Former stay-at-home beneficiaries Deliveroo PLC (LSE:ROO) and Ocado Group PLC (LSE:OCDO) joined a chorus of companies noting that higher costs from the Ukraine war and energy prices may weigh on their outlooks for the year.
Ocado’s shares sank 7.5% after the company said its retail joint venture with Marks and Spencer Group PLC (LSE:MKS) will face some challenges as the conflict with Russia pushes up oil prices, adding to the squeeze after the end of lockdowns.
The retail business is a relatively small part of the overall valuation for Ocado, but analysts at Barclays noted it is "clearly negative for sentiment".
Deliveroo had broadly similar concerns to Ocado, with founder Will Shu saying that “Europe will face headwinds due to inflationary pressures, the removal of economic stimulus and the broader geopolitical and economic impacts of the conflict in Ukraine.”
The company’s loss for 2021 widened to £298mln from £213mln a year earlier and it said it won’t break even until the second half of next year at the earliest.
The shares recovered some ground as it increased its market share in the UK and Ireland, but the stock remains valued at less than half of its initial public offering price a year ago.
Meanwhile, beleaguered Cineworld Group PLC (LSE:CINE) said that trading has been encouraging after the reopening of its movie theatres, though the pandemic is still weighing on some of its global operations.
Net debt at the company rose increased by $492.7mln to $4,837.2mln in 2021. The shares edged lower to 37.7p
“Cineworld may be able to trade its way out of its current debt position but very material uncertainties are hanging over the business,’’ wrote Ivor Jones, an analyst at Peel Hunt.
“With this imminent financing challenge in mind, we reiterate our hold recommendation and 32p target price,’’ Jones added.