Lords Group Shows Resilience Despite Share Weakness

1033 GMT - Lords Group Trading has proven significantly more resilient than some more established firms in the sector recently and this isn't reflected in the share price performance, Berenberg says in a note after the distributor of building, plumbing, heating and DIY supplies maintained its expectations for its performance for fiscal 2023. "We believe management's experience of trading through a downturn, the diversification within the business and its exposure to a diverse range of end-markets with a weighting to RMI [repairs, maintenance and improvement] support this," analyst Robert Chantry writes, pointing out that shares having lost almost 25% year to date, which he attributes to technical factors rather than fundamentals. Berenberg rates the stock buy. (elena.vardon@wsj.com)

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European Auto Body Wants EU to Postpone Tariffs on EV Battery Materials

1019 GMT - The European Automobile Manufacturers Association says it wants the European Union to wait three more years before imposing planned tariffs on battery parts and materials for electric vehicles imported from outside of Europe and the U.K. The auto industry group, known as ACEA, says the rule, scheduled to start January 1, 2024, will cost car makers EUR4.3 billion through 2026 and hurt the region's electric-vehicle industry. "There has been massive investment in the European battery supply chain, but time is needed to build up the required capacity," ACEA says. Car makers still rely on battery materials from Asia, so the rule could curb production and help foreign competitors gain ground in Europe and the U.K., ACEA says. (david.sachs@wsj.com)

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Motorpoint Vulnerable to Bid As UK Car Retail Sector Shrinks

1006 GMT - The UK-listed car retail sector has been shrinking in recent years and investor focus could turn towards to Motorpoint Group's vulnerability to a bid, AJ Bell says in a market comment after peer Lookers received a takeover offer from Canada's Alpha Auto Group, continuing the trend in the sector. "Scale matters in this industry and operators are always looking for a way to plant more flags, be it locally or internationally," investment director Russ Mould writes, pointing to successful bids for Marshall Motors and Cambria Automobiles and a failed one for Pendragon. Motorpoint shares trade at all-time lows and have lost almost three fourths of their value since Sept. 2021 due to a pullback in car prices, higher interest rate costs and inflationary pressures hurting demand. (elena.vardon@wsj.com)

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AB Foods' Outlook Seen Improving on Sugar Prices, Primark Margins

0955 GMT - AB Foods' earnings are expected to improve on the back of higher sugar prices and slightly higher margins for Primark, RBC Capital Markets analyst Richard Chamberlain says in a note. Primark gives confidence regarding its margin recovery as sales have now fully recovered from prepandemic levels of 2019, which is likely to support operating margins with more than 10% by FY 2025, he says. For FY 2024, the group is likely to benefit from a bigger than GBP100 million tailwind supported by lower freight costs, while a stronger pound should also support earnings, he notes. RBC raises its FY 2024/25 EPS forecast by 2% and price target on the stock to 2,300 pence from 2,250 pence. (michael.susin@wsj.com)

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Lookers Shares Jump Close to 'Irrefusable' Takeover Offer Price

0939 GMT - Lookers shares surge by over a third to near the premium price offered by the takeover cash deal from Canadian company Alpha Auto Group--which owns Bidco--which values the car dealership at GBP465.4 million pounds. "For Lookers, the more than 35% premium represents an irrefusable offer for shareholders," Interactive Investor head of investment Victoria Scholar says in a market comment, noting the U.K. retailer is in a strong position financially, that it raised its 2023 profit forecast recently and is benefiting from higher average selling prices for new vehicles. Scholar points out however that the group is still grappling with the pressures from inflation and rising interest rates. Shares rise 33.5% at 118.4 pence. (elena.vardon@wsj.com)


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06-20-23 0816ET