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MARKET REPORT: Rising profits fail to paper over higher costs at Mondi


MARKET REPORT: Rising profits fail to paper over higher costs at Mondi with shares within the packaging giant falling 5%

Investors binned shares in Mondi, the packaging and paper giant, after it became the newest heavyweight company to gripe about significant increases in input costs.

The shares fell 5 per cent, or 81p, to 1529p, after the corporate experienced higher energy, wood, resins, transport, chemical and paper costs in the primary half of the yr.

That news overshadowed a pointy increase in profit before tax to £933million from £354million the yr before. The corporate’s profits statement now exclude its Russian operations, which were put up on the market in May.

Cost crunch: Packaging and paper giant Mondi experienced higher energy, wood, resins, transport, chemical and paper costs in the primary half of the yr

Earnings of £406million were 7 per cent higher than investment analysts had expected, however the broker Jefferies suggested fund managers had pencilled in a figure of £421million and thus were disenchanted.

The drugs aren’t working for Hikma Pharmaceuticals, which reported flat revenues for the primary six months of 2022 as higher sales of its injectable and branded products were offset by weaker pricing in its generic drugs business. 

The corporate’s shares lost 6.3 per cent, or 111.5p, to 1650.5p because the group’s core operating profit dipped 4 per cent to £250million from £261million the previous yr.

Hikma slashed its full-year revenue guidance range for its Generics business to £536million to £556million from previous guidance of £585million to £618million. 

On the plus side, branded revenue is now expected to indicate some modest growth having previously been expected to be in step with 2021’s outturn.

The FTSE 100 reacted phlegmatically to the Bank of England’s rate of interest hike and recession warnings, rising 0.03 per cent, or 2.38 points, to 7448.06. 

The FTSE 250, meanwhile, climbed 0.7 per cent, or 136.92 points, to 20155.76. Considered one of the mid-cap index’s star performers was Convatec Group, up 6.8 per cent, or 15.6p, to 245.8p. 

Stock Watch – Sanderson Design Group

Shares in Sanderson Design Group have plunged greater than 40 per cent over the past yr.

And there was little to cheer in the posh interior furnishings company’s half-year trading update yesterday.

The corporate said it ‘retained a moderately cautious outlook, mindful of the associated fee, supply chain and consumer confidence issues that impact the macro-environment’.

Sales barely budged and profit must be in step with the board’s expectations. Shares fell 8 per cent, or 9p, to 104p.

The medical products company confirmed its full-year guidance, saying it’s on the right track to deliver organic revenue growth of 4 per cent to five.5 per cent and an adjusted operating margin (on a relentless currency basis) of no less than 18 per cent, notwithstanding the present inflationary environment.

Chief executive Karim Bitar said the first-half performance demonstrated the corporate is ‘continuing to pivot to sustainable and profitable growth’, although as pivots go, it’s barely noticeable, with adjusted operating profit of $204.3million barely modified from $204.4million a yr earlier.

Ocado shares rose 3.1 per cent, or 27.8p, to 940p and are up almost 20 per cent over the past week for the reason that company announced changes to the manager responsibilities of board member Mark Richardson.

Richardson, the chief operating officer, shall be chief executive of Ocado’s latest business, which is able to extend the warehouse technology pioneer’s offering into latest market sectors alongside grocery.

The strategic shift has prompted some market commentators to invest that the corporate can be open to selling its 50 per cent stake in its retail three way partnership with Marks & Spencer (up 1.5 per cent, or 2p, to 139.3p) should M&S be excited about taking full control.

London-based Lloyd’s List – which listed the insurance of the Titanic only three months before it sunk in 1912 – has been sold by the publishing and exhibitions organiser Informa to the German private equity fund Montagu.


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