Press | Vox Markets
RYA
FLYB
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IAG
Michael O’Leary, chief executive of Ryanair Holdings (RYA), wrote to Sajid Javid, the chancellor, yesterday threatening action if the government did not clarify what support had been given to Flybe Group (FLYB) and whether the duty “holiday” would be extended to other airlines, including Ryanair, easyJet (EZJ) and BA. Mr O’Leary said Ryanair was deeply concerned and shocked by the bailout, which “distorts fair competition between airlines, clearly constitutes illegal state aid, and represents a badly thought-out bailout of a chronically loss-making airline model in the UK”. He told The Times that it was a scam, dubbing it state support for a “bunch of billionaires”, including Sir Richard Branson, the Virgin Atlantic tycoon. Ministers have said Flybe is important to the UK’s regional connectivity and economies. The government has defended the rescue deal and a government spokesman said that ministers had “not given any state aid to Flybe”. The carrier is the UK’s largest regional airline and operates just over half of domestic flights outside of London, carrying eight million passengers last year. It flies between 71 airports across the UK and Europe, including Southampton, Exeter, where it is based, and Aberdeen. The deal has triggered a backlash from the industry with International Consolidated Airlines Group SA (CDI) (IAG) claiming that it constitutes illegal state aid. IAG has filed a complaint to the EU. Willie Walsh, the outgoing chief executive called it a “blatant misuse of public funds”.
LEK
One of the world’s biggest law firms advised Lekoil Ltd (DI) (LEK) on a supposed deal with the Qatar Investment Authority that turned out to be fake, The Times has learnt. Norton Rose Fulbright is understood to be the “retained UK legal counsel” that gave the Aim-quoted Nigerian oil explorer advice before it signed the bogus $184 million loan deal. The disclosure that such an established law firm did not spot the apparent fraud may be embarrassing for Norton Rose Fulbright but adds new intrigue to the emerging scandal. Sources say the fake representatives of the QIA conducted a highly sophisticated operation including numerous meetings in the Middle East and their authenticity was not questioned by anyone involved in the deal.
WTB
Whitbread (WTB) Boris bounce juddered to a halt yesterday after a warning over rising costs and continuing economic uncertainty sent the Premier Inn operator’s shares tumbling by more than 5%. The 250p fall to £45.87 follows a 20% jump since October on the back of optimism that the British-based budget hotel chain would be a beneficiary of any rise in consumer confidence resulting from a Tory majority in the election. The group was buoyed by the £3.9 billion sale a year ago of the Costa coffee chain to Coca-Cola, enabling it to return £2.5 billion to shareholders, but trading at its budget hotels has proved tough and last year it launched a £220 million three-year cost-saving programme. Alison Brittain, the chief executive, admitted the political and economic environment and the continuation of “sustained industry inflation” meant it remained “difficult to predict business confidence in the short term and its impact on the market”. However, she insisted the company had the financial strength and business model to tap into the “significant structural growth opportunities in the UK and internationally”.
PSON
Pearson (PSON) is in danger of losing its place in the FTSE 100 for the first time after it warned that profits will fall again this year and its finance director resigned. The publisher lost up to 14% of its value yesterday after admitting that the downturn at its American higher education arm was gathering pace. Revenues at the division fell 12% last year as sales of textbooks tumbled 30%. The business accounts for a quarter of Pearson’s turnover and has been struggling as students ditch print for cheaper online alternatives. The turmoil at its largest division will reduce adjusted operating profits to between £500 million and £580 million this year, Pearson said in a trading update. Earnings for last year would be £590 million, at the bottom of a forecast range the group cut three months ago.
ABF
A surge in festive sales could push Primark to a record £1 billion profit this year as it puts its struggling high street rivals in the shade. The low-cost fashion retailer, owned by Associated British Foods (ABF), said sales rose 3% in the 16 weeks to January 4, boosted by new store openings. Like-for-like sales increased for the first time since 2017 after an overhaul of its business in Germany and an improved performance across Europe. Sales in Britain rose by 4%, helped by its new stores, but like-for-like sales dropped marginally. John Bason, ABF’s finance chief, said he was “pleased with the UK performance because we demonstrated that we outperformed the wider market”. Primark’s like-for-like sales fell by 0.5 per cent but Britain’s clothing, footwear and accessories market was down by between 1 per cent and 2 per cent, according to Kantar figures, meaning that the UK’s biggest retailer continued to gain market share. Primark said that it had a “huge” rise in gift sales, particularly boosted by its Harry Potter licensed products that included a wooden advent calendar based on the Hogwarts Express train.
HAS
Hays (HAS) blamed Australian bush fires and French strikes as it warned shareholders to expect a £24 million slide in profits for the six months to December. Shares fell after it said operating profits would be about £100 million for its first half, less than the £105 million expected and down from £124 million reported for 2018. Alistair Cox, chief executive, said: “Growth slowed markedly in December, driven by specific events in key markets: general strikes in France, tragic Australian bushfires and the UK election.” Total fees in the three months to December fell 7%, while the decline was 4% after adjusting for currency movements.
BT.A
BT Group (BT.A) and other telecoms companies yesterday pressed the government to ease business rates on new broadband networks at a meeting in Downing Street. Philip Jansen, BT’s chief executive, as well as bosses from Virgin Media and smaller providers met Boris Johnson and Baroness Morgan of Cotes to discuss ambitious plans to meet the prime minister’s pledge to provide “gigabit” speed broadband to all premises by 2025. They are understood to have urged ministers to reduce business rates on the building of new broadband infrastructure by extending an exemption “holiday” from five years to 20. The companies hope the government will include the measure in the budget in March. The meeting comes after the regulator last week outlined proposals to increase competition in broadband infrastructure. market.
BWNG
Shares in Brown (N.) Group (BWNG) lost a quarter of their value yesterday after the owner of the Jacamo fashion brand issued a profit warning, blaming a “highly promotional” retail market and fewer credit customers. The business said its profits would now be between £70 million and £72 million, down from its previous forecasts of £78 million to £84 million. It also warned that profits were unlikely to grow in 2021. The company said it had reacted to “wide sweeping regulatory intervention” across the financial services sector by making changes to the way it managed its debtor book. This brought lower debtor balances and a fall in fees as fewer customers entered into arrears. Last year it made 35% of gross profits from financial services.
DPLM
Diploma (DPLM) shareholders have revolted against the pay package for the engineering company’s new boss, who earned a full bonus last year despite being in the role for only seven months. As a result ISS, the shareholder advisory group, recommended that investors vote against the remuneration report, which 44.2% of those who voted did at Wednesday’s annual meeting. The other point of contention among shareholders was that Diploma also tweaked its long-term bonus scheme. Before, its chief executive could earn up to 1.75 times their salary in share options which would vest over the next three years if certain targets were met. However, Mr Thomson, 47, has the chance to earn shares worth 2.5 times his salary. ISS acknowledged that the change was made to attract a high-calibre candidate but it raised concerns that new joiners would also want improved bonus schemes, called long-term incentive plans.
 
 
SENS
Sensyne Health (SENS) closed down 12p at 39½p as the selloff continued. It floated at 175p in August 2018 when it was valued at £225 million. The Aim-quoted biotech company has been hit by governance concerns after it emerged last year that it had paid about £1 million of undisclosed executive bonuses. It has also been exposed to the crisis at Woodford Investment Management, which was a leading shareholder, and suffered turmoil in the boardroom where a number of directors have departed. Sensyne Health uses artificial intelligence algorithms to analyse anonymised patient data to generate intellectual property that can be licensed to pharmaceutical companies for the discovery of medicines. One market source said the fall had been exacerbated by thin trading and the stock being tightly held by Lord Drayson, 59, and his wife, who own a combined 29%.
CRDA
Tempus – Croda International (CRDA): Hold. Company is resilient but markets are going to be tough probably for at least a year
AO.
Tempus – AO World (AO.): Avoid. With profitability at least two years away risks are high
Banks are reining in lending at the fastest rate since the global crash as fears rise of an economic slowdown which could spell chaos for high-risk borrowers following a years-long debt binge. Business loans suffered their toughest squeeze on availability since the 2008 financial crisis in the final three months of 2019, amid a slump in appetite from lenders. At the same time a crackdown on access to credit cards intensified, according to Bank of England data, with availability falling for three straight years following warnings from regulators that a risky bubble has blown up. The figures will intensify speculation that an interest rate cut is needed to boost the flagging economy.
FLYB
IAG
Brussels will use the British government bailout of Flybe Group (FLYB) to extract trade concessions from the UK, as the European Commission looks to tie Britain into EU rules long after Brexit. London insisted that the bailout of the airline is not state aid after rival International Consolidated Airlines Group SA (CDI) (IAG), the owner of British Airways, made a complaint to the EU executive on Wednesday. Whether or not there is eventually found to be a breach of competition rules, the EU will point to Flybe to help justify its demands for “level playing field guarantees” in the post-Brexit trade deal. Brussels is seeking British pledges to not undercut EU tax, state aid, environment or labour standards as part of the agreement that will form the basis of the future relationship.
RYA
FLYB
Ryanair Holdings (RYA) boss Michael O’Leary has launched a stinging attack on billionaire Virgin founder Sir Richard Branson over the bailout of cash-strapped regional airline Flybe Group (FLYB). Mr O’Leary – whose airline has threatened to sue the Government after it allowed Flybe to delay a tax payment – accused Sir Richard of rushing to claim credit for business successes but hiding at his Caribbean estate on Necker Island when problems struck. Virgin Atlantic, the airline Sir Richard founded, is one of Flybe’s three shareholders. Mr O’Leary said: “There’s no better billionaire to duck bad news than Branson. Branson is only around for the good news days. “For the flotations and the press conferences. When yet another of his businesses fails or loses money you won’t see Branson for dust, he’ll be over in Necker.”
ABF
A raft of store openings and a strong performance on the Continent drove up total sales at Primark over Christmas. Sales jumped 4.5% in the 16 weeks to Jan 4 compared to a year earlier, partly due to a marked upturn in its Eurozone market. Trading was particularly good over November and December, the chain’s owner Associated British Foods (ABF) said, although there was an expected squeeze on profits amid a blizzard of price cuts across the high street. But in the UK there was a small decline in like-for-like sales, which strip out the impact of new store openings and are seen as a better measure of true health. Britain is Primark’s most important market. John Bason, ABF’s finance director, said he was pleased with trading in the quarter. He added that Primark had a “sensational” Christmas period.
CCR
The boss of Magners cider owner C&C Group (CCR) has stepped down with immediate effect after revealing plans to leave the business. Stephen Glancey, 59, who has been chief executive of the drinks firm since 2012, will leave next month following a handover period with chairman Stewart Gilliland taking on an executive position in the interim. Mr Glancey joined C&C Group as chief operating officer in 2009 and has been a board member since 2008. It is thought he plans to retire from executive roles permanently following his departure.
HFD
A surge in demand for bicycles and scooters drove Halfords Group (HFD) sales higher over the festive period. The company built 86,000 bikes for pick-up in the week before Christmas and reported a 1.3% increase in like-for-like sales, which strip out new stores, for the 14 weeks to Jan 3. This increase was mostly down to its cycling business, up almost 6pc, but offset by motoring, which fell 2.7%. Electric scooters were particularly popular, as well as custom bikes where buyers build their own model from a range of parts. The retailer is trying to offer more services such as MOTs under chief executive Graham Stapleton and not rely as heavily on product sales.
RICA
Questor: ready for both fear and greed – why this ‘wealth preservation’ trust is a hold. Questor investment trust bargain: Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) has made minimal gains since we tipped it in 2016 but should come into its own if markets implode
RMG
Questor: our Royal Mail (RMG) replacement is a more resilient business and has better scope for dividend rises. Questor Income Portfolio: a firm that offers a perennially popular form of family entertainment is a better bet than a delivery business struggling to reinvent itself​
HFD
Booming sales of electric bikes in the run-up to Christmas have helped Halfords Group (HFD) stick to its full-year profit guidance. The car equipment and bicycle retailer said it sold 96% more electric bikes in the 14 weeks to January 3 than the same time last year, and that one in five bikes and scooters sold are electric. Chief executive Graham Stapleton said the rise in sales was powered by customers’ efforts to be more environmentally friendly, as electric bikes are a greener way to travel short distances than diesel cars or motorbikes. Stapleton said: ‘Customers are responding to what they’re seeing on climate. ‘There’s just no doubt that electric is now here – it’s no longer an emergent small trend. It’s becoming a very significant part of our business in both cars and bikes.’ Older customers who wanted to return to cycling were also boosting sales of electric bikes, Stapleton added.
PSON
Pearson (PSON) is fighting for its place on the FTSE 100 after a bleak warning about its prospects sent shares tumbling. More than £411million was wiped off the publisher’s market value yesterday as the company, once a titan of the business world which now sells text books, said profits for 2019 would total around £590million. This was at the lower end of its September guidance, of £590 million to £640million. Pearson added that profits in 2020 were likely to fall to between £500million and £580million. The rout has left Pearson, formerly owner of publishers Ladybird and Penguin, with a market value of just £4.4billion – right at the bottom of Britain’s blue-chip index.
RYA
FLYB
EZJ
IAG
Ryanair Holdings (RYA) boss Michael O’Leary has threatened to sue the Government over its £106million plan to bailout struggling airline Flybe Group (FLYB). Mr O’Leary said Ryanair, easyJet (EZJ) and other budget airlines could ‘step in’ to cover routes to regional destinations including Exeter and Southampton if Flybe goes bust. He said the Government’s multi-million pound plan to rescue the air carrier ‘breaches state aid and competition law’ before branding it a ‘nasty cover up’. Describing Flybe as a ‘subsidised billionaire boys club’ he urged Chancellor Sajid Javid to give Ryanair and other rival airlines the same tax holidays as them. The Government’s plan has been met with staunch opposition from other UK airlines, with British Airways submitting a formal complaint to the EU’s competition watchdog over what it calls a ‘blatant misuse of public funds’. BA’s owners International Consolidated Airlines Group SA (CDI) (IAG) today wrote to the Government accusing it of a ‘lack of transparency’ and asking for further details on the deal. Whatever the outcome of IAG’s complaint to the EU Directorate-General for Competition, officials in Brussels could use the Flybe crisis to their advantage in post-Brexit trade talks, according to The Telegraph.
WRKS
TheWorks.co.uk plc (WRKS) boss has stepped down after nearly nine years at the helm – just two months after a shock profit warning sent its shares tumbling. The retailer said chief executive Kevin Keaney has been replaced by chief financial officer Gavin Peck. Shares soared as investors welcomed the change at the top and the group’s Christmas update showed like-for-like sales growth of 1.5% over the crucial trading weeks. Interim results on Thursday showed underlying pre-tax losses at The Works more than doubling to £8million in the 26 weeks to October 27 from £4.4million a year earlier.

BWNG
Shares in Brown (N.) Group (BWNG) have dropped over 20% after the group issued a profit warning. Blaming a ‘highly promotional’ retail market and less money coming through from shoppers via credit revenues, N Brown said it now expects its annual pre-tax profit to come in between £70million and £72million, against previous estimates of between £78million and £84.1million. Worse still, N Brown said it even expects profits for the year after to now come in at a similar level to this year. Steve Johnson, chief executive officer of N Brown, said: ‘This has been an encouraging period of peak trading for the business in a highly promotional market, as we delivered digital revenue growth across both womenswear and menswear with particularly strong digital growth from Simply Be and Ambrose Wilson as customers responded well to our ranges. ‘Financial services revenue was down, reflective of our strategic approach to the retail business and continued tightening of our lending criteria. ‘Our expectations remain that the retail market will continue to be challenging and promotional, but we are focused on our clear strategy of delivering profitable digital growth.’
LEK
A company that claimed to represent Qatar’s huge sovereign wealth fund may have been struck off at the time it allegedly duped a Nigerian oil firm, it has emerged. Seawave Invest, which calls itself an ‘independent consultancy firm’ specialising in Africa, received a consultancy fee from petroleum company Lekoil Ltd (DI) (LEK) in return for a $184million (£142million) loan agreement from the Qatari Investment Authority (QIA). But Lekoil said on Monday that the Bahamian-registered firm had deceived it after the QIA said no such loan exists. Now, the PA news agency reports that Seawave Invest might have had its business licence revoked before the deal was announced on January 2 this year.
ABF
Primark suffered a dip in same-store UK sales in the last quarter, its owner Associated British Foods (ABF) revealed in a trading update today. But, taking into account new store openings, Primark’s UK operations actually saw sales rise 4% in the 16 weeks to 4 January. With this is mind, Primark is poised to open 18 new shops in the current financial year, including its first outlet in Slovenia and a second store in Poland. The fashion retailer’s owner gave no actual figure for the fall in like-for-like UK sales dip, which is a measure of business recorded by the same number of stores a year ago. But, Primark said it saw ‘particularly good’ trading over November and December in the UK. On the back of this, the group said it ‘delivered a further increase in share of the total clothing, footwear and accessories market.’ Primark is one of the few retailers sticking to its bricks-and-mortar roots, and plans to continue expanding its store portfolio to give shoppers cheap and fast fashion.
WTB
Whitbread (WTB) has been hit by a fall in trade at its regional hotels. Total like-for-like sales at the leisure and hospitality firm fell by 1.3% in the 13 weeks to November 28, as it expects its losses in Germany to be around £10million next year. Another 20 hotels comprising 4,500 rooms across the UK, Ireland and Germany, are planning to open in the coming year, although Whitbread says that higher national living wage and utility costs will negatively impact its margins. The Beefeater and Brewers Fayre operator says that despite the ‘uncertain’ political and economic environment in the UK, it remains optimistic of its future performance. They write: ‘Whitbread’s strong balance sheet, efficiency programme, resilient business model and ongoing investment puts it in a strong relative position to benefit as the environment improves.
The popularity of online stories about presenters Ant and Dec and the royal family have boosted profits at the owner of celebrity news site Entertainment Daily. , which also owns satirical news site The Daily Mash, said its 2019 profits would be ahead of expectations after the number of those clicking on Entertainment Daily stories from Google searches grew by 127%. The Daily Mash’s audience levels also rose 15%.
WG.
Wood Group (John) (WG.) shares surged after it said 2019 profits would be well ahead of the previous year’s figures and that it is making solid progress paying down its debt pile. It now expects to bring in up to £658million, up from £531million, though this was below a company-compiled forecast of about £661million and revenue is expected to fall from the previous year. Investors warmly welcomed the news that it has trimmed net debt – which had been mounting since its £2.2billion takeover of smaller rival Amec Foster Wheeler in 2017 – down from £1.4billion at the end of June to £1.1billion.
RNK
Rank Group (RNK) was also on the up as it bet on profits being higher than expected in the year to the end of June. The Mecca Bingo-owner reckons it will make as much as £115million, up from an earlier estimate of £103million.
 
KIE
Kier Group (KIE) released a reassuringly mundane update that said trading was ticking along as normal and it is still progressing with plans to cut costs, dispose of its housebuilding business and working out what to do with another property division.
PSON
Lombard – Pearson (PSON) failings must be consigned to the history books. Publishing group has suffered from management and strategic mis-steps
RYA
FLYB
Ryanair Holdings (RYA) O’Leary wades into Flybe Group (FLYB) debate. Part-owner Stobart says EU delays contributed to need for airline’s rescue
WG.
Lex – Wood Group (John) (WG.): sun worshipper. Investors will be rewarded if the company can reinvent itself
WTB
Whitbread (WTB) hobbled by UK uncertainty. Premier Inn owner blames higher costs and weak confidence outside London as room sales fall
ABF
Associated British Foods (ABF) – Primark sales rise helped by US growth and German overhaul. UK market suffers small decline but total revenues climb on new store openings
LEK
Consultancy Seawave investigating Lekoil Ltd (DI) (LEK) loan scandal. Bahamas-based group accused of helping to arrange a $184m loan that proved fake
HFD
Halfords Group (HFD) bolstered by boom in electric cycles and scooters. E-bike sales almost double in third quarter to keep retailer on track after three warnings
PSON
Pearson (PSON) warns of profit fall as leadership contender quits. Educational publisher’s finance chief to follow chief John Fallon out the door
HAS
Hays (HAS) warns on profit as economic uncertainty stifles recruitment. Group disrupted by events ranging from the Australian bushfires to UK election
RYA
FLYB
Ryanair Holdings (RYA) has demanded that the government extend any “tax holiday” granted to Flybe Group (FLYB) to other airlines or be in breach of competition and state aid laws. In the growing industry backlash against the rescue of the regional carrier, the Dublin-based airline said that it had written to the chancellor, Sajid Javid, to request the same treatment as Flybe’s “billionaire owners” – who include Sir Richard Branson and Delta Airlines. Ryanair’s chief executive, Michael O’Leary, warned that Flybe would “undoubtedly fail once the subsidy ends”. The details of the rescue agreement have been kept under wraps since Tuesday evening, when ministers led by Javid announced that Flybe had been saved. The package is understood to involve the short-term deferral of an outstanding air passenger duty (APD) tax bill of £106m, a possible loan, and the promise to review APD levels before the March budget.
MOSB
BWNG
MKS
ABF
Sales at Primark’s UK stores went backwards at Christmas in a further sign of the toll taken on fashion retailers by grim market conditions over the traditionally lucrative trading period. The no-frills fashion chain suffered a “marginal” decline in underlying sales and said it would open only one store in the UK this year – the lowest number in decades – as it turns its financial firepower overseas in search of growth. The Primark update came as high-street suits specialist Moss Bros Group (MOSB) said it would make a loss of £1m in the current financial year. The chief executive, Brian Brick, said “intensive discounting” by rivals and a big dip in shopper numbers on the high street were behind a 3.2% drop in like-for-like sales in the 24 weeks to 11 January.  The plus-sized online specialist Brown (N.) Group (BWNG), which owns Simply Be and JD Williams, also blamed wall-to-wall discounting in December alongside problems in its finance arm for a profit warning that knocked nearly 25% off its shares. Its sales finished 5% down in the 18 weeks to 4 January, a performance that shaved £10m off pre-tax profits, which are expected to come in at £71m. Many retailers, including big high-street names such as John Lewis and Marks & Spencer Group (MKS), struggled to get shoppers to part with their cash in 2019 as political instability and worries over Brexit weighed on consumer confidence. Many retailers resorted to price cuts, and last week Steve Rowe, the chief executive of M&S, complained of “unprecedented discounting” between Black Friday and Christmas. Analysts said Primark fared better than other UK clothing chains, with sales at established UK stores down by about 0.5% compared with a drop of as much as 2% across the market in the 16 weeks to 4 January. John Bason, finance director at Primark’s owner, Associated British Foods (ABF), said the retailer had won business from rivals with its low prices.
HFD
Halfords Group (HFD) enjoyed a surge in bicycle and scooter sales over the Christmas period, bolstered by the popularity of electric models and its partnerships with Disney and Trunki, with a record number of children’s bikes sold. The UK’s biggest bike retailer said sales of electric bikes and scooters jumped 96% year-on-year in the 14 weeks to 3 January. They now make up 13-14% of total sales. Overall bike and scooter sales rose 5.9% at established stores. Halfords built 86,000 bikes in the week before Christmas alone. The firm developed a new range of Trunki folding children’s scooters and balance bikes and launched 48 children’s’ bike models overall in the past quarter. The popularity of cycling has soared in Britain in recent years. Graham Stapleton, the Halfords chief executive, said: “People want to get healthier. People are looking for alternative modes of transport with the climate on their minds.”
Donald Trump has signed the first phase of a new trade agreement with China after two years of tension between the two superpowers that have rattled economies around the world. Trump said: “Today, we are taking a momentous step towards a future of fair and reciprocal trade. Together we are righting the wrong of the past.” “At long last Americans have a government that puts them first at the negotiating table,” he said. “This is the biggest deal anybody has ever seen.” Trump and China’s chief trade negotiator, Liu He, signed the deal at a packed press conference, attended by Ivanka Trump, much of Trump’s cabinet, Henry Kissinger, and media and business leaders including Stephen Schwarzman, the chairman of Blackstone, and Ajay Banga, the president of Mastercard. The signing came hours after Democrats named the team that will prosecute Trump in an impeachment trial that starts early next week.
GRG
JE.
Greggs (GRG) has partnered up with Just Eat (JE.) to offer home delivery across the UK after a successful trial last year. The bakery firm said it would begin making deliveries in Bristol and Birmingham this week and continue its expansion in London, Newcastle and Glasgow, where there were trials with a variety of delivery firms, including Deliveroo and Uber Eats as well as Just Eat. Deliveries are expected to kick off in Manchester, Leeds, Sheffield and Nottingham in the spring, with a plan to achieve national coverage by the end of the year. Greggs and Just Eat will choose future destinations for expansion depending on customer demand. Customers can vote for their local area to receive delivery and the rollout plans will be reviewed every few months based on the poll.
PSN
Sales at Persimmon (PSN) have fallen as the housebuilder scrambles to improve build quality and restore its tarnished reputation, after a barrage of criticism over its poorly built homes and huge executive payouts. After a deluge of complaints from customers, the company commissioned an independent review last year. The report, which was published a month ago, accused Persimmon of a “systemic nationwide failure” to install fire-stopping cavity barriers that left customers exposed to an “intolerable” fire risk. The damning review said the failure to meet minimum building standards was “a manifestation of poor culture” at the firm. Persimmon completed 15,855 homes last year, down 4% from the previous year when it built 16,449 and made an annual profit of £1.09bn – the biggest ever reported by a UK housebuilder. Revenues fell 2.4% to £3.65bn in 2019, and City analysts are forecasting a small drop in pre-tax profits to £1.04bn. At that level of profit the firm is still making nearly £66,000 on every home it builds. The firm’s forward sales were down 3% to £1.4m at the end of the year.
LEK
Seawave boss says it will address Lekoil Ltd (DI) (LEK) loan scandal. Bahamas-based group is alleged to have been paid $600,00 for brokering a loan that proved fake
PSN
VTY
UK housebuilders optimistic but quality concerns linger. Persimmon (PSN) and Vistry Group PLC (VTY) to continue focus on customer satisfaction
GRG
JE.
Greggs (GRG) deal with Just Eat (JE.) heats up UK delivery wars. Boost for British app in battle with Uber Eats and Deliveroo for exclusive restaurant tie-ups
TLW
Tullow Oil (TLW) set for $1.5bn hit after cutting oil price forecast. Explorer’s writedown warning follows repeated cuts to production outlook
TLW
Tullow Oil (TLW) shares dropped although the trading update had few real surprises sent it plunging into the red. Scrapped exploration projects, a lower assumption about what oil prices will be in the long term and a re-evaluation of how much oil is at some of its sites in Ghana mean it will take a one-off hit of £1.2billion in its 2019 results. It has also had to suspend a pilot project in Kenya because heavy rain at the end of the year destroyed roads that led up to it. The £1.2billion blow comes after a horrific year for Tullow, when its shares lost almost two-thirds of their value, a vaunted discovery off the coast of South America turned out to be a dud and chief executive Paul McDade made a hasty exit. But, as Bank of America put it, this was an update with ‘no new shocks’. SP Angel analysts believe the £1.2billion write-down ‘will have been expected’, but that the massive drop in its share price could now make it a takeover target.
PFG
Provident Financial (PFG) made a sharp move after putting out an update that leaves the bigger picture little changed. It traded in line with its own forecasts in the three months to December and still expects full-year profits to be the same – as a strong performance in its credit card subsidiary Vanquis was cancelled out by impairments at its car finance division Moneybarn.
AML
Aston Martin Holdings (AML) managed to shake off a downbeat broker note from analysts at Jefferies, who said the luxury car maker will need to raise ‘at least’ £400million of new cash.
CPI
Goldman Sachs took a shine to Capita (CPI), adding it to its ‘Conviction List’ and raising its price target to 240p from 200p. Capita’s shares rose to 172.45p, as analysts at the US investment bank said the risk has been taken out of the outsourcer since Boris Johnson’s landslide election victory last month.
RBS
Royal Bank of Scotland Group (RBS) fell after Barclays brokers downgraded their rating on its stock to ‘underweight’ and warned the restructuring of its Natwest Markets and Ulster arms will require patience from investors.
 
 
IRR
Top-notch results from early tests of a gold project in the Ivory Coast sent shares in IronRidge Resources Limited (DI) (IRR) up to 11.75p. The AIM-listed exploration firm, which is based in Australia, said the ‘exceptional’ data from the Zaranou site indicates a lot of high-quality gold. The area borders Ghana and is close to several other mines run by companies such as Newmont Mining. Ironridge plans to do more drilling when it has reviewed the results in more detail.
EMAN
Everyman Media Group (EMAN) raked in record revenues and profits last year as film fans flocked to see hits such as Knives Out, Vice and Green Book. Blockbusters including Joker and The Lion King also drew in crowds, but Everyman said it was the less well publicised and independent movies that boosted business. Profits rose 30% to £12million in the 52 weeks to January 2, the group said in a trading update. Revenues jumped 25% to £65million – which included sales from seven new cinemas that opened in 2019.
GRG
JE.
Greggs (GRG) has joined forces with Just Eat (JE.) as it prepares to expand its home delivery service nationwide following a successful trial. The bakery chain’s decision is a coup for the takeaway app after Greggs tested it alongside rival Deliveroo in several cities last year. Greggs said that it had decided to work exclusively with Just Eat and will begin to roll out delivery this week, launching first in Bristol and Birmingham. The service will be expanded in the spring to include Manchester, Leeds, Sheffield and Nottingham, with a plan to achieve national coverage by the end of the year. Greggs chief executive Roger Whiteside said: ‘We know from the trials we have carried out that our customers love the idea that they can get Greggs delivered directly to their door.’
PSN
Persimmon (PSN) has reported a fall in revenues for 2019 after being beset by scandals over poor housing quality. The company completed about 600 fewer homes last year, with housing revenues falling by 3.5% to £3.42billion, as controversy wracked the firm. Persimmon wrote that the revenue decline ‘reflects the action being taken to ensure the Group delivers improved levels of quality and service to its customers.’ Its new-build homes only sold for an average £137 more than they did last year, at a price of £215,700, with the firm’s Westbury Partnerships division comprising a greater share of its sales. Group chief executive Dave Jenkinson commented: ‘While our plans for delivering a sustained improvement in quality go far beyond a focus on the criteria of the HBF customer satisfaction survey, our current rating, which is trending strongly ahead of the Four Star threshold, is tangible evidence of the improvement we are making.’
VTY
Vistry Group PLC (VTY) says it expects to report record profits this year. The Kent-headquartered firm believe pre-tax profits will rise above market expectations of £181.6million for the year, compared to £168.1million last year. The company recently changed its name after completing the acquisition of Galliford Try PLC businesses, including Linden Homes for £1.14billion. Vistry completed 3,867 homes – up 108 on the year before – in the 12 months to December 31, with the average selling price rising from £273,200 to £279,000. The average selling price of private houses rose to £341,000 from £337,400. It added that uncertainty arising from the general election and Brexit impacted on sales, with the cost of new homes decreasing between 1 and 2% in the last six months of the year.
QUIZ
Quiz (QUIZ) has seen its share price fall sharply after becoming the latest casualty of sluggish sales over Christmas. While the group fared fairly well over the Black Friday period, in the seven weeks to 4 January sales ‘softened’ and revenue slipped over 9%. Online sales fell 14.8% over the period, with the group blaming its termination of a string of deals enabling it to sell its goods via certain third party websites. The chain bemoaned falling footfall at its in-store and concession sites over the last year, revealing that sales at its bricks-and-mortar outlets fell by 7% over Christmas. Quiz websites saw revenues rise 5.9% over the period, driven by a rise in full-price sales as the company cut its promotions against the previous year.
RBG
Revolution Bars Group (RBG) says its locations raked in more than £65,000 each on average over the Christmas holidays. The Revolucion de Cuba brand operator saw both higher half-year and Christmas trading revenues last year as the firm closed three poorly performing bars and focused on improving their existing estate. Revolution reported earning £81.2million in revenue for the six months to 28 December, a £2.7million increases on the first half as well as a like-for-like sales increase of 1.2% in the four weeks to New Year’s Eve. This is the seventh year in which the Revolution Bars Group saw greater sales in the festive trading period. It now expects its full-year underlying earnings to ‘have improved in line with market expectations.’
GRG
JE.
Greggs (GRG) sausage rolls are to be delivered to homes across Britain after the bakery chain struck a deal with takeaway company Just Eat (JE.). The delivery service is launching in Birmingham and Bristol this week, before expanding to Manchester, Leeds, Sheffield and Nottingham during the spring. Bakery chain Greggs – which has enjoyed surging popularity after it launched a vegan sausage roll last year – narrowed its choice of partner down to three contenders over a series of trials in London, Newcastle and Glasgow before choosing Just Eat. The companies said they hoped to go nationwide by the end of 2020. Customers will be able to order the chain’s bakery goods, breakfast products and sandwiches via Just Eat’s app, as the delivery chain expands beyond the takeaway restaurants that have long been its core offering.
QUIZ
Quiz (QUIZ) has unveiled dire sales over Christmas, triggering a share price plunge which means the stock has dropped 90% since it floated in July 2017. Revenue in the seven weeks to Jan 4 was 9.3% lower than a year earlier, driven by a 14.8% decline in online sales. Shares dropped a further 17.4% on Wednesday to 15.5p. The stock was floated two and a half years ago for 161p, in a listing which netted a £92m cash pay-out for backers including founder and chief executive Tarak Ramzan. The update is a fresh blow for Mr Ramzan, who last month vowed to boost shares. Mr Ramzan said: “While the trading backdrop remains challenging, it is disappointing to report a decline in revenues in the period.”
PSN
Sales at Britain’s second-largest housebuilder Persimmon (PSN) dropped last year following a storm of criticism about shoddy workmanship. The developer said a 2.4% fall in revenue to £3.7bn was driven by a decision to slow down building work and boost quality, after a devastating independent report highlighted fire safety issues and a host of other problems with its properties. The number of houses sold in 2019 was also 4% lower than a year earlier. The average selling price rose just £137, to £215,700. The trading update comes after months of criticism of the property giant over the state of its homes, culminating last in December when the scathing report found a toxic culture meant it was failing to meet minimum building standards.
FERG
Questor: plumbing giant Ferguson (FERG) sprang a major leak 14 years ago but today it is much more resilient. Buy. Questor share tip: a rocky time for the plumbing supplies company prompted new management to transform the business for the better
TLW
Tullow Oil (TLW) has warned that it expects to book a $1.5 billion write-down due to lower prices and exploration failures. The group was plunged into turmoil last month when it fired its chief executive and suspended its dividend following repeated exploration and production disappointments. Tullow said yesterday that it would delay publication of its full-year results by a month to give it more time to conduct a sweeping review of the business to cut costs and improve efficiency. It said the pre-tax impairment charge primarily reflected its decision to reduce its long-term oil price assumption to $65 a barrel, from $75, as well as a reduction in the estimated reserves of its Ten field off Ghana. It had also written off the costs of drilling wells off Guyana, where it struck oil last year. It initially described the find as a “transformational opportunity” but later admitted it would be hard to produce and may not be commercially viable.
QUIZ
Quiz (QUIZ) announced another drop in sales. The fashion chain, which has 73 shops and 170 concessions, revealed a 9.3% fall in sales over the seven weeks to January 4. That, in turn, pushed the shares down to 15½p, meaning that the company has lost more than 90% of its value since being floated on the stock market two and a half years ago. The retailer, which issued three profit warnings last year, said that trading had “softened” since Black Friday. Sales at its shops fell by 7% during the period, while online sales were down by 14.8% after Quiz severed ties with third-party websites, having decided that they were unprofitable. The group reassured investors that it had a “strong” balance sheet with a £10.7 million net cash position.
VTY
Vistry Group PLC (VTY) said yesterday that it was set to report record annual profits. Vistry said that it expected to deliver annual profit slightly ahead of a previous forecast of £186.1 million after selling more homes and benefiting from lower costs. In a year-end trading update, the company said that home sales in 2019 had risen by 3% on 2018’s total to 3,867. Building cost savings and a lack of cost inflation helped to improve its operating margin. The average selling price of its homes was £279,000, up from £273,200 a year earlier. “We have a strong forward sales position and trading has been very positive, with consumer confidence returning and industry fundamentals remaining strong,” Vistry said. It expects to report a net cash balance of £362 million, up from £126.8 million a year earlier. That includes the proceeds of a £150 million placing in November to raise funds for the acquisition of Galliford’s housing division.
PSN
Persimmon (PSN) said yesterday that it was about to break the £1bn profit again, despite additional spending on building quality and customer service. The company, which became the first housebuilder to break the billion-pound profit barrier in February 2019, said that it expected to report pre-tax profits in line with the market consensus of £1.04 billion, down from £1.09 billion a year earier. The new-build housing market remained buoyant last year, with cheap mortgages and the government’s Help to Buy scheme supporting purchases. Taylor Wimpey, a rival housebuilder, said on Tuesday that it had sold a record number of homes last year and at higher prices, with consumer sentiment “surprisingly robust”. Persimmon said that it was selling homes at a later stage of construction to improve quality and customer service. A £1.5 million review of its operations, commissioned by the company last year, criticised a corporate culture that had resulted in “poor workmanship” and “potentially unsafe” homes.
AML
Aston Martin Holdings (AML) needs a cash injection of “at least” £400 million and even that may not be enough to ensure its sustained profitability according to analysts at Jefferies, who claimed yesterday that potential investors should be looking for the British carmaker to complete a “transformational deal” rather than a mere fundraising. Bosses have already confirmed that they are in talks with possible backers, amid speculation that Lawrence Stroll, the Formula One motor racing billionaire, Geely, which owns the Lotus and Volvo car brands, and CATL, the Chinese battery manufacturer, are all considering an investment. As for other potential investors or buyers, analysts reckon there’s little chance of any of the industry giants getting involved, apart from — possibly — Daimler, which supplies engines to Aston Martin.
RBS
Royal Bank of Scotland Group (RBS) shares slid after Barclays warned that the stock could nearly halve in value this year. Analysts there think that pressure on net interest margins has been “underappreciated” by investors, particularly if the Bank of England goes ahead and cuts interest rates this month. There is also Brexit. The number-crunchers think that the risk of no-deal is yet to be eliminated and could lead to a “material de-rating” of RBS’s shares.
 
was hammered after it raised £12 million by selling shares at a 49% discount to Tuesday’s closing price. Its shares fell 42½p to 46½p. At the beginning of the year they were changing hands for 115½p.
CLG
Clipper Logistics (CLG) drops plan to go private. The decision to abandon plans by its founder to take a delivery group private led to a fall of more than 5% in its shares yesterday. Sun Capital confirmed yesterday that it would not make a formal bid after it had failed to agree a price with Clipper’s board. Clipper, which makes deliveries for retailers such as Asos and John Lewis, said that it had spoken to several shareholders about a valuation, but that Sun could not match their price. “Consequently, both sides agreed to terminate discussions,” Clipper said in a stock exchange statement. Under UK takeover rules, Sun and Mr Parkin cannot reopen talks for six months unless another suitor comes forward. Mr Parkin, 59, owns a third of the company after its flotation in London five years ago, from which he made £30 million.
HIK
Tempus – Hikma Pharmaceuticals (HIK): Avoid. Outlook is uncertain but growth likely to be muted and yield is not justified by price
SXS
Tempus – Spectris (SXS): Hold. It has been prepared for growth and needs to deliver