ING
We wrote a small backgrounder on ING (Ingham) back at the last downgrade.
That was in November, and since then, whatever you feed chickens, it costs more, based on today’s update.
It is very hard to manage margins, cashflow, working capital when inputs (labour, raw materials) are bouncing around in price and availability.
Mind you, we’d also thought we’d see more of this from the homebuilders, and from the REITs that have development and construction risk, but so far, we’ve not (although reporting season is just around the corner).
We are certainly seeing it from supermarket operators, and maybe not as much as I’d expected from regular discretionary retail.
Still, whilst nowhere near as severe as Delta, Omicron is sure to feature in company outlook statements from February onwards given the extra transmissibility.
Back to Ingham’s – the result just states that they are expecting bad outcomes, but as yet, haven’t quantified them. The market normally hates that more than a straight “sales are down X%”, and as such I’d be expecting at least a 10% fall in the share price.
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