If it’s not a threat to Putin’s atrocities or rising interest rates in Ukraine, it’s what the media has dubbed the “living cost crisis” in the UK’s consumer confidence at the lowest level since the 1970s.
Investors are rattling and it seems that at the recent conferences we attended, there was little courage to buy this market.
I don’t want to bury my head in the sand and deny that it’s a tricky economic environment, but there’s good news from a UK-based company whose underlying performance is far more optimistic than expected. I have come to believe that the tough economic headlines are directed at all of us.
Here are three examples of UK-based businesses across different sectors. All of these are doing well and doing business.
The iconic pub company that owns and operates freehold pubs throughout London and Home County reported its annual results last week.
Transactions have improved throughout the year. Recall that we were not allowed to enter the pub until the summer of 2021. Sales during Easter were 39% higher than in 2021. CEO Patrick Darges said: , There are some record weeks. We look forward to an extended Jubilee weekend hoping to break more records. Young is firmly back in business. “
Meanwhile, Young’s share price has fallen 20% this year, reflecting macroeconomic concerns, and in our opinion it doesn’t represent the company’s good performance at all. We are steadily buying Young’s stock all year round and we are confident that they are “returning to business.”
About Technology: Softcat, a leading IT supplier for small and medium-sized businesses in the UK (for example, Microsoft, Dell, and Cisco’s largest distributors) reported in May and upgraded its guidance. This business has resulted in double-digit revenue and profit growth. The company said it expects to offer “ahead of previous expectations.”
Softcat’s stock fell 22% in 2022. This is an obvious buying opportunity for us.
Clanswick is a white label producer of pork and chicken in most of the UK’s largest supermarkets. For example, sliced ham from Tesco and Sainsbury’s are both manufactured by Clanswick. They reported annual results on May 24 that they were able to maintain a flat margin and grow their top line despite “unprecedented labor and supply chain challenges across the industry.” rice field.
It’s interesting that the CEO emphasizes the importance of management looking at all stakeholders during tricky times. “It’s when partnerships and cooperation come to the fore. I want to thank all our stakeholders for helping them in this very tough time.”..
Like Youngs and Softcat, Clanswick shares have been hit this year. In our opinion, this does not reflect the growth of the underlying business, but is instead driven by macro concerns.
There are many other examples of businesses that stick to knitting and are actually producing very strong results despite harsh trading conditions. We believe this market provides good buying opportunities for long-term investors and is added to the investment of all UK equity funds as a whole.
Fred Mahon is a co-manager of the Church House UK Equity Growth Fund.
UK PLC has quality – take the risk and write it down
https://www.investmentweek.co.uk/opinion/4051007/quality-uk-plc-write-peril UK PLC has quality – take the risk and write it down