BAE, Barratt, AO World: 3 companies that weathered supply chain limits

The Competition and Markets Authority (CMA), a UK-based regulator that looks after the business competition and prevention of anti-competitive activities in the country, is teaming up with its counterparts from four other countries to detect malpractices taking place in the global supply chain and also investigate for any collusion between shipping companies and suppliers.

The agencies from countries like the US, Australia, Canada, New Zealand, and the UK will work closely and share information related to collusion and anti-competitive conduct from businesses in the supply chain. Those found guilty of misconduct and colluding would be fined and face prosecution. The joint investigation comes amid a record rise in transportation costs for the businesses because of an increase in shipping fees.

The surge in transport prices is one of the key factors contributing to higher consumer goods prices and consequently the surge in inflation that has been adversely impacting household spending. Many FTSE listed companies have also suffered due to supply chain-related issues in the last two years.

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Let us look at some of the listed stocks that were impacted and how they overcome the supply chain challenges:

BAE Systems Plc (LON: BA.)

FTSE100 listed defence sector company provides technology solutions to its clients in more than 40 countries. The aerospace and defence industry has faced acute supply chain constraints in the past one year, with many firms issuing profit warnings.

BAE Systems Plc was also facing similar challenges but was able to mitigate some impact of supply chain pressure through its long-term programme position, which helped the company to manage lead times against demand requirements.

BAE Systems Plc’s last close was at GBX 594.40 on 17 February 2022, with a market cap of £18,702 million.

Barratt Developments Plc (LON: BDEV)

The housebuilding company has operations in the United Kingdom. It is one of the largest housebuilders in the country, managing its operations through three consumer-facing brands.

The company’s business faced multiple challenges like material and labour shortages because of supply chain disruption. Still, the company was able to deliver growth in construction activity, and it delivered 8,067 homes to its consumers resulting in revenue of £2,247 million for the six months ended 31 December 2021. 

Barratt developments Plc’s last close was at GBX 602.60 on 17 February 2022, with a market cap of £6,161.90 million.

AO World Plc (LON: AO.)

The online electronics retailer has operations in the UK and Germany. It offers different electronic products to consumers.

The company reported a rise in revenue above the pre-pandemic levels through robust business operations despite facing multiple challenges related to the shortage of electronic products due to semiconductor shortages and other supply chain constraints.

AO World Plc’s last close was at GBX 92.20 on 17 February 2022, with a market cap of £442.12 million.