Boohoo.com (BOO) has given its high street rivals another set of results to cry over after delivering a bumper increase in quarterly revenues driven by a sharp jump in Britain. Group sales at the online fast-fashion specialist beloved of twentysomethings were up by 39% to £254.3 million over the three months to the end of May, with UK revenues rising 27% to £140.6 million despite the economic uncertainties around Brexit. Revenues at Boohoo’s overseas divisions leapt even further, although they account for a far smaller portion of turnover for the company by value. Sales on the Continent for Boohoo, which also owns the Pretty Little Thing and Nasty Gal brands, jumped by 72% to £38.2 million and in the United States they rose by 66% to £51.3 million.
Saga boss Patrick O’Sullivan attacks former private equity owners. The chairman of Saga (SAGA) has criticised the way the over-50s insurer and cruises group was floated five years ago, accusing its private equity owners and bankers of “over-egging” its potential. Patrick O’Sullivan explicitly attacked Charterhouse, CVC and Permira, as well as their bank advisers led by Citigroup, yesterday as he announced the departure of Lance Batchelor, his chief executive, by mutual agreement. “There’s no question they [the private equity firms and banks] oversold it at the time of the IPO,” Mr O’Sullivan told The Times. “They over-egged the potential of the business. “There was virtually no investment in the brand,” he said, and “no certainty” that the group was capable of selling lots of other products to its over-50s demographic, as it proposed to do. The same three private equity groups floated the AA roadside rescue group a few months later, with similar disastrous consequences: its shares are now at 52¾p, a decrease of almost 80 per cent from the 250p issue price. CVC also was behind the flotation of Debenhams, which failed in April this year, wiping out shareholders. It is now in the throes of a rescue.
Lance Batchelor has announced plans to quit as chief executive of Saga (SAGA), only two months after a seismic profit warning and after being encouraged to go by the board. Patrick O’Sullivan, chairman of the struggling insurance and cruises group for the over-50s, said that the departure had been mutually agreed. It was, he said, “a managed separation, a controlled exit, so to speak”. Mr Batchelor, 55, who has run the business since shortly before its flotation in May 2014, said that he would “retire” at the end of the company’s financial year in January. He will not be awarded a long-term bonus in respect of the current year, Saga said. Any short-term bonus would depend on his performance in his final seven months.
Reckitt Benckiser makes clean break for next chief Laxman Narasimhan. For the first time since its formation two decades ago, Reckitt Benckiser Group (RB.) has turned to an outsider for the top job. Laxman Narasimhan, 52, a Pepsico executive and a former director at McKinsey, the consultancy, was named yesterday as the next chief executive of the consumer goods group.He will leave his role as global chief commercial officer at Pepsico to join the board in the middle of next month, before formally succeeding Rakesh Kapoor, who has been in charge for eight years, in September. News of his appointment came after a five-month search.
New boss Mark Herbert is breathing fire at poor state of Pendragon (PDG). The legacy of 30 years of being run by the same chief executive has been laid bare at Pendragon, with the motor retailer unveiling a catalogue of issues yesterday that immediately drove its shares to a seven-year low. According to Mark Herbert, the company’s chief executive, those issues include too many old second-hand cars, too many new cars registered as sold that hadn’t actually found a buyer, not selling enough new cars and selling too many new cars at giveaway prices to hit manufacturer targets — and all that set against a background of generally falling motor sales in a moribund consumer economy. Mr Herbert, 51, was brought in to rescue the company in March after Trevor Finn, 61, the former chief executive who had shaped the business over three decades, was encouraged to go after a series of profit warnings.
Martin Sorrell looks for growth from sacked former WPP colleague Scott Spirit. Sir Martin Sorrell has hired a former WPP colleague who was dismissed by the advertising company last year. Scott Spirit is joining S4 Capital (SFOR), Sir Martin’s new venture, next month as chief growth officer and will take a seat on the board. The executive worked at WPP for 15 years, serving his final three years as the company’s chief digital officer, based in Singapore. A spokesman for WPP said that Mr Spirit, 42, had been “terminated for cause” last year. S4 Capital did not respond to specific questions about his departure from WPP. In a statement it said Mr Spirit had “worked at WPP plc for 15 years and his proven knowledge of global markets will be invaluable as we continue to expand the business technologically and internationally”.
Legal & General ready for its first affordable homes. Legal & General Group (LGEN) has secured the first four sites for its new affordable homes business and is in talks to buy ten times that number with the potential to deliver 1,500 homes in the next two years. The FTSE 100 group, which is Britain’s largest investment manager for corporate pension schemes, said that it had agreed deals to deliver an initial 278 homes in London, Cornwall, Dunstable in Bedfordshire and Shrivenham, Oxfordshire, after gaining regulatory approval six months ago to act as a social housing provider. L&G is a big backer of housing and infrastructure projects, with investments matching its long-term commitments to pay people’s pensions. It aims to deliver 3,000 homes each year over the next four years.
Growth of BAT’s ‘reduced-risk’ brands fails to light up investors. The new chief executive of British American Tobacco (BATS) plans to reduce the number of brands in its e-cigarettes and heat-not-burn tobacco business amid concerns that the growth of new products is running out of puff. In his first trading update as its boss, Jack Bowles said that as part of a focus on building global brands, the company planned to “consolidate our new category portfolio into fewer brands. “Our strategic brands continue to take share, while new product launches and a sharpened focus on priority markets and products are expected to drive stronger new category growth in the second half.”
The prospect of a £100 million-plus sale of its 200 shops to finance expansion of its online Naked Wines business sent shares in Majestic Wine (WINE) fizzing almost 10% higher yesterday. Better still, a queue appears to be forming at the bar. Elliott Advisors has been added to a list of potential suitors, pitting it against rivals including Opcapita and Softbank’s Fortress investment unit, although at its full-year results today the company will confirm only that a sale of Majestic Retail, including its commercial business, is the preferred option. Proceeds from exiting Majestic’s retail operations, together with its commercial unit and Lay & Wheeler, will be used to boost investment in new customer acquisition at Naked from £20 million to £26 million this year, with further increases thereafter, although the dividend is under review.
Castings (CGS) rose 19p to 446p after it said that investment in automation was improving efficiency and boosting margins and product quality. It reported a 12.7% increase in annual revenue to £150.2 million as group operating profit rose from £11.9 million to £13.9 million.
Norcros (NXR) added 5p to 205p after reporting a 25.5% rise in its underlying profit to £34.4 million. Its operating margin advanced from 9.1% to 10.4% and the company said its board remained confident that the group would continue to make further progress in the year ahead.
Tempus – Greggs (GRG): Buy. Remarkable sales figures that, with the stores programme far from complete, should continue
Tempus – Fisher (James) & Sons (FSJ): Long term hold. Only relatively low yield prevents it from being a buy
