Bovis Homes says it is on course for record profit but claims uncertainty over Brexit is still putting off buyers of larger properties. Bovis Homes expects to post a record profit for the last year, it said in a trading update today. The group said it will see profits for 2018 that are slightly ahead of market expectations after a ‘significant step-up’ in operating margins. Chief executive Greg Fitzgerald, said: ‘The significant improvement in operational performance across all areas of the business is expected to deliver a record year of profits for the Group. ‘Customer satisfaction is a key priority and the Group’s return to 4 star housebuilder status along with another controlled and disciplined period end reflect this. ‘We are looking forward to delivering the first homes from our new housing range in 2019 and continuing to make further operational and financial progress.’
The boss of Reckitt Benckiser Group (RB.), the firm behind household goods including Vanish, Dettol and Durex, is to retire after more than eight years as CEO and 32 years with the company. Rakesh Kapoor said today that he will stand down by the end of 2019, adding that it had been a ‘huge privilege’ to head Reckitt but the time was right for new leadership. A search is underway for Kapoor’s successor. It comes after the firm, which also owns Cillit Bang and Nurofen, acquired baby milk maker Mead Johnson in a mammoth $16.6billion deal in 2017. Kapoor said: ‘The last two years, in particular, have been transformational with the acquisition of Mead Johnson, the catalyst for the creation of our two business units, health and hygiene (and) home. ‘2020 will herald a new decade and I believe now is a good time for new leadership to take this great company through the next phase of outperformance.’
Investors in Flybe Group (FLYB) have succumbed to a sinking feeling, as hopes evaporated that a white knight buyer may table a higher bid for the struggling airline. Virgin Atlantic, Stobart Group Ltd. (STOB) and investment company Cyrus Capital last week joined under the name of Connect Airways to put up a £2.2million offer for Flybe, paying shareholders 1p per share. Though the price was raised yesterday to £2.8million, to prevent Flybe from failing before the deal concluded, shares in the airline fell 41.8%, or 1.7p, to 2.4p. Investors will still get only 1p per share, and the extra £600,000 will go towards running the company.
Shares in healthcare technology company NetScientific (NSCI) were looking sickly as it called off a bid to sell itself. The firm, which invests in ideas and businesses that target chronic diseases, put itself up for sale in November. But yesterday it said it had not received any approaches and did not believe it would. Options now may include asking shareholders for extra money, further reducing costs and possibly delisting from the stock market.
Britain’s gambling companies were on a downwards slide, as the US Justice Department looked set to tighten restrictions on internet betting firms. The shift was a slap in the face to many investors who had taken a punt after the US moved to legalise sports betting last year. Players such as William Hill (WMH), Ladbrokes Coral owner GVC Holdings (GVC) and 888 Holdings (888) stepped into the US market following the Supreme Court ruling. They had hoped for a boom, but all online gambling may now be restricted. Yesterday, the Justice Department’s criminal division, which prosecutes illegal gambling, issued a new opinion in which it said the law has been misinterpreted for several years. Its previous guidance, that restrictions applied only to online sports betting, was wrong, and they should instead apply to all online gambling.
Investors were disappointed in The Gym Group (GYM), even though membership for 2018 grew 19.3 per cent to 724,000 and revenue rose 35.6% to £123.9million. Its rapid expansion, which saw 30 sites open last year, has resulted in extra costs, and profit would be around £37million, lower than estimates of £38.6million from analysts at Liberum.
Predictions of a gloomy 2019 from estate agent Savills (SVS) caused it to dip 4.8%, or 36.5p, to 728p, despite a solid year. It said: ‘Prospects for 2019 are overshadowed by macro-economic and political uncertainties across the world.’ As a result, it expects sales to fall in a number of markets.
Private hospital company Spire Healthcare Group (SPI) sank 13.9p, to 102.7p after it hinted it would miss its previous profit aims. It expects 2018 profits to be between £119million and £120million, down from guidance of £120million to £125million.
Persimmon is set to become the first housebuilder in Britain to rake in profits of more than £1billion in a year. The FTSE 100 firm made around £1.1billion in 2018 as it cashed in on the taxpayer-funded Help To Buy scheme. That is up from £966million the previous year and comes after sales reached £3.5billion. The bumper results fuelled anger that a taxpayer subsidy has left the industry awash with cash when many families are struggling to get on the housing ladder. Persimmon (PSN) has been fiercely criticised for making massive payouts to executives and faced criticism over shoddy workmanship and poor-quality homes. Former boss Jeff Fairburn was ousted over his ‘obscene’ bonus that at one stage was worth £131million.
More than 1,000 jobs at risk as M&S axes 17 more stores with boss blaming crippling business rates. More than 1,000 jobs are at risk after Marks & Spencer Group (MKS) revealed its latest round of store closures as it struggles to deal with crippling business rates. In a desperate bid to save money, the High Street stalwart said it would shut another 17 shops. M&S chief executive Steve Rowe has said punishing business rates – a tax on commercial properties – are an ‘unfair’ burden that have directly contributed to the High Street’s struggles. M&S’s rates bill was £184million last year while it made sales of £10.7billion. The company is preparing to close a total of 100 shops and have one-third of sales made online by 2022. So far it has closed 30, with a further eight planned.
Estate agent Savills expects lower sales as Brexit and global slowdown fears take a toll on property investor confidence. Savills (SVS) expects lower property sales in a number of markets this year as Brexit-related uncertainty and US trade policy take a toll on property investors’ confidence. The upmarket estate agent, which has offices around the world, said prospects for 2019 are ‘overshadowed by macro-economic and political uncertainties’ globally. But the group, which also runs consultancy and property management businesses, said it still expects full-year results to be in line with expectations as these ‘less transactional’ divisions would offset a decline in sales volumes.
Provident Financial’s profit gloom hits shares with nearly £320m wiped off the value of the doorstep lender. Nearly £320million has been wiped off the value of doorstep lender Provident Financial (PFG) after it warned profits will be lower than forecast. The Provvy suffered from customers falling behind on payments at its credit card arm, Vanquis Bank, which opened 76,000 new accounts in the last three months of 2018 – 17,000 fewer than a year earlier. It means profits for 2018 will be at the lower end of analysts’ predictions of between £151million and £166million.
