The Mail 11/01/19 - Vox Markets | Vox Markets

The Mail 11/01/19

Online retailer AO World’s stock on the up after revealing it managed to cash in on Black Friday. Online electrical retailer AO World’s sales were improved by the much-hyped ‘Black Friday’ discount event, allowing the firm to stick to its full-year forecasts as many other retailers flounder. AO World’s shares rose on the news and were up 3.4% to 128.4p in early trading on Friday, after a record number of customers took advantage of Black Friday’s trimmed down prices in the UK. The Bolton-headquartered company, which specialises in households appliances including washing machines and televisions, posted a 8.2% rise in revenue growth for the third quarter, which ended December 31.

Fashion retailer Quiz sees a third lopped off its share price as it warns of lower profit after a disappointing Christmas. Fashion retailer Quiz has warned its profit and revenue will be lower after Christmas trading failed to meet expectations. The company, which has 71 stores and 169 concessions in the UK as well as a sizeable online business, said underlying earnings would be about £8.2million for the full year. Revenue is also set to fall short of market expectations, coming in at around £133million.

Lidl surprises supermarket rivals by poaching £58million of Christmas food spend as shoppers gobble up its posh ranges. Fast growing discounter Lidl – the sixth largest supermarket in the UK – tempted shoppers to transfer £58million worth of spending from Waitrose, M&S, Tesco, Asda, Sainsbury’s and Morrisons over the Christmas period. This, coupled with a surge in demand for its upmarket Deluxe range, helped the grocer snare an 8% uplift in sales over the last six weeks. Best sellers from its Deluxe range, up 33% year-on-year, included its brioche burger buns and luxury mince pies.

Floundering Flybe Group (FLYB) ‘rescued’ at just 1p a share, as Virgin Atlantic and Stobart offer £2.2m for airline valued at £35.5m last night. Virgin Atlantic and Stobart Group Ltd. (STOB) have agreed to buy Flybe in a £2.2million deal – but the 1p a share offer is at a massive discount to the 16.4p the airline’s shares closed at last night. The deal for the Exeter-based regional airline would create a new airline group, in partnership with New York-based investment firm Cyrus Capital Partners. The Stobart Group runs Irish regional airline Stobart Air, headquartered in Dublin, which already operates some of its flights under the Flybe brand. The plan is to combine the airline with Stobart Air in a joint venture called Connect Airways. The ‘rescue’ bid reflects Flybe’s nosedive in fortunes, with the airline valued at about £100million a year ago and £35.5million at the close of the stock market last night.

Mike Ashley led a dramatic boardroom coup at Debenhams (DEB) last night after the struggling chain posted a dismal set of Christmas sales figures. The Sports Direct tycoon, who owns nearly 30 per cent of shares in Debenhams, teamed up with another top investor to vote chairman and City veteran Sir Ian Cheshire off the board at an annual general meeting. They also removed chief executive Sergio Bucher from the board, plunging the department store group into a fresh crisis. The company said former Amazon executive Bucher would stay in his post – for now – but Cheshire immediately stepped down and was temporarily replaced by Terry Duddy, the senior independent director. Duddy was last night locked in talks with Ashley about the future of the 241-year-old chain.

Marks & Spencer has blamed a challenging November, heavy discounts by rivals and lower in-store footfall for falling sales over the three months to 29 December. The High Street stalwart posted a 2.2% drop like-for-like sales over the period, which includes Christmas. The sales slip was slightly worse than some analysts expected, but the embattled retailer retained its profit forecast for the full year. In a trading update today, Marks & Spencer Group (MKS) said: ‘The combination of reducing consumer confidence, mild weather, Black Friday, and widespread discounting by our competitors made November a very challenging trading period. ‘However, overall our 13-week performance was steady with some early encouraging signs.’

Britain’s biggest supermarket Tesco (TSCO) enjoyed a bumper festive period, with sales up 2.2% from the same time a year ago. With sales on the up, the supermarket enjoyed its strongest Christmas sales period since 2009. The supermarket’s ‘Festive 5’ vegetable offer proved particularly popular with shoppers, selling 19.7million units over the three weeks to Christmas. Half-price lamb and beef joints helped meat sales grow by 12.2% over the Christmas period. A deal for a quarter off six bottles of wine also proved popular with shoppers.

Management at pub group Mitchells & Butlers (MAB) are due a celebratory pint, after a jump in Christmas sales of both food and drink caused shares to shine. While several retailers are blaming poor consumer confidence for their floundering sales, pub-goers at the M&B chains – which include brands such as Browns, Nicholson’s and Harvester – seemed more than willing to splash the cash. Food sales were up 4.6% in the 14 weeks to January 5, compared to a year earlier, while drinks were up 4.8%. Over the final two weeks of that period, which included Christmas and New Year, sales were up 12.3%, with punters splashing out £12million on Christmas Day alone.

Hormone therapeutics company Diurnal Group (DNL) rocketed on announcing it has been granted a second patent in the US. Its Chronocort drug, which allows for the release of hydrocortisone in a way which aligns with the natural sleep cycle, treats conditions which affect the adrenal glands. The patent will protect the drug from copycats until 2033, and comes on top of the original patent which protected the formulation. Shares soared 116.3%, or 25p, to 46.5p.

Burberry Group (BRBY) was the biggest drag on the FTSE 100, as analysts at Berenberg predicted growth could be harder to come by for luxury goods companies as the global economy shows signs of slowing. The broker was particularly negative on stocks which are trading at a high value compared to their earnings, and are trying to implement a turnaround – putting Burberry, as well as Hong Kong-listed Prada and Milan-listed Tod’s, firmly under the spotlight. Berenberg downgraded Burberry from ‘buy’ to ‘hold’, saying it was a riskier choice than some of its more stable peers.

Shares in Brooks Macdonald Group (BRK) leapt 4.9%, or 72.5p, to 1540p as the firm revealed it would axe 50 jobs in a cost-cutting drive. The redundancies will predominantly come in administration and IT roles, and should help save around £4million per year.

Rathbone Brothers (RAT) sank after a busy year. Savers had entrusted the firm with £8.5billion more money by the end of the year compared to 12 months previously, although £6.8billion of this came from the acquisition of Speirs & Jeffrey. Rathbones looks after £44.1billion of savings, up from £39.1billion last December. But it admitted that it lost £2.8billion in the fourth quarter of the year, or 6.8% of its assets, as investment markets grew choppy. Investors were unimpressed with the performance, even though it was better than the FTSE 100’s 10.4% loss over the same period. Shares in Rathbones fell 8%, or 198p, to 2286p.

Asset manager Jupiter Fund Management (JUP), which deals with larger institutional investors, also suffered from the market slide. The firm was looking after £42.7billion for its clients at the end of December – this was a £5billion fall over the last three months of the year, £3.5billion which was due to investments declining in value.

Stock-picker Neil Woodford was given a pat on the back as Hvivo (HVO) – the drug development company in which he owns a 29.1% stake – announced its flu vaccine had proved effective in trials. Shares shot up 5.5p, to 34p.


Mentioned in this post

Burberry Group
Brooks Macdonald Group
Diurnal Group
Flybe Group
Jupiter Fund Management
Mitchells & Butlers
Marks & Spencer Group
Rathbone Brothers
Stobart Group Ltd.