ASOS (ASC) lost almost a quarter of its value yesterday after a bungled warehouse overhaul knocked the online retailer’s sales growth off course and prompted its third profit warning in a year. Investors fear one of the brightest names in retail is coming under intense pressure from rivals while its investment-hungry business model stumbles. Yesterday’s warning sent the shares down by 636p to £21.07, meaning the company’s value has fallen by 65% this year. Investors appeared to be unmoved by the chairman Adam Crozier’s attempt to support the business by buying £100,000 worth of shares. Asos said that its pre-tax profit will now be about £30 million to £35 million this year, £20 million less than analysts expected. Total sales grew 12% to £919.8 million in the four months to June 30, far below its typical growth rate of 25%.
Britain’s pub industry is set for a shake-up after the company behind Yates’s, Walkabout and Slug and Lettuce agreed to buy EI Group (EIG), the largest owner of tenanted pubs in the country, in a £3 billion deal. Ei Group, formerly called Enterprise Inns, said it had agreed a 285p-a-share deal with Stonegate Pub Company valuing its equity at £1.27 billion. Including its net debt, the takeover equates to an enterprise value of £2.97 billion. The combined business will have almost 5,000 bars and pubs, making it the largest company in the industry. Ei Group has just over 4,000 pubs, the vast majority freehold, and at its recent half-year results it declared the value of its property assets at £3.3 billion.
The consortium of investors seeking to buy Britain’s largest satellite company has made legally binding commitments to the government to protect the future of its UK operations. Apax and Warburg Pincus, the private equity firms, and two Canadian pension schemes agreed a £2.6 billion takeover of Inmarsat (ISAT) in March. After talks with the government, the investors said yesterday that they had given three-year voluntary undertakings, including that they would “support Inmarsat’s continued role as a leader in the space sector”, ensure that “the majority of key strategic decisions . . . are taken in the UK” and maintain its global network of operations centres in the UK. The buyers also said that the consortium would provide Jeremy Wright, the digital secretary, with “annual written notice confirming its compliance with the undertakings”.
Estate agents should be overseen by a new independent regulator, a government-backed inquiry has recommended. The working group also called for mandatory qualifications for estate agents, a code of practice and transparency over charges. Complaints about the sector have been rising and a survey by Ipsos Mori found last year that more than two thirds of the public don’t trust estate agents. The Property Ombudsman, a public redress scheme, received a record 29,000 enquiries last year, up 22% on the previous year. The industry is self-regulated by trade organisations such as the Royal Institution of Chartered Surveyors (Rics). Most of the laws that apply to estate agents are policed by local trading standards officers, who focus on individual criminal cases.However, the government is looking at ways to crack down on poor practices and ensure all estate agents are properly trained, qualified and licensed under a single set of rules. Ministers established a working group in October to develop the plans, chaired by Lord Best, a crossbench peer and former boss of the Joseph Rowntree Foundation.
easyJet (EZJ) has hired a key lieutenant of Michael O’Leary at Ryanair and announced better-than-expected revenues during the spring and into summer as it used artificial intelligence systems to give it the confidence to keep its fares higher for longer. The airline announced an 11% rise in revenues to £1.76 billion in the three months to the end of June, despite carrying only 8% more passengers, at 26 million. Average revenues per passenger, a proxy for average fares, rose 3% to £66.70. The company said that it had appointed Peter Bellew as its chief operating officer, who has been doing the same job at rival Ryanair. Mr Bellew has been in the Ryanair job for 18 months although it was his second tour of duty, having worked there heading flight operations and sales between 2006 and 2014. In between he was the chief executive of Malaysia Airlines when it was trying to rebuild its reputation after the twin disasters of the disappearance of Flight MH370 to Beijing and Flight MH17, shot down over Ukraine in 2014.
The owner of the Mirror, Express and Star national newspaper titles is in talks to acquire parts of the rival publisher behind the i and The Scotsman. Reach Plc (RCH), which changed its name from Trinity Mirror last year, said yesterday that it was looking at “certain of JPI Media’s assets”. JPI was put up for sale in May by its bondholder owners about six months after the debt-ridden company was bought out of administration. It is one of the largest local newspaper groups and owns more than 200 local and national newspaper titles, which include The Yorkshire Post and The Portsmouth News.
Eve Sleep PLC (EVE) cut its losses by 50% in the first half of the year but warned investors that the company expects to miss its annual sales targets. The direct-to-consumer mattress group reported a 50% fall in losses to £5.9 million in the six months to June 30 after it focused on its core markets in the UK, Ireland and France. Group underlying revenue fell by 8% to £12.9 million after a 29% sales slump in France. The warning on sales sent its shares tumbling yesterday, down 1¼p to 7½p giving it a market value of £19.7 million. This compares with an issue price of 101p and a value of £140 million at its float on London’s junior Aim market in May 2017.
Philip Morris delivered strong results for the second quarter. The company is on track for the highest percentage increase since April 2015, up nearly 30% for the year, boosted by the popularity of its heated tobacco in Italy, Russia, Ukraine and Japan. The US Food and Drug Administration has also authorised the product for sale in America. London’s investors were willing to cough up to back the trend: British American Tobacco (BATS) added 179½p to £31.04½ and Imperial Brands (IMB) gained 46p to £21.42½.
Moneysupermarket.com Group (MONY) retreated 33p to 369p, after it reported slower sales growth in the second quarter: 6% compared with 7% and 13% in the two quarters before. Analysts at Liberum were satisfied, though, recommending that investors buy the shares. Mark Lewis, chief executive, said: “We grew the business strongly in the first half, already helping households save over £1 billion this year, particularly after the energy price cap came in and then went up. Millions of people faced rising energy bills and we helped many of them to find a better deal, saving them hundreds of pounds in just a few minutes on our sites.”
Just Eat (JE.) shot up to 625¼p yesterday morning after McDonald’s ended its exclusivity agreement with Uber Eats, but investors had lost their appetite by the afternoon. The shares closed down 7¾p to 616¼p.
Greggs (GRG) is on track for “magnificent” interims on July 30, according to analysts at Peel Hunt, who said forecasts for the company’s results would be likely to rise but “the market well knows that” so it is time to cash in now. “The shares are now the highest valued domestic bricks-and-mortar retailer by a mile: they are priced for perfection,” the analysts said. They predicted that African swine fever, the contagious disease which is incurable in pigs, will impact pork prices in the UK and Europe significantly.
7digital (7DIG) surged 47.2% to 0.27p. The departure of John Aalbers, chief executive, and Julia Hubbard, the chief financial officer, as part of plans to save £1 million a year, was clearly music to dealers’ ears.
There was plenty of market noise about Silence Therapeutics (SLN) yesterday after the biotechnology company struck a “transformational” deal worth up to $700 million with a larger New York-listed company. The Aim-quoted, Neil Woodford-backed company announced a collaboration with Mallinckrodt in the US. The intention is to develop and commercialise drug targets designed to “silence” a group of proteins involved in the immune system that play a role in the development of inflammation. “These proteins are known to contribute to the pathogenesis of many diseases, including autoimmune diseases,” Silence said. Mallinckrodt gains an exclusive licence to Silence’s SLN500 asset and will provide an upfront payment of $20 million. Depending on milestones being reached, payments could stretch as far as $703 million.
Tempus – St. Modwen Properties (SMP): Buy on weakness. Increasing success of the strategic shift should lead to much higher dividends
