Category: Market News

Hermès (EU:RMS) saw its shares drop more than 12% in Paris after reporting slower sales growth in the first quarter, with geopolitical tensions linked to the Iran conflict weighing on sentiment across the luxury sector.

The sell-off erased over $20 billion from the group’s market value.

Revenue reached €4.07 billion for the three months to March, representing organic growth of 5.6% year-on-year. This was below the 7.1% consensus forecast referenced by Jefferies and marked a notable slowdown from the 9.8% growth achieved in the previous quarter.

On a reported basis, sales declined compared with last year due to €290 million in adverse currency movements. The reported revenue figure also missed analyst expectations of €4.16 billion, based on a Visible Alpha survey.

Jefferies analysts, led by James Grzinic, estimated that tensions in the Middle East reduced first-quarter revenue growth by around 150 basis points. Wholesale activity—particularly in concession stores and airport locations in the region—was most affected, although the company noted that trends in the Middle East have begun to improve in the second quarter.

Asia-Pacific excluding Japan also underperformed, with growth of just 2.2%, well below the 5.7% consensus and sharply down from 8% growth in the fourth quarter. According to analysts, this slowdown is likely to be a key concern for investors.

“The stock’s poor performance in the run-up to today’s update reflected two fears. Firstly, that of a heavily challenged ME exposure (at c.8% inc travel spend by the cluster outside the region),” they wrote. “Secondly, and more relevant for the broader valuation debate, are concerns around a slowing Chinese momentum.”

“Today’s APAC ex Japan Q1 gain of 2.2% (after 8% in Q4) will be a major point of debate at the 8am UKT call, and a clear source of concern for fundamental investors,” the analysts added.

In contrast, the Americas delivered strong performance, with revenue increasing 17.2%, comfortably ahead of expectations.

Hermès reiterated its medium-term outlook, maintaining its guidance for sales growth at constant exchange rates. “In a still uncertain economic and geopolitical context, the group has moved into 2026 with confidence,” the company said.

Kering (EU:KER) shares fell more than 8% after its flagship brand Gucci reported weaker-than-expected first-quarter sales, weighing on overall group performance. Gucci’s comparable revenue declined 8%, missing analyst expectations for a 6% drop.

Group revenue for the quarter came in at €3.57 billion, slightly below the €3.59 billion consensus, with comparable growth flat overall. This follows declines in the previous two quarters, underscoring ongoing pressure in the luxury sector. Gucci generated €1.35 billion in revenue, falling short of the €1.39 billion expected and dragging the Fashion and Leather Goods division to a 3% comparable decline, compared with forecasts for a smaller drop.

Analysts at Jefferies, which rates the stock “hold” with a €280 price target, said “evidence of a clear turn in Gucci’s brand heat remains patchy,” adding that the upcoming capital markets day was “unlikely to provide a ready-made toolbox of KPIs.”

Regional performance was mixed. North America showed improvement, while Europe also strengthened but remained in negative territory. China continued to decline, and Japan remained challenging. The Middle East reduced group retail comparables by around 70 basis points; excluding this impact, March comparable growth would have been approximately 3% rather than flat.

Other divisions provided some support. Kering Jewellery delivered strong comparable growth of 22%, well above expectations, driven by price increases at Boucheron and new product launches. Kering Eyewear grew 7%, while the Corporate and Other segment posted 10% growth, both exceeding consensus forecasts.

By region, comparable retail sales rose 9% in North America but declined 3% in Japan, 4% in Asia-Pacific excluding Japan, 7% in Western Europe, and 8% in the rest of the world.

Management reiterated its full-year outlook, maintaining expectations for a flat gross margin and indicating a “probable slight improvement” in operating expenses compared with prior guidance. The group continues to target growth across its portfolio in 2026, excluding Alexander McQueen.

Jefferies forecasts full-year 2026 adjusted EBIT of €1.85 billion, below the €1.94 billion consensus, with earnings per share estimated at €6.67 versus consensus of €6.16.

Antofagasta (LSE:ANTO) reported an 8% year-on-year decline in copper production for the first quarter of 2026, though output still exceeded internal consensus estimates, helping lift shares by around 3% following the update. The Chilean miner produced 143,000 tonnes of copper in the period, ahead of the expected 138,000 tonnes, while copper sales fell more sharply, down 19.5% to 137,000 tonnes.

Costs showed significant improvement, with net cash costs falling 30% year-on-year to $1.08 per pound. This was driven by a surge in by-product credits, which more than doubled to $1.69/lb, offsetting a 17% increase in underlying cash costs. Strong gold and molybdenum prices supported this performance, with gold production rising 8% to 46,500 ounces and realised prices climbing 70% to $5,264 per ounce. Molybdenum output remained broadly stable at 3,000 tonnes.

Chief executive Iván Arriagada highlighted the resilience of the company’s asset base and the contribution from by-products. “Our net cash costs during the quarter were 108c/lb at the Group level, including 72c/lb and 34c/lb at Los Pelambres and Centinela respectively,” he said.

Looking ahead, the company expects copper production to increase progressively through the year, supported by higher throughput and improved ore grades at Los Pelambres. “As we move through the year, we expect copper production to increase quarter-on-quarter, with higher processing rates and improving grades at Los Pelambres, in line with the mine plan,” Arriagada added.

Full-year guidance remains unchanged, with copper production forecast at 650,000 to 700,000 tonnes, net cash costs expected in the range of $1.15 to $1.35 per pound, and capital expenditure set at $3.4 billion. Analysts at Morgan Stanley noted that Antofagasta will need to increase its production run rate by around 18% over the remainder of the year to reach the lower end of guidance, leaving limited margin for operational setbacks.

The company also confirmed that key growth projects are progressing as planned. Pre-commissioning work is underway at the Centinela Second Concentrator Project, while construction continues on the Los Pelambres concentrate pipeline and desalination plant expansion. All major developments remain on schedule and within budget, and the group reported no fatalities across its operations so far in 2026.

Ferrexpo (LSE:FXPO) reported a sharp decline in first-quarter production, with output nearly halving as ongoing attacks on Ukraine’s energy infrastructure disrupted operations. The iron ore pellet producer saw its shares fall around 2.6% in early trading following the update.

Total production dropped 45% quarter-on-quarter to 593,000 tonnes, including 525,000 tonnes of premium iron ore pellets and 68,000 tonnes of commercial concentrate. Concentrate output was particularly impacted, plunging as much as 90%, while pellet production rose 27% as the company began restarting one production line toward the end of February.

Interim Executive Chair Lucio Genovese said the weak performance was largely due to sustained damage to Ukraine’s power grid caused by Russian strikes late last year. “By January, given the supply of electricity could not be assured on a sustainable basis at the levels required, we were forced to make the difficult decision to temporarily suspend operations and place our workforce on furlough,” he said.

As electricity availability and pricing conditions improved, Ferrexpo was able to resume limited operations at its Ferrexpo Poltava Mining unit, restarting one pellet production line in late February. However, overall output remains constrained, with the company continuing to operate below full capacity. Exports are ongoing, with rail logistics being used to supply customers across Eastern and Central Europe.

The company also highlighted ongoing financial strain, prioritising cash preservation and cost reductions. Measures include cutting working hours and halting all non-essential capital expenditure. Ferrexpo added that it is exploring potential funding options, including a possible equity raise, although it cautioned there is no guarantee that such initiatives will be successfully completed.

Rank Group Plc (LSE:RNK) lifted its full-year underlying operating profit guidance to at least £68 million, exceeding the top end of analyst expectations and sending shares up more than 8%. The upgrade follows continued like-for-like growth in net gaming revenue (NGR) across all divisions during the third quarter.

The revised outlook surpasses the upper range of analyst forecasts, which had been between £65.1 million and £68.2 million for the 2025–26 financial year. Group like-for-like NGR rose 5% year-on-year to £205.4 million in the third quarter, while year-to-date NGR increased 6% compared with the prior year.

Interim chief executive Richard Harris said the performance highlights “the resilience of the business” and added that, with measures in place to offset higher Remote Gaming Duty and “clear plans in place to drive sustainable revenue growth, the Group is well placed to deliver the medium-term objective of generating at least £100m operating profit.”

Within the divisions, Grosvenor venues—Rank’s largest segment—reported Q3 like-for-like NGR of £95 million, up 5%, with gaming machines delivering the strongest growth at 10%. The company noted some potential uncertainty linked to international travel but still expects continued growth in that segment.

Digital operations also performed positively, with like-for-like NGR rising 4% to £60.9 million. The UK digital business grew 2%, while international digital operations expanded by 14%. Rank has implemented cost-saving measures, including reductions in marketing spend, supplier costs, and headcount, to help offset the impact of Remote Gaming Duty increasing to 40% from April 1, 2026.

Mecca venues generated Q3 like-for-like NGR of £37.8 million, up 5%, and are expected to deliver profit growth in 2026–27, supported by the removal of Bingo Duty from April 2026. Meanwhile, Enracha, the group’s Spanish venues division, was the fastest-growing segment, with Q3 NGR up 9% to £11.7 million, driven by a 27% increase in gaming machine revenue. Year-to-date growth for Enracha stands at 7%.

Looking ahead, Rank expects further year-on-year revenue growth in the fourth quarter. The group also noted that energy price volatility is unlikely to have a material impact on profitability, supported by its hedging strategy.

Tatton Asset Management Plc (LSE:TAM) reported annual net inflows of £2.8 billion, outperforming expectations and indicating that full-year results are likely to come in at the upper end of market forecasts. Analysts noted that flows exceeded their projections, reinforcing the strength of the group’s performance over the period.

Total assets under management and influence increased 11% year-on-year to £24.2 billion for the year ended 31 March. Monthly net inflows averaged £234 million, in line with guidance, with momentum building in the second half, where inflows rose to £242 million per month compared with £225 million in the first half.

Investment performance and market movements contributed £2.456 billion during the year. However, a previously disclosed client mandate loss led to £3.329 billion in outflows in January 2026. Excluding this impact, underlying assets under management grew by 26.8%, highlighting the strength of core business inflows.

The group also expanded its distribution network, adding 108 independent financial adviser firms to reach a total of 1,218. Its Paradigm mortgages division delivered £17.5 billion in lending completions, up from £14.2 billion a year earlier, while the number of mortgage member firms increased to 2,014 from 1,915.

Analysts at RBC Capital Markets said underlying net inflows were around 10% ahead of their £2.5 billion estimate, with total assets under management and influence exceeding their forecast by approximately 3%. They also noted stronger inflows in the second half and suggested that the company would need lower monthly inflows than current levels to achieve its £30 billion target by 2029.

Chief executive Paul Hogarth said “against a volatile and challenging macroeconomic and geopolitical backdrop, I am particularly pleased with the consistency of our underlying net inflows throughout the year, with a stronger second half contributing to a full-year average of £234 million per month and at the top of our guidance range.”

Great Portland Estates (LSE:GPE) reported a strong finish to its financial year, completing £70.9 million in annual rental agreements across 88 new leases and renewals. Market lettings were achieved at an average of 10.3% above the March 2025 estimated rental value (ERV), highlighting continued demand for high-quality office space.

In the fourth quarter alone, the company secured £24.4 million in rent from 28 leasing transactions, with deals completed at 15.8% above ERV. Performance was supported by strong occupier interest in fully managed and fitted workspaces, including a significant 52,300 square foot pre-let to Quantexa at Minerva House, also known as The Delft, which was agreed well above ERV expectations.

Rent reviews during the period were also robust, settling 49% above previous passing rent and 11.1% ahead of ERV benchmarks. The group completed its largest development at 2 Aldermanbury Square, which has been fully pre-let to Clifford Chance, further reinforcing demand for prime, centrally located office space.

On the capital recycling front, Great Portland Estates completed £490 million of disposals at 2% above book value, including the sale of wells&more, W1 to Felberg Capital for £172 million. The transaction reflected a 5% net initial yield and a valuation of £1,483 per square foot.

“Despite a volatile macroeconomic backdrop, this has been an excellent finish to the year,” said Toby Courtauld.

“We signed £24.4 million of leases in the quarter and delivered a record £70.9m of deals for the year, 10.3% ahead of ERV, reflecting the strength of demand for high quality, well located space and the momentum in our Fully Managed offer.”

Iofina plc (LSE:IOF) delivered a record-breaking first quarter in 2026, producing 178.9 metric tonnes of crystalline iodine from its eight IOsorb facilities in Oklahoma—up 44% year-on-year. The increase was driven by additional capacity brought online in late 2025, alongside favourable conditions such as warmer brine temperatures. Strong market demand has kept iodine spot prices above $70 per kilogram, prompting the company to upgrade its outlook, with first-half production now expected to reach around 385 metric tonnes, ahead of previous guidance. The group also noted it has not been impacted by current global supply chain disruptions.

The company continues to expand its production footprint, progressing construction of a larger IOsorb plant in the Permian Basin in partnership with Western Midstream Partners. The new facility is expected to come online in late Q3 2026 and will represent the group’s ninth plant. Management highlighted that the strong start to the year, combined with a growing pipeline of opportunities across the Permian and Oklahoma, positions Iofina for a sustained period of growth. Full-year 2025 financial results are scheduled for release in early May.

From an investment perspective, Iofina’s outlook is supported by solid financial stability and ongoing strategic expansion initiatives. While technical indicators suggest some caution due to overbought conditions, the company’s growth trajectory and valuation remain appealing.

More about Iofina plc

Iofina plc is a vertically integrated iodine producer and specialty chemicals company, operating through its Iofina Resources and Iofina Chemical divisions. It is the second-largest iodine producer in North America, with eight IOsorb plants currently in operation in Oklahoma and a ninth under development in the Permian Basin. The company also manufactures a range of halogen-based and non-iodine specialty chemical products for global markets.

hVIVO (LSE:HVO) reported a challenging 2025, with revenue falling to £46.8 million from £62.7 million and adjusted EBITDA declining to £1.4 million. The downturn reflects a transitional year for the business alongside broader macro pressures across the pharmaceutical services sector. Profitability and cash levels were notably lower, although the company ended the year with a £30 million contracted order book and expects a return to growth in 2026, with revenue forecast to increase by high single digits, weighted toward the second half.

During the year, hVIVO expanded its capabilities through the acquisition and integration of two Clinical Research Units in Germany from CRS, as well as UK-based Cryostore. These additions broaden its offering into early-phase trials, cardiometabolic and immunology studies, and temperature-controlled storage. The group has also reorganised into four core service lines and introduced a validated human metapneumovirus (hMPV) challenge model. Further progress includes securing multi-site trial agreements and an influenza challenge study with Traws Pharma, while unifying its operations under a single hVIVO brand to reflect its evolution into a more diversified clinical development partner.

Management believes the expanded platform and increased cross-selling between its UK and German operations will reduce reliance on infectious disease challenge trials and support margin recovery over time. A strong pipeline across all service lines, combined with ongoing discussions for additional contracts, underpins confidence in long-term growth and a stronger competitive position within the sector.

From an investment standpoint, the outlook reflects a mix of improving fundamentals and lingering challenges. While revenue growth prospects and a relatively low leverage position are supportive, recent financial performance has been weak. Technical indicators show positive momentum, though the share price remains below key moving averages, suggesting potential resistance. Valuation appears attractive, with a low price-to-earnings ratio and a modest dividend yield offering appeal to value-oriented investors.

More about hVIVO plc

hVIVO plc is a UK-based, full-service clinical development company and a global leader in human challenge trials, working with several of the world’s largest biopharmaceutical firms. The group provides an integrated platform covering early-stage development, including preclinical planning, first-in-human studies, Phase II trials, and specialist laboratory services, across facilities in the UK and Germany.

Its four core divisions—Consulting, Clinical Trials, Human Challenge Trials, and Laboratories—are designed to accelerate drug development timelines. hVIVO also operates extensive participant recruitment capabilities, including the FluCamp platform, and runs the world’s largest quarantine facility for controlled human infection studies in London.