Whitbread launches share buyback after banking cash from Costa Coffee sale. Whitbread (WTB) has begun a £500m share buyback programme to hand back funds to shareholders following sale of Costa Coffee. A share buyback programme had been widely anticipated after the company disposed of its coffee chain Costa to Coca-Cola for £3.9m. It aims to finish the scheme by the end of April. Alison Brittain, chief executive, said it had been a “momentous” year for the company and that the sale was completed “much sooner than expected”. Whitbread surprised the City last September when it first announced the deal to sell Costa to Coca-Cola. Net proceeds from the Costa sale will be £2.9bn after£500m of short-term debt is repaid and a £350m pension hole is plugged.
Associated British Foods (ABF) – Primark leans on new stores to drive up sales. Clothing retailer Primark has reported a “modest decline” in like-for-like sales over the last three months after its shops struggled in November in the run-up to Christmas. The budget fashion chain relied on new store openings to drive up sales, which rose 4% in the 16 weeks to Jan 5. However this was a marked slowdown on the 7% growth it chalked up in the same period a year ago. Sales in the UK over the period rose 1% compared to the previous year, while operating profit margin increased.
Premier Foods blames logistics overhaul for sales slide. Premier Foods (PFD) has blamed problems with its logistics overhaul, which aims to consolidate warehousing and distribution operations, for sliding sales at the end of last year. The Mr Kipling owner reported a 2.2% fall in revenues to £255.6m for the three months to Dec 29 as it dealt with issues transferring stock to a new outsourced warehouse in Tamworth. The St Albans-based company said it won market share for its top five major brands, including Mr Kipling, Bisto and Batchelors, which collectively rose 0.2% over the period. Sales of Mr Kipling jumped 5%, but lower margin non-branded sweet treats dropped more than a fifth.
‘Signs of recovery’ at Sage after year of change at the top. Software provider Sage Group (SGE) has rebounded in 2019 as it focuses on subscriptions growth amid “signs of recovery” in its UK business. The FTSE 100 company pushed up sales 7.6% after a year of executive change in 2018, which saw chief executive Steve Hare step up from the company’s finance director post. The Newcastle-headquartered business increased revenues for the first three months of the year to £465m, while recurring revenues grew 10.5% as subscriptions to its software rose by 28%. Mr Hare said that the first half of the year was likely to appear stronger in comparison to the previous year, due to a weak period in early 2018. “I would urge you not to get too carried away,” he said. Mr Hare took up the chief executive post in November after a choppy start to the year brought about the resignation of former boss Stephen Kelly in August.
Patisserie Valerie hires KPMG to prepare for potential collapse. Patisserie Valerie lurched back towards the brink after hiring KPMG to prepare the business for “all options”, including collapsing into an insolvency. Its “devastating” accounting scandal was “significantly worse than first thought”, the company warned on Wednesday. Forensic accountants, believed to be PwC, have identified “thousands of false entries into the company’s ledgers”, parent company Patisserie Holdings (CAKE) said. Their analysis “revealed that the misstatement of its accounts was extensive”.
Pearson stockpiles textbooks for no-deal Brexit. Pearson (PSON) said it has separated its UK and EU supply chains and stockpiled textbooks in preparation for a no-deal Brexit. John Fallon, chief executive of the FTSE 100 education publisher, said that it had taken precautions to protect its business on the continent, which accounts for a tenth of overall annual sales of more than £4bn. “Obviously it’s not something we want to see,” he said. “We believe the closer and more fruitful a relationship we have with our European partners the better. But we can’t hang around and wait to see what might happen.
Cineworld powers ahead in US but UK audience numbers decline. Blockbuster hits including Avengers: Infinity War and Incredibles 2 drove movie fans to Cineworld Group (CINE) in the US but customers in the UK were less enticed. The FTSE 250 company welcomed a record 308m people into its cinemas last year, but UK admissions dipped 0.6% on a constant currency basis. The fall was offset by a 8.6% surge in American audience numbers. The region now accounts for around 70% of revenue after Cineworld swallowed Regal Entertainment, the second largest cinema chain in the US by number of screens, for £2.7bn last year.
Bovis bounces back from faulty homes scandal. Housebuilder is on track to deliver “record” profits ahead of market expectations as it bounces back from a faulty homes scandal that cost it millions. Greg Fitzgerald, chief executive, hailed a “significant level of improvement in performance across all areas of the business”, pointing to a big rise in the company’s customer satisfaction scores as evidence it had dealt with its quality problems. The FTSE 250 company sold 3,759 homes last year, up 3%, and its average selling price rose marginally to £273,000. Earnings have also been boosted by cost cuts and other efforts to bolster its margins.
