Billionaire owner Mike Ashley is eyeing a swoop on 137-year-old toy seller Hamleys in a bid to expand his retail empire. Fellow toy chains The Entertainer and Smyths are also understood to have expressed an interest to Hamleys’ Chinese owners, C Banner. It comes just a day after Ashley, 54, warned November had been the worst on record for the High Street, and attacked Debenhams for refusing a £40million loan he offered in return for a further 10 per cent stake in the department store. Ashley already owns almost 30% of Debenhams through Sports Direct, and his firm rescued House of Fraser earlier this year. But he is unlikely to be a frontrunner to snap up Hamleys unless he can get it for a knockdown price. C Banner paid £100million for Hamleys three years ago and is understood to have put a £90million price tag on it.
SHARE PUNT OF THE WEEK: Telecom Plus (TEP) operates the Utility Warehouse brand and gives shareholders 10% off their bills. Telecom Plus supplies gas, electricity, landline, broadband and mobile services to homes and businesses. It operates the Utility Warehouse brand, which relies on word-of-mouth recommendations from members to attract new customers. The company released solid half-year results in November which showed customer numbers, sales, profits and the dividend all rising. It added that no competitors seem to be copying its business model, which slashes marketing expenses. Charles Wigoder, the son of former Liberal Party politician and barrister Lord Widoger, is the largest shareholder. He joined shortly after its formation. Melvin Lawson, one of the company’s directors, is also a top-ten shareholder. Standard Life, Schroders, Canaccord Genuity Wealth Management and Neptune Investment Management all appear among the biggest investors. As well as bill discounts, AJ Bell’s Russ Mould says Telecom Plus’s competitive position remains strong. Its 20-year power supply deal with Npower has also helped to shelter it from energy price swings. However, Mould points out that the shares are trading on a high value compared to the company’s underlying earnings. The ratio is approximately 23 times. The FTSE 100 on average is trading on barely half of that. Mould says: ‘As a result, the shares are unlikely to suddenly zoom higher but the scope for further growth in customers, sales, profit and ultimately dividend increases mean that Telecom Plus may appeal to patient portfolio builders, especially if they get a discount on some of their bills.’
Building materials firm Low & Bonar (LWB) sank after warning of continued tough trading conditions. The business, which creates materials used in car interiors and house roofing, will consider issuing new shares to investors to help pay down its £129million debt pile. Its dividend for the year ended in November will likely be lower than last year, bosses added. Low & Bonar is still looking to sell its civil engineering business.
Gambling firm GVC Holdings (GVC) was a strong bet for traders yesterday as analysts at Investec said a sell-off of its shares had been considerably overdone. The whole betting sector has been weighed down by Government plans to cut the maximum stake customers can place on highly-addictive self-service machines in High Street bookies. Many betting firms were worried this would cut revenues and force them to close shops, especially after political pressure forced the Government to impose the changes earlier than expected. The £2 limit on bets made through the machines will now come into force in April, along with an increase in taxes for online casinos from 15% to 21%. Investec’s Alistair Ross warned the changes will hit GVC earnings, and pushed down his profit forecasts for 2019 by 20% to £630m. But the Ladbrokes Coral owner is still his top pick in the sector. Ross said there could be a boost from its expansion into the US now that sports betting has been legalised there. Analysts at Citi argued the early enactment of the new gaming machine rules is actually a ‘significant positive’ for GVC.
Poor economic data from China worried investors in steel company Evraz (EVR) (down 3.9%, or 18.9p, to 464.4p) and copper miner Antofagasta (ANTO) (down 2.1%, or 16.6p, to 778p), since the country imports so much metal. Housebuilders were also stuck in a dip as they extended their rollercoaster ride, amid growing fears about the Brexit deal. Investors are worried a hard Brexit could knock the UK economy and make people less keen to buy houses. Barratt Developments (BDEV) was down 2.7%, or 12.2p, at 440.5p, Persimmon (PSN) slid 2.7%, or 52.5p, to 1897p and Taylor Wimpey (TW.) fell 2.1%, or 2.9p, to 132.3p. Smaller rival McCarthy & Stone (MCS) revealed that its top brass had missed out on grabbing 283,332 shares through reward schemes since 2015, due to falling short of performance targets. At last night’s value, the shares would have been worth £383,065, and around half would have been awarded to chief executive John Tonkiss. Shares yesterday dipped 2.7%, or 3.8p, to 135.2p.
