Small Cap Value Report (Thu 31 Oct 2024) - FTC, KNOS

Good morning from Paul amp; Graham!

Everyone still digesting the consequences of the Budget, I expect. I emphasise that this is a time for people to be taking professional advice from authorised financial (tax amp; pension, etc) advisers, for estate planning, etc, before making any changes, as it's already become clear that some of the IHT changes are complicated and have created some uncertainty.

In terms of shares, I think we should now see a wave of broker forecast cuts, because I don't believe that hefty extra wages costs (hike in minimum wage of 5%-16% in April 2025, and increased employers NICs from the rate going up and the threshold coming down) are likely to be already factored into forecasts. Hence why, for me anyway, retail amp; hospitality are out of my portfolio altogether for the time being until the dust has settled. Plenty of other companies are also likely to need to cut forecasts due to higher wages costs as other workers press for differentials to be maintained. Mitigation measures can soften the impact, but tend to take time to implement.

Looking for positives, I think the removal of uncertainty now allows many companies and individuals to press ahead with expansion or purchasing plans that might...