After a positive trading update today, Nick Davis, Chief Executive of Shoe Zone (SHOE) said: “The Group has performed well through the year with a particularly strong performance in the second half. Our strategy of growth through Big Box expansion and online channels allied with excellence in the operations of the core Shoe Zone estate provides us with a clear path for the future. I am particularly pleased that the continued strong cash conversion has enabled the Board to outline its intention to propose its third Special Dividend. The new financial year has started well and there are a further 14 Big Box openings planned. We look forward to updating shareholders on progress at the time of our Final Results in January.”
Pharmaceuticals giant AstraZeneca (AZN) has frozen investment in the UK until it knows what’s happening with Brexit, according to the firm’s chairman. Leif Johansson told French newspaper Le Monde that the UK-Swedish firm has activated its contingency plans. It is now stockpiling medicines at national borders and has duplicated some of its UK operations in Sweden.
Medical products group Convatec Group (CTEC) today issued a profits warning and said its chief executive would be stepping down with immediate effect. Commenting on the update, Ian Forrest, investment research analyst at The Share Centre said: ‘This is a lot of unexpected news for the market today and, unsurprisingly, the shares have responded with a sharp 27% fall. ‘While three of the company’s four divisions saw revenue growth in the third quarter, the fact that the company is now looking for a new CEO and faces other challenges means that investors should expect the shares to remain volatile for some time to come. ‘As such we have moved our recommendation to a ‘hold’ for investors willing to accept a higher level of risk.’
Profit warning from Superdry triggers fresh fears for retail. Investors in Britain’s retailers were left stunned on Monday after a shock profit warning from Superdry (SDRY), blaming warm weather and bad foreign exchange hedging. Shares in the group crashed 20%. The fashion brand is reliant on sales of heavy winterwear such as jumpers and jackets, 45% of annual sales, and has always traditionally struggled in the summer months. But this year was even worse, with what it called “unseasonably hot weather” in the UK, Europe and the east coast of the US hitting sales. Superdry said it expects to make £83 million in profit this year, well shy of the near-£110 million expected. The shock update underlines the latest struggles on the High Street this year after House of Fraser crashed into administration and comes just three months after Superdry paid a special dividend based on “strong cash generation”.
Purplebricks in European launch as it teams up with Germans. Online estate agent Purplebricks Group (PURP) is expanding its empire into Europe after striking a joint venture with German giant Axel Springer on Monday. Purplebricks has teamed up with the Bild publisher to buy a 25.9% stake in German online estate agent Homeday, tapping into a fast-growing market in Europe’s biggest economy. The UK firm, which has launched in Australia, Canada and the US since floating four years ago, is paying €12.7 million (£11.2 million) for a 12.9% stake in Homeday. Its foray into continental Europe comes as the property market at home has been hit by lower household spending and uncertainty over Brexit.
Patisserie Holdings (CAKE) scandal will keep investigators and lawyers in luxury cake for months to come. As well as the obvious questions about why the auditor Grant Thornton didn’t spot anything amiss, the weekend’s revelations that the company had two secret overdrafts totalling £10 million raise a whole series of new issues. First, let’s correct something: reports have described “secret accounts” with HSBC and Barclays. That’s not quite true: last year’s annual report, which the board signed off on, referred to short-term overdraft facilities with an interest rate of Libor plus 3.5%. Also, Barclays requires overdraft terms to be signed off by the client’s chief executive and finance director. They also have to be discussed and approved by the customer’s board. So, were the accounts known about? If so, they clearly should have been checked.
Patisserie Holdings (CAKE) chief executive Paul May today quit the board of Restaurant Group (RTN) to concentrate on helping the cakes chain bounce back from a devastating accounting scandal. The group, which owns the Frankie & Benny’s and Chiquito brands, said that 59-year-old May has stepped down from his role as non-executive director with immediate effect. TRG’s chairman, Debbie Hewitt, said the firm understood May’s decision after the patisserie’s tumultuous week. The pastry chain is chaired by serial entrepreneur Luke Johnson who owns 37% of the shares. Johnson agreed to provide £20 million in loans to stop the business from collapsing, safeguarding 2800 jobs, but an emergency share placing is likely to see the value of the group slashed from almost £450 million to less than £70 million when the shares eventually resume trading.
Britain’s biggest sandwich-maker Greencore Group (GNC) on Monday agreed to sell its troubled US business for £817 million just two years after buying it. The FTSE 250 manufacturer has agreed the sale of the US arm — comprising 3000 employees across 13 sites where sandwiches and salads are produced — to Illinois-based Hearthside Food Solutions. Greencore’s planned disposal comes less than two years after it bought US firm Peacock Foods for $747.5 million (£570 million) in a move expected to quadruple its sales across the Atlantic. But this year Greencore warned of problems in the division when it found it was hard to expand and it planned to end production at a loss-making Rhode Island factory. Greencore chief executive Patrick Coveney said: “We got off to a poor start [in the US] this financial year… we weren’t where we expected to be.”
London-founded bakery Cake Box Holdings (CBOX) put its struggling rival Patisserie Valerie in the shade on Monday, after it revealed a profits upgrade. The firm showed that not all cakes businesses are having a tough time of it — unlike its better-known rival which has suspended shares in the wake of an accounting scandal. Cake Box boss Sukh Chamdal said he was “really happy” that a rescue deal was agreed for Patisserie Valerie, but was even more upbeat as he updated on his firm’s first-half performance. The retailer, which has 102 branches, expects sales to increase 40% to £8.3 million and profits to come in ahead of the £3.7 million analysts had pencilled in. Shares in the firm rose 12.5p, or more than 7%, to 176p. It floated at 108p per share in June.
