Shares in two North West firms slide after negative sentiment

Shares in two North West firms have fallen following negative reports.

Bolton-based AO World saw its stock continue to fall after yesterday’s (July 4) reports that its credit insurer, Atradius, had cut cover for its suppliers.

And Stretford-based Supreme today saw its stock tumble following a warning that revenues and EBITDA will be lower this year.

AO World shares fell by around 15% yesterday and by almost 13% in early trading this morning. This was despite a statement it released to the stock exchange regarding the weekend reports, in which it said: “The company’s current financial performance and financial position remain in line with the board’s expectations and the guidance set out in its trading update on 29 April 2022.”

It said the rebased insurance cover of one of its third-party credit insurers “has had no effect on AO’s liquidity position which remains in line with the board’s expectations for FY23.”

And it added: “AO continues to have full access to its £80m revolving credit facility, the term of which runs until April 2024. In addition, the company continues to consider and implement a number of ongoing initiatives and further actions to strengthen its balance sheet while optimising its focus on profit and cash generation against the uncertain macroeconomic conditions in the UK and the continuing global supply chain challenges.”

By close of trading today (July 5), AO World shares had fallen by 16.19%, finishing at 46.64p, a 9.01p decline.

This morning, fast moving goods specialist Supreme announced annual results which showed good growth in revenues and profits, but warned that revenue and EBITDA are both expected to be below 2022 levels and below previous market expectations, driven by a recent marked decline in the Lighting category following a slow-down in sales compounded by customer overstocking in 2022.

Shares in the company tumbled by almost 28% this morning following the latest update.

When Supreme began trading on AIM on February 1, last year, it was valued at £175m, with shares trading at 150p per share.

Today, following the decline in its stock price, it was valued at approximately £106m with shares trading at 91.15p per share by mid-morning.

However, the stock finished trading priced 82.08p per share, down 43.92p, a 34.85% fall, valuing the group at £95.73m, and setting a new yearly low of 78p per share.