Press | Vox Markets
SMWH
Lombard – WH Smith (SMWH) $400m deal is half the incredible story. Retailer is expanding into US airports but still growing margin on UK high street
CAL
Growthpoint to take control of Capital & Regional (CAL). South African group in £150m move for majority stake in struggling UK shopping mall owner
RTO
Lex – Rentokil Initial (RTO): papa roach. Acquisitions have paid off for UK pest controller but now other acquirers are multiplying
BARC
SFO case against ex-Barclays (BARC) bankers is ‘misconceived’, court told. Roger Jenkins would have been ‘insane’ to risk his job in sham with Qatar PM, defence argues
BLT
BHP Billiton (BLT) UK investors urge halt to fossil fuel lobbying. Miner defends green credentials as one-fifth of shareholders vote to pull out of fossil fuel industry groups
DOM
Domino’s Pizza Group (DOM) to exit four markets after weak performance. Chief says pizza chain ‘not best owner’ of businesses as search for successor continues
SMWH
WH Smith (SMWH) to buy US travel company for $400m. UK stationery-to-travel company expands with plan to buy Marshall Retail
MONY
Shares in Moneysupermarket.com Group (MONY) slumped over 10% after the group admitted it was still having problems with ‘product availability’ across its money arm. The group’s money division, which spans everything from credit cards to travel money, shrank 5% to £20.6million in the three months to the end of September. While the group’s money division struggled, overall, the group’s total revenue grew 4% year-on-year to £100.9million. The company’s insurance arm sales rose 3% to £50million. ‘Insurance grew in a subdued premium environment despite some volatility in our natural search rankings,’ MoneySupermarket said. Meanwhile, the group’s home services division, which includes energy, saw revenue rise 21% to £17.7million.
DOM
Domino’s Pizza Group (DOM) is set to pull the plug on it sizeable international operations as sales in these markets remain lacklustre. Outgoing chief executive David Wild said today that, following a review of the division – which spans Iceland, Norway, Sweden and Switzerland – the firm is better off selling out and focusing on its core UK market, where it has more than 1,100 shops. ‘We have concluded that, whilst they represent attractive markets, we are not the best owners of these businesses. The board has therefore decided to exit the markets in an orderly manner,’ he said.
SMWH
Shares in WH Smith (SMWH) jumped over 6% this morning after the retailer announced it had snapped up Las Vegas-based Marshall Retail Group for £312million. While WHSmith looks set to continue losing money across its high street branches in the UK, the deal with Marshall will enable it to continue expanding at travel hubs in the US. For this year, WHSmith expects its UK high street revenue to fall by 2%, while its profits are predicted to stay flat at around £60million. Once the deal is completed, the number of stores WHSmith has is the US will double. Marshall has 170 stores in North America, 59 of them in airports. WHSmith will pay for Marshall by raising £155million from shareholders in an underwritten share placing and by taking on more debt.
FDBK
Feedback (FDBK) is in advanced talks with the NHS to trial its app Bleepa at pilot sites. The encrypted messaging app allows doctors to send each other pictures of X-Rays and other scans. Doctors usually use WhatsApp to do this when diagnosing patients, leaving them vulnerable to lawsuits. The firm is also pondering other commercial opportunities for Bleepa, within and outside the NHS.
GFTU
Grafton Group Units (GFTU) shares sank after it became the latest building materials supplier to warn that the construction slowdown and DIY drought is chipping away at its profits. The firm warned profits would be 4% to 8% lower for the full-year as sales suffered in its merchanting arm, which sells to builders. Although chief executive Gavin Slark was quick to say that recent trading was more reflective of a nervous market than the nuts and bolts of the business. Group revenue rose 0.9% between July and September, but fell 1% in the UK and 3% in the Netherlands. Grafton, whose stores include Selco, Buildbase and Woodie’s, blamed a court ruling on nitrogen emissions in the Netherlands for holding up construction projects there, and, like many firms, pointed the finger at ‘economic uncertainty’ for the stumble in the UK.
ULVR
Britain’s tea drinkers are a dying breed as younger customers desert the traditional builder’s brew in favour of trendier alternatives, the owner of PG Tips has warned. A growing shift among younger consumers toward herbal tea and coffee means that PG Tips and Lipton maker Unilever (ULVR) is struggling to grow the brands in developed countries such as the UK and US. Finance boss Graeme Pitkethly said: “I drink five or six cups of builder’s tea a day, but unfortunately we are dying at a faster rate than generation Z and millennials are consuming it. “They might drink tea but they want to drink quite high-end, expensive products. They drink a lot of coffee.
CAL
Shares in retail property firm Capital & Regional (CAL) leapt the most in a decade yesterday, after the company accepted a £150m offer from South Africa’s Growthpoint Properties that will make the group its majority owner. The decision lifted C&R, which owns shopping centres including The Marlowes in Hemel Hempstead, to the top of the FTSE All-Share index. If the deal is passed, Growthpoint will hold just more than 51% of the company’s shares. C&R is currently sitting on a heavy debt pile, which the South African group hopes to cut.
GFTU
Grafton Group Units (GFTU), the owner of Selco and Buildbase, has warned on profits as consumers cut back on DIY home improvement projects. The FTSE 250 building materials supplier said on Thursday that annual profit would be 4% to 8% lower than the £193.5m projected by analysts. The warning comes as the UK construction sector grapples with weak demand from households and wider economic uncertainty. Grafton said sales in the Netherlands were dampened by a court ruling on nitrogen emissions, which led to delays in permits for new construction projects.
DOM
Domino’s Pizza Group (DOM) yesterday named its Australian counterpart as a potential buyer of its international business after announcing plans to sell the loss-making operations. David Wild, chief executive, confirmed that it would contact Domino’s Pizza Enterprises, which holds the Domino’s master franchise rights in Australia and New Zealand along with Belgium, France, the Netherlands, Japan, Germany, Luxembourg and Denmark. Asked whether its Australian listed sister company might buy the British group’s operations in Switzerland, Iceland, Norway and Sweden, Mr Wild, 64, said: “Clearly they’re somebody we’ll be making phone calls to, but we need more than one option.”
SMWH
WH Smith (SMWH) has stepped up its overseas expansion with a $400 million takeover of Marshall Retail Group in the United States. The buyout will broadly double the size of the stationery retailer’s international travel business and follows its $198 million takeover of the US business Inmotion last October. Marshalls has 170 shops in North America, 59 of them inside airports, making $84 million in sales last year. Stephen Clarke said that his successor Carl Cowling, 46, was the architect of the deal. “It’s got his hard work and fingerprints all over it,” Mr Clarke, 51, said. “But if I were still here we would still be doing the deal because it is a fantastic acquisition and fits the strategy entirely.” Nick Bubb, a retail analyst, said the acquisition meant that Mr Clarke was “going out with a bang”.
ULVR
Lacklustre ice cream sales and a slowdown in China and India stalled quarterly sales growth for Unilever (ULVR), causing the Anglo-Dutch consumer giant to narrowly miss market expectations. The muted sales growth has highlighted the challenge facing Alan Jope to keep up sales growth in emerging markets. Mr Jope, who took over from Paul Polman in January, had promised to accelerate sales in emerging markets and said that the company would deliver growth in “the lower half” of a 3% to 5% range this year. However, Unilever recorded 2.9% underlying sales growth in the third quarter. The company is sticking to its guidance for the full year, however, and highlighted that sales had risen by 3.4% over a longer nine-month period.
BARC
A former Barclays (BARC) senior executive would have risked a £50 million “good leaver” package if he had sought a criminal deal with Qatar during the credit crisis, a court was told yesterday. John Kelsey-Fry, QC, a lawyer for Roger Jenkins, told a jury at the Old Bailey in London that it would have been “lunacy” for his client to risk such accrued benefits and a job that had paid him £38 million in 2007 alone. Mr Jenkins is one of three former Barclays executives charged with substantive fraud and conspiracy to commit fraud by false representation over undisclosed payments to Qatar during emergency fundraisings at the height of the financial crisis in 2008. Barclays raised £11.2 billion from Qatar and other investors to avert a state bailout.
GFTU
A slowdown in consumer spending on home improvement has prompted a profit warning from Grafton Group Units (GFTU), one of Britain’s biggest suppliers of building materials. Grafton said that annual profit would miss expectations in an unscheduled update that sent its shares closing more than 10% down. It said that third-quarter sales in the UK had been affected by “weak underlying demand fundamentals as households deferred discretionary spending on home improvement projects against the backdrop of increased economic uncertainty”. Consumer sentiment was weaker in Ireland, despite a more buoyant economy, causing a fall in demand in its merchanting and DIY markets.
CAL
One of South Africa’s biggest listed property companies has agreed to acquire a majority stake in Capital & Regional (CAL) in a rescue share deal. Growthpoint Properties will invest about £150 million for a 51% interest in Capital & Regional by buying shares at a discount to the property group’s net asset value. The offer includes an agreement to buy 30.3% of the issued share capital for £72.4 million, or 33p per share. Growthpoint will also acquire 311.5 million new shares at 25p per share to raise £77.9 million.
RTO
Rentokil Initial (RTO) boosted revenue by nearly 10% in the third quarter with its highest level of organic growth in ten years and a round of acquisitions. Revenue at the pest control and washroom supplies business increased by 9.8% to £723 million in the June to September period. The group noted the good growth in the UK in its pest control and hygiene businesses. Pest control services also performed well in the North American and Latin American markets with hygiene improving in Europe and the Pacific. The group said it was on track to meet full-year expectations and its M&A pipeline remained strong for the year.
MONY
Shares in Moneysupermarket.com Group (MONY) tumbled yesterday after the price comparison website posted a fall in revenues in its money business. The company said in an update that revenues from comparing loans, credit cards and mortgages fell 5% year-on-year to £20.6 million in the three months to the end of September. Moneysupermarket.com warned it faces “continuing challenges in product availability” in money and that the performance of the division will weaken in the rest of the year. Analysts at Peel Hunt blamed the slowdown in money on “limited” appetite among financial services firms for new customers.
BLT
Nearly a quarter of BHP Billiton (BLT) shareholders in Britain have voted to support a resolution calling on the Anglo-Australian mining group to suspend its membership of pro-fossil fuel lobbying groups. A total of 22.2% of BHP’s London-listed investors voted for a proposal initiated by investors including the Church of England Pensions Board, Standard Life Aberdeen and Aviva. Shareholders in Australia have yet to vote. It is a member of the Minerals Council of Australia, the main lobby group for the coal industry. Ken MacKenzie, chairman of BHP, had said that the miner could use its influence on pro-fossil fuel lobby groups by being a part of them. “If we’re going to successfully develop solutions we need to collaborate within our industry,” he said.
PRU
Prudential (PRU) found its way to the top of the market due to a bullish research note from analysts at Bank of America Merrill Lynch who argued the case for a re-rating ahead of the upcoming demerger of the UK business. Last spring, the Pru confirmed plans to separate its £7 billion UK and Europe-focused arm, which will be called M&G PLC, from the group’s operations in the US and Asia. Once their ways have parted, Bank of America thinks the Prudential share price will start life at about £12, which, according to their calculations, means the US business would be valued at next to nothing. More importantly, it would mean that the company would be valued at a similar ratio — close to eight times price-to-earnings — as the enlarged group at present. That’s despite the new bias towards the Asian business, which will account for 80% of the new Pru and, as the analysts note, is the “jewel in the crown”.
EVRH
EVR Holdings (EVRH) unveiled a new tie-up with the phone giant, O2. As part of its 5G UK launch, O2’s customers will get a 12-month subscription to EVR’s MelodyVR platform, which lets users watch gigs and artists in virtual reality. For each O2 customer that takes advantage of the promotion, MelodyVR will receive an undisclosed fee, while O2 will also promote the app in six of its flagship stores.
AFX
Shares in Alpha Fx Group (AFX) have more than quadrupled since the foreign exchange and payments group floated in London in the spring of 2017. The stock was up again yesterday, 60p higher to 910p, as bosses lifted their full-year guidance for the second time in three months. “Growth continues to be derived from the core UK corporate market, European clients serviced from the London office, as well as the institutional division and the broadening of the product base into currency options,” Alpha said. “As a result of the strong performance, the board expects earnings for the year ending 31 December 2019 to be ahead of market expectations.” One of the big drivers of the company’s outperformance is that it helps companies to hedge their exposure to currencies. That has proved useful since the EU referendum, which kicked off a period of volatility for sterling that firms would wish to avoid as it can have undue influence on performance.
FLTR
Tempus – Flutter Entertainment (FLTR): Hold. Fairly valued gaming growth stock with plenty of opportunities but also some regulatory pressure
ASHM
Tempus – Ashmore Group (ASHM): Buy. High quality investment manager that generates good value over time
HL.
Hargreaves Lansdown (HL.) customers lash out over Woodford. FCA examining role of funds supermarket, which promoted stockpicker
TCG
Thomas Cook Group (TCG) airport slots draw bids from rivals. Collapsed travel group’s Nordic business also attracts interest as asset sales increase
ASC
Lex – ASOS (ASC): click fate. Retailer struggles to show it has matured into a smoothly-run sales machine
ASC
ASOS (ASC) shares surge despite fall in earnings. Online fashion retailer strengthens management after pre-tax profits drop 68%
WPCT
Despairing investors in Woodford Patient Capital Trust (WPCT) are in danger of incurring even bigger losses if they hang on to their shares, analysts warned yesterday. On the first day of trading since Neil Woodford resigned as fund manager, shares fell as much as 12% to a record low of just below 30p. They closed at 32.5p, having been worth around 119p in August 2015. But JP Morgan analysts have warned that those desperate to avoid crystallising their losses may get even less back in future. The trust’s board is looking at whether it should appoint a new manager, sell it to another fund management company or wind it down and sell the assets. JP Morgan said that all scenarios will bring risk. Shares have been trading at a huge 50% discount to the estimated value of the assets as investors have shunned it. Yesterday, JP Morgan said: ‘This already includes some hefty writedowns, but it is inevitable that there will be more. We just don’t know how much and when.’It added: ‘An orderly wind-up is the best way forward.’
The competition watchdog has formally launched an investigation into Amazon’s investment in food delivery firm Deliveroo. It follows a multi-million pound deal, part of a £460million fundraising round, which saw the internet retailer attempt to buy a minority stake in the British company. The Competition and Markets Authority (CMA) has suggested this could lead to a full takeover of Deliveroo. It has ordered the companies to temporarily halt the process until its inquiries into the deal are complete. The CMA probe could lead to a more detailed ‘phase 2’ investigation – and possibly prompt it to block the investment.
ASC

ASOS (ASC) said profits tumbled 68% in the 12 months to August 31, as it forked out to remedy warehouse issues in Germany and the US, was pipped to the post by rivals on Black Friday and struggled amid weak consumer confidence.  Costly investment and rising costs meant the company even swung into debt, with £95million now on its books. Investors appear to have been braced for worse numbers than Asos actually delivered, therefore many have seen today as buying opportunity. Reassuring bright spots in the results include rising customer numbers and a 13% uplift in sales to £2.73billion as its more ‘glam’ shoppers snapped up animal print, broderie and satin. Adam Vettese from eToro said this proves Asos ‘it is still incredibly popular with fashion-conscious twenty-somethings’. But he added: ‘The firm will want to see this progress carried into the new year, meaning this is perhaps the most important Christmas trading period in Asos’ history.’

BDEV
Barratt Developments (BDEV), said it has the cash to deal with any Brexit fallout in the housing sector. The sector’s economic outlook depends on how Britain leaves the EU, Barratt said, but insisted its net cash balance and the homes it is set to sell this year means it has the ‘resilience and flexibility to react’ to changes next year and beyond. The developer finished more than 3,250 homes in the last 15 weeks and is due to sell nearly 13,000 for more than £3 billion over the financial year. However the average value of the homes it is set to deliver is around £236,800, down from £243,900 last year. Barratt chief executive David Thomas said the company has started its financial year well, showing ‘a good sales rate and a healthy forward order book’. ‘We maintain our focus on the delivery of operational improvements across our business, and our commitment to deliver the highest quality homes across the country,’ he added.
Sativa Investments plc (SATI) has been granted a licence by the Government to grow cannabis in Somerset. The firm said the licence allowed it to grow cannabis that contains more than 0.2% tetrahydrocannabinol (THC), a psychoactive compound. It can now collaborate with researchers looking at the impact of the drug on people with respiratory health issues. Sativa already grows cannabis with lower levels of THC.
MDC
Mediclinic International (MDC) was on the rise after issuing a cheery trading update. The company said that profits would be better than expected when it reports half-year results next month, after strong performance in southern Africa and the Middle East. Revenue for the six months to September 30 was about 9% higher than a year ago, while profits were likely to have risen by 5% to about £224million.
RIO
Rio Tinto (RIO) reported a 5% rise in iron ore shipments that was helped by strong demand from China. The London-based company shipped 86.1m tonnes of the ore in the three months to the end of September, compared with 81.9m a year earlier. Iron ore typically accounts for more than 60% of Rio’s earnings. It said it still expected iron ore shipments for the year of between 320m and 330m tonnes, however, after a global squeeze on supplies started to ease.
MTRO
Metro Bank (MTRO) is under pressure from the Bank of England to hire an industry veteran as its next chairman, as the troubled lender braces for another set of gloomy financial results. The lender is understood to be facing demands to hire an experienced insider in place of Metro founder Vernon Hill, who is stepping down as chairman following a disastrous year in which a major accounting gaffe left investors nursing huge losses. In a sign of their concerns about how Metro has been run up to now, Bank of England regulators are taking a keen interest in who gets the job.
Fund manager M&G has hired City law firm Baker McKenzie to investigate allegations that one its senior managers sexually harassed junior female colleagues. The unnamed fund manager is accused of targeting women at the firm’s London headquarters with sexually explicit text messages and inappropriate comments, Bloomberg reported on Wednesday, citing sources claiming to have witnessed the behaviour. The allegations were reported by Gavin Finch, the same Bloomberg journalist who earlier this year uncovered widespread sexual harassment and bullying across the Lloyd’s of London insurance market. The revelations prompted bosses to launch a full-scale review into its working culture.
BKG
The chairman and founder of Berkeley Group Holdings (The) (BKG) has banked almost £80 million in the past three months after selling shares in the housebuilder. Tony Pidgley, 72, sold a million shares in the company for £42 million this week, on top of the million shares he sold for £37.2 million in July. The latest sale reduced his stake in the business by a quarter. He now holds a 2.1% stake that was worth more than £120 million at last night’s share price close of £44.54. Mr Pidgley’s share sale comes amid increased scrutiny of executive pay in the housebuilding sector. At Berkeley’s annual meeting last month, 43% of voting investors opposed the directors’ pay policy.
ASC
Shares in ASOS (ASC) rose by more than a quarter yesterday after investors bet that the online retailer had turned a corner, despite profits falling by 68% on the back of problems at its international warehouses. Marcus Morris-Eyton, a portfolio manager at Allianz, which is Asos’s fifth largest shareholder, said that it was “probably too early to call a complete turnaround” but that there was now “ample room” for the retailer to grow profit margins after resolving the issues with its warehouses and strengthening the management team. Nick Beighton, the chief executive, admitted that Asos had “taken its eye off the ball” because its internal operations had not kept up with its international growth. Overhauling two overseas warehouses simultaneously had thrown up too many challenges. “We were not adequately prepared for the additional complexities of planning and trading across our expanded warehouse footprint,” Mr Beighton said.
BDEV
Barratt Developments (BDEV) reported a resilient sales rate for the first 15 weeks of the new financial year, but the value of the homes it sells has dipped. The company said that it had a forward order book of 12,963 homes, slightly up on the 12,903 it had on its books this time last year. The average price agreed for the homes it is due to build has fallen to £236,800 from about £243,900 last October. Lower average selling prices have been driven in part by Barratt’s decision to move out of the central London market. The housebuilder’s weekly average private sales per site for the 15 weeks to October 13 was flat year-on-year at 0.72. It reiterated that it expected sales volumes to grow towards the lower end of its medium-term annual target range of 3% to 5%.
NEX
National Express Group (NEX) has signed a €1 billion bus contract in Casablanca that will give it more buses in Morocco than in Britain. Alsa, the transport operator’s Spanish and Moroccan division, said that it would provide about 700 buses and a new payment system and scheduling in the country’s largest city and economic capital. The company started operations in Morocco in 1999 with a contract to manage the urban transport system in Marrakesh. The Alsa contract will last for ten years, with the potential to extend to 15, and nearly doubles National Express’s presence in Morocco. The group will run 400 buses in Casablanca next month, with an additional 300 next year, carrying 100 million passengers annually.
PRU
Claims of sexual harassment by a star fund manager at M&G Investments and suggestions that the company tolerates a culture of drink-fuelled abuse against female staff have threatened to overshadow its £8 billion flotation next week. One of the investment group’s top money managers is alleged to have harassed younger women over several years, according to Bloomberg. The allegations surfaced just days before Prudential (PRU) is due to spin off M&G as a separately listed company with almost certain membership of the FTSE 100. M&G manages £334 billion of funds for retail investors and institutions as well as operating Prudential’s UK insurance operations.
The competition watchdog will begin a formal investigation into whether Amazon’s estimated $500 million investment in Deliveroo would hurt the takeaway delivery market. The Competition and Markets Authority, which had served an initial enforcement order on the alliance in July, said that it had decided to launch a phase-one investigation and had set a deadline of December 11 for determining whether to refer it to an in-depth phase-two inquiry. When it served the initial enforcement notice, the regulator said that its intervention was due to concern that the American ecommerce company would use its investment to wield significant influence over the British online takeaway company.
LLOY
RBS
BARC
Lloyds Banking Group (LLOY), Royal Bank of Scotland Group (RBS) and Barclays (BARC) all found themselves on the up as Morgan Stanley brightened its outlook on UK banks. Its analysts said the industry “remains challenging” given the intense competition and a tough macroeconomic backdrop, but they reckon most of the negative news is already in the share prices. “Q2 results season already lowered expectations on revenues, and we believe operating trends would improve in a negotiated Brexit scenario,” Alvaro Serrano and his team said in a note to clients. Such an outcome is now more likely, they argue, which bodes well for a sector whose exposure to the UK economy has seen it bear the brunt of Brexit headwinds. According to Morgan Stanley’s economists, there is now a 10% chance of no-deal, compared with their previous estimate of 40%. Lloyds remains the top pick of the number crunchers, who reckon the current valuation is “compelling” and provides “the best risk-reward skew” in the UK domestic sector.
AUG
Augean (AUG) told the market that profits this year would be “materially ahead” of estimates as the amount of rubbish it takes to landfills had jumped by 20%, while the prices it can charge to take that rubbish away had also picked up.
Hipgnosis Songs Fund (SONG) has bought a music catalogue from Timbaland, the Grammy award-winning hip-hop songwriter and producer. Timbaland — real name Timothy Mosley — has produced albums for Justin Timberlake, Missy Elliott and Nelly Furtado, which sold tens of millions of copies. In return for an upfront fee, Hipgnosis will receive Timbaland’s cut of the royalties from 108 albums and songs he has been involved in. “Ask any of today’s greatest creators who their biggest influences are and the one name on everybody’s list is Timbaland,” Merck Mercuriadis, founder of Hipgnosis, said.
BATS
IMB
Tempus – British American Tobacco (BATS), Imperial Brands (IMB): Buy. They could easily absorb the demise of vaping for decades to come and the shares are extremely cheap
Woodford empire implodes as he quits last two funds. UK’s best-known stockpicker takes ‘highly painful decision’ after being fired from flagship
BARC
Former Barclays (BARC) chiefs ‘scared to death’ of bailout prospect. Court told of nationalisation worries as bank sought emergency fundraisings
HAS
Lex – Hays (HAS)/Brexit: hire purchase. Unpredictable UK politics will produce new buying opportunities
RMG
Royal Mail (RMG) union votes to strike in run-up to Christmas. Dispute over conditions, job security and alleged bullying risk first nationwide walkouts in a decade
VSVS
RSW
Vesuvius (VSVS) and Renishaw (RSW) slump amid global production chill. Manufacturers blame challenging economic backdrop as profits squeezed
TCG
Thomas Cook Group (TCG) chief says lack of government support led to collapse. Peter Fankhauser tells MPs he had no contact with UK ministers in days leading up to liquidation
MARS
Marston’s (MARS) shares take knock after warning on profit. Pitcher & Piano owner expects ‘broadly flat’ earnings, hit by food-led division
INDV
Indivior (INDV) shares rise as it boosts guidance for a second time. Drugmaker lifted by strong performance of opioid treatment Suboxone
TSCO
SBRY
MRW
The market share of the Big Four supermarkets has tumbled to a 15-year low as the march of the German discounters Aldi and Lidl continues. Tesco (TSCO), Sainsbury (J) (SBRY), Asda and Morrison (Wm) Supermarkets (MRW) now hold just 62.7% of the market. The last time it was that low was in November 2014 – piling pressure on the Big Four ahead of the crucial Christmas trading period. Aldi and Lidl have raked in an additional £1billion in sales over the past year, boosting their combined market share to 14.1%, data company Kantar said. Aldi, which has an 8.1% share, is now rapidly catching up with Morrison’s, which has slumped to under a tenth of the UK market. The discounter has been luring middle-class customers by selling high-end products such as yellowfin sole and Aberdeen Angus steaks under the banner ‘Luxury you can afford’. Sainsbury’s, the second-largest supermarket with 1,400 stores, performed better than its Big Four rivals, giving some relief to chief executive Mike Coupe after the failed merger with Asda.
HL.
The collapse of Neil Woodford’s investment empire is a major embarrassment for Hargreaves Lansdown (HL.). The fund supermarket was one of the fallen stock picker’s biggest cheerleaders, repeatedly featuring him on its ‘best buy’ list, despite concerns about his portfolio. It also offered clients discounted fees if they backed his funds. But Hargreaves, which has 1.1m customers, had to apologise when Woodford’s Equity Income fund was frozen in June. The freeze was imposed when investors concerned about poor performance rushed to the exit, leaving Woodford short of the cash he needed to repay them. Since then, critics have questioned why bosses continued to support Woodford publicly. This month angry shareholders told Hargreaves its closeness to Woodford had ‘badly damaged’ its reputation.
HAS
Investors reacted with relief to a tough update from recruiter Hays (HAS), which kept its fees stable in the face of a difficult UK private sector. The fees fell by 1% when analysts had been expecting a 2% fall. It follows profit warnings from recruiters Page and Robert Walters last week. Liberum analyst Sanjay Vidyarthi said there may be ‘some relief’ that the results were not even worse.
BWY
Bellway (BWY) has posted another rise in annual profits but warned that a slowdown in house price growth and higher building costs will squeeze margins further. The builder expects a ‘moderate volume of growth’ in the year ahead as the uncertainty about Brexit could have an impact on consumer confidence and the number of homes it sells. As the property market in London stalls, Bellway said it has started to shift its investments away from the capital towards other parts of the country, as areas like Manchester and East Midlands ‘performed well’.
CCS
Crossword Cybersecurity plc (CCS) surged more than 10% after it did a deal with Leonardo that commits the defence giant to using its Rizikon Assurance software to manage information about suppliers and other partners they work with, in bids for major contracts. Leonardo will now bid for a slew of contracts in 2020 across ‘multiple industries’. Jake Holloway, Crossword’s business development director, said: ‘This is a big step in our development.’
BLND
UU.
LAND
LLOY
BDEV
CYBG
HMSO
Fresh hopes of a Brexit deal fuel a Boris bounce with traders piling into the pound and other British assets. Banking, housing and utility stocks – seen as having fortunes tied to the health of the economy – gained an instant lift, with British Land Company (BLND) up 32.2p, to 623p, United Utilities Group (UU.) up 43.2p, to 865.4p, Land Securities Group (LAND) up 54.2p, to 946p, Lloyds Banking Group (LLOY) up 3.03p, to 60.82p and Barratt Developments (BDEV) up 33.4p, to 683p among the biggest risers. CYBG (CYBG) saw its shares rise 7.65p, to 134.35p too, while shopping centre owner Hammerson (HMSO) rose 21.9p, to 322p. It also triggered a surge in sterling against the dollar, helping the currency climb to its highest level in five months. But analysts warned the fraught nature of the talks meant further wild swings are ahead.
VSVS
Vesuvius (VSVS) plunged 75.4p, to 341p after it warned of tough market conditions, exacerbated by the US-China trade war which is damaging the steel and car industries. Full-year profits were now expected to be between £180million and £190million, down from an earlier estimate of £197.2million.
RSW
Renishaw (RSW) saw its shares tumble after bosses unveiled a whopping 85% fall in first-quarter profits, blaming turmoil in the world economy. The company said its profits were just £5.1million in the three months to September 30, compared to £33.5million a year earlier. That was after revenues fell from £154million to £124.6million. Renishaw, which has expertise in machinery used for everything from brain surgery to jet engines, also warned: ‘Trading conditions are expected to remain challenging’ – a prognosis that triggered a sell-off.
INDV
Indivior (INDV), which told investors it was hiking its full-year forecast after its best-selling opioid addiction drug, suboxone, was not hit as badly as feared by competition from new ‘copycat’ rivals. Profits are now expected to range between £127million and £150million, up from the previous forecast of £63million-£103million.
WTB
Whitbread (WTB) rose 109p, to 4279p after analysts at UBS said fears about a slump in hotel room revenue had been exaggerated. They upgraded the firm from ‘neutral’ to ‘buy’, claiming the doom-mongering was ‘too conservative’, and said it was well-positioned to grow.