Press | Vox Markets
RYA
Ryanair warns of Brexit risks as fare price war buffets profit. Ryanair Holdings (RYA) issued a second profit warning in less than four months on Friday after a winter air fare price war and overcapacity in the market took their toll. Outspoken chief executive Michael O’Leary admitted cutting prices to stay competitive had hurt the budget airline. Fares had been expected to fall 2% on last year over winter but are likely to be down 7%. It is currently offering flights to Spain from London for just £9.98. The airline, which has been grappling with strikes, lowered its full-year forecasts to a range of between €1 billion and €1.1 billion. That is down from between €1.1 billion and €1.2 billion. O’Leary said Ryanair cannot rule out further price cuts or another downgrade “if there are unexpected Brexit or security developments which adversely impact yields between now and the end of March”. He added there is short-haul overcapacity in Europe this winter.
MGR
‘Nimble’ Miton doubles up as it pulls in £1bn of savers’ money. Fund manager Miton Group (MGR) attracted a record £1 billion from savers last year after financial advisers started to divert more cash to more “nimble” stockpickers. The boutique firm, which is shunning the sector’s merger fever, said net inflows rose 106% from £494 million due to the strong performance of its funds. “Financial advisers and discretionary managers who buy our funds really do like active funds that help them manage their client portfolios in performance terms, but also do something different,” said chief executive David Barron. “You’ve got to have a model of scale where you go for very large assets and big scalable funds, or you’ve got to be more active and specialist and nimble like us.”
BBY
Canadian investor Realstar on Friday ignored Brexit jitters in the residential market, and revealed it has agreed to create £200 million of new rental homes in London. It has just inked a deal with Balfour Beatty (BBY) and housing association Places for People to acquire a plot by the Olympic Park in Stratford. It will also fund a project being built by FTSE 250 business Redrow in Southall, west London. Realstar will build more than 300 homes on the sites, and the Southall project will be run by its new residential brand called Uncle. The firm’s UK boss Ryan Prince said he wants to “aggressively” grow Uncle, which aims to create high-quality rental homes, filled with Made.com furniture, free on-site gyms, and no-letting fees to estate agents. At present there are around 2000 existing or under construction Uncle flats, mostly in London.
Shoppers ignore panic price cuts. Retailers are cutting prices at the fastest rate in almost two years as nervous shoppers rein in spending, official figures revealed on Friday. The Office for National Statistics’ latest figures on the crucial month of December showed an overall 0.9% drop in retail sales, while annual sales growth also slowed. While some sales were pulled forward to November by Black Friday promotions, December’s slide came despite desperate price cutting. The ONS’s annual sales deflator, its measure of how much prices have gone up or down in the past year, fell to 0.4%, the lowest since January 2017. The biggest price-cutters were clothing and retail stores, where prices fell 0.5% on a year earlier.
Tesla to cut more than 3,000 jobs because cars ‘still too expensive’. Elon Musk says he has no choice but to reduce electric car manufacturer’s headcount. Tesla is cutting more than 3,000 jobs, or 7% of its workforce, after experiencing a year its founder, Elon Musk, said was both its most challenging and most successful. The chief executive of the electric car manufacturer told staff on Friday that “the road ahead is very difficult” because its products were not yet affordable for most people and it was up against a big incumbent industry. The California-based company had a torrid 2018 as it struggled through production problems with its mass market” Model 3 car and had to pay out $40m over tweets Musk made about taking the firm into private ownership. Musk said it had also been a good year because Tesla had sold almost as many cars in 2018 as it had in its entire history and the firm had made its first profit.
Scottish shopping centre up for sale with reserve price of £1. Plight of the Postings in Kirkcaldy shows crisis facing bricks-and-mortar retailers. It’s the kind of price tag usually associated with discount stores such as Poundland, but an entire Scottish shopping centre is to go under the hammer with a reserve price of just £1. The Postings mall in Kirkcaldy, in which 14 of the 21 shops currently lie empty, is being auctioned by its City pension fund owner next month, according to the auctioneer’s website. That a shopping centre could change hands for less than the cost of a short stay in its rooftop car park underlines the current high street crisis. While locals may worry about the growing number of empty stores in their town centre, the other side of the coin is the devastating impact on retail property values. When it opened in 1981 the Postings, which cost £4.25m to build, promised to be a magnet for shoppers. Each store opening prompted local news, with 1980s TV celebrity and Generation Game presenter Isla St Clair even dropping in to cut the ribbon at the William Low store (a supermarket chain bought by Tesco in 1994) when it opened.
RYA
Ryanair issues profit warning as winter fares fall. Lower-fare environment will shake out more loss-making rivals, says Michael O’Leary. Ryanair Holdings (RYA) has issued its second profit warning in four months, blaming intense competition over the winter that prompted the Irish budget airline to cut fares. Profits for the year ending 31 March will be €100m (£88m) lower than previous expectations, at between €1bn to €1.1bn, the company said in a statement to the stock market. That was down from the €1.1bn to €1.2bn range previously expected. Ryanair’s chief executive, Michael O’Leary, said he was disappointed to cut the company’s profit guidance and said the airline could be forced to further reduce fares and guidance. “We cannot rule out further cuts to air fares and/or slightly lower full-year guidance if there are unexpected Brexit or security developments which adversely impact yields between now and the end of March.” Ryanair shares fell 5% after the profit warning, which was the result of lower than expected air fares in the second half of the company’s financial year, which includes the Christmas holiday period. Average fares from November onwards fell by 7%, considerably lower than the 2% fall the company had expected.
DEB
Debenhams rating cut raises fears of creditors going unpaid. Moody’s downgrade adds to department store chain’s debt refinancing worries. The credit agency Moody’s has said Debenhams (DEB) will struggle to refinance its debts without raising new funds from shareholders as it warned creditors of a higher risk they would not be paid back by the retailer. The department store chain, which last week said it had net debt of £286m, is battling to reach a new deal with its banks this month after a difficult Christmas capped off a lacklustre 2018 during which it issued three profit warnings. In a note explaining its decision to cut Debenhams’ credit outlook to negative from stable, which will make it harder for the company to borrow money, Moody’s said the action by two key shareholders after a dive in the company’s share price was a mark of dissatisfaction among investors that could hinder access to fresh capital. It added that the purchase of House of Fraser out of administration by Sports Direct had only ramped up pressure on Debenhams because it had resulted in the rival chain’s stores continuing to trade with heavy discounts. “Today’s change in outlook reflects our view that there is a risk that refinancing negotiations may not result in a timely and cost-effective solution and thus the process could ultimately culminate in losses for financial creditors,” said David Beadle, a Moody’s vice-president.
ITV
ITV shares fall as broadcasters are warned not to underestimate Netflix. The market underappreciates the pace of the decline in TV consumption, say analysts. Shares in ITV (ITV) fell by nearly 6% on Thursday after investors took fright at a report warning that the market is underestimating the decline of traditional TV viewing and the disruptive impact of of services such as Netflix and YouTube. ITV was the biggest faller in the FTSE 100 by late afternoon trading – down 5.9% at 129p – following a bleak assessment of the prospects of traditional TV broadcasters by analysts at Bank of America Merrill Lynch. “We think the market underappreciates the pace of the decline in TV consumption and concurrent rise of online video,” the note on European TV companies said. “The UK is the European TV market most ripe for disruption and where we expect the share of TV to fall first.” The report says that while Britons still watch more than three hours of TV a day, its “edge is eroding quickly”, especially among the under-35s – or “digital natives” – whose traditional TV watching has declined by 30% since 2012. “TV is quickly losing its reach and scale advantage,” the note said. By 2020, digital natives will account for 50% of the labour force, making them invaluable targets for advertisers. They will only be light TV users, however.
RBS
RBS seeks to buy government shares worth up to £1.4bn. Bank hopes to obtain shareholder approval to purchase stake of up to 4.99%. Royal Bank of Scotland Group (RBS) is looking to buy up to £1.4bn worth of shares from the government as part of efforts to cut the publicly owned stake in the lender, following its 2008 bailout. The bank is seeking shareholder approval to buy a stake of up to 4.99% from the Treasury, in a move that would reduce the government holding from about 62.3% to 60.3%. Shares bought by RBS would be cancelled, resulting in a smaller cut in the government’s total stake because there would be fewer shares in circulation. The move follows months of speculation about how the bank will use its excess cash, having already spent £240m on its first shareholder dividend in a decade last October. About £150m of that total was pocketed by the Treasury.
UK retail sales slip in gloomy end to 2018. Fall in December turnover comes after Black Friday drove November rise
Spending on smartphones overtakes shopping centres. Nine out of 10 shoppers surveyed had bought from Amazon in the past year
WTB
Lombard – Will investors check out of Whitbread (WTB) after coffee deal? Chief Alison Brittain struggles with vacant rooms in UK and Germany
CAKE
Shareholder fears grow over future of Patisserie Holdings (CAKE). Café chain in urgent talks with lenders to extend financing deal beyond Friday deadline
Hitachi pullout throws UK nuclear policy into disarray. Falling cost of renewables adds to pressure for rethink of energy strategy
New radar can stop drones disrupting airports say experts. Scientists warn that UK airports have been slow in adopting new technologies
Scottish shopping centre’s £1 price tag sign of retail woes. Sites such as the Postings in Kirkcaldy are being sold as redevelopment opportunities
UK banks braced for slump in consumer borrowing. Survey shows greater gloom on credit card lending than during the financial crisis
Hitachi shelves new Welsh nuclear plant. Japanese company writes off $2.8bn and triggers questions on future of UK energy policy
ABF
Associated British Foods (ABF) – Primark defies wider retail gloom with strong Christmas. Low prices continue to draw consumers as chain presses on with overseas expansion
A bleak Christmas for retailers as shoppers do their gift hunting on Black Friday instead, report finds. Retail sales dropped in December as shoppers increasingly shifted spending to the Black Friday promotional period. Volumes fell by 0.9% on November as all sectors except food and fuel declined compared to the previous month, according to the Office for National Statistics (ONS). Annual sales growth inched higher to 2.7% compared with 2% in 2017, though this marked a slowdown compared to the post-recession peak of 4.7% seen in 2016.
RYA
Ryanair darkens clouds over ailing airline sector with another profit warning as the budget carrier is stung by lower prices over winter. Ryanair Holdings (RYA) has warned over profits for the second time in quick succession, triggering a spate of share price declines across the UK airline sector. The budget airline’s own shares dipped by nearly 3% to €9.75 after it said its profits for the year could be up to €200million lower than it previously thought. It expects earnings to now be somewhere between €1billion and €1.1billion, compared with a previous forecast that capped its earnings at €1.2billion. The Irish carrier blamed lower than expected airfares over the winter – a drop of 7% instead of the previously guided 2%, as well as tougher competition in Europe. As a further sting in the tail, Ryanair boss Michael O’Leary said he could not rule out further profit downgrades either, given the ongoing Brexit uncertainty.
ESL
Road haulier Eddie Stobart’s sales rise ahead of forecasts as it’s boosted by new contract wins. Eddie Stobart Logistics (ESL) saw sales race ahead last year as the road haulier was improved by new contract wins. The logistics firm reported a 35% rise in full-year revenue to £843 million in the 12 months to November 30, which is ahead of market expectations. The boost was driven by £162 million of new contracts across all its sectors, according to the company. Sales were up 18%, excluding contributions from its subsidiaries iForce, Speedy Freight and The Pallet Network (TPN). Underlying earnings for the period were broadly in line with market expectations. At period end the net debt was around £154 million, a rise from £109.5 million, representing working capital investment. The company said the increased investment is needed to support the ‘significant levels of sales increase’ and the added debt associated with the acquisition of TPN.
DC.
Poor mobile phone sales set to drag Dixons Carphone down again when it updates investors next week. Dixons Carphone (DC.) is expected to book another sales slump at its troubled mobile phone division when it reports on its third-quarter performance next week. City analysts forecast the retailer’s Carphone Warehouse outlets will post a 5% decline in like-for-like sales in the period, which includes Christmas. The Currys PC World owner’s shares were stung in December when it detailed mammoth write-downs on the value of Carphone, alongside a £200 million cost-cutting exercise.
SOPH
Sophos shares crash by a quarter on cyber security firm’s sales slowdown warning. Shares in British security software and hardware company Sophos Group (SOPH) tumbled on Friday after the firm warned that ‘subdued’ trading would spill into the fourth quarter. Shares tumbled more than 25% in morning trade to 282p following the company update. Warning that constant-currency billings for the full year would see a ‘modest decline’, FTSE 250-listed Sophos said the dry figures were dragged down by challenging comparatives last year.
ABF
Animal print skirts and faux sheepskin coats help Primark shine in the High Street’s Christmas gloom. Animal print skirts and faux sheepskin coats helped Primark shine in the High Street’s Christmas gloom. Sales at the bargain chain, which is owned by Associated British Foods (ABF) and sells its products online, climbed 1% in the UK in the 16 weeks to January 5. The figures were a relief for investors following an earlier warning that trading had been tough in November. ABF posted a 1% rise in revenues, sending shares up 152p, to 2330p. Sales across all of ABF’s divisions grew apart from in sugar, where they fell 14% as the business continued to suffer from the impact of lower prices across the EU. ABF is one of Britain’s biggest food producers with brands such as Ovaltine, Ryvita, Twinings and Jordans.
PFD
Premier Foods reports Christmas sales slip as ‘sweet treats’ stumble and firm stockpiles raw ingredients for Brexit. Premier Foods (PFD) saw its ‘sweet treat’ revenues fall by 6.9% in its third quarter, but has opted to maintain its full-year profit forecast. The Mr Kipling owner, maker of Bisto gravy and Oxo-cube saw its sales hampered by logistics issues, while oversupply dented overall sales in the third quarter. Non-branded sweet treat sales plunged by 20.7% in the quarter as the group pulled out of a number of lower margin seasonal and non-seasonal cake contracts. Premier Foods faced several issues in the quarter including higher inventory of Cadbury cake in the Australian supply chain, which pushed down international sales by 27%. In today’s trading update, the group reported a 2.2% drop in sales for the Christmas period, reflecting a decline in non-branded foods. Premier Foods confirmed it remains in talks over a potential sale of the Ambrosia brand and its factory in Lifton, Devon. It first revealed plans to offload Ambrosia in November in a bid to boost its performance and slash its £500million debt pile. But the firm said efforts to cut debts will be hampered by previously announced moves to stockpile raw ingredients ahead of Brexit.
ITV
Warning on future of advertising from a major investment bank sends television company ITV’s shares into the red. Adrien de Saint Hilaire at Bank of America Merrill Lynch said the fall in the number of viewers watching traditional TV channels, combined with the loss of advertising that this will bring, made broadcasters like ITV (ITV) look vulnerable. The likes of ITV are also having to spend increasing amounts of money to develop their online products – such as on-demand service ITV Hub – in the race to catch up with rivals including Netflix and Sky’s Now TV. Saint Hilaire added that TV watching is declining by 8% every year among the younger generation which was brought up surrounded by modern technology. These individuals will, by 2020, represent around 50% of the workforce and be the direct target audience of advertising.
SGE
Sage Group (SGE) climbed 32p, to 625p. It raked in £465m in revenue for the three months to December 31, a 7.6% increase on the same time a year before. Sage, which makes accounting software for businesses, has desperately been trying to improve its products and move from one-off sales to subscriptions to pull more money through the door. The shake-up saw chief executive Stephen Kelly abruptly depart last August. Steve Hare, Sage’s finance head, replaced him in November. Shortly after he took up the role, Hare dropped the firm’s medium-term revenue growth target of 10%. In the last three months of 2018, only Sage’s North American division delivered revenue growth above 10%. The UK and Ireland’s revenue growth was 5.9%, which Sage said indicated ‘strong signs of recovery’.
WG.
Wood Group (John) (WG.), which helps oil and gas businesses to build their rigs, weighed on the index as it slid 4.7%, or 26.4p, to 541.2p following a downgrade from a broker.
JE.
Shares in takeaway business Just Eat (JE.) rocketed as US investor The Capital Group Companies, one of the world’s oldest investment firms, ramped its stake up from 5.1% to 10%. The deal occurred on Tuesday and, taking Just Eat’s closing share price that day, would have cost Capital Group around £209m.
PFD
Super Noodle and Paxo owner Premier Foods (PFD) also crept higher as investors chewed over its update for the 13 weeks ending December 29. Sales of its Mr Kipling products were up 5%, which helped investors stomach a 2.2% decline in group sales as a warehousing and distribution reshuffle hit sales of unbranded sweet treats. Change was afoot elsewhere at Premier as finance head Alastair Murray was appointed temporary replacement for outgoing boss Gavin Darby until a permanent successor is found. Premier added it was still in talks with potential buyers for its Ambrosia custard and rice pudding brand.
PMP
Portmeirion Group (PMP), owner of the Royal Worcester and Pimpernel brands, jumped 6%, or 60p, to 1060p as it said 2018 revenue would be ahead of expectations, at a minimum of £89.2m. Sales in the UK, US and South Korea were credited with driving the strong performance, and the home fragrance business did particularly well.
RYA
Ryanair issues second profit warning in four months. Low-cost carrier Ryanair Holdings (RYA) has issued its second profit warning in four months blaming lower than expected air fares. It now expects full-year profits between €1bn and €1.1bn (£880m to £970m), down from its previous forecast of €1.1bn to €1.2bn. The Dublin-based airline said air fares are expected to fall 7% this winter, compared to a previous guidance of a 2% slump, adding that there was too much capacity in the short haul European air market. It expects traffic growth to increase 9% for the full year to 142m passengers, compared to the 141m it had anticipated. Michael O’Leary, chief executive, said he was “disappointed” with the profit revision.
Retail sales slide in December amid changing shopping habits. Retail sales fell 0.9% in December to a 19-month low in what is traditionally the most important month for the sector. The official figures capped a torrid year for the high street after reports of poor sales figures from major retailers. The Office for National Statistics revealed an overall 0.2% decline in the amount sold in the final quarter of 2018. The data also suggested that the traditional trend of December outperforming November for retailers has been reversed. The ONS said that there was no longer an increase in retail sales into December. Last year, growth in amount and value of purchases slowed to 9.8% in December, compared to 13.1% in November.
SOPH
Sophos share price collapses by a fifth on subdued trading update. Cyber security company Sophos Group (SOPH) suffered a bruising from investors after it reported a decline in billings and new customer sign ups. The Oxford-headquartered software company, which makes network security and antivirus software, reported an 8% decline in earnings to $104m (£80m) for the nine months to the end of December, compared to $113m the same period the previous year. The FTSE-250 company said a strong prior year had made for a “challenging” comparable. Sophos shares fell more than 20% in early trading. “There are a lot of problems in this announcement, not least the fact that management guidance once again has proven overly optimistic,” said Hargreaves Lansdown analyst Nicholas Hyett.
GVC
Ladbrokes and Coral shops ‘in terminal decline’ as online gambling thrives. GVC Holdings (GVC), Britain’s biggest bookmaker, has warned Ladbrokes and Coral shops will become a “relatively small part” of operations. Speaking as the FTSE 100 firm beat City expectations, boss Kenny Alexander said: “UK retail is in terminal decline.” However, the high street malaise was more than offset by double-digit growth in online gaming revenue. “We’re growing market share in all our major territories. We’re shooting the lights out at the moment,” he told The Telegraph. “It’s all about digital. And thankfully our digital business is going gangbusters.”
BWNG
Online-only switch hits N Brown sales. Sales at Brown (N.) Group (BWNG) tumbled in the key Christmas trading period as it moved away from catalogues and high street trading to become an online-only retailer. The plus-size clothing chain, which owns Simply Be and JD Williams, said group sales in the three months to Jan 5 slipped 1.6%, with product sales declining 6% compared to a 3.1% fall in the first half. Its Simply Be and Jacamo “power” brands grew over the quarter amid “challenging market conditions”, with product revenues up 1.6% and 5.5% respectively. However, sales at its largest brand, JD Williams, dipped 3.3%. N Brown said product margins were maintained despite high levels of promotions in the festive season.
WTB
After the Costa coup, how will Whitbread fare as a one-trick pony? Whitbread (WTB), once a brewer, restaurant owner, gym operator, pizza franchisee and coffee barista, disappointed in its distinctly new one-dimensional guise. Freed of coffee chain Costa, Whitbread now primarily comprises just one business: the budget hotel chain Premier Inn. As analysts pointed out, the problem for Whitbread is the strong link between the hotels industry and the state of the economy. That meant investors were spooked at references by chief executive Alison Brittain to a “subdued” UK market. They were even more flustered after being told that next year’s profits, which were pencilled in to grow by roughly 5%, would be flat.
GMD
Spanish success offsets UK declines for Game Digital. Game Digital (GMD) shares have soared after the video game retailer’s Spanish business helped cushion subdued festive sales at its UK shops. It posted a 2% rise in like-for-like sales over the 7 weeks to 5 January, although UK shop sales fell by 0.3%. Total sales at its Spanish business were up 4.9%. The retailer hailed a “successful” performance over Black Friday with success in higher margin categories, which include consoles such as the Playstation 4 and Nintendo Switch. However, it said the pre-owned game market “remained challenging”. Martyn Gibbs, chief executive, said Game had traded solidly over the Christmas period.
RTN
Wagamama woe for Restaurant Group (RTN). Casual dining struggler Restaurant Group’s recent rally was derailed after anger towards its controversial Wagamama swoop was rekindled in the City. The deal for the Asian food chain was pushed through a shareholder vote last year but faced considerable opposition from investors after being funded through a £315m rights issue. Citigroup analysts reignited the debate yesterday by arguing that Restaurant Group had overpaid for the business that faces the departure of boss Jane Holbrook. The costly takeover was compounded by the negative investor reaction to the deal and higher-than-expected dilution of existing shares in the rights issue, analyst James Ainley argued.
FCH
Funding Circle beats revenue forecasts after float flop. Funding Circle (FCH) is climbing back from its disappointing listing after announcing that its revenue growth has beaten expectations. The company, set up in a London pub by three friends in the aftermath of the financial crisis, said revenues and loans under management would beat previous guidance by soaring 55% for the fourth quarter of 2018. Shares in the company plunged after its debut on the London Stock Exchange last year, triggering other British businesses to put their plans for a UK float on hold. Although the peer-to-peer lender has since reported two strong sets of results, its shares are still below the 440p listing price and were trading at 332p on Thursday.
BAB
Babcock chairman takes aim at hedge funds as he yields to investor pressure and quits. Embattled Babcock International Group (BAB) chairman Mike Turner took aim at “hedge funds who had got together to cause mischief and make money” after bowing to pressure from shareholders and announcing he is retiring from the engineering outsourcer. Mr Turner, who was appointed to his role in 2008, said that he would step down at the FTSE 250 company’s annual meeting in July. New corporate governance rules suggest that chairmen should not serve for more than nine year. Babcock was the target of a scathing criticism in October by a mysterious outfit calling itself Boatman Capital Research.
Black Friday took the sparkle out of Christmas for retailers. Shoppers cut back on their spending last month after splashing out on Black Friday bargains in November. Retail sales dropped 0.9% by value and volume in December, compared to a jump of 1.4% in November, data from the Office for National Statisitcs show. Economists had expected a fall of 0.8%. The official statisticians said that the data pointed to a shift in Christmas shopping from December to November, as the retailers adopt the American tradition of Black Friday promotions. Howard Archer, chief economic adviser at the EY Item Club, said the drop in December volumes was a disappointment for retailers. “This pointed to Black Friday-related promotions primarily bringing retail purchases forward to November from December rather than lifting sales overall,” he said, with savvy shoppers taking advantage of discounts.
SOPH
Sophos shares cut by a quarter after slump in demand. Sophos Group (SOPH) lost about a quarter of its value this morning after the cybersecurity firm revealed a sharp slowdown in orders and warned that demand would remain subdued over the coming months. The company, which counts Ford and Toshiba among its customers, said that billings grew by 2% between October and December, down from a 14% rise a year earlier. It said that growth would remain muted over the coming months and that it had braced itself for a modest decline in orders for its financial year, which ends in March. The warning marks the third time that the company has downgraded since July, sending its shares tumbling 85.58p or 23%, to 290.02p.
£1 shopping centre reveals retail crisis. Giveaway price shows many centres ‘are obsolete’. A shopping centre has been put up for auction with a starting price of £1 in a move underlining the crisis facing retail landlords. Columbia Threadneedle Investments, the large City fund manager, is selling the Postings Centre in Kirkcaldy, Fife, on behalf of a pension fund. The shopping centre receives £152,005 rent each year but 13 of its 21 shop units are vacant as a result of retailers pulling out of the town or closing down. Tesco quit as the centre’s anchor tenant in 2015. The £1 reserve price allows Allsop, the auctioneers, to pitch the asset as having a gross initial yield of 15.59 million per cent. However, the running cost more than offsets its income and buyers are expected to see the site as ripe for demolition and redevelopment. Miles Gibson, of the property consultancy CBRE, said: “It’s an extreme case. It’s the first time I can remember a starting price so low for a property of this type. But it is symptomatic of the difficulties facing the sector.”
IMB
Tobacco firms lose millions on Palmer & Harvey. Two tobacco groups that supported Palmer & Harvey will receive less than a third of the amount that they paid to shore up the wholesaler before it collapsed into administration. The latest administrator’s report shows that although the main lenders, including Barclays, HSBC Invoice Finance, PNC Business Credit and Royal Bank of Scotland, will receive the full £187.4 million that they are owed collectively, Japan Tobacco International (JTI) and Imperial Brands (IMB) will not fare as well. The two companies are likely to receive between £59.5 million and £66.1 million in total, far less than the £250 million they are owed.
BAB
Mike Turner throws in the towel at Babcock. A torrid year for one of Britain’s leading captains of industry has been capped by Mike Turner’s decision to step down as chairman of Babcock International Group (BAB), the stumbling defence contractor. Mr Turner, one of the great boardroom bruisers of his generation, was chairman of two FTSE 100 companies — Babcock and GKN, the automotive and aerospace engineer — but this time last year he became embroiled in a highly contentious hostile takeover. It ended when GKN lost 350 years of independence and fell into the hands of Melrose Industries, an acquisitive but smaller conglomerate. Mr Turner was criticised both for his handling of the company before the bid and GKN’s defence during the battle. He is now set to lose his other chairmanship with the announcement that he is to stand down as Babcock’s top non-executive director in the summer.
Hammond and Clark must go, say Brexiteers. Brexiteers have called on the chancellor and the business secretary to resign after they tried to reassure company bosses that a no-deal Brexit could be blocked. Philip Hammond and Greg Clark set out how the departure from the European Union could be delayed and pledged to help ensure Britain maintains close ties with the bloc, during a teleconference call with business leaders this week. Senior executives who took part in the call welcomed their remarks. However, those who argue that Britain has nothing to fear from a hard Brexit described Mr Hammond and Mr Clark as “lackeys” of big business. Lord Lilley, the Conservative former trade secretary and deputy party leader, described their assurances as “hugely irresponsible”.
ABF
Primark sales boost puts ABF’s fears to bed. Primark has reported a rise in sales and profits as its mix of on-trend affordable clothing drew in shoppers in defiance of the gloom on the high street. Associated British Foods (ABF), parent of the discount chain, said that sales at Primark rose by 4% in the 16 weeks to January 5, ahead of the same time last year. The uplift in total sales came despite a torrid November when the chain’s like-for-like sales were negative as fewer people bought coats and spending was diverted to other retailers offering Black Friday discounts. Despite rising comparable sales in September and October and better-than-expected Christmas trading, the November sales fall was enough to leave Primark with a “modest decline” in like-for-like sales during the period.
BWNG
Glitter comes off N Brown despite the sequins. The retailer behind Jacamo, Simply Be and JD Williams may have recorded strong sales of luxury nightwear and “all things sequin” but it failed to offset a fall in sales over Christmas, sending its shares down by almost 12%. Brown (N.) Group (BWNG), which specialises in clothing for plus-size and mature customers, said that its product revenue had fallen 6% in the 18 weeks to January 5. The steepest fall in sales, of 22.9%, was in its catalogue-focused business, which includes brands such as Marisota, Figleaves and High & Mighty. Its power brands — Jacamo, Simply Be and JD Williams — performed better, with online sales rising 6.4%. Overall group revenue fell by 1.6%. While the group’s international revenue was down 5%, the company said that it had begun to “better re-engage with its target customer base”.
Banks braced for big fall in consumer borrowing. Demand for mortgages and credit card lending is expected to fall sharply in the next three months, according to a survey by the Bank of England. In a further sign that consumers are reining in their spending before Brexit, the Bank said lenders expect demand for credit card loans to fall by the largest amount since records began in 2007. Demand for mortgages will be at an eight-year low. Growth in consumer credit has been slowing since it peaked at almost 11% in November 2016, prompting fears of another debt bubble and leading the Bank to demand tougher affordability standards for borrowers. The survey of credit card lending will help to calm concerns at the Bank about excessive borrowing, but economists said that there was a risk of too sharp a reverse.
RBS
Taxpayers risk loss from RBS buyback. Royal Bank of Scotland Group (RBS) will seek approval from investors to spend more than £1 billion buying back its own shares from the government, creating a further loss for taxpayers following its rescue in 2008. The government took an 84% stake in RBS through its £45.5 billion bailout of the bank a decade ago to prevent it from collapsing. That has fallen following sales of shares to institutional investors in 2015 and last year. A new sale of shares would stir new controversy for the government, which would almost certainly suffer another large loss on its holding, for which it paid on average 502p. RBS will hold a meeting for shareholders at its Gogarburn headquarters in Edinburgh where it will ask for permission to buy back up to 4.99% of its share capital, which would currently cost about £1.4 billion. It requires approval from 75% of votes cast. The government will not take part.
WTB
Life’s a grind for Whitbread after Costa sale. Whitbread (WTB) kicked off life as a focused hotel company with a weak third-quarter trading update and warned investors that its results for 2020 would be no better than flat. The Premier Inn operator’s shares, which have been buoyed in recent months by the £3.9 billion sale of Costa Coffee to Coca-Cola, fell by 32p to  £47.41 yesterday on the back of its cautious outlook. Alison Brittain, chief executive, said that although trading in London had benefited from inbound tourism, in the regions lower consumer confidence in both the leisure and corporate markets had dampened demand.
GVC
Ladbrokes owner GVC jumps ahead of forecasts with strong last quarter. Shareholders of GVC Holdings (GVC) were counting their winnings last night after the FTSE 100 gambling operator raised its full-year earnings forecast. The Ladbrokes and Sportingbet owner said that after a strong final quarter it expected underlying earnings to be between £750 million and £755 million, ahead of the previous consensus of £739 million. The positive full-year update sent GVC’s shares up 14p to 687p, a rise of 2.1% — a welcome return to form after a sharp fall since August from a record high of £11.75. Kenny Alexander, GVC chief executive, said that the company was winning market share in all its main territories, notably the UK and Germany, performing particularly well in the fourth quarter against tough comparative trading. “We shot the lights out,” he said. Asked how the group was managing to outperform his peers, he said: “Our brands are very strong, our marketing and technology are better than our rivals and we have the best management in the sector.”
GMD
SPD
Mike Ashley blows whistle on Game Digital (GMD) switch. Mike Ashley’s Sports Direct International (SPD) has shot down attempts to move Game Digital’s listing to the junior Aim market. The computer game retailer, which sells titles such as Stifled and Wreckfest, said that 37.3% of voting investors had opposed its switch from the main market at a shareholder meeting yesterday. Under listing rules, Game needed the approval of more than 75% of voting shareholders. Sports Direct, which has become Game Digital’s biggest shareholder with just over 25% of the stock, according to filings, is understood to have opposed the plans. Its rejection of the scheme comes despite the two companies striking a partnership a year ago under which Game outlets or its new Belong arenas for gamers will be introduced in Sports Direct stores. The collaboration has been backed by a £55 million loan from Sports Direct.
CHG
Chemring takes hit after fatal explosion at factory. Chemring Group (CHG), the defence company, has suffered a £105 million loss after the death of one of its workers in an explosion at its factory in Salisbury. Last summer’s explosion at the plant, which produces countermeasures from unstable chemicals almost exclusively for the Ministry of Defence and BAE Systems, the jet fighter manufacturer, was the fourth in 19 years at Chemring factories around the world. The company was founded in 1905 as the British Foreign & Colonial Automatic Light Controlling Company to make street lighting. By the 1950s it specialised in a silver-coating process used to make radar reflectors that was adapted for chaff systems used by aircraft to stop missiles locking on to them. Chemring reduced revenues by £22 million and profits by £17 million in its countermeasures divisions in its latest annual results. In addition, the company booked nearly £13 million of legal costs from the regulatory investigations into the death and safety at the Salisbury plant.
SSPG
Swann to fly company nest on a high. Kate Swann looks set to go out on a high when she hands over the top job at SSP Group (SSPG), despite disruption to its French operations caused by the yellow vest protests. The transport catering group, which she has run since 2013, said that it had made a good start to the financial year, reporting total first-quarter revenue growth of 7.7%, up 7.6% at constant currency. It said that the increase was formed of like-for-like growth of 2.5% and slightly better-than-expected net contract gains of 3.8%, while the acquisition of Stockheim, a German business, added a further 1.3% to sales. The company, formerly part of Compass Group, runs about 2,600 concessions at 140 airports and 280 railway stations in 33 countries. It operates under 500 brands including franchises such as Burger King, Starbucks and Yo! Sushi, and under its own brands such as Upper Crust and Caffè Ritazza. It employs more than 37,000 workers.
CAKE
Patisserie Valerie’s Lee Ginsberg joins the exodus. Patisserie Holdings (CAKE) suffered another setback yesterday when Lee Ginsberg, its deputy chairman and former head of its audit committee, resigned with immediate effect. Luke Johnson, the executive chairman, is the only board member to have remained in post since the café chain was plunged into crisis in October, when it revealed a £40 million hole in its accounts and potential fraud. Mr Ginsberg is the second Patisserie director to leave this week after James Horler resigned on Monday. Chris Marsh, Patisserie’s finance director, resigned in October after he was arrested amid an investigation by the Serious Fraud Office, which continues, and was released on bail. Paul May, the chief executive, left in November. The company has since hired Steve Francis, the former boss of Tulip, the pork processor, as chief executive and appointed Jeremy Jensen, a restructuring specialist, as chairman of the audit committee.
FCH
Rising defaults take gloss off Funding Circle’s lending boom. Funding Circle (FCH) reported robust loan and revenue growth for last year, although it admitted that default rates among borrowers had risen substantially. The peer-to-peer lender said that its loans under management and turnover both rose 55% last year, beating targets set when it floated in September. The lender said loan originations increased 40% to £2.3 billion. However, evidence of stress among its customers took the shine off the trading figures, stoking fears that Brexit uncertainties could squeeze small and medium-sized businesses. Funding Circle revealed that between 3% and 3.8% of loans arranged last year would default. Its previous target range was 2.5% to 3.5%. Funding Circle is one of the fast-growing British financial technology companies hoping to displace the established banks. Its float was seen as a litmus test for the sector but its shares have fallen by more than a fifth since its debut. The company was set up in 2010 in London by Samir Desai, chief executive, and two friends from the University of Oxford. Its platform pools investors’ cash to provide loans to small and medium-sized companies. Funding Circle earns a fee on each loan it originates.
SGE
Sage has faith in wisdom of shift towards subscriptions. The software developer Sage Group (SGE) reported a steeper rise in subscription revenues than expected over the past three months, sending shares as much as 8% higher yesterday. The Newcastle-based company, which develops accountancy and payroll software for small businesses, said that underlying sales rose 7.6% year-on-year to £465 million between October and December, the first quarter of its financial year. This included a 27.7% jump in revenues from subscription packages to £237 million in the period. Shares in Sage closed 32p higher, or 5.4%, at 625p on the back of the trading update because of hopes that the company was emerging from a period of turmoil in its boardroom.
EXPN
Demand for data adds up for Experian (EXPN). The world’s largest credit rating agency has said that demand for its data services is growing as businesses look to harness customer information more effectively. Experian, a FTSE 100 company, reported a 5% revenue increase between October and December, with a slide in its Latin American division more than offset by a further surge in the US. In the same quarter a year ago, sales rose 8%. Brian Cassin, chief executive, said profits for its financial year would meet targets, sending Experian stock up 33½p to £19.08. Experian, registered in Dublin and with its main base in Nottingham, has more than trebled in value to £17 billion since 2006, when it spun out of Great Universal Stores, the conglomerate that spawned Burberry and Littlewoods. It employs 16,500 people in 39 countries and made a profit of $470 million in the six months to the end of September.
ITV
ITV (ITV) was at the bottom of the FTSE 100 index yesterday after analysts at Bank of America Merrill Lynch told investors what they already knew: young people aren’t watching a lot of television. Specifically, TV viewing is declining by 8% among adults under 35 year on year. With these “digital natives” making up more than 50% of the workforce by 2020, up from 35% in 2015, advertisers are going to be less keen on paying for broadcasting space. Advertising on online video channels, where younger people are spending more of their viewing time, costs between 30% and 40% less, the analysts reckon, so spending on TV advertising could fall by between 2% and 3% by 2025. The bank downgraded ITV to “underperform” from “buy”, which triggered algorithm-driven trades and sent the shares down 8p to 129p.
WG.
BP.
RDSB
Energy was the worst performing sector after Opec forecast demand for its oil would be almost 1 million barrels a day lower in 2019 than last year, while production from outside the cartel was likely to rise by 2.1 million barrels a day. Wood Group (John) (WG.), the oil services company, fell 26½p to 541¼p. BP (BP.) lost 5p to 511p; Royal Dutch Shell ‘B’ (RDSB) dipped 25½p to £23.05.
PSN
TW.
BKG
Housebuilders were down after their sales outlook reached its weakest level in at least two decades, according to the estate agents survey by the Royal Institution of Chartered Surveyors. Persimmon (PSN) fell 5p to £23.15. Taylor Wimpey (TW.) dipped 2p to 162p. Berkeley Group Holdings (The) (BKG) edged down 20p to £37.80.
NRR
NewRiver REIT (NRR), the property company that is trialling pubs in shopping centres and “click and collect” points in pubs, rose ½p to 212p after it said it had secured 119 leasing deals in 378,000 sq ft of its retail property in the third quarter. The shopping centre, retail park and pubs owner said it was in a strong position to offer retailers average rents of £12.37 per sq ft, or about half the market average.
WKP
Workspace Group (WKP), the flexible office space landlord, added 6p, or 0.7%, to 888½p after it said inquiries from new tenants were coming in at a rate of 907 a month, compared with 858 a year earlier.
CAY
Assets at wealth manager slip. Analysts are expected to trim their full-year profit forecasts for Charles Stanley Group (CAY) after the wealth manager disclosed a £2.2 billion fall in assets under management and said client trading volumes dived by 17% in the December quarter. Shares in Charles Stanley fell 19p to 249p as it said total funds under management or administration dropped by 8.8% to £22.8 billion in the three months because of tumbling markets. Inflows of £200 million from discretionary clients, customers who delegate investment decisions to the firm, were equally matched by outflows in other parts of the business. Commission income fell by 14.6%, or £2.1 million. Paul Abberley, chief executive, described conditions in the quarter as difficult. Fee income was up by 5.1%, however. Cannacord Genuity, the company’s broker, said it expected consensus forecasts for full-year profits to March to be cut by about 10% from the current £11.7 million.
MNZS
Tempus – Menzies(John) (MNZS): Hold. Menzies looks set for growth but uncertainty over how Brexit will affect aviation may act as a drag on shares
BBOX
Tempus – Tritax Big Box Reit (BBOX): Buy. Big modern warehouses with big sticky tenants
Britain on nuclear alert after Hitachi shelves £20bn plant. The future of the UK’s nuclear supply was in doubt on Thursday when Hitachi pulled a £20 billion project after government talks collapsed. The Japanese conglomerate confirmed it was suspending plans to build the Wylfa Newydd nuclear power plant in Anglesey, North Wales and would take a multi-billion pound writedown. Hitachi has been in talks with the UK government since June about funding the equity portion of the project, known as Horizon Nuclear Power, to make the deal more economically viable but both sides failed to reach agreement. “The decision was made from the viewpoint of Hitachi’s economic rationality as a private enterprise,” the company said. Business Secretary Greg Clark said: “Despite extensive negotiations, the Government and Hitachi are unable to reach agreement to proceed at this stage.”
CHG
Chemring profits dented after fatal factory explosion. Defence firm Chemring Group (CHG) saw a £17 million dent to profits last year after the factory explosion in August which left one man dead. The fighter jet flares supplier said that underlying operating profits were flat at £31 million after taking into account the temporary factory closure. Work will gradually be increased at the site this year, it added. A 29-year old man died after an explosion at the flare mixing factory in Salisbury on August 10, named by local media as Piotr Zukowski. The group, which has equipment on the Curiosity Mars rover programme, said revenue for the year ending 2018 was down by 3% to £297 million. The order book rose to £394 million from £325 million.
ABF
Investors breathe sigh of relief on Primark trading. Primark joined the list of Christmas retail winners on Thursday after a bumper festive period, offering relief to investors spooked by a warning late last year. The discount fashion brand’s finance chief John Bason said: “We’ve had a great Christmas, it’s as simple as that. It’s a testing time [for the High Street], but we’ve had good growth.” Primark was buoyed by a spike in animal print clothes and teddy bear — or Borg — coats, Bason added. The retailer’s 4% rise in total sales in the quarter to January 5, was mostly down to new store openings. The growth was partly offset by a “modest decline” in same-store sales, it admitted. But investors seemed pleased and shares in parent Associated British Foods (ABF) rose 112p, or 5%, to 2290p. ABF spooked the City in November, saying there had been a dip in sales at Primark — one of the High Street’s most resilient names. Overall revenue for the group was up 1%.
WTB
Premier Inn owner Whitbread warns of flat profits ahead. Investors were left disappointed on Thursday as hotels giant Premier Inn’s owner Whitbread (WTB) warned profits will be flat next year amid market “uncertainty”. The FTSE 100 firm expects underlying pre-tax profits in the year to February 2020 to “be consistent with” the £444 million analysts have pencilled in for the current financial year, which ends next month. Shares in Whitbread fell 85p, or 1.8%, to 4688p. In early trading the shares dropped almost 5%. Whitbread, which this month completed a £3.9 billion sale of its Costa Coffee arm to Coca-Cola, revealed the outlook as it updated on its remaining Premier Inn business. Chief executive Alison Brittain said total sales rose 2.5% in the third quarter to November 28, but comparable sales were down 0.6%.
Home loans slump as Brexit jitters darken the housing picture. Demand for mortgage loans has slumped amid Brexit uncertainty, the Bank of England’s latest snapshot of credit conditions warned on Thursday. Lenders reported that demand for home loans “decreased significantly” in the three months to December, showing the steepest drop since the immediate aftermath of the referendum vote in 2016. More falls in demand are expected in the quarter to February, it added, despite lenders slicing profit margins to entice buyers. The gloomy findings tallied with a Royal Institute of Chartered Surveyors warning that the housing market faced its bleakest outlook for 20 years over the next three months.
EMAN
Brexit has Brits flocking to the cinema. Britons have been heading to the cinema to escape Brexit, bosses said on Thursday. Crispin Lilly, the chief executive of upmarket chain Everyman Media Group (EMAN), said: “Cinema is about escape and turning off for a couple of hours. I think there’s a halo effect there [from Brexit].” The boss of bigger rival Vue, Timothy Richards, added: “When things are really dire, we see an uptick in admissions.” He added that recessions actually drove consumers to the cinema. Last year appears to have been the strongest in history for cinemas, attracting a record number of customers, Lilly and Richards agreed.
Hitachi scraps £16bn nuclear power station in Wales. Japanese giant unable to agree deal with UK as fears grow for Anglesey atomic plant. Hitachi has scrapped plans to build a nuclear power station in Wales, becoming the second firm in two months to abandon a major nuclear project and triggering “a full-blown crisis” for the UK energy’s strategy. The £16bn Wylfa plant on Anglesey was meant to be the next in a line of new nuclear plants behind Hinkley Point C but the Japanese conglomerate failed to reach a deal with the UK government. A Hitachi board meeting pulled the plug on mounting costs on Thursday, and the company said it would take a 300bn yen (£2.14bn) hit from axing Wylfa. The move was a “significant blow” to the UK’s future energy supply plans, the Confederation of British Industry said.
WTB
Premier Inn owner says bookings are falling outside London. Whitbread says tourists are bringing business to capital, but sales are weak elsewhere. Whitbread (WTB), the owner of the UK’s biggest hotel brand, Premier Inn, has said bookings outside London are falling as travellers tighten their purse strings. Alison Brittain, the chief executive, said central London was still benefiting from international tourists but outside the capital the picture was grim, with both businesses and leisure travellers reining in spending. Whitbread is left with its budget hotel business and 692 restaurants, located next to Premier Inns, following the £3.9bn sale of its Costa Coffee chain to Coca-Cola, which has just been completed. It bought Costa from its founders for £20m in 1995. Sales at Premier Inn rose 3.1% in central London, excluding new hotel openings, but fell 1% across the rest of the UK, including outer London, in the third quarter to 29 November. This resulted in a 0.2% dip for the UK as a whole. Overall like-for-like sales, including Beefeater, Brewers Fayre and other restaurants, dropped 0.6%
CAKE
Patisserie Valerie says its accounts were ‘significantly manipulated’. Cafe chain says it has uncovered thousands of false entries in its ledgers. Patisserie Holdings (CAKE), the cafe chain which came within hours of financial collapse in October after discovering a multimillion-pound gap in its accounts, has uncovered “thousands of false entries into the company’s ledgers”. In a statement to the Stock Exchange, the company, which operates 200 cafes and employs 3,000 staff, said work carried out by forensic accountants had revealed that “the misstatement of its accounts was extensive, involving very significant manipulation of the balance sheet and profit and loss accounts”. The company said it was now clear that the cash flow and profitability of the business had been overstated in the past and was “materially below” the numbers the company provided when the accounting black hole first emerged in October
UK banks braced for slump in consumer borrowing. Survey shows greater gloom on credit card lending than during the financial crisis
Hitachi shelves new Welsh nuclear plant. Japanese company writes off $2.8bn and triggers questions about future of UK energy policy
Hitachi nuclear decision bad news for UK. Foreign companies are increasingly leery of British infrastructure projects
ABF
Associated British Foods (ABF) – Primark defies wider retail gloom with strong Christmas. Low prices continue to draw consumers as chain presses on with overseas expansion
CAKE
Patisserie Holdings (CAKE) says problems worse than expected. ‘Thousands of false entries in ledgers’, says café chain
RB.
Kapoor to step down as Reckitt Benckiser Group (RB.) chief. Near doubling of share price since 2011 marred by 2 years of problems
PSON
Pearson (PSON) hit by falling sales in US higher education. Educational publisher relies on cost savings to keep itself on track to meet guidance
WTB
Whitbread kicks off £500m share buyback scheme with Costa sale cash but Premier Inn owner’s shares still fall. Whitbread (WTB) has kicked off a £500million share buyback scheme as it ploughs ahead with its plan to return a ‘significant majority’ of the proceeds it raked it from the sale of Costa to Coca-Cola for £3.9billion earlier this month. The FTSE-100 listed group, which is now focused on its Premier Inn hotel operations, has seen its share price fall over 4% this morning. The firm has warned that it remains cautious about its performance within the UK due to ‘increased uncertainty and continuing high inflation.’
ABF
Primark tops expectations over Christmas to sweeten parent firm Associated British Foods (ABF) profits as sugar sales sour. After gloomily warning of ‘challenging’ trading in November, High Street darling Primark pulled through to deliver a better-than-expected performance over Christmas. Owner of the cut-price fashion chain Associated British Foods (ABF) said today that profits at Primark are ‘well ahead’, as it revealed a 4% uplift in sales over the last four months. The positive update comes despite the retailer bemoaning tough trading in November, when a slew of retailers complained of falling shopper numbers, and bad weather weighed on Primark’s European arm.
PFD
Premier Foods reports Christmas sales slip as ‘sweet treats’ stumble and firm stockpiles raw ingredients for Brexit. Premier Foods (PFD) saw its ‘sweet treat’ revenues fall by 6.9% in its third quarter, but has opted to maintain its full-year profit forecast. The Mr Kipling owner, maker of Bisto gravy and Oxo-cube saw its sales hampered by logistics issues, while oversupply dented overall sales in the third quarter. Non-branded sweet treat sales plunged by 20.7% in the quarter as the group pulled out of a number of lower margin seasonal and non-seasonal cake contracts
MTRO
BVS
PSN
TW.
BDEV
Housebuilders on the move as profits flood in thanks to taxpayer-backed Help to Buy scheme. Revived hopes of a softer Brexit, following Theresa May’s failure to push through her deal for leaving the EU through the House of Commons, helped. Investors feared that the economy could slow if the UK suddenly cut ties with the continent, and this has weighed on companies like Bovis since, theoretically, fewer people would buy houses. But it said the UK housing market ‘remains strong, with demand for new homes supported by attractive mortgage finance and Government initiatives’. The same optimism caused Metro Bank (MTRO) to soar, as the lender’s shares lifted 10.1%, or 188p, to 2056p. Bovis Homes Group (BVS) said uncertainty  surrounding Britain’s departure from the EU slowed sales of larger homes, however. For 2018, it built 3,759 homes, 3% up on the previous year. The average selling price rose to £273,000 from £272,400. Greg Fitzgerald, the chief executive, said: ‘The significant improvement across all areas is expected to deliver a record year of profits.’ Bovis was up 35.4p, to 962.2p, Persimmon (PSN) climbed 119p, to 2320p, Taylor Wimpey (TW.) rose 8.75p, to 164p and Barratt Developments (BDEV) edged up 19.5p, to 518p.
FIF
Bread and cake manufacturer Finsbury Food Group (FIF) was also left feeling flat as it released a trading update for the latter half of 2018. The maker of Disney-branded cakes, Thorntons baked goods and Weight Watchers snacks plummeted 9.8p, to 83.2p, after revenue slipped 3.5% to £152.3million.
CPC
Drinkers propped up The City Pub Group (CPC), as total revenue leapt by 22% to £45.6million in the 52 weeks to December 30. The majority of the 1.6% like-for-like growth was driven by increased sales, the South of England chain added, since price increases only kicked in at the end of 2018. It owns and runs 44 pubs, and shares fizzed up by 5.1%, or 10p ,to 207p.
SAGA
Over-50s insurance and travel specialist Saga (SAGA) declined, as it warned competition in the insurance sector was tough. Shares dipped 1.7p, to 101.5p.
VANL
Ground engineering business Van Elle Holdings (VANL) was on shaky foundations as it announced results for the six months to the end of October. The Nottinghamshire firm, which also builds the infrastructure for rail networks and has worked on stations such as East Croydon, said profit sank 53.6% to £2.6million. A quiet start to the financial year pushed revenue down by 18.4% to £42.9million, though new boss Mark Cutler has already begun to cut costs.
RB.
Reckitt boss bows out with £116m: Rakesh Kapoor to retire by the end of 2019 after masterminding turnaround that saw shares surge 90%. The boss of Reckitt Benckiser Group (RB.) could trouser £30million after leaving – on top of the £86million he was paid while in charge. Rakesh Kapoor, one of the FTSE 100’s best-paid chief executives, will retire by the end of 2019 after 32 years at the company, including more than eight in charge. The 60-year-old was hailed for a 90 per cent surge in shares during his time at the top and for masterminding a major overhaul of the business, which is behind brands such as Dettol, Cillit Bang and Durex.
PSON
Education publisher Pearson sees share price fall as it reports squeeze on its US business. Education publishing group Pearson (PSON) has seen its share price fall over 6% after revealing its total revenue slipped by 1% in the last year. In today’s trading update, the group said its revenue levels had come under pressure amid challenging trading conditions in the US. Looking ahead, the firm said it expects pressures in its US higher education business to continue this year, leading to flat revenue or a fall of up to 5%.
CAKE
Accounting scandal at Patisserie Valerie is even worse than we feared, cafe chain owner admits. The owner of stricken cafe chain Patisserie Valerie has admitted its accounting scandal is worse than previously thought. In a strongly worded statement, Patisserie Holdings (CAKE) spoke of the devastating effects of a fraud that involved ‘significant manipulation’ of its books, including thousands of false entries. Initial findings from a probe into the scandal reveal cash flow and profitability have been overstated. The chain is now pleading with lenders for a further extension to loan arrangements. Patisserie Valerie, headed by entrepreneur Luke Johnson, has overhauled its management after a £40million black hole was discovered on its books and former finance boss Chris Marsh was arrested on suspicion of fraud.
BVS
Bovis Homes says it is on course for record profit but claims uncertainty over Brexit is still putting off buyers of larger properties. Bovis Homes Group (BVS) expects to post a record profit for the last year, it said in a trading update today. The group said it will see profits for 2018 that are slightly ahead of market expectations after a ‘significant step-up’ in operating margins. Chief executive Greg Fitzgerald, said: ‘The significant improvement in operational performance across all areas of the business is expected to deliver a record year of profits for the Group. ‘Customer satisfaction is a key priority and the Group’s return to 4 star housebuilder status along with another controlled and disciplined period end reflect this. ‘We are looking forward to delivering the first homes from our new housing range in 2019 and continuing to make further operational and financial progress.’
CINE
Fantastic year for films – with hits like Mamma Mia, Avengers and Incredibles – lifts revenue at Cineworld Group (CINE). Record numbers of film fans visited Cineworld last year to watch blockbusters such as Mamma Mia, Avengers and Incredibles 2. The cinema chain, which bought US rival Regal for £2.6billion in March and has 790 sites with 9,518 screens, saw revenues rise 7.2%. Growth was driven by an 8.6% rise in sales in the US. In the UK and Ireland, revenues were up 3% while sales in the rest of the world rose 3.1%. The highest grossing films in the UK were Avengers: Infinity War, Mamma Mia: Here We Go Again, and Incredibles 2. Cineworld said it had a strong slate of films for the year ahead including Toy Story 4, Star Wars: Episode IX and remakes of Disney classics Dumbo, Aladdin and The Lion King.