Bank of Canada rate decision – 08/03 – at its last meeting in January the Bank of Canada decided that it would take the decision to signal a pause in its rate hiking cycle after its latest rate rise of 25bps took the headline rate to 4.5%.
The central bank did indicate that the pause was conditional on inflation coming down, however, the decision to signal a pause with hindsight, given the strength of recent data does come across as a little hasty. Headline CPI in Canada has fallen to 5.9%, but core prices still look sticky at 5%, and recent economic data has shown the economy looks resilient. Consumer spending has held up well in recent months, while January payrolls also saw a huge jump of 150k, with most of them being in full-time employment. The participation rate also surged to 65.7%, a sharp rise from 65.4%. No changes are expected to monetary policy; however, we could see some hawkish guidance.
Darktrace H1 23 – 07/03 – back in January Darktrace shares fell to record lows of just below 200p after management cut its recurring revenue growth forecasts for the full fiscal year to between 29.5% and 31%, from its previous forecast of 31% to 34%.
Management said they expect H1 revenue to come in at $258m, an increase of 35.2% from a year ago, while the number of customers has risen by 741 since the end of the last fiscal year to 8,178. The rate of customer growth in percentage terms does appear to be slowing, however, it is still in the mid-20 %. Back in August the shares briefly spiked up on reports that the company was in talks with Thoma Bravo. Since it was announced that these talks had ended its been one-way traffic lower with questions being asked in various circles about the transparency of the company's accounting methods. Last month short seller Quintessential Capital Management expressed scepticism over the validity of its financial statements, while also taking an active short position.
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Harbour Energy FY 22 – 09/03 – the decision by the UK government has been ruinous for the Harbour Energy price over the last 12 months, sliding from highs of just over 520p last April, they hit a low of 270p back in February, just shy of their record lows of 260p back in 2020.
As a largely domestic producer, and a company that recently upped its contribution to UK energy security to 5% of UK gas output. 90% of its UK production takes place through 5 key hubs with the latest one to come online being the Tolmount Gas field. With higher gas prices its annual revenue looks set to rise sharply. In 2021 the company saw annual revenues of $3.48bn, and this looks set to rise to $5.4bn in the current fiscal year. As a result of the extension of the windfall tax, the company said that it would have to set aside a higher amount than the $600m it set aside in its H1 numbers. Full-year production is expected to come in at the top end of expectations at 208k oil equivalent barrels per day with a 50/50 split between oil and gas. Total capex for the year is also set to be lower at $1bn, down from the previous $1.3bn due to the decision not to proceed with several North Sea exploration and appraisal wells due to the decision to reassess its future investment plans in the North Sea, and not bid for the new round of UK oil and gas licences, resulting in the company announcing job losses earlier this year. Guidance for 2023 is forecast to be lower at between 185-200kboepd as well. While the decision to rethink its UK investment plans is not surprising, it is depressingly predictable given current government policy. If you take the decision to overtax businesses, especially small ones, don't be surprised if they choose to walk away.
