Daily market update: Greencore / Bakkavor, Raspberry Pi, Topps Tiles

“Liberation Day has arrived and investors are bracing themselves for a barrage of bad news,” says Russ Mould, Investment Director at AJ Bell.

“European markets were down ahead of the announcement as investors fear widespread tariffs will be announced. Worst case scenario, higher tariffs could dampen economic growth.

“From the recipients’ perspective, there is nothing liberating about tariffs, even if they retaliate with their own levies on imported US products and services.

“Donald Trump has moved fast since returning to the White House and Liberation Day looks like his way of getting all the bad news out in one go, rather than doing tariffs piecemeal. In doing so, it means trade partners are lined up together as the starting gun is fired on negotiations.

“This is all about doing deals. Trump wants companies to invest in factories and jobs in the US, to supply America with strategic items such as natural resources, and to make it easier for US firms to do business overseas. His phone could be ringing off the hook over the next few days and weeks as country leaders try to work out a middle ground.

“While the EU has indicated it will fight back hard, the UK has taken a more considered approach in hope that a long-standing strong relationship with the US will help it avoid the worst of any tariff pain.

“Keir Starmer has focused a lot of his energy on keeping the conversation going with Trump. If that approach doesn’t prove fruitful, we could see heightened volatility among shares in companies linked to the pharma, food and drink, aviation, chemical and automotive sectors — the biggest sources of British exports to the US.

“It was telling that GSK, AstraZeneca, Rolls-Royce and Melrose were among the top fallers on the FTSE 100, given they are in the firing line if Trump doesn’t give the UK special treatment.”

Greencore / Bakkavor

“After a song and dance around valuation, it looks like Greencore has finally hit upon the magic number to gobble up Bakkavor. While still subject to a firm offer and shareholder vote, the tone of the latest update implies that Bakkavor is now on board to combine forces with the sandwich maker.

“There is strategic merit in parking the two companies together. They are big names in the UK food market, offering a range of products from ready meals and soups to pizzas and salads. Greencore wants a bigger slice of the pie and devouring Bakkavor would take the business to the next level.

“It would represent quite a turnaround for Greencore which was derailed by the pandemic. More people being called back to the office has been great news for its sandwich sales. Greencore has sustained positive momentum by doing more work for existing clients and winning new ones.

“However, transformational acquisitions are always harder work than you think, so simply parking Greencore and Bakkavor together is not a guaranteed ticket to success.”

Raspberry Pi

“Low-cost computing specialist Raspberry Pi’s maiden full-year results as a public company are respectable enough.

“Crucially, while revenue and profit were both lower, the latter by a significant margin, the company made encouraging noises about the prospects for the current year — backed by the launch of several new products in the back end of 2024.

“Raspberry Pi has consistently hit the goals it set out at IPO and that has helped build credibility with the market.

“Investors reacted to the company’s IPO like a thirsty traveller in a desert given the dearth of new UK listings in the technology sector.

“However, the company is effusive about how going public has helped raise awareness of its proposition and this may help push other tech companies to consider joining the London market.

“Raspberry Pi’s momentum in the longer term will depend on its ability to translate the promising discussions it says it is having with major prospective customers into orders and revenue, profit and cash flow. It expects these talks to bear fruit in 2026 and investors will be watching closely for evidence.”

Topps Tiles

“Topps Tiles posted encouraging sales growth in the six months to 31 March. While homeowner sales remain subdued, the company is benefiting from strong demand from trade. It suggests those who can afford it are pushing ahead with major renovations while more minor DIY projects are being put on hold.

“Rising costs associated with last year’s Budget are neither new news nor a major shock although the scale may have caught some observers by surprise.”

Brighton Pier

“The end of Brighton Pier on the stock market is more of a tragedy than a comedy for shareholders as the shares plunge on news of a planned delisting.

“The owner and operator of Brighton Palace Pier has a list as long as your arm of why things have gone wrong including Covid, bad weather, increased costs associated with last year’s Budget and wider pressures on consumer spending.

“Ultimately, it’s hard to see why a business like Brighton Pier needs to be on the stock market and the decision to exit looks logical given the costs of remaining listed.”

These articles are for information purposes only and are not a personal recommendation or advice.