Patisserie Valerie could go bust any moment as it scrambles to sign a deal with its lenders. Patisserie Holdings (CAKE) could go bust as soon as today as it scrambles to strike a deal with its lenders. The stricken café chain has lined up KPMG to explore all options for its future, including a possible administration. Chairman Luke Johnson is racing to extend an agreement with HSBC and Barclays to repay £9.7million of overdraft debt which was due on Friday. If the 56-year-old fails to reach a deal with lenders and is unable to stump up enough emergency cash, Patisserie Valerie and its 206 sites could be plunged into administration, risking 2,800 jobs. Investors lashed out at Johnson, calling the situation a ‘travesty’. He is fighting to keep the chain alive after a £40million black hole was discovered in its accounts in what is thought to be a potential fraud.
Patisserie Valerie could go bust any moment as it scrambles to sign a deal with its lenders. Patisserie Holdings (CAKE) could go bust as soon as today as it scrambles to strike a deal with its lenders. The stricken café chain has lined up KPMG to explore all options for its future, including a possible administration. Chairman Luke Johnson is racing to extend an agreement with HSBC and Barclays to repay £9.7million of overdraft debt which was due on Friday. If the 56-year-old fails to reach a deal with lenders and is unable to stump up enough emergency cash, Patisserie Valerie and its 206 sites could be plunged into administration, risking 2,800 jobs. Investors lashed out at Johnson, calling the situation a ‘travesty’. He is fighting to keep the chain alive after a £40million black hole was discovered in its accounts in what is thought to be a potential fraud.
Cheers! Pubs will add fizz to your portfolio: Glass is half full but beware the risk of a hangover. High Street retailers might be drowning their sorrows after a tough festive period, but Britain’s pub groups have been on the crest of a post-Christmas wave. The four stock market-listed chains that have already revealed their winter trading results all reported higher sales than last time, kicking the New Year off with a bang. Analysts are concerned that consumers are tightening the purse strings as shoppers have shunned chains from Marks & Spencer to Debenhams. But the updates from the likes of The City Pub Group (CPC), Greene King (GNK), Revolution Bars Group (RBG) and Mitchells & Butlers (MAB) have shown people are still thirsty for a pint. Pub groups haven’t had it easy in recent years, and savers may be wary of propping up the bar, so to speak. Beer sales in UK pubs and bars fell to 12,635 barrels in 2017 from 18,737 a decade earlier, according to statistics from the British Beer and Pub Association. As with the retailers, rising rents and business rates have hit the sector. Some chains are still struggling under the huge debt burdens they were encouraged to take on in the early noughties. After a slew of mergers and takeovers, by 2012 more than a fifth of the UK’s pubs were owned by Enterprise Inns and Punch Taverns.
South African miner Ironveld (IRON), which extracts high purity iron, vanadium and titanium, climbed as it came a step closer to reaching a sale agreement. It has been supplying its products to a potential partner which hopes to sell the metals. This firm has received enough to begin full testing. If these tests are satisfactory, Ironveld expects it will enter into an agreement with the firm.
Online security firm Sophos Group (SOPH) had little good news for investors after admitting it was dogged by subdued performance for the last three months of 2018. The software firm – which issued a profit warning in November – said that billing grew just 2% in the final three months of the year as higher spending from existing customers was largely offset by a decline in new clients. Sophos said it expected the lacklustre performance to continue over the next three months, the final quarter of its financial year, which would mean a modest decline in billings for the full year.Nicholas Hyett, an analyst at Hargreaves Lansdown, said shareholders would be displeased that management’s previous predictions of a slight improvement in trends had not materialised. He said: ‘Our real concern is the repeated cuts to guidance with little in the way of explanation. ‘It raises serious questions about management’s grip on the business and has perhaps irreparably damaged the group’s credibility with investors.’
It was a turbulent end to the week for airlines as Ryanair Holdings (RYA) slashed its full-year profit expectations from between £969million and £1.1billion to between £881million and £969million. The budget airline’s shares fell as much as 4% as markets opened, after boss Michael O’Leary said further cuts to guidance could follow if unexpected Brexit developments push up costs for his airline. Ryanair revealed it has been forced into discounting fares more heavily than planned to keep up with the competition and fill seats. It noted more customers are choosing lower cost options for their flights and bags. Russ Mould, investment director at AJ Bell, said airlines only have themselves to blame for lower fares. The cheaper pricing is often a side-effect of rapid expansion, which has resulted in too much space on short-haul flights. As the ripples spread across the sector, easyJet (EZJ) was also battered by a critical note from analysts at JP Morgan Cazenove. Though they said both Ryanair and Easyjet should provide long-term opportunities to shareholders, and have solid growth prospects, the analysts added the poor performance of Ryanair’s shares recently make it a more interesting buying opportunity.
Entertainment One Limited (ETO), creator of children’s hit TV show Peppa Pig, soared 5.2%, or 19.2p, to 387.6p after a promotional clip for a film featuring the character went viral in China.
MIDAS SHARE TIPS: Rock solid… mining expert can unearth rich seam of profits. Weir Group (WEIR) announces 2018 results at the end of next month and brokers forecast sales of almost £2.4 billion, roughly equivalent to 2017. Profits are expected to climb 18% to £296 million and a 5% increase in the dividend has been pencilled in, to 46.2p. Sales are likely to rebound in 2019, with profits moving ahead strongly too. Reassuringly too, more than 95% of Weir’s business is generated outside the UK so Brexit has very little impact, one way or the other.
