Accenture drops after guidance misses expectations

Market Performance

South African Market

South African markets ended weaker yesterday, with the JSE All Share Index down 0.89% at 114,997.71 points and the Top 40 losing 1.00% to 106,955.68 points. Investor sentiment was shaped by Wednesday’s softer-than-expected May inflation print, which reduced expectations of another South African Reserve Bank interest rate hike next month. In the Western Cape, recent flooding caused more than R9 billion in damage, with the final cost still expected to rise and the province warning that its R10 billion infrastructure budget may need to be reprioritised. Separately, Finance Minister Enoch Godongwana said a shortage of SARS detector dogs could be costing the fiscus about R415 million annually in lost customs revenue.

European Market

European markets ended weaker on Thursday, with the STOXX 600 slipping 0.3% and snapping a five-day winning streak as investors increased bets on a US Federal Reserve rate hike later this year following hawkish policymaker commentary. Regional performance was mixed, with French and German equities gaining, while Italy and Spain declined. The FTSE 100 fell 1.0%, weighed down by heavyweight energy and healthcare shares. The Bank of England kept interest rates unchanged at 3.75%, citing uncertainty around inflation pressures. Oil and gas stocks lost 1.5% as crude prices eased following a US-Iran deal. Automakers also struggled, while European IT services shares fell sharply after Accenture cut its full-year guidance.

US Market

US equities rallied on Thursday, led by technology and semiconductor shares, as easing Middle East tensions helped calm inflation concerns despite investors continuing to price in further Federal Reserve rate hikes this year. The Nasdaq gained 1.9%, while the Philadelphia Semiconductor Index surged 6.4%. Intel jumped 10.6% to a record high after President Donald Trump said Apple had agreed to work with the chipmaker on US-based chip design and manufacturing. Oil prices fell to their lowest levels since early March after the US and Iran signed an interim agreement extending the ceasefire by 60 days. For the shortened week, the S&P 500 rose 0.93%, the Nasdaq advanced 2.43% and the Dow gained 0.71%.

Asian Market

Asia-Pacific markets were mixed on Friday, with South Korea’s Kospi extending its record-setting run as Samsung Electronics and SK Hynix advanced to all-time highs. In Japan, annual core inflation remained below the Bank of Japan’s 2% target for a fourth consecutive month, with fuel subsidies helping offset higher raw-material costs linked to the Middle East conflict. Core consumer inflation, excluding fresh food, rose 1.4% year on year in May, in line with expectations and unchanged from April. A narrower measure excluding both fresh food and fuel increased 1.8%, its slowest annual pace since September 2022. Analysts still expect inflation to re-accelerate, keeping the Bank of Japan on course for further rate hikes.

Commodity Market

Gold and oil prices weakened on Friday as easing Middle East supply risks and a stronger dollar pressured key commodities. Gold was on track for a third consecutive weekly decline, weighed down by hawkish signals from the US Federal Reserve and reduced demand for the non-yielding metal. Oil also fell after tankers began moving through the Strait of Hormuz following the US-Iran interim peace deal, raising expectations that stranded Middle East Gulf supply could return to global markets. Analysts estimate that more than 85 million barrels of oil could be released, while the lifting of US sanctions on Iranian oil would add further supply. However, continued Israel-Hezbollah tensions kept geopolitical risk firmly on investors’ radar.

Currency Market

Currency markets were shaped by competing forces on Thursday and Friday, as easing Middle East tensions supported risk appetite while hawkish Federal Reserve signals strengthened the US dollar. The rand initially firmed after the US and Iran released the text of an interim peace agreement, reducing geopolitical risk and improving sentiment towards emerging-market assets. However, the dollar remained near a 13-month high as markets priced in more than one further US rate hike this year. The yen stayed close to four-decade lows, despite Japan’s recent rate hike and earlier dollar-selling intervention, with investors watching for renewed official action. Markets were otherwise broadly steady as Strait of Hormuz shipping normalised, although doubts over the durability of the truce remained.

Domestic Company News

Marshall Monteagle PLC (MMP) 0.00%

Marshall Monteagle PLC expects a significant improvement in earnings for the year ended 31 March 2026, driven by stronger investment performance and favourable currency movements. The company guided for headline earnings per share of US$25.6 cents, compared with US$2.2 cents in the prior year, while basic earnings per share are expected to rise to US$26.2 cents from US$1.0 cent previously. The sharp increase reflects realised profits and fair value gains recognised on the group’s equity portfolio, supported by exchange-rate benefits. The trading statement has not yet been reviewed or reported on by auditors. Marshall Monteagle expects to publish its summarised audited results on or about 26 June 2026 for shareholders.

STADIO Holdings Limited (SDO) +3.42%

STADIO Holdings reported continued student growth in its voluntary business update, with total semester-one enrolments reaching 55,854 by 15 June 2026, up 9% from 51,197 at 30 June 2025. Distance learning remained the core driver, rising 8% to 47,750 students, while contact learning increased 15% to 8,104 students. Management described the overall growth as satisfactory given South Africa’s challenging operating environment, with STADIO Higher Education growing more than 18%. The Durbanville campus now exceeds 1,300 students, while Centurion has surpassed 2,300. Milpark B2B and Namibia’s free higher education policy weighed on distance learning. STADIO expects to meet its prelisting target of 56,000 students in 2026, with second-semester intake underway.

Libstar Holdings Limited (LBR) -0.93%

Libstar reported a softer-than-expected trading performance for the 21 weeks to 31 May 2026, reflecting constrained consumer demand, inflationary cost pressure and operational challenges in selected divisions. Group revenue increased 0.9%, supported by 0.3% volume growth and a 0.6% price/mix contribution, while revenue excluding Dickon Hall Foods rose 3.5%. Perishable Products grew 1.6%, helped by resilient Dairy and Value-added Meats demand, while Ambient Products increased 0.2%, or 5.6% excluding Dickon Hall Foods. Gross margins declined by 1 to 1.5 percentage points, mainly due to cost under-recovery in Dickon Hall Foods and Dry Condiments. Net debt improved, with gearing falling to 1.3 times, while management expects a better second-half performance.

Brait PLC (BAT) -9.57%

Brait reported audited results for the year ended 31 March 2026 and confirmed plans for a R2.5 billion rights offer as it advances its value-unlock strategy. Net asset value per share increased 7% to R3.27, while earnings and headline earnings per share rose to 34 cents from 23 cents. Underlying assets performed strongly, with EBITDA growth of 37% at Virgin Active, 18% at Premier and more than 100% at New Look. Proceeds from the rights offer, Premier share monetisation and expanded facilities will fund Brait’s £108 million contribution to Virgin Active’s capital raise and the £138 million convertible bond redemption. Post-transaction, Brait expects lower debt, reduced currency risk and better-positioned assets.

Global Company News

Accenture PLC (ACN) -17.97%

Accenture shares fell more than 17% after the IT consulting group issued fourth-quarter revenue guidance below Wall Street expectations, reflecting weaker demand linked to geopolitical and economic uncertainty. The company said the Iran war caused a US$400 million hit to its Middle East business in the third quarter, with further pressure expected in the fourth quarter. Annual revenue growth guidance was narrowed to 3% to 4%, from 3% to 5%, while fourth-quarter revenue is expected between US$17.75 billion and US$18.4 billion, below consensus. Third-quarter revenue rose 6% to US$18.72 billion, slightly missing estimates, while bookings fell 2% to US$19.3 billion. Accenture is increasing acquisition spend to strengthen cybersecurity, AI, cloud and data capabilities.

Kroger Company (KR) -8.43%

Kroger shares fell about 7% after the US supermarket operator maintained its annual guidance but warned of rising inflationary pressure in the second half of the year. The company continues to expect fiscal 2026 identical sales, excluding fuel, to rise 1% to 2%, with adjusted earnings of US$5.10 to US$5.30 per share. Quarterly sales increased to US$46.12 billion, ahead of expectations of US$45.47 billion, while adjusted profit of US$1.58 per share was marginally below consensus. Gross margin eased to 22.7% from 23% a year earlier, reflecting higher fuel, transport and investment costs. Kroger is cutting prices, expanding private-label ranges and investing in digital capabilities to regain share from Walmart and Costco.

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