The Mail 11/09/19 - Vox Markets | Vox Markets

The Mail 11/09/19

The battle for Cobham (COB) heated up last night after one of the defence firm’s major investors hit out at its planned takeover by a US private equity group. Sanderson Asset Management said it was ‘inclined to vote against’ Advent International’s £4billion offer at a crucial shareholder meeting to be held on Monday. ‘We have privately communicated our position to the board along with our desire to see the management team continue their good work in the event a better offer does not materialise,’ said Sanderson senior portfolio manager Christian Paaskesen.

Equipment rental firm Ashtead Group (AHT) has notched up higher first-quarter profits as another bumper US performance offset tougher UK trading. The group reported a 9% rise in underlying pre-tax profits to £319million for the three months to July 31, with group revenues jumping 22% to £1billion. Statutory pre-tax profits were 8% higher at £304.7million. Its Sunbelt business in the US and Canada drove the performance, thanks to higher rental demand for industrial gear and recent acquisitions in Canada. But its UK arm – called A-Plant – suffered a 31% plunge in operating profits to £15.4million as it said the market remained competitive.

JD Sports Fashion (JD.) reminded its rivals that it’s still the ‘Undisputed King of Trainers’ today as it raced ahead both on the High Street and online. The sportswear firm said store sales in the UK and Ireland jumped by 10% in the six months to August, ‘against a backdrop of widely reported retail challenges in the UK’. Meanwhile group revenues – including international stores, online sales and its fledgling gym chain – surged 47% to £2.72billion. The impressive half-year results place JD Sports firmly in the lead ahead of its troubled tracksuit and trainer rival Sports Direct. The cut price sports chain founded by Mike Ashley has suffered a string of embarrassments of late, including a shock £600million tax bill and the loss of its near-30 per cent stake in Debenhams.

Housebuilder Bovis Homes Group (BVS) has rekindled talks with rival Galliford Try (GFRD) over merging with its housing arm in a deal valuing the newly formed firm at £1.08billion. Bovis said the talks to combine Bovis Homes and Galliford’s Linden Homes unit are at an early stage, and stressed there remains significant work to be completed before a deal can be agreed. The tie-up would not be a full merger of the two companies, with Galliford Try remaining a separately listed non-housing construction firm. The potential deal would see Bovis pay Galliford £300million in cash, award shares worth £675million to Galliford investors and take on £100million worth of debt. Bovis would also take on Galliford’s pension schemes. Following completion of the proposed deal, Galliford Try shareholders would own around 29% of the enlarged Bovis Homes.

Shares in struggling fashion chain Superdry (SDRY) fell after analysts warned ‘radical’ change was needed. As it prepared to meet shareholders at the annual meeting today, Investec urged investors to sell their shares as the retailer’s target price was slashed from 490p to 370p. Investec was previously a broker for Superdry but quit this year after co-founder Julian Dunkerton orchestrated a boardroom clear-out and returned to head the firm, ousting former chief executive Euan Sutherland. Dunkerton has admitted it will take time to revive Superdry, which sunk to an £85million loss in July after it wrote off the value of poorly-performing stores. He blamed the ‘misguided strategy’ introduced by former management.

Altitude Group (ALT) lost height after warning that sales haven’t taken off as much as management had hoped. Revenue at Altitude is expected to have jumped 42% to £5.4million compared with the first six months of 2018. Turnover was boosted by the acquisition of a US firm early this year. But third and fourth quarter revenues will track ‘well below expectations’.

Metro Bank (MTRO) will soon drop out of the FTSE 250. The up coming relegation could have further-reaching consequences, analysts warn. Dropping out of the mid-cap index will limit the amount of funds which may be able to invest in it, as many focus primarily on FTSE 350 firms. This, in turn, could squeeze its ability to raise cash from shareholders in future, according to Goodbody analysts, and result in it being snapped up by a High Street lender if it is unable to produce better returns for investors. If Metro becomes a takeover target it will dash Metro’s dream of becoming a heavyweight challenger to the UK’s established lenders.

Premier Foods (PFD) shares have suffered in the last year, down a cool 22% from what they were trading at last September. Focus on the company has intensified since it last week appointed a chairman, City veteran Colin Day, and chief executive, Alex Whitehouse. Former finance boss and interim chief executive Alastair Murray was handed a £480,000 pay cheque as he departed. Sources say £60,000 of this is an extra three months’ worth of the monthly £20,000 he got for stepping up into the chief executive role. A strategic review of the firm is under way and speculation is rife that this could include the sale of five (or more) of its major brands, with cake-maker Mr Kipling thought to be in the line of fire. Premier is keeping quiet on any possible sales, though it has tried to sell Ambrosia.

 

Anglesey Mining has said it believes there could be much more ‘potentially mineable’ ore at a zinc, copper and lead site on Parys Mountain on Anglesey than it previously thought, sending its stock soaring 17.1 per cent, or 0.3p, to 2.05p.

 

 

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Mentioned in this post

AHT
Ashtead Group
ALT
Altitude Group
BVS
Bovis Homes Group
COB
Cobham
GFRD
Galliford Try
JD.
JD Sports Fashion
MTRO
Metro Bank
PFD
Premier Foods
SDRY
Superdry