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(Correcting that Made.com first-half sales were 19% lower year-on-year, but up 55% from pre-Covid-19 levels, and not Wise's.)
(Alliance News) - Stocks in London were lower early on Tuesday, with equities in Europe taking a hit after Wall Street suffered on Monday following a report that Apple is planning to slow hiring.
Bloomberg reported that the technology firm plans to slow hiring and spending growth in 2023 in some of its divisions to cope with a potential economic downturn.
The FTSE 100 Index was down 24.25 points, 0.3%, at 7,198.99 shortly after markets opened on Tuesday. The FTSE 250 was down 69.87 points, 0.4%, at 18,945.28. The AIM All-Share lost 1.29 points, 0.2%, at 884.68.
In early UK corporate news, business media firm Informa backed annual expectations, while sofa seller Made.com lowered its own outlook. Cybersecurity firm Darktrace expects growth in its new financial year to slow, while currency transfers provider Wise has kicked off its new year with a revenue rise.
London-based publisher and events organiser Informa still expects revenue between GBP2.15 billion to GBP2.25 billion for 2022, with adjusted operating profit between GBP470 million to GBP490 million.
At best, this would represent revenue growth of 25% from GBP1.80 billion in 2021 and adjusted operating profit growth of 26% from GBP388.4 million.
Guidance does not include any contribution from Industry Dive, which Informa announced it has acquired for up to USD525 million. The initial cash consideration is USD389 million.
"Industry Dive brings a scalable, single proprietary technology platform, which will enable us to expand our digital services capabilities and deliver content led services to our B2B audiences," Informa said.
Informa said that for the first half of 2022, it expects to report underlying revenue growth of 40%, helped by a return of live events.
Cybersecurity company Darktrace said it expects revenue growth of 48% in the financial fourth quarter that ended June 30. It forecasts an annualised recurring revenue climb of 42%.
"Darktrace continued to deliver strong sales performance in its fourth quarter, adding over 500 net new customers, and bringing the group's customer base at year-end to over 7,400. This reflects year-over-year growth of approximately 32%," the company said.
For the year, Darktrace expects revenue of USD417.0 million, up 48%. Its adjusted earnings before interest, tax, depreciation and amortisation margin is tipped to land at 19.5%, above its previous guidance range of 15% to 17%.
For the new financial year, revenue growth will slow. Darktrace expects a revenue rise of between 29% and 32%. Growth has been hit by foreign currency movements.
"It cautions that particularly for the first six-to-nine months of the year, year-over-year growth comparisons are expected to be dampened by the impact that significant movements in exchange rates relative to the prior year period have already had, and are expected to continue to have, on the conversion of British pound and euro-denominated ARR to US dollar-denominated revenue," Darktrace explained.
Wise, meanwhile, has kicked off its new financial year with growth in revenue and volumes.
In the three months ended June, the international money transfer service provider said revenue grew 51% yearly to GBP185.9 million from GBP123.5 million. Quarter-on-quarter, revenue was up 21%.
Transaction volumes were 49% higher yearly and 14% higher quarterly at GBP24.4 billion.
"Volume growth was driven by a higher number of active customers that are increasingly using the Wise Account and Wise Business products, which in turn also leads to a higher average volume per customer. The growth also reflects to a lesser extent, more variable drivers which include people and businesses responding to increased levels of FX volatility and the translation impact from FX movements which was a tailwind in the quarter, compared with a headwind in FY22. On a constant currency basis volume grew 45% year-on-year," Wise explained.
Wise left revenue guidance unchanged. It still expects annual growth of between 30% and 35% for financial 2023.
Furniture retailer Made.com lowered guidance, however, as consumer purse strings tighten. Gross sales in the first half of 2022 were 19% lower year-on-year, though up 55% from pre-virus levels.
"Recent trading has been volatile, and the worsening of consumer confidence has impacted demand for discretionary big-ticket items, making new customer acquisition at financially attractive rates challenging," Made.com cautioned.
Profit for 2022 will take a GBP20 million one-off hit from clearance work related to excess inventory and additional costs in its supply chain.
For 2022, Made now expects gross sales to fall by between 15% to 30%. It had previously expected an outcome ranging from flat sales to a 15% fall.
Revenue guidance has been lowered to a range of a 9% fall to a 24% fall from between 8% growth and a 7% decline previously.
Asian stock markets were mostly lower on Tuesday.
In China, the Shanghai Composite closed marginally higher, and the Hang Seng in Hong Kong was down 0.5% in. The S&P/ASX 200 in Sydney fell 0.6%.
The Nikkei 225 closed up 0.7%. Tokyo was playing catch up after being closed for the Marine Day holiday on Monday.
The pound was quoted at USD1.1984 early Tuesday in London, down from USD1.1994 late Monday. The euro stood at USD1.0180, down from USD1.0167. Against the yen, the dollar was trading at JPY137.88, down from JPY138.17.
The economic events calendar on Tuesday has eurozone inflation readings at 1000 BST.
Already out, the UK unemployment rate remained unchanged in the three months to May, in line with market expectations, figures on Tuesday showed.
The jobless rate was 3.8%, the same level as in the three months in April, according to the Office for National Statistics.
A year earlier, the unemployment rate had sat at 4.9%.
The latest figure was in line with FXStreet cited consensus.
Wage growth figures, meanwhile, were a mixed bag.
Average earnings including bonuses rose 6.2% on an annual basis, slowing from 6.8% in the reading for April and below FXStreet-cited consensus of 6.9%. Excluding bonuses, wages grew 4.3%, in line with consensus and picking up from 4.2% growth in April.
That means UK earnings by both measures continue to lag consumer price inflation, which ran at 9.1% in May.
Brent oil was quoted at USD106.27 a barrel early Tuesday in London, up from USD105.55 at the European equities close on Monday. Gold stood at USD1,708.15, down slightly from USD1,709.33.
By Eric Cunha; ericcunha@alliancenews.com
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