Dixons Carphone swings to huge loss after writedowns. Retailer Dixons Carphone (DC.) has revealed plans to slash costs by £200m after tumbling to a half-year loss following a near-£500m hit on its mobile business and store estate. The group’s shares dropped 14% after it swung to a £440m pre-tax loss for the half-year to October 27 against profits of £54m a year earlier after charges of £490m, largely due to a writedown on the value of its Carphone Warehouse arm. It also said it was set to see full-year costs surge to £190m – including a £17m hit from the cyber attack revealed in June that saw 5.9 million bank card details and 10 million personal data records hacked last year. But the group offered a dose of cheer to staff with plans for a share incentive award scheme that will see more than 30,000 employees given at least £1,000 in shares each over the next three years.
Sainsbury’s and Asda demand judicial review of competition probe timeline. Sainsbury (J) (SBRY) and Asda are challenging the competition watchdog in court for more time to be given to the probe into their £12bn mega-merger on the grounds of its “unprecedented scale and complexity”. The two supermarkets are to apply for a judicial review of the Competition and Markets Authority (CMA) investigation into their proposed tie-up, as they request more time to consider the evidence. But the watchdog has said it will defend its position in court, and is “not willing to compromise on the thoroughness or objectivity” of the investigation. The application, lodged on Wednesday with the Competition Appeal Tribunal, will request a review of the CMA’s timetable and process.
Superdry shares crash after blaming warm weather for ‘difficult’ trading. Shares in Superdry (SDRY) have tumbled after it blamed warm weather for “difficult” trading conditions that left it unable to shift thick jackets and sweaters. The company reported a 190% lift in statutory pre-tax profit to £26.4m in the six months to Oct 27. However, stripping out one-off gains from ‘financial derivatives’, pre-tax profit fell 49% during the period to £12.9m. Revenue slid 3.1% to £414m. Shares fell by nearly a third to 390p in morning trading, leaving the stock down around 81% this year. The FTSE 250 clothing retailer, known for putting snippets of Japanese on hoodies and checked shirts, said that sales were “under pressure” given the unusually warm weather in November and the beginning of December.
Macron’s credibility shattered as France joins Italy in budget disgrace. Emmanuel Macron’s bid to buy off France’s “gilets jaunes” protesters with instant budget handouts threatens to blast through eurozone’s fiscal limits, fatally damaging his credibility as the champion of the European project and the guardian of French public accounts. The package of short-term measures announced in a theatrical mea culpa on Monday night leaves President Macron’s putative “grand bargain” with Germany in tatters. He had pledged root-and-branch reform of the French economy and a restoration of spending discipline after 11 years in breach of the EU’s Stability Pact. The calculation was that Berlin would in return drop its long-standing opposition to fiscal union and shared liabilities, agreeing to rebuild the euro on stronger foundations.
WPP targets return to growth by wielding the axe on jobs. WPP (WPP) will cut 3,500 jobs and shut dozens of offices in an attempt by new chief executive Mark Read to steady the advertising giant after a torrid two years marked a bitter parting with the architect of its sprawling empire, Sir Martin Sorrell. Mr Read said the overhaul would cut costs by £275m by 2021 and restore sales growth. About 80 WPP offices worldwide have been earmarked for closure, with a further 100 agencies due to share accommodation. “The old WPP was in structural decline,” he said. “The new WPP will not be.” Half the savings will be reinvested, including hiring 1,000 new staff to reinvigorate the creative side of its business and push further into technology.
Marks & Spencer adds former Sainsbury’s boss Justin King to the board. Justin King, the former Sainsbury’s boss, is to return to Marks & Spencer Group (MKS) as a non-executive director as the struggling retailer beefs up its board. Mr King was credited with reviving Sainsbury’s during his decade-long rein at the supermarket between 2004 and 2014 by turning it from a retailer that struggled with empty shelves to spearheading its lucrative push into the convenience market, notching up nine years of sales increases. He previously ran Marks & Spencer’s food division and set up its Simply Food chains, which until recently had remained the biggest growth driver for the retailer.
Carpetright losses widen sharply as it closes stores. Carpetright (CPR) losses have widened dramatically as the embattled retailer has been hurt by weak consumer demand and the whiplash of a rescue plan that has closed dozens of stores. The company said that it had been a “transitional year” as it reported that pre-tax losses had ballooned to £11.7m in the 26 weeks to Oct 30, compared to losses of £0.6m a year earlier. Sales tumbled 15.7% to £191m after the retailer shut 65 stores during the period. The company said that like-for-like sales had improved from a 16.8% slump in the first quarter to an 8.9% drop as the company repaired some of the damage to its reputation caused from its restructuring. Suppliers withdrew their product and consumers shunned the brand while there was “negative sentiment” associated with its company voluntary arrangement (CVA), it said.
‘Don’t panic’ says Ashtead boss as plant hire company defies slowdown concerns. Ashtead’s chief executive has dismissed worries about the economy’s health, issuing a firm “don’t panic” message as the tool and plant hire company posted surging revenues and profits. Geoff Drabble, who has led the FTSE 100 business for 13 years, said that fears of a downturn in the construction sector were overdone and driven by “academic” concerns. Speaking as Ashtead Group (AHT) reported revenues up 19% at £2.25bn in the six months to the end of October, with pre-tax profits rising 25% to £610m, the chief executive played down worries that have hit the company’s shares recently. “Financial markets are getting very agitated about academic metrics – I’d never heard of an inversion curve until recently,” he said. “Despite hysteria in the global economy our experience on the ground is that markets are strong. “People are talking about a reduction in housebuilder confidence from 60-something percent to 60pc – but 60pc by their own definition is still a really strong market.
Anglo American coy on dividends as it eyes growth. Anglo American (AAL) will resist pressure to put up dividends while it focuses on making its mines around the world work harder, its bosses have insisted. The FTSE 100 miner will stick to a payout ratio of 40% of its earnings despite expectation from some analysts that it may follow its peers in showering shareholders with cash. Stephen Pearce, chief financial officer, deflected calls for more generous payouts, saying that while it would “always consider” its capital allocation, it had devised its current policy with “a forward view”. “It’s great we’re in a position to have choices,” he said. “The business is in a better place.” Higher dividends is ”something that always has to be discussed”, he added.
Online shopping minnow MySale loses half its value after profit warning. Mysale Group (MYSL), an Australian online retailer backed by retail tycoons Mike Ashley and Sir Philip Green, lost half its market value after issuing a profit warning triggered by tax changes down under and “challenging” market conditions. Carl Jackson, chief executive, said he was “very disappointed” with the performance after the company warned that revenue and profit for the year to June 2019 would be “significantly” below market expectations. The Aim-listed retailer also swung to a loss before interest, tax, depreciation and amortisation in the first half of the year, though it expected an improvement in the second half. Shares in the company fell more than 50% to 16p in afternoon trading. Its market cap tumbled to £25m. Sir Philip’s Shelton Capital fund, which has a 22% stake in the company, made paper losses of around £5m as a result of the drop. Mr Ashley’s Sports Direct, which owns a 4.8% stake, lost around £1.3m.
Growth in the grocery sector is at its lowest level since March 2017, piling pressure on retailers in the run-up to the key Christmas trading period. Grocery price inflation ran at 1.6% in the 12 weeks to Dec 2, according to research firm Kantar Worldpanel, less than half the rate it was 12 months ago, benefiting consumers but causing growth in the grocery sector to slow to 2%. During the 12-week period, Tesco (TSCO) and Sainsbury (J) (SBRY) reported a drop in sales, by 0.1% and 0.2% respectively. Asda outperformed its merger partner Sainsbury’s with sales growth of 1.5%. The Walmart-owned supermarket plans to merge with Sainsbury’s in a £15bn deal. Morrison (Wm) Supermarkets (MRW), the fourth member of the “Big Four”, chalked up sales growth of 0.5%. This marks two years of continual growth for the retailer, although compared with this time last year, its market share has fallen by 0.1% points. Despite the downbeat figures, the Big Four will breathe a sigh of relief as Christmas spending this year is expected to break records, with overall sales reaching £10bn. “Because of the way Christmas falls, grocers have an extra trading day this year meaning overall sales in December – up to and including Christmas Eve – could reach £10bn,” said Fraser McKevitt of Kantar Worldpanel. He added that traditional retailers were likely to perform well over the festive period as consumers shift to food-led supermarkets such as Waitrose and Sainsbury’s.
Superdry (SDRY) shares were in the red after investment bank Berenberg downgraded the stock to “hold” from “buy” and trimmed its price target from 1,200p to 950p. Shares fell 7.3%, or 45p, to 573.50p, adding to a string of woes for the fashion retailer this year. In October it warned that profits for the year would be £10m less than expected due to hot summer weather affecting sales. The FTSE 250 clothing firm is due to release results for the first six months of its financial year today but has already warned that its second-half performance would drag down its full-year results if temperatures were higher than normal over the past few months.
888 Holdings (888) nudged up to 156p after it announced it was accelerating its US gaming expansion by acquiring the remaining 53% of All American Poker Network. The $28m (£22.4m) bid gives 888 independent control of its growth strategy in the US.
Questor: ‘This stock trades at a triple discount. We think the share price should be 40% higher’. Informa (INF) profits are growing at a decent clip but an aversion to British media stocks and worries about China have depressed its valuation