to £110m is very stretching.
“In the near term, we also note that inventory levels stand some 30%-50% higher than pre-COVID levels, which may bring further earnings pressure through the need to clear inventory.”
Taylor Wimpey (TW.L)
Taylor Wimpey shares slumped 3% on Wednesday after it revealed pre-tax profits nearly halved last year and issued a warning about the impact of planning delays.
The developer, which is one of Britain’s biggest housebuilders, said revenues fell 20.5% to £3.5bn in 2023, while profits before tax dropped 47.8% to £473.8m as buyers dealt with higher mortgage costs.
It also completed 3,306 fewer homes during the period, down 23% to 10,848. The company’s guidance for 2024 is to sell between 9,500 and 10,000 homes over the course of the year. The middle of this range implies a 10% fall in volumes compared to 2023. Average selling prices on private homes rose 5.1% to £370,000, it revealed.
Chief executive Jennie Daly said the “planning environment remains challenging”.
She added: "Looking ahead we are well-positioned in an attractive market, with significant underlying demand for our quality homes and are poised for growth from 2025, assuming supportive market conditions.“
The dividend payout for the year was 9.58p, a yield of almost 7%, which was ahead of market expectations.
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Reckitt Benckiser (RKT.L)
Reckitt Benckiser, the maker of Dettol and Durex, has revealed a £55m hit after "inappropriate" staff conduct in Middle East.
The company admitted making “an understatement of trade spend in two Middle Eastern markets” which meant revenue performance was £55m lower than previously expected.
It said: “Following investigation, we concluded a small group of employees had acted inappropriately and we are taking necessary disciplinary action.”
The consumer goods firm saw shares fall 11% in London after it also posted a drop in sales over the latest quarter thanks to declines in its health and nutrition arms.
Like-for-like net revenues fell by 1.2% over the final quarter of last year, with overall net revenues down 7% to £3.6bn.
There was also an increase in gross margin, thanks to pricing strategies and productivity savings, however, this was overshadowed by a decrease in operating margin, influenced by higher marketing spend and inflationary cost pressures.
Kris Licht, chief executive of Reckitt, said: "While our performance in Q4 was unsatisfactory, we look to 2024 and beyond with confidence. We target another year of mid single-digit growth in health and hygiene, driven by a more balanced contribution from price, mix and volume."
Aston Martin (AML.L)
Aston Martin shares skidded on Wednesday, falling as much as 2%, as investors fretted over the cash flow and volumes despite the firm revealing that annual losses more than halved in 2023.
The luxury carmaker, which is fictional secret agent James Bond's car brand of choice, posted that operating losses came in at 22% to £111.2m, while revenues increased by 18% to £1.6bn. Analysts were expecting an adjusted pre-tax loss of £209m, according to a company-compiled consensus.
Aston Martin now expects positive cash generation in the second half of this year.
"While recognising the ongoing geopolitical and macroeconomic volatility and associated inflationary and supply chain uncertainties, our world-class teams continue to collaborate with our partners, seeking to minimise potential impacts on our operations," the company said in a statement.
It comes as the group completed the first deliveries of its next generation DB12 sports car and overcame production delays. Selling prices also reached record levels as it delivered its Valkyrie models and other special edition cars.
Hargreaves analyst Sophie Lund-Yates, said: "Aston Martin is pumping reams of cash into marketing in a bid to help position itself at the ultra-luxury end of the spectrum. This pivot was never going to come cheap."
Aston Martin shares are down more than 90% over the last five years and have fallen by 18% since the start of 2024.
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