Pendragon shares plunge as profits go into reverse. Shares in Pendragon (PDG) lost a fifth of their value on Wednesday after Britain’s biggest car dealer said it would fall into the red for the year, with a “significant” first-half loss. The motor retailer, which owns the Evans Halshaw, Stratstone and Car Store brands, blamed challenging market conditions, tougher margins on premium cars, and higher labour costs. It also added that it had too many used cars and had been inefficient with managing that side of the business. Pendragon has been slashing prices to allow car makers to hit volume targets. New chief executive Mark Herbert, who took the driving seat on April 1, said the annual loss for the year was “disappointing”. “We see significant addressable opportunities to improve the business and return to profitable growth,” he said. “We are continuing to work on our review of the business … but I am confident there are real opportunities for self-help that will improve the performance of the core UK motor and leasing businesses.”
Reckitt poaches Pepsi executive as new boss. Reckitt Benckiser Group (RB.) has turned to Pepsi’s chief commercial officer to succeed outgoing chief executive Rakesh Kapoor, who is due to depart this year after more than three decades at the maker of Cillit Bang and Air Wick. Laxman Narasimhan will join Reckitt’s board on July 16 as an executive director before taking the top job from September. He will also lead the company’s health business unit, which suffered a hit to revenues over the winter due to an unusually weak cold and flu season across US and Europe. Mr Narasimhan, who speaks six languages and holds degrees in engineering and German, was given the nod “after a thorough and rigorous global selection process from a strong bench of internal and external candidates”, said Reckitt chairman Chris Sinclair. The company favoured Mr Narasimhan due to his experience in the consumer goods sector in both developed and emerging markets. He has held several jobs at Pepsi, where he has managed 125,000 employees, generating £14.5bn in sales in more than 100 countries.
Saga (SAGA) boss to leave over-50s group after choppy period. Saga’s boss is stepping down after a difficult year for the over-50s specialist which investors said had put the chief executive “under severe pressure”. The cruise and insurance company said Lance Batchelor, who joined the group from Domino’s Pizza just before Saga’s disastrous float in 2014, would leave at the end of the current financial year in January 2020. A friend of Mr Batchelor’s said he did not expect the former Navy submarine officer, who early in his career was hired by Amazon chief Jeff Bezos to launch a video division, to take on another chief executive job. The 55-year-old’s exit follows a turbulent period for the company. Its shares fell to a record low in April after it unveiled a “fundamental” change in strategy, an annual loss and said profits would slump this year. The shock profit warning was the latest blow for Saga investors, who bought into the business after it was split off from the AA by the pair’s former owner five years ago. Shares in both companies have since plummeted.
Online retailer Boohoo races ahead with surging sales. Online retailer Boohoo.com (BOO) enjoyed a bumper start to its financial year as booming demand for its fast fashion saw a big jump in sales in all of its markets. The company’s storming growth continued in the three months to the end of May as it boosted revenues by 39% to £254m, beating City expectations. Sales in the UK, which accounts for more than half of revenues, were up 27%. International sales rose by more than half. In contrast to the struggles of high street retailers, Boohoo, whose other brands include PrettyLittleThing and Nasty Gal, has enjoyed runaway success as it taps into growing demand for cheap fashion, relying heavily on online marketing and celebrity endorsements to reach younger customers. It spent £80m on marketing last year, increasing its sales by almost half as it booked a profit of £60m.
City concerns over Provident Financial (PFG) “precarious” capital position sparked the doorstep lender’s sharpest one-day loss in five months. Canaccord Genuity predicted that its surplus capital will “diminish” in the coming years, putting its dividend “at risk”. Analyst Portia Patel expects its capital surplus to drop below its minimum target of £50m by the end of next year. The dividend could be cut or “potentially suspended” if its “capital position comes under pressure”, and it could be forced to raise money from investors in “the most extreme case”, she warned. Provident shares gave up most of the gains made after Non-Standard Finance dropped its hostile takeover bid last week.
BP (BP.) and Royal Dutch Shell ‘B’ (RDSB) shares weighed heavily on London’s market after oil prices threatened to slip below $60 per barrel following another surprise climb in US crude stockpiles. BP slid 16.2p to 540.8p while rival Shell pulled back 22p to £25.26 despite Jefferies upping its target price for the oil major by 50p to £30.50. Analyst Jason Gammel “found the potential for shareholder returns compelling” after a recent strategy update.
Majestic Wine (WINE) leapt to a six-month high after a Sky News report claimed that Paul Singer-led hedge fund Elliott Advisors has launched a bid for the company’s network of stores. Majestic could sell its entire retail arm as part of a radical overhaul that will shift its focus to its online Naked Wines brand. It rose 27p to 318p.
Banknote printer De La Rue (DLAR) clawed back 6p to 306p after selling its international identity solutions business in a £42m deal. Its shares plunged 34% last month after issuing a profit warning and its boss quit.
