M&S names 17 stores for closure, with loss of 1,000 jobs. Marks & Spencer Group (MKS) has named the next 17 shops set to close in a move that puts 1,045 more jobs at risk as part of its ongoing turnaround plan. The former high street stalwart announced last year its plans to shut more than 100 shops as it grapples with the rapid rise of online shopping and spiralling property costs. M&S has proposed closures in Ashford, Barrow, Bedford, Boston, Buxton, Cwmbran, Deal, Felixstowe, Huddersfield, Hull, Junction One Antrim Outlet, Luton Arndale, Newark, Northwich, Rotherham, Sutton Coldfield and Weston Super Mare.
Boohoo sales beat expectations to ease worries over online growth. Online fashion retailer Boohoo.com (BOO) has upgraded its outlook for the full year after posting strong Christmas sales. The company, which owns PrettyLittleThing and US brand Nasty Gal, posted a 44% surge in revenue in the four months to Dec 31. As sales in the US rocketed 78% over the period and jumped 33% in the UK, Boohoo’s gross profit margin also rose to 54.2%. It now expects full-year revenue growth to be between 43% and 45%, ahead of its previous 38% to 43% guidance.
More pain for Provident Financial with another profit warning. The long spell of bad news for Provident Financial (PFG) continued on Tuesday after shares in the embattled doorstop lender plunged following another profit warning. The former FTSE 100 company lost almost a fifth of its value after warning investors that profits for 2018 would be towards the lower end of expectations. The collapse puts it on track for its steepest loss since August 2017, when £1.7bn was wiped off its value in one day. The profit warning was a bitter blow to shareholders, who had hoped that the 138-year-old business – dubbed “the Provvy” – might turn a corner following the worst year in its history.
Flybe wins £10m loan to stay aloft. The consortium bidding for Flybe Group (FLYB) has revised the terms of the deal after failing to reach agreement with the struggling airline’s lenders. Connect Airways, which includes Virgin Atlantic, Stobart Group and US private equity firm Cyrus Capital Partners, will release £10m from a revised bridging loan to Flybe on Tuesday that will allow the airline to continue operating. A further £10m will be released at a later date. Connect will also pump a further £80m funding into the troubled business. In return for the £10m loan, Flybe will sell its two main subsidiaries, Flybe Limited and Flybe.com Limited, to the group.
Savills predicts gloomy 2019 as uncertainty knocks property sales. Savills (SVS) has warned it will struggle to eke out growth next year as a cocktail of economic worries discourage people from investing in property. The property agent, which employs 35,000 people, said while last year’s profits had grown as forecast, “prospects for 2019 are overshadowed by macro-economic and political uncertainties across the world”. Savills said it was difficult to predict the precise impact of the economic wobbles on demand for property from businesses and investors but “at this stage, we expect to see declines in transaction volumes in a number of markets”.
Overseas growth offsets weak UK for Hays (HAS). Strong growth overseas helped Hays offset a subdued UK market beset by Brexit uncertainty at the end of last year. Hays, the UK’s biggest recruitment firm, posted a 8% rise in net fees in the three months to December 31. Alistair Cox, chief executive, praised the company’s strong performance in the quarter “despite continued economic uncertainties”. “While activity levels at the start of the New Year will be an important driver of the Group’s second half performance, and we remain mindful of macroeconomic conditions,” he warned.
Persimmon bids to move on from bonus debacle. Britain’s second-largest housebuilder Persimmon (PSN) is seeking to move on from the embarrassing departure of its former boss Jeff Fairburn as it revealed profits for last year would come in “moderately” above expectations. Dave Jenkinson, who has been running the business on a temporary basis since December, said he hoped the company could “move forward”, although he too benefitted from the bonus share scheme that cost Mr Fairburn his job. Mr Jenkinson, thought to be the favourite for the top job, made around £40m through the bonus, but later returned £3m of it.
Games Workshop in ‘great shape’ after posting record sales. Fantasy game retailer Games Workshop Group (GAW) has said it is in “great shape” after unveiling record sales and profits. The FTSE 250 company reported a 14% rise in revenue to £125.2m in the six months to Dec 2, while pre-tax profit grew 7% to £40.8m. However this marked a slowdown in growth compared to the year June 30. Retail and trade sales climbed 6.8% and 26.4% respectively, but were offset by weak online sales, which dipped 3.6% to £21.2m. Games Workshop said that revenue at its online Citadel shop remained flat compared to last year and that its Forge World and Black Library stores declined 13% to £4.6m.
New warning adds to fears for global car industry. Concerns about the car industry’s health continue to mount after parts giant Continental warned of deteriorating conditions in the sector, sales of cars in China plunged and Ford flagged up the huge costs of developing technology for electric and driverless vehicles. Continental, the world’s second-largest supplier of vehicle parts and tyres, forecast weak demand for at least the first six months of this year. The German-based business – an industry bellwether – twice warned on profits last year and on Monday gave an update painting a picture that is only getting bleaker.
Next (NXT) post-Christmas relief rally ran out of steam after City analysts warned that the resilient retailer’s stores could be hit by its rivals’ woes. The high street giant’s shares have surged in 2019 after it survived the worst of the sector slump, bolstered by a 15% jump in online sales during another tough festive period. But Credit Suisse’s analysts told clients that Next could be affected by subdued footfall sinking further as other struggling chains close stores and shoppers desert the high street.
Goals Soccer Centres dives by a fifth on profit warning. Higher costs have taken a bite out of profits at football pitch operator Goals Soccer Centres (GOAL), sending its share price tumbling by a fifth. The company alarmed investors by slashing its profit guidance and issuing a cautious outlook for the next two years, despite an improvement in sales through the second half of last year. After a disappointing first half, in which cold weather and the football World Cup kept punters away from the pitch, new initiatives introduced in the second half boosted sales, helping revenues in the year to the end of December rise 0.5% to £32.4m.
Ophir Energy rejects Medco takeover bid. Ophir Energy (OPHR) is calling on takeover suitor Medco Energi to raise its planned takeover offer or walk away from the negotiating table. The UK-listed oil company called time on talks over a possible cash offer of £340m for the company on Monday, saying that the plan “undervalues” Ophir. The board’s swift rejection came just days after Ophir confirmed that it was in talks with the Indonesian oil giant over a possible takeover, and ahead of Ophir’s trading statement on Tuesday. Medco has until the end of the month to make a formal offer for the company, and Ophir is likely to use the market update to prove the company is worth more.
Sportswear and toy boosts Christmas sales for Shop Direct. Shop Direct, the retailer that owns the Very.co.uk and Littlewoods.com brands, has reported strong Christmas sales driven by a surge in demand for sportswear and toys. Group revenue increased 3.7% in the seven weeks to Dec 28, compared to the previous year, as growth at Very, its largest and fastest growing brand, jumped 8.8% over the period. The multi-brand online retailer, which is owned by Sir David and Sir Frederick Barclay, the owners of Telegraph Media Group, said the results were achieved “without compromising margin”, despite participating in its earliest and longest Black Friday promotional period.
Capita ‘naively ambitious’ and ‘chased revenue’ to win Army recruitment deal. Capita (CPI) will never make money on the troubled £495m contract it signed to recruit soldiers for the British Army, MPs have been told. The boss of the outsourcing company admitted Capita was “chasing revenue” when it took on the programme in 2012, and which has failed to provide enough soldiers, leaving the Army dangerously under strength. The admission came as the Public Accounts Committee quizzed Capita boss Jon Lewis and generals about the Defence Recruiting System (DRS) deal, which handed over responsibility to the private company for signing up the almost 10,000 troops needed each year.
Pagegroup (PAGE) boss predicts more growth despite China and Brexit wobbles. The boss of recruitment giant Michael Page has insisted it is on track for another year of strong growth despite signs of a slowdown in some of its markets towards the end of 2018. Net fees across the company, which employs 7,800 staff across dozens of countries, rose 15.9% to a record £815m in the 12 months to December. But it was dogged by economic uncertainty in the final quarter as worries over China’s trade relationship with the US cut growth in the country in half and its UK executive headhunting arm Michael Page shrank 1% amid Brexit worries.
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