Press | Vox Markets
MKS
Marks & Spencer Group (MKS) has hired former Sainsbury’s boss Justin King ahead of what is set to be a make or break Christmas on the High Street. King, 57, ran Sainsbury’s from 2004 to 2014 and is credited with breathing life back into Britain’s second largest supermarket. His appointment as a non-executive director at M&S comes as the retailer battles to revive sales and profits, which have been dented by fierce competition from online rivals and discount supermarkets Aldi and Lidl.
WPP
WPP (WPP) shares surged after it unveiled steep job cuts, adding nearly £7million to the fortune of ousted founder Sir Martin Sorrell. The marketing conglomerate is to axe 3,500 jobs and shut or merge almost 200 offices in a battle to cut costs. It is part of a strategy unveiled by chief executive Mark Read, who replaced Sorrell after the 73-year-old was forced out earlier this year amid claims he paid for a Mayfair prostitute on company expenses, allegations he denies.
MYSL
Online retailer Mysale Group (MYSL) saw more than half of its value wiped off today after it warned it will make a loss in the first half of its financial year due to changes to tax sales regulation in Australia, its largest market. Mysale – which operates flash-sales websites selling clothes, beauty and homeware products also in the UK, New Zealand and South East Asia – said it expects to make an underlying loss in the first half to December. It also warned sales and profits would come in ‘significantly below’ market expectations for the full-year to the end of June 2019. Shares in MySale fell by over 53% to 16p in morning trading.
BARC
Barclays (BARC) has become the first major UK bank to allow profligate customers to block certain kinds of debit card spending. The bank is aiming to help vulnerable spenders to avoid blowing their wages on things they do not need amid fears over surging household debt. Customers will be able to block spending or allow spending on five different categories including groceries and supermarkets; restaurants, takeaways, pubs and bars; petrol stations; gambling; and premium rate websites and phone lines such as for TV voting, competitions and pornography.
IRV
Speculators have made an estimated £68million betting against Interserve (IRV) so far this year. Hedge funds and other short-sellers likely made almost £2million alone on Monday when the struggling government contractor’s share price plunged 53% after it announced plans for its second bailout in nine months, calculations from IHS Markit reveal. The rout has sparked fears that the company, which works in schools, the NHS, prisons and other state sectors, could become ‘Carillion mark two’ and collapse like its larger rival.
CPR
Carpetright (CPR) shares, which have been in the doldrums since the firm unveiled a radical store closure plan last April, spiked by more than 9 per cent in early trading today. The minor rebound came as the flooring stalwart revealed hefty losses relating to the closure of 65 shops, but reassured investors with signs of green shoots. Carpetright racked up losses of £11.7 million in the six months to the end of October, compared with a small profit a year ago, while sales declined 15.7% to £191million.
Macron’s credibility shattered as France joins Italy in budget disgrace. Emmanuel Macron’s bid to buy off France’s “gilets jaunes” protesters with instant budget handouts threatens to blast through eurozone’s fiscal limits, fatally damaging his credibility as the champion of the European project and the guardian of French public accounts. The package of short-term measures announced in a theatrical mea culpa on Monday night leaves President Macron’s putative “grand bargain” with Germany in tatters. He had pledged root-and-branch reform of the French economy and a restoration of spending discipline after 11 years in breach of the EU’s Stability Pact. The calculation was that Berlin would in return drop its long-standing opposition to fiscal union and shared liabilities, agreeing to rebuild the euro on stronger foundations.
WPP
WPP targets return to growth by wielding the axe on jobs. WPP (WPP) will cut 3,500 jobs and shut dozens of offices in an attempt by new chief executive Mark Read to steady the advertising giant after a torrid two years marked a bitter parting with the architect of its sprawling empire, Sir Martin Sorrell. Mr Read said the overhaul would cut costs by £275m by 2021 and restore sales growth. About 80 WPP offices worldwide have been earmarked for closure, with a further 100 agencies due to share accommodation. “The old WPP was in structural decline,” he said. “The new WPP will not be.” Half the savings will be reinvested, including hiring 1,000 new staff to reinvigorate the creative side of its business and push further into technology.
MKS
Marks & Spencer adds former Sainsbury’s boss Justin King to the board. Justin King, the former Sainsbury’s boss, is to return to Marks & Spencer Group (MKS) as a non-executive director as the struggling retailer beefs up its board. Mr King was credited with reviving Sainsbury’s during his decade-long rein at the supermarket between 2004 and 2014 by turning it from a retailer that struggled with empty shelves to spearheading its lucrative push into the convenience market, notching up nine years of sales increases. He previously ran Marks & Spencer’s food division and set up its Simply Food chains, which until recently had remained the biggest growth driver for the retailer.
CPR
Carpetright losses widen sharply as it closes stores. Carpetright (CPR) losses have widened dramatically as the embattled retailer has been hurt by weak consumer demand and the whiplash of a rescue plan that has closed dozens of stores. The company said that it had been a “transitional year” as it reported that pre-tax losses had ballooned to £11.7m in the 26 weeks to Oct 30, compared to losses of £0.6m a year earlier. Sales tumbled 15.7% to £191m after the retailer shut 65 stores during the period. The company said that like-for-like sales had improved from a 16.8% slump in the first quarter to an 8.9% drop as the company repaired some of the damage to its reputation caused from its restructuring. Suppliers withdrew their product and consumers shunned the brand while there was “negative sentiment” associated with its company voluntary arrangement (CVA), it said.
AHT
‘Don’t panic’ says Ashtead boss as plant hire company defies slowdown concerns. Ashtead’s chief executive has dismissed worries about the economy’s health, issuing a firm “don’t panic” message as the tool and plant hire company posted surging revenues and profits. Geoff Drabble, who has led the FTSE 100 business for 13 years, said that fears of a downturn in the construction sector were overdone and driven by “academic” concerns. Speaking as Ashtead Group (AHT) reported revenues up 19% at £2.25bn in the six months to the end of October, with pre-tax profits rising 25% to £610m, the chief executive played down worries that have hit the company’s shares recently. “Financial markets are getting very agitated about academic metrics – I’d never heard of an inversion curve until recently,” he said. “Despite hysteria in the global economy our experience on the ground is that markets are strong. “People are talking about a reduction in housebuilder confidence from 60-something percent to 60pc – but 60pc by their own definition is still a really strong market.
AAL
Anglo American coy on dividends as it eyes growth. Anglo American (AAL) will resist pressure to put up dividends while it focuses on making its mines around the world work harder, its bosses have insisted. The FTSE 100 miner will stick to a payout ratio of 40% of its earnings despite expectation from some analysts that it may follow its peers in showering shareholders with cash. Stephen Pearce, chief financial officer, deflected calls for more generous payouts, saying that while it would “always consider” its capital allocation, it had devised its current policy with “a forward view”. “It’s great we’re in a position to have choices,” he said. “The business is in a better place.” Higher dividends is ”something that always has to be discussed”, he added.
MYSL
Online shopping minnow MySale loses half its value after profit warning. Mysale Group (MYSL), an Australian online retailer backed by retail tycoons Mike Ashley and Sir Philip Green, lost half its market value after issuing a profit warning triggered by tax changes down under and “challenging” market conditions. Carl Jackson, chief executive, said he was “very disappointed” with the performance after the company warned that revenue and profit for the year to June 2019 would be “significantly” below market expectations. The Aim-listed retailer also swung to a loss before interest, tax, depreciation and amortisation in the first half of the year, though it expected an improvement in the second half. Shares in the company fell more than 50% to 16p in afternoon trading. Its market cap tumbled to £25m. Sir Philip’s Shelton Capital fund, which has a 22% stake in the company, made paper losses of around £5m as a result of the drop. Mr Ashley’s Sports Direct, which owns a 4.8% stake, lost around £1.3m.
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MRW
Growth in the grocery sector is at its lowest level since March 2017, piling pressure on retailers in the run-up to the key Christmas trading period. Grocery price inflation ran at 1.6% in the 12 weeks to Dec 2, according to research firm Kantar Worldpanel, less than half the rate it was 12 months ago, benefiting consumers but causing growth in the grocery sector to slow to 2%. During the 12-week period, Tesco (TSCO) and Sainsbury (J) (SBRY) reported a drop in sales, by 0.1% and 0.2% respectively. Asda outperformed its merger partner Sainsbury’s with sales growth of 1.5%. The Walmart-owned supermarket plans to merge with Sainsbury’s in a £15bn deal. Morrison (Wm) Supermarkets (MRW), the fourth member of the “Big Four”, chalked up sales growth of 0.5%. This marks two years of continual growth for the retailer, although compared with this time last year, its market share has fallen by 0.1% points. Despite the downbeat figures, the Big Four will breathe a sigh of relief as Christmas spending this year is expected to break records, with overall sales reaching £10bn. “Because of the way Christmas falls, grocers have an extra trading day this year meaning overall sales in December – up to and including Christmas Eve – could reach £10bn,” said Fraser McKevitt of Kantar Worldpanel. He added that traditional retailers were likely to perform well over the festive period as consumers shift to food-led supermarkets such as Waitrose and Sainsbury’s.
SDRY
Superdry (SDRY) shares were in the red after investment bank Berenberg downgraded the stock to “hold” from “buy” and trimmed its price target from 1,200p to 950p. Shares fell 7.3%, or 45p, to 573.50p, adding to a string of woes for the fashion retailer this year. In October it warned that profits for the year would be £10m less than expected due to hot summer weather affecting sales. The FTSE 250 clothing firm is due to release results for the first six months of its financial year today but has already warned that its second-half performance would drag down its full-year results if temperatures were higher than normal over the past few months.
888
888 Holdings (888) nudged up to 156p after it announced it was accelerating its US gaming expansion by acquiring the remaining 53% of All American Poker Network. The $28m (£22.4m) bid gives 888 independent control of its growth strategy in the US.
INF
Questor: ‘This stock trades at a triple discount. We think the share price should be 40% higher’. Informa (INF) profits are growing at a decent clip but an aversion to British media stocks and worries about China have depressed its valuation
Pensions suffer as retail property values tumble. Fears grow of further falls amid shift in shopping habits. Shops, shopping centres and retail parks suffered one of their sharpest monthly falls in value since the financial crisis in November, highlighting the pressure on the retail industry and dealing a blow to pension funds invested in the sector. CBRE, Britain’s largest valuer, said that retail property values had fallen by 1.9% month-on-month, the biggest drop since May 2009, except for the period immediately after the Brexit referendum in 2016. There are fears that the fall is only the beginning for retail property, which is suffering from a structural shift towards online shopping, an increase in costs from business rates, a higher minimium wage and fragile consumer confidence. Several well-known retailers have collapsed or closed shops this year, including Toys R Us, House of Fraser and Debenhams.
Britain ‘will build ties with China after Brexit’. Financial standards will not be relaxed after Brexit, Philip Hammond pledged as he committed to building close ties with China and India to ensure the City flourishes outside the European Union. Britain will continue to lead “the race to the top” in banking regulation, despite calls by experts to use light-touch regulation as a bargaining chip to draw business to the City. “I reject the idea that laxer regulation makes a jurisdiction more attractive,” the chancellor told a Bloomberg conference.
MKS
Return of King to try to restore M&S crown. Justin King is set to return to Marks & Spencer Group (MKS), 15 years after he left it to run the Sainsbury’s supermarket chain. Mr King, right with his partner Claire Lenighan, will join the retailer’s board in January as a non-executive director. He ran M&S’s food business between 2001 and 2004 and helped to develop its Simply Food shops. He ran Sainsbury’s for ten years, revitalising the group and helping to re-establish it as the second biggest grocery retailer behind Tesco. Since then Mr King, 57, has been working in private equity at Guy Hands’ Terra Firma vehicle. However, he stepped down from a full-time role this month.
WPP
WPP cuts 3,500 jobs to fight tech giants. The need to compete more effectively with Facebook and Google has forced WPP (WPP) to announce 3,500 job cuts in an attempt to reduce overheads by £275 million a year. Mark Read, chief executive of the advertising conglomerate, said that “painful steps” were unavoidable as he laid out a three-year plan to reboot the company for the digital era. Most of the job losses are expected to be in back- office and finance teams as Mr Read simplifies WPP’s sprawling empire. “As an industry we are facing tremendous changes from technology and we have to change the way we work. We need to return the company to growth and unfortunately some painful steps will be necessary over the coming years,” he said.
AAL
Anglo American production growth gets the Minas touch. The promise of more for less lifted investors’ spirits and Anglo American (AAL) to the top of the FTSE 100 leaderboard yesterday. The global mining giant said that production should grow by more than expected this year and would rise again next year — and would do while the company kept a lid on costs. Shares in Anglo rose by 5.5% to close 86½p up at £16.61½ as it outperformed a rally in the mining sector sparked by higher copper prices. Anglo American, which is dual-listed in Johannesburg and London, mines commodities including copper, platinum and diamonds. It reported profits of $3.2 billion last year.
CPR
Sales hit floor as bad publicity at Carpetright spooks shoppers. Publicity over its restructuring has been blamed by Carpetright (CPR) for a slump in its sales and deepening losses. The flooring retailer sank to a £11.7 million pre-tax loss in the six months to October 27, compared with a loss of only £600,000 in the same period a year earlier. It has been closing dozens of poorly performing stores since agreeing a company voluntary arrangement, an insolvency procedure, and launching a capital-raising to shore up its finances earlier in the year. Wilf Walsh, chief executive, said that coverage of its financial difficulties had knocked “customers’ confidence in our brand”, suggesting that some shoppers had been unwilling to put down deposits for fear that their money would be at risk.
MYSL
Mysale goes down under pressure of tax reforms. A profit warning from Mysale Group (MYSL), the online retailer part-owned by Sir Philip Green and Mike Ashley, has wiped out almost half the value of the company. In a trading update yesterday, the group said that full-year profit for 2019 would be “significantly below market expectations”, with a loss in the first half of the financial year before picking up in the second half. It will review its operations in Britain and southeast Asia. Its London-listed shares promptly fell by almost 50% to 17½p, wiping £27 million off the value Mysale. Sir Philip, who owns Topshop, has a 22% stake in Mysale via Shelton Capital Management. Mr Ashley has 5% via Sports Direct.
AHT
Ashtead sings the praises of America. Robust results in the United States helped Ashtead Group (AHT) to defy the sceptics yesterday by unveiling a 19% rise in revenue and a 25% increase in pre-tax profits. Shares in equipment rental group have been one of the worst performers in the FTSE 100 index amid concerns about a slowdown in the American economy as President Trump embarks on a trade war and as the Federal Reserve prepares for further increases in interest rates. The stock had fallen from £24.38 ten weeks ago to £16.06½p. However, the shares rose by more than 3.5% yesterday on the back of its half-year results, closing up 57½p at £16.64 and valuing Ashtead at £8 billion.
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SBRY
Cold weather and low inflation sent a chill through the grocery sector this autumn, but it could prove to be the calm before a storm of spending over the festive period. Shoppers spent £27.5 billion at the tills in the 12 weeks to December 2, a 2% increase on the year before, according to Kantar Worldpanel, the market researcher. This increase represents the slowest growth in the grocery market since March 2017 as price inflation dropped to 1.6% compared to 3.6% in December last year. Aldi, Lidl and the Co-op were the only leading retailers to grow their market share during the period. Aldi grew from 6.9% of the market a year ago to 7.6%, with the Co-op up from 6% to 6.2% and Lidl expanding from 5.1% to 5.6%. As the German discounters and the Co-op grew, Tesco (TSCO) and Sainsbury (J) (SBRY), the UK’s biggest grocery retailers, suffered declines in sales and market share. Tesco’s market share dropped from 28.2% to 27.6% while Sainsbury’s declined from 16.4% to 16%. The worst performer in the industry was Waitrose, where sales fell by 0.7%
VOD
The European competition regulator is investigating the €18.4 billion takeover of Liberty Global’s cable businesses in Europe by Vodafone Group (VOD). The European Commission said that it feared the deal could reduce competition in Germany and the Czech Republic, two of the four territories where Vodafone is buying Liberty assets. Margrethe Vestager, the competition commissioner, said that the investigation would look to ensure that the deal “will not lead to higher prices, less choice and reduced innovation in consumers’ telecoms and TV services”. Vodafone has operations in 25 countries and works with networks in 44 other territories. It aims to bolster its position in Europe with the takeover of Liberty’s cable businesses in the Czech Republic, Germany, Hungary and Romania.
MRW
Few swallow latest talk of Morrisons and Amazon. Morrison (Wm) Supermarkets (MRW) has long been talked about as a potential takeover target. It lags behind the likes of Tesco (which has added Booker, the wholesaler, to its ranks) and Sainsbury’s (in mid-merger with the Walmart-owned Asda) in terms of scale and market share. Moreover, it has already agreed wholesale supply deals with Amazon, which is moving into bricks-and-mortar retailing after its takeover of Whole Foods. Amazon, meanwhile, has been rapidly acquiring warehouse space across Britain as it builds a sophisticated last-mile delivery logistics network that could make it a serious competitor in new areas of retail such as food. All the ingredients were in place, therefore, when the rumour (re)surfaced yesterday on the FT Alphaville market blog. Cue a rise in Morrisons’ shares, which closed up 2¾p at 226¼p. Mind you, that 1.3% increase hardly reflected a widespread buying of takeover talk.
AAL
ANTO
GLEN
Miners topped the premier index as optimism of a breakthrough in trade relations between the United States and China boosted commodities prices. Anglo American (AAL) rose 86½p to £16.62, Antofagasta (ANTO) gained 34¾p to 774½p and Glencore (GLEN) climbed 9¼p to 283¾p.
INDV
KIE
Stocks heavily sold in a risk-off market regained some ground. Indivior (INDV), the opioid addiction treatment maker that has been unloved since a court ruling last month paved the way for a rival to sell a generic version of its treatment, leapt 8¼p to 84¾p. Kier Group (KIE), the outsourcing and construction group carrying out a heavily discounted rights issue, rallied 18p to 394½p.
SLA
Standard Life Aberdeen (SLA) fell almost 4½p to just under 225p after RBC downgraded the global investment company to “sector perform” from “outperform”, saying that its dividend was less secure now that the business had moved away from its insurance roots.
888
888 Holdings (888) edged up 2p to 156p after the gambling group said that it had acquired the 53% interest in the All-American Poker Network joint venture that it did not already own for $28 million.
SDRY
Superdry (SDRY), the casual clothing retailer, fell sharply for a the second consecutive trading session after Berenberg downgraded it to “hold” from “buy” the day after Julian Dunkerton, the brand’s co-founder, had taken a swipe at the present management’s strategy in an interview with Liberum. On the day before interim results from the fashion retailer, Berenberg cut earnings forecasts for the next three financial years by as much as 13% “to reflect ongoing weakness across the UK retail market, as well as our understanding that the current strategy could take another 12 months to come to fruition”.
ASC
Cash is out of fashion at Asos. Claims that ASOS (ASC) is “burning cash” and can no longer self-finance its expansion sent shares in the online fashion retailer down by 5.6% yesterday. Morgan Stanley’s analysts said that Asos could find itself uncomfortably tight on liquidity within two years and that it may have to reduce its spending and growth ambitions. The stock market darling has spent £400 million on capital expenditure in the past two years, which is more than in the previous 15 years put together, the analysts say. Only one third of that sum is going on warehouses.
TPK
Tempus – Travis Perkins (TPK): Hold. Management has taken the right strategic steps but now needs to deliver
SCIN
Tempus – Scottish Inv Trust (SCIN): Buy and hold. A shareholder-minded trust that should deliver over the long term
WPP
WPP axes 3500 jobs as new boss vows to simplify ad giant. WPP (WPP) chief executive Mark Read on Tuesday admitted that the business had become “unwieldy” as he set out a “radical evolution” to bring it to heel, a plan that will cost £300 million and lead to 3500 job cuts. Industry criticism of WPP under Sir Martin Sorrell had it that the company was so sprawling that it was frequently competing with itself for trade. Read on Tuesday confirmed that diagnosis, saying the ad giant was “too unwieldy, with too much duplication… as a result, it is not always as focused or as fleet of foot as it needs to be”. The £300 million cost over three years will pay for property closures and redundancies. The 3500 jobs will be lost from a total of 134,000 in 110 countries. Around 1000 new jobs, probably in digital roles, will be created, and acquisitions are on the agenda.
AHT
Tools rental firm Ashtead Group (AHT) stamped on fears of a possible US recession on Tuesday, saying it had seen no evidence of a slowdown as it upped profit forecasts. The FTSE 100 company has seen its shares crash by a third since October because of forecasts of a possible recession in the US, where Ashtead makes 90% of its money. Today strong rental sales growth and a rosy outlook allayed some of the concerns. Chief executive Geoff Drabble, who is leaving next year, said there were no prospects of an American recession in the next three years. “The whole financial world thinks there is impending doom in North America and the evidence on the ground and our lead indicators could not be further from that. “Go around America. We could list hundreds of jobs of datacentres, Hudson Yards, LaGuardia airport, that are one or two years into five-year projects. That work just doesn’t suddenly stop. You have to think outside a spreadsheet.”
Households are lifted by highest growth in pay for more than 10 years strengthening case for rate rise. The highest pay growth for more than a decade has put household finances in their best shape since 2016, official figures showed today. The Office for National Statistics’ latest labour market figures showed pay growth of 3.3% in the quarter to October, the best since June 2008. Adjusting for inflation, real-terms pay is rising at 1%, the highest since December 2016, before the pound’s post-referendum slump bit into incomes. In October alone, pay was 3.5% ahead of a year earlier. While rising pay will concern the Bank of England’s rate-setters, it will encourage retailers hoping for a Christmas boost on the High Street.
CPR
Carpetright says negative headlines damaged sales. The boss of Carpetright (CPR) on Tuesday claimed negative headlines about the embattled retailer had knocked sales as it posted widening losses. Chief executive Wilf Walsh, who is trying to turn its fortunes around, said: “I can’t point the finger at the media. We did have two profit warnings, but the customers see the headlines.” He argued that shoppers, who often have to pay a deposit for the wares, have been put off by doubts over Carpetright’s future. Similarly, the boss of struggling Mothercare, Mark Newton-Jones, blamed the media last month for its slump in sales. Carpetright’s half-year losses widened to £11.7 million for the six months to October 27, from £600,000 in the previous half. It closed 65 stores of the 81 earmarked this year after striking a deal with creditors and landlords to prevent it from going bust.
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MRW
Tesco (TSCO), Sainsbury (J) (SBRY) and Morrison (Wm) Supermarkets (MRW) on Tuesday pinned their hopes on last-minute Christmas shopping to boost their coffers as it emerged fewer shoppers had visited their stores in recent weeks. Three of the four biggest grocers lost market share to rivals as they entered the crucial trading period, according to Kantar’s latest industry figures. Tesco dipped to 27.6% in the 12 weeks to December 2 from 28.2% the year before. Sainsbury’s fell from 16.4% to 16%, while Morrisons edged down from 10.6% to 10.5%. Asda’s market share was flat. Tesco, Sainsbury’s and Waitrose saw sales drop 0.1%, 0.2% and 0.7% respectively. Co-op and German discounters Aldi and Lidl continued to grab market share. Giles Hurley, boss of Aldi UK, said: “We enter the Christmas trading period with great momentum as the UK’s fastest-growing supermarket.”
MKS
Ex-Sainsbury’s boss Justin King takes M&S role. Former Sainsbury’s boss Justin King on Tuesday said he will join Marks & Spencer Group (MKS) as a non-executive director, a week after he stepped back from his full-time role at Terra Firma. King, a City grandee credited with turning around Sainsbury’s during his decade-long tenure, will join M&S chairman and fellow retail heavy-weight Archie Norman and chief executive Steve Rowe in January. M&S has been revamping its top team to turn its fortunes around, under the close watch of Norman, credited with reviving supermarkets chain Asda in the Nineties. M&S’s sales have been suffering as cheaper rivals have piled on the pressure and shoppers have migrated online.
MYSL
Sir Philip Green and Mike Ashley hurt by Mysale Group (MYSL) profit warning. Billionaire retail tycoons Mike Ashley and Sir Philip Green were on Tuesday left nursing millions of pounds worth of paper losses after MySale, the online fashion retailer they back, issued a profit warning. AIM-listed MySale said tax changes in Australia, and the disruption that caused in the online market, led to more discounting amid higher competition in the second quarter. It expects full-year profits and revenues to come in “significantly” below the A$15 million (£8.5 million) and $295 million analysts had been expecting. Boss Carl Jackson called it a “short-term dip” and plans are under way to reduce costs.
MYSL
MySale shares plunge by more than 50% after profits warning. £29m wiped off paper value of flash-sale site part-owned by Philip Green and Mike Ashley. Mysale Group (MYSL), the online flash-sale retailer part-owned by retail tycoons Sir Philip Green and Mike Ashley, issued an unexpected profits warning on Tuesday, prompting a plunge in the shares that wiped out half the company’s market value. In an unscheduled trading update, MySale said it expected revenue and profits for the year to 30 June 2019 to be significantly below market expectations, blaming “challenging conditions” in the run-up to Christmas. Shares in the Australia-focused but UK-listed firm plunged by 54% to 17.9p, wiping £29m off the value of the company.
WPP
WPP advertising group to cut 3,500 jobs in £300m restructuring. Firm to shut or merge almost 200 offices worldwide months after Martin Sorrell’s exit. WPP (WPP) is to cut 3,500 jobs worldwide and shut or merge almost 200 offices as the embattled advertising group seeks to restructure after a torrid year that included the exit of its founder and chief executive, Sir Martin Sorrell. The restructuring, which will be revealed in full at a lengthy analyst and investor presentation on Tuesday, will include shutting 80 offices globally and combining operations of a further 100 in locations where business is slow. The company is to cut 3,500 of its 134,000 global workforce but would not say how many roles or offices would be affected in the UK. It has 400 ad businesses in more than 3,000 offices in 112 countries.
SDRY
Co-founder takes a swipe at Superdry (SDRY) business model. Julian Dunkerton steps up campaign to return to fashion retailer he quit this year. The Superdry co-founder Julian Dunkerton has stepped up his campaign to return to the fashion retailer by voicing his concerns over the company’s direction in a City stockbroker note. In an unusual intervention, Dunkerton criticised the firm’s business model in comments to the Liberum analyst Wayne Brown, a former head of investor relations at Superdry. The retail entrepreneur states in the Liberum note that he quit the company’s board in March because he could not “put his name to the strategy”. Dunkerton told Liberum: “The interaction between stores and the internet is going to be so fundamental to the future of retail. Consumers have adopted the internet and, by doing so, have moved away from the limitations of the high street and towards a world of unlimited choice. The premise here is if one does not participate in this world you will get left behind.”
Interserve in financial rescue talks with creditors. Shares plunge more than 70% as government contractor tries to avoid fate of Carillion
JUST
Just Group (JUST)/equity release: the burden of roof. Shares leap 20% on welcome news from regulator but lender needs to diversify
JUST
Just Group (JUST) jumps as PRA softens equity release stance, Insurer welcomes greater clarity on changes to accounting rules
BA.
Small businesses to receive boost from BAE Systems (BA.) pension fund. Lending programme with ThinCats aims to transform the way SMEs get financing
MYSL
Online retailer Mysale Group (MYSL) saw more than half of its value wiped off today after it warned it will make a loss in the first half of its financial year due to changes to tax sales regulation in Australia, its largest market. Mysale – which operates flash-sales websites selling clothes, beauty and homeware products also in the UK, New Zealand and South East Asia – said it expects to make an underlying loss in the first half to December. It also warned sales and profits would come in ‘significantly below’ market expectations for the full-year to the end of June 2019. Shares in MySale fell by over 53% to 16p in morning trading.
WPP
WPP (WPP) is cutting 3,500 jobs across the world as it looks to close some offices and remove some job roles that overlap across its agencies. It comes as new chief executive Mark Read, who recently replaced founder Martin Sorrell, announced the advertising group is going to slash costs by £275million over the next three years in a bid to return to growth. The 3,500 job cuts but will be partially offset by adding 1,000 in key locations such as New York, according to Reuters.
Average earnings are rising at the fastest level in a decade at 3.3%, new figures on the jobs market revealed today. Average earnings were up by 3.3% in the year to October – an improvement from 3.1% in September. It is highest figure since 2008 and beats the current inflation figure of 2.4%. Employment is also up by another 79,000 to a record high of 32.4million people, according to the Office for National Statistics report. Those out of work was also up, by 20,000, though unemployment rate is still lower than a year ago at 1.38million. The UK’s jobless rate is now 4.1%
CPR
Carpetright (CPR) shares, which have been in the doldrums since the firm unveiled a radical store closure plan last April, spiked by more than 9% in early trading today. The minor rebound came as the flooring stalwart revealed hefty losses relating to the closure of 65 shops, but reassured investors with signs of green shoots. Carpetright racked up losses of £11.7 million in the six months to the end of October, compared with a small profit a year ago, while sales declined 15.7 per cent to £191million.
IRV
Lloyds Banking Group’s chairman has been dragged into the crisis at Interserve (IRV), having led the ailing outsourcer for a decade. With fears mounting that the service support and construction group could follow Carillion into oblivion, the spotlight has turned on the company’s former and current decision-makers – including Lord Blackwell. Analysts said the seeds of the crisis were sown years ago when bosses embarked on a dangerous expansion plan. The aggressive push for growth – and a disastrous move into the energy-from-waste sector – was spearheaded by then chairman Blackwell, chairman of Lloyds, and chief executive Adrian Ringrose. Having made millions during their time at Interserve, Blackwell left in 2016 and Ringrose in 2017 following a collapse in the share price.
TED
Ted Baker (TED) chairman told to quit for failing to take action over claims chief exec harassed staff. Ted Baker’s chairman is facing calls to resign as the fashion chain reels from allegations of harassment against its chief executive. David Bernstein, 75, is under pressure to step down having failed to take action over claims that founder and boss Ray Kelvin massaged, kissed, hugged or inappropriately touched members of staff. Bernstein has been on the fashion chain’s board since 2003 and became chairman in 2013.
CARR
One might think that the worlds of agricultural feed blocks and nuclear engineering make very unlikely bedfellows, but Carr’s Group (CARR) seems to prove that the two can sit comfortably together in a business that looks to be growing well. Carr’s traces its roots back 150 years to a bakery business that diversified into flour milling and animal feed manufacture and, as a result, grew to include an engineering side to service its mills and a transport side to deal with distribution. The bakery business provides a lasting legacy through the Carr’s Water Biscuits name, savoury crackers of note, although the company disposed of that business in 1964 and all of its remaining food operations in 2016, having dropped the Carr’s Milling name a year earlier.
BOWL
Hollywood Bowl has announced a special dividend for the second consecutive year as it booked record profits and revenues. The UK’s largest 10-pin bowling operator said it will hand investors a special dividend of 4.33p per share on top of the ordinary dividend for the year, returning a total of £15.9million to shareholders. Shares in Hollywood Bowl Group (BOWL), which listed on the London stock exchange in 2016 at 160p, rose 9.2% to 200.5p in morning trading.
SDRY
Superdry slump sparks call for a rethink as founder Julian Dunkerton slams management for ‘halting innovation’. Superdry (SDRY) is under pressure to rethink its strategy with concerns about its performance growing. The fashion retailer is expected to post an £8million drop in half-year profits to £17million tomorrow. The figures come amid a row between management and Superdry founder Julian Dunkerton, who is eyeing a return to the business. The group has blamed a lack of cold weather for poor sales of its coats and jumpers which account for almost half of annual turnover.
JUST
Equity release rule change sees Just Group shares soar 19% as Bank of England deals the firm a good hand. Investors in Just Group (JUST) breathed a sigh of relief today after it emerged that new rules around lifetime mortgages will hurt the pensions provider and equity release specialist far less than feared. Shares rose by as much as 27% to 101p in early trading after the Bank of England’s Prudential Regulatory Authority published its new rules. They closed the day up 19%, or 15.65p, at 97.75p. Just Group said the rules are ‘considerably less onerous’ than those set out in a consultation paper earlier this year.
AVCT
Pharmaceuticals business Avacta Group (AVCT) has shot up on signing a deal with the life sciences branch of LG Group, worth up to £143million. Avacta is developing an alternative to vaccines, which don’t rely on antibodies and the immune system’s response to them. It has signed a development partnership and licence agreement with LG Chem, but did not reveal what diseases it would be targeting. Avacta’s shares rose by 31.5%, or 7.3p, to 30.5p.
PHTM
Photo-Me International (PHTM) wasn’t looking so healthy. Revenue for the six months ending in October fell 2% compared with last year to £119.8million, while profit before tax plunged 21% to £26million. There were some rays of light for Photo-Me. Operations in Japan recovered faster than expected after a tricky period, while the roll-out of its Revolution outdoor self-service washing machines helped revenue in that division climb 28.5%. But it blamed slow activity in its UK business-to-business arm for dragging down profits, saying there had been a lag in the number of large orders placed by firms buying its equipment.
IRV
KIE
In another terrible day for outsourcers, as Interserve (IRV) plunged 53.1%, or 13p, to 11.5p on revealing its rescue plan, Kier Group (KIE) continued to slide lower. Kier told investors last week it was planning to reduce its debt by offering them new shares to buy, since banks had become less willing to lend to the sector following the collapse of Carillion. These shares will be sold at 409p, and banks and brokers including Numis, Peel Hunt, Citigroup, HSBC and Santander promised that if they couldn’t find investors to buy all the shares, they would buy the excess themselves. Since Kier’s share price is significantly lower than the 409p offer price, down 1.5%, or 5.6p, at 376.4p yesterday, it looks like the banks may have to stump up. Investors aren’t likely to buy the new shares for 409p when they can buy existing ones for just over 376p. The offer for the new shares closes next Wednesday, so Kier still has a little time to start climbing again.
MKS
Justin King, the former Sainsbury’s boss, is to return to Marks & Spencer Group (MKS) as a non-executive director as the struggling retailer beefs up its board. Mr King was credited with reviving Sainsbury’s during his decade-long rein at the supermarket between 2004 and 2014 by turning it from a retailer that struggled with empty shelves to spearheading its lucrative push into the convenience market, notching up nine years of sales increases. He previously ran Marks & Spencer’s food division and set up its Simply Food chains, which until recently had remained the biggest growth driver for the retailer.
WPP
WPP (WPP) will cut 3,500 jobs and shut dozens of offices in an attempt by new chief executive Mark Read to steady the advertising giant after a torrid two years marked a bitter parting with the architect of its sprawling empire, Sir Martin Sorrell. Mr Read said the overhaul would cut costs by £275m by 2021 and restore sales growth. About 80 WPP offices worldwide have been earmarked for closure, with a further 100 agencies due to share accommodation. “The old WPP was in structural decline,” he said. “The new WPP will not be.” Half the savings will be reinvested, including hiring 1,000 new staff to reinvigorate the creative side of its business and push further into technology.
CPR
Carpetright (CPR) losses have widened dramatically as the embattled retailer has been hurt by weak consumer demand and the whiplash of a rescue plan that has closed dozens of stores. The company said that it had been a “transitional year” as it reported that pre-tax losses had ballooned to £11.7m in the 26 weeks to Oct 30, compared to losses of £0.6m a year earlier. Sales tumbled 15.7pc to £191m after the retailer shut 65 stores during the period. The company said that like-for-like sales had improved from a 16.8pc slump in the first quarter to an 8.9% drop as the company repaired some of the damage to its reputation caused from its restructuring. Suppliers withdrew their product and consumers shunned the brand while there was “negative sentiment” associated with its company voluntary arrangement (CVA), it said.
MYSL
Mysale Group (MYSL), the Australian online retailer backed by retail tycoons Mike Ashley and Phillip Green, lost half its market value as the fashion seller issued a profit warning amid “challenging” market conditions.
Carl Jackson, chief executive, said he was “very disappointed” with the performance after the company said that revenue and profit for the year to June 2019, would be “significantly” below market expectations
The Aim-listed retailer also said that it swung into a loss before interest, tax, depreciation and amortisation in the first half of the year, though it expected an improvement in the second half.
Shares in the company fell more than 50pc to 16p in afternoon trading. Its market cap fell to £25m.
Crossrail delayed indefinitely as bosses warn it could require £1.7bn injection. The crisis-hit Crossrail project has been delayed indefinitely as bosses warn that the project could require an extra £1.7bn funding injection, according to transport executives and politicians. The flagship new Elizabeth Line that will run east-west through London was originally due to open this month. Now the company has admitted it does not know when it will open. “It has now become clear that more work is required than had been envisaged to complete the infrastructure and then commence the extensive testing necessary to ensure the railway opens safely and reliably,” Crossrail said in a statement.
IRV
Shares in outsourcer Interserve (IRV) plunge after confirming plan to hand control to lenders. Crisis-hit outsourcer Interserve saw the value of its shares cut in half on Monday after revealing plans for a deal with its lenders that could leave its current investors’ stakes all but wiped out. The company, which builds schools, cleans prisons and maintains roads, said it was in talks with creditors including HSBC and RBS about a possible debt-for-equity swap to tackle its ballooning debt pile which is expected to grow as high as £650m by the end of the year. It hopes to cut its leverage to 1.5 times pre-tax earnings in a move that “could result in material dilution for current Interserve shareholders”. Cenkos analyst Kevin Cammack said the figures implied Interserve would need to create new shares worth as much as £500m, dwarfing its current stock market value of around £17m.
IRV
CPI
MTO
KIE
Interserve (IRV) scrambles for survival in the shadow of Carillion. Since the dramatic collapse of Government contractor Carillion 11 months ago, the question on the City’s lips has been: “Who will be next?” Outsourcers have had a rough time over the past few years, competing fiercely for contracts on tiny margins and racking up big debt piles that have forced several of them to tap shareholders for more cash. Some thought Capita (CPI), the “white collar” contractor that runs recruitment for the British Army and IT networks for a number of Whitehall departments, was done for. Others turned their attention to facilities management specialist Mitie Group (MTO) and  construction contractor Kier Group (KIE). But it has now become clear that Interserve, which cleans hospitals, feeds prisoners and builds roads, is the most in peril.
BOWL
Shares in Hollywood Bowl Group (BOWL) were on a roll after the bowling alley operator announced a special year-end dividend for the second consecutive year. Pre-tax profits rose 12% to £24.9m in the year ending September 30 after a 5.8% rise in sales to £120m sending stock jumping 26.50p to 210.0p on the back of the news. The company, which is the largest bowling alley chain in the UK, proposed a special dividend of 4.33p per share, 30% higher than last year’s special dividend, while the final dividend was raised 7.1% to 4.23p. Chief executive Steve Burns, said that while the company was “mindful” about the uncertainty surrounding Brexit, Hollywood Bowl offered a “low-cost experience which is less likely to be impacted by any squeeze to consumer spending”.
CNA
Shares in electricity and gas supplier Centrica (CNA) dipped 4.58%, or 6.40p, to 133.20p following a report that suggested the firm might find it difficult to maintain its dividend policy. In a review of European utilities, Deutsche Bank downgraded its rating for the British Gas owner from ‘buy’ to ‘hold’ and reduced its target price to 115p from 135p. Last month the company confirmed it had lost an additional 370,000 customers at its residential supply division in the four months to October.
WGB
Questor: this wallpaper firm has had two thirds stripped from its share price and is now a buy. A series of mishaps has sent shares in Walker Greenbank (WGB) to a valuation of just seven times earnings, so there is plenty of scope for gains
Treasury’s Brexit analysis is overly optimistic, warn MPs. Parliament cannot rely on the Treasury’s analysis of the economic impact of leaving the European Union because its models are overly optimistic and ignore the effect of triggering the “backstop”, MPs said today. In a scathing response to government analysis of the withdrawal agreement, the Treasury select committee said that it could not be used to inform a meaningful vote. The judgment was unanimous on the 11-strong committee of four Conservative MPs, five Labour MPs, one independent MP and one member of the Scottish National Party. “The committee is disappointed that the government has modelled its white paper, which represents the most optimistic reading of the political declaration, rather than a more realistic scenario,” Nicky Morgan, the committee’s chairwoman, said.
WPP
WPP (WPP) shake-up will make 3,500 people redundant. The advertising giant WPP plans to axe 3,500 jobs in an attempt to reduce overheads by £275 million a year so that it can compete more effectively in an industry dominated by Facebook and Google. Mark Read, its new chief executive, said that “painful steps” were unavoidable as he laid out a three-year plan to reboot the company for the digital era. The bulk of the redundancies are expected to come from back-office and finance teams as Mr Read simplifies WPP’s sprawling empire. “As an industry we are facing tremendous changes from technology and we have to change the way we work. We need to return the company to growth, and unfortuantely some painful steps will be necessary over the coming years,” said Mr Read.
IRV
Interserve plummets over worries that it is ‘Carillion Mark Two’. The crisis engulfing Interserve (IRV) intensified yesterday after it warned of a big hit to shareholders from an emergency rescue plan. Shares in the outsourcing company slumped by as much as three quarters to 6p, valuing it at less than £9 million. The latest sell-off was triggered by Interserve warning that its deleveraging plans were likely to involve the conversion of a “substantial proportion” of its debt into new shares. “If implemented in this form, the deleveraging plan could result in material dilution for current Interserve shareholders,” it said.
KIE
Falling share price piles pressure on ailing Kier. The pressure on Kier Group (KIE) increased yesterday as its shares fell deeper below the price at which the company is seeking to sell new stock. The construction and outsourcing specialist unveiled a surprise £264 million rights issue last month as it tries to cut debt and boost its balance sheet. Its discounted offer price of 409p was 45% below its share price, but the shares have continued to slide since then. Indeed, they have halved since November 30, when Kier announced the fundraising, and they closed down 1.5% at 376½p yesterday, a 15-year low. Kier traces it roots back to the late 1920s as a concrete design and construction business.
JUST
New rules are what Just Group hoped for. The insurance regulator has softened rules that would have imposed strict capital requirements on the providers of lifetime mortgages. Shares in Just Group (JUST) rose by nearly 20% after the Prudential Regulation Authority announced what the life insurer described as “considerably less onerous” proposals than had been expected. The watchdog had been considering additional capital requirements on providers of lifetime mortgages that could have forced Just Group to raise capital. Lifetime mortgages are loans usually taken out by retired people to release equity from their home.
AZN
Astrazeneca works with Cancer Research UK. A new partnership has been launched between AstraZeneca (AZN) and Cancer Research UK to harness big data and genetics and accelerate the development of new medicines. The Anglo-Swedish pharmaceuticals company and the charity are collaborating on a new centre of excellence based in the Milner Therapeutics Institute at the University of Cambridge. Astrazeneca, which is also building a new headquarters in the city, is one of the world’s leading drugs companies with a filling pipeline of cancer treatments. Sales of its oncology products jumped by 42% to almost $2.7 billion in the first half of its financial year.
SDRY
The co-founder of Superdry (SDRY) has increased the pressure on the retailer after convincing a City broker that the present management’s strategy is flawed. Julian Dunkerton has “spoken extensively” to analysts at Liberum about his objections. Under a plan announced in September 2017, the company has scaled back the breadth of its clothing range, arguing that it was offering too many variations that didn’t generate enough sales. Mr Dunkerton, however, is not impressed. A “halt to innovation” has affected performance, he told analysts. “One should be generous with customers, offering them a wider and greater choice”, he said. “This is what they are asking for, if not demanding.” Superdry, he added, could become “the Asos of branded  clothing in a very exciting way”. A presentation by in April showed that it had cut its product lines from 5,900 to 3,800. Asos has 114,000, up from 84,000 in January.
GSK
BATS
DGE
CRST
Brexit uncertainty and a weak start to trading on Wall Street put pressure on stocks. The FTSE 100 closed down 56.57 points, or 0.8%, at 6,721.54. Losses were limited by a fall in sterling, which gave a boost to multinational companies that make a high proportion of their earnings overseas. GlaxoSmithKline (GSK) rose 32¼p to £14.70, British American Tobacco (BATS) gained 57½p to £27.21 and Diageo (DGE) edged up 16p to £28.01. The more domestically focused FTSE 250 tumbled 351.80 points, or almost 2%, to 17,492.31. Housebuilders and retailers were sold off as uncertainty around Brexit is expected to dampen demand. Crest Nicholson Holdings (CRST) was among the biggest fallers after Peel Hunt downgraded the stock to “reduce” from “hold”, saying that the builder was one of the most exposed in the sector. Its shares fell 28¼p to 309½p.
MTO
The chief executive of Mitie Group (MTO) put nearly £200,000 into its shares as investors fled the outsourcing sector, spooked by rescue talks at Interserve and Kier’s discounted rights issue. Phil Bentley bought 146,800 shares at just under 136p per share. That was not enough to convince investors worried about the risk of contagion and the security and maintenance  contractor closed down 7¾p at 129½p.
GFRD
Galliford Try (GFRD), the FTSE 250 housebuilder and construction group struggling with cost issues on the Aberdeen bypass, was also caught up in negative sector sentiment. Its shares fell 51p to 597p
AVCT
Avacta Group (AVCT), the biotech company developing cheaper alternatives to antibodies, shot up 7¼p to 30½p after announcing a development and licence agreement with LG Group, of South Korea. LG Chem Life Science will inject up to $180 million to help Avacta to develop drug technology for different diseases.
TCG
Investors in Thomas Cook Group (TCG) could be forgiven for feeling a little fraught. Since its latest profit warning two weeks ago, shares in the travel business have been bouncing around like a Super Ball in a concrete bunker. Yesterday was another day to forget after UBS cut its price target on the 177-year-old company’s stock from 60p to 34p, citing “lower estimates on underlying profits, higher exceptional costs as well as more conservative assumptions on working capital”. The shares duly fell by 4½p to 26½p, valuing the group at £409 million.
BOWL
Hollywood Bowl Group (BOWL) closed 25½p higher at 210p, a jump of 14.5%, after Britain’s biggest tenpin bowling operator accompanied strong full-year results with a second consecutive year-end special dividend.
MRW
SBRY
TSCO
Tempus: Buy Morrison (Wm) Supermarkets (MRW); hold Sainsbury (J) (SBRY); avoid Tesco (TSCO). Morrison’s has room to grow, trading is on a roll and the shares are good value
Under-fire Theresa May dealt fresh blow as Brexit wilts economy. More warning lights flashed over the UK economy on Monday as a deluge of data signalled slowing growth in a crucial week for Brexit. The latest official estimates for the economy’s performance revealed a deceleration in the quarter to October as overall output expanded 0.4%. That compared with a much faster 0.6% in the three months to September. The Office for National Statistics data painted a grim picture, with only services keeping the UK from stagnation in October as construction and manufacturing slid into reverse. A 0.2% expansion for the UK’s dominant services firms in the month, accounting for nearly 80% of overall growth, kept the UK just about in expansion territory, growing 0.1%. The latest evidence of a stuttering economy comes amid growing business uncertainty as the country’s EU exit looms closer.
IRV
The rout of Interserve’s bombed-out shares intensified on Monday as the firm said restructuring its debt would hammer investors. Shares in the company tanked nearly 60% — down 14.25p to 10.25p — after it admitted that a likely debt-for-equity swap of its £600 million-plus borrowings “could result in material dilution for current Interserve (IRV) shareholders”. Shares in Interserve, whose contracts include back-up services for the Metropolitan Police on demonstrations and ceremonial occasions, have plunged 90% this year.
BOWL
Hollywood Bowl Group (BOWL) dishes out special divi after sales jump. The tenpin bowling operator revealed revenues increased 5.8% to £120.5 million in the year to September 30. It saw pretax profits rise 13.4% to £23.9 million and said a special dividend of 4.33p per share will be paid on top of ordinary dividends. That means a proposed £15.9 million return to shareholders for the year. Shares in Hollywood Bowl jumped 18.5p, or more than 10%, to 202p. The company said it benefited from a number of revamps, plus consumers still viewing a trip to centres as affordable- a family of four can bowl for £20. Boss Stephen Burns said Hollywood Bowl is confident of further growth and excited to be opening new branches within big extensions at Intu Properties’ Lakeside and Watford centres this financial year
AVCT
Avacta Group (AVCT) was the top riser in London after agreeing on a development partnership and licence agreement with South Korea’s LG Group. The AIM-listed developer of Affimer biotherapeutics and reagents said the multi-target therapeutics development agreement provides for upfront and near-term milestone payments, plus longer-term clinical development milestones totalling $180 million.