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

The Telegraph 11/01/19

Industrial output slump stokes eurozone fears. Fears that the eurozone could be headed for crisis are mounting after disappointing industrial data from Italy and Spain added to the already dismal figures from Germany and France this week. Industrial production in Italy fell by 1.6pc in November from the previous month, and was down 2.6% on a year ago – the biggest fall since October 2014. The sharp decline was significantly worse than the 0.3% drop many economists had been expecting. In Spain output contracted by 1.5%. German industrial production was down 1.9% in November, and output dropped 1.3% in France.

Price cuts push fashion retailer Quiz to another profit warning. Clothing retailer Quiz (QUIZ) has become the latest high street casualty after issuing its second profit warning in three months. The Scottish-based fashion chain cited lower-than-expected Christmas sales and tighter margins, blaming “challenging trading conditions” as it was forced to slash prices on more of its stock than planned. It now expects to make £8.2m for the full year, compared to its £11.5m forecast, adding that it took a £400,000 writedown due to the administration of House of Fraser, where it had concession stands.

Moss Bros heads for a loss after being forced to cut prices. Moss Bros Group (MOSB) has confirmed it is on track for a £600,000 loss for the year after it became caught up in price cutting during the festive season. The suit hire company said the period after Black Friday required “deeper discounting than planned” to remain competitive, adding that some of its stores “underperformed” due to reduced footfall. Margins fell by 2.6% in the 23 weeks to Jan 5 as promotional activity increased, particularly from late October onwards. Total sales edged up 0.6% over the period but were down 1% on a like-for-like basis amid a “challenging consumer backdrop”. Like-for-like hire sales also dropped 11.2%.

Grafton shrugs off building trade worries with bright outlook. The owner of builders merchants including Selco and Macblair expects to beat profit forecasts for 2018 after sales boomed across Europe and its takeover of rival Leyland SDM began to bear fruit. Total sales at Grafton Group Units (GFTU), excluding the impact of currency swings, reached almost £3bn in 2018 despite a slowdown in the last two months of the year. Like-for-like revenues rose 4.3%. The FTSE 250 member, which also owns Irish DIY chain Woodie’s, now expects pre-tax earnings to come in “slightly ahead” of analysts’ forecasts of between £185m and £188.5m.

AO World wins over shoppers with Black Friday deals. Electricals retailer AO World (AO.) defied a slowdown in the white-goods market by using an extended Black Friday sales period to boost sales. Revenue rose 8.2% in the three months to Dec 31 compared to the same period the year before, despite what the company called a “challenging backdrop” of waning consumer confidence. Sales in the UK grew 4.4%. AO World started running promotions on Nov 9, two weeks before Black Friday, with sales of LED TVs and washing machines doing well as a result. Zoe Mills at GlobalData said this was a “wise move allowing it to spread demand for its logistic teams and better manage the influx of sales”.

Sports Direct pushes Debenhams bosses off the board. Sports Direct International (SPD) has pulled off a major coup at Debenhams (DEB) by ousting chairman Sir Ian Cheshire and forcing the department store’s chief executive off the board. In a dramatic turn of events on Thursday afternoon, Sir Ian and Sergio Bucher were voted off the board by Sports Direct, which controls about 28% of the embattled retailer, and Landmark, which has a 7.5% stake in Debenhams. Because so few shareholders turned up to Debenhams’ annual meeting, Sports Direct and Landmark had enough firepower to vote against the retailer’s resolution.

Biotech minnow Angle (AGL) triumphs with cancer blood testing kit. Biotech company Angle has scored a win after its blood testing technology was central in helping doctors discover a potentially ground-breaking treatment for cancer. The Aim-listed firm’s device, called Parsortix, is able to catch tumour cells circulating in the blood through a simple blood test. Now researchers at Basel University Hospital in Switzerland have now shown that Parsortix can also harvest tumour cells that are attached to each other in clusters, called circulating tumour cell clusters, or CTC clusters. These are highly metastatic meaning they spread the cancer easily, but research has been limited because until now it has not been possible to harvest them.

B&M targets more stores despite sales wobble. B&M European Value Retail S.A. (DI) (BME) bargains hailed a “pleasing finish” to the year after reporting a jump in festive sales and said it would look to open more UK stores despite uncertain trading conditions. Total sales at the discount retailer climbed 12% to £1.08bn in the three months to Dec 28, while UK sales rose 4.5% to £874.5m. B&M’s December sales at stores open more than one year were up 1.2%, but fell 1.6% across the three months – a result blamed on a “difficult November”. The group enjoyed 3.9% growth in the same period last year.

M&S recovery hits a setback as sales slide again. Marks & Spencer Group (MKS) long-awaited recovery has been hit with another setback from sliding sales in both its clothing and food divisions as a tough November and more cautious consumers took their toll on the retailer. The struggling high street chain posted a 2.2% drop in total like-for-like sales over the 13 weeks to Dec 29 after suffering lower footfall to stores and an attempt to strip out promotions on its food ranges. Steve Rowe, chief executive, said that guessing when the retailer would see a recovery in sales was “a bit crystal ball, particularly in terms of the consumer backdrop… I wouldn’t want to call it”.

Tesco toasts victory in Christmas sales battle. Tesco (TSCO) has beaten City expectations and toasted a victory over its ‘big four’ rivals following its best Christmas performance since 2009. Britain’s biggest retailer recorded a 0.7% rise in UK like-for-like sales over the 13 weeks to Nov 24. The supermarket’s growth accelerated over the festive period with like-for-like sales up 2.2% over the six weeks to 5 January, marking its fourth consecutive year of growth. Dave Lewis, Tesco chief executive, said that the supermarket had a “successful Christmas” after it had “achieved a lot in the last 19 weeks”.

All Bar One owner scores record-breaking Christmas. The company behind Harvester, All Bar One and Toby Carvery beat its rivals over the festive season while taking a record £12m on Christmas Day alone. Mitchells & Butlers (MAB) like-for-like sales swelled by 12.3% in the final two weeks of December, pipping double-digit performances by the likes of Greene King and Stonegate. Like its rivals, M&B benefited from milder weather and the fact Christmas and New Year’s days fell in the middle of the week. Chief executive Phil Urban said records had fallen “on all key festive dates”. Shares rose more than 6% in afternoon trade. Comparable sales over the seven weeks to Jan 5 were 6.9% higher and up 4.7% up over the 14 weeks to the same date.

Profit warning hammers Halfords Group (HFD) shares. Investors knocked almost a quarter off the value of Halfords shares after mild winter weather and weak consumer confidence sparked a profit warning on Thursday. The retailer now expects annual pre-tax profit to be between £58m and £62m, compared to last year’s £71.6m, with a similar result for 2020. The bike and car parts seller said like-for-like retail revenue fell 2.2% in the 14 weeks to Jan 4, with motoring and cycling sales down 3.4% and 0.3% respectively. Growth in cycle accessories and children’s cycles was offset by a decline in more expensive items such as adult bikes.

Record production helps Premier Oil cut debt. Premier Oil (PMO) has used its second consecutive year of record oil production to make bigger than expected cuts into its huge debt pile. The London-listed oil and gas company expects its financial results to reveal end-of-year debts of $2.3bn, after shaving $390m off the total following a boom in its oil output. Premier told investors it found $100m more than expected to help pay off debt after producing an average of just over 80,000 barrels of oil a day in 2018. The record production helped Premier post a $300m rise in annual profit of $1.4bn last year.

 

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Mentioned in this post

AGL
Angle
AO.
AO World
BME
B&M European Value Retail S.A. (DI)
DEB
Debenhams
GFTU
Grafton Group Units
HFD
Halfords Group
MAB
Mitchells & Butlers
MKS
Marks & Spencer Group
MOSB
Moss Bros Group
PMO
Premier Oil
QUIZ
Quiz
SPD
Sports Direct International
TSCO
Tesco