A bleak Christmas for retailers as shoppers do their gift hunting on Black Friday instead, report finds. Retail sales dropped in December as shoppers increasingly shifted spending to the Black Friday promotional period. Volumes fell by 0.9% on November as all sectors except food and fuel declined compared to the previous month, according to the Office for National Statistics (ONS). Annual sales growth inched higher to 2.7% compared with 2% in 2017, though this marked a slowdown compared to the post-recession peak of 4.7% seen in 2016.
Ryanair darkens clouds over ailing airline sector with another profit warning as the budget carrier is stung by lower prices over winter. Ryanair Holdings (RYA) has warned over profits for the second time in quick succession, triggering a spate of share price declines across the UK airline sector. The budget airline’s own shares dipped by nearly 3% to €9.75 after it said its profits for the year could be up to €200million lower than it previously thought. It expects earnings to now be somewhere between €1billion and €1.1billion, compared with a previous forecast that capped its earnings at €1.2billion. The Irish carrier blamed lower than expected airfares over the winter – a drop of 7% instead of the previously guided 2%, as well as tougher competition in Europe. As a further sting in the tail, Ryanair boss Michael O’Leary said he could not rule out further profit downgrades either, given the ongoing Brexit uncertainty.
Road haulier Eddie Stobart’s sales rise ahead of forecasts as it’s boosted by new contract wins. Eddie Stobart Logistics (ESL) saw sales race ahead last year as the road haulier was improved by new contract wins. The logistics firm reported a 35% rise in full-year revenue to £843 million in the 12 months to November 30, which is ahead of market expectations. The boost was driven by £162 million of new contracts across all its sectors, according to the company. Sales were up 18%, excluding contributions from its subsidiaries iForce, Speedy Freight and The Pallet Network (TPN). Underlying earnings for the period were broadly in line with market expectations. At period end the net debt was around £154 million, a rise from £109.5 million, representing working capital investment. The company said the increased investment is needed to support the ‘significant levels of sales increase’ and the added debt associated with the acquisition of TPN.
Poor mobile phone sales set to drag Dixons Carphone down again when it updates investors next week. Dixons Carphone (DC.) is expected to book another sales slump at its troubled mobile phone division when it reports on its third-quarter performance next week. City analysts forecast the retailer’s Carphone Warehouse outlets will post a 5% decline in like-for-like sales in the period, which includes Christmas. The Currys PC World owner’s shares were stung in December when it detailed mammoth write-downs on the value of Carphone, alongside a £200 million cost-cutting exercise.
Sophos shares crash by a quarter on cyber security firm’s sales slowdown warning. Shares in British security software and hardware company Sophos Group (SOPH) tumbled on Friday after the firm warned that ‘subdued’ trading would spill into the fourth quarter. Shares tumbled more than 25% in morning trade to 282p following the company update. Warning that constant-currency billings for the full year would see a ‘modest decline’, FTSE 250-listed Sophos said the dry figures were dragged down by challenging comparatives last year.
Animal print skirts and faux sheepskin coats help Primark shine in the High Street’s Christmas gloom. Animal print skirts and faux sheepskin coats helped Primark shine in the High Street’s Christmas gloom. Sales at the bargain chain, which is owned by Associated British Foods (ABF) and sells its products online, climbed 1% in the UK in the 16 weeks to January 5. The figures were a relief for investors following an earlier warning that trading had been tough in November. ABF posted a 1% rise in revenues, sending shares up 152p, to 2330p. Sales across all of ABF’s divisions grew apart from in sugar, where they fell 14% as the business continued to suffer from the impact of lower prices across the EU. ABF is one of Britain’s biggest food producers with brands such as Ovaltine, Ryvita, Twinings and Jordans.
Premier Foods reports Christmas sales slip as ‘sweet treats’ stumble and firm stockpiles raw ingredients for Brexit. Premier Foods (PFD) saw its ‘sweet treat’ revenues fall by 6.9% in its third quarter, but has opted to maintain its full-year profit forecast. The Mr Kipling owner, maker of Bisto gravy and Oxo-cube saw its sales hampered by logistics issues, while oversupply dented overall sales in the third quarter. Non-branded sweet treat sales plunged by 20.7% in the quarter as the group pulled out of a number of lower margin seasonal and non-seasonal cake contracts. Premier Foods faced several issues in the quarter including higher inventory of Cadbury cake in the Australian supply chain, which pushed down international sales by 27%. In today’s trading update, the group reported a 2.2% drop in sales for the Christmas period, reflecting a decline in non-branded foods. Premier Foods confirmed it remains in talks over a potential sale of the Ambrosia brand and its factory in Lifton, Devon. It first revealed plans to offload Ambrosia in November in a bid to boost its performance and slash its £500million debt pile. But the firm said efforts to cut debts will be hampered by previously announced moves to stockpile raw ingredients ahead of Brexit.
Warning on future of advertising from a major investment bank sends television company ITV’s shares into the red. Adrien de Saint Hilaire at Bank of America Merrill Lynch said the fall in the number of viewers watching traditional TV channels, combined with the loss of advertising that this will bring, made broadcasters like ITV (ITV) look vulnerable. The likes of ITV are also having to spend increasing amounts of money to develop their online products – such as on-demand service ITV Hub – in the race to catch up with rivals including Netflix and Sky’s Now TV. Saint Hilaire added that TV watching is declining by 8% every year among the younger generation which was brought up surrounded by modern technology. These individuals will, by 2020, represent around 50% of the workforce and be the direct target audience of advertising.
Sage Group (SGE) climbed 32p, to 625p. It raked in £465m in revenue for the three months to December 31, a 7.6% increase on the same time a year before. Sage, which makes accounting software for businesses, has desperately been trying to improve its products and move from one-off sales to subscriptions to pull more money through the door. The shake-up saw chief executive Stephen Kelly abruptly depart last August. Steve Hare, Sage’s finance head, replaced him in November. Shortly after he took up the role, Hare dropped the firm’s medium-term revenue growth target of 10%. In the last three months of 2018, only Sage’s North American division delivered revenue growth above 10%. The UK and Ireland’s revenue growth was 5.9%, which Sage said indicated ‘strong signs of recovery’.
Wood Group (John) (WG.), which helps oil and gas businesses to build their rigs, weighed on the index as it slid 4.7%, or 26.4p, to 541.2p following a downgrade from a broker.
Shares in takeaway business Just Eat (JE.) rocketed as US investor The Capital Group Companies, one of the world’s oldest investment firms, ramped its stake up from 5.1% to 10%. The deal occurred on Tuesday and, taking Just Eat’s closing share price that day, would have cost Capital Group around £209m.
Super Noodle and Paxo owner Premier Foods (PFD) also crept higher as investors chewed over its update for the 13 weeks ending December 29. Sales of its Mr Kipling products were up 5%, which helped investors stomach a 2.2% decline in group sales as a warehousing and distribution reshuffle hit sales of unbranded sweet treats. Change was afoot elsewhere at Premier as finance head Alastair Murray was appointed temporary replacement for outgoing boss Gavin Darby until a permanent successor is found. Premier added it was still in talks with potential buyers for its Ambrosia custard and rice pudding brand.
Portmeirion Group (PMP), owner of the Royal Worcester and Pimpernel brands, jumped 6%, or 60p, to 1060p as it said 2018 revenue would be ahead of expectations, at a minimum of £89.2m. Sales in the UK, US and South Korea were credited with driving the strong performance, and the home fragrance business did particularly well.
