Reckitt Benckiser Group (RB.) saw profits and sales rise as its departing boss cheered ‘a year of good financial progress’, sending shares in the company higher. The consumer goods giant said it saw a solid performance across both its health division, which includes brands like Nurofen and Gaviscon, and its home division, which includes Cillit Bang and Veet. Net revenue rose 2% to £3.4billion in the fourth quarter, leading to an 8.9% rise in profit to £2.7billion. Over the full-year, operating profits rose 8% to £3.3billion, with revenues 10% higher at £12.59billion.
Fishing equipment retailer Angling Direct (ANG) said it is well stocked to weather any disruption to supply due to Brexit as it unveiled a strong rise in sales. In a pre-closing trading update, the company said it has structured the company in preparation for Brexit given ‘the very high percentage of stocks coming from the Far East’. ‘Inventory numbers in general are good and the business does not foresee any disruption to supply throughout the next few months, regardless of any Brexit outcome,’ the company said in a statement.
Trainers and sportswear retailer JD Sports Fashion (JD.) has bought up sizeable stake in its rival Footasylum (FOOT), triggering a sharp rise in the latter’s shares. Footasylum, which has suffered a dismal year amid challenging trading conditions, saw its beleaguered shares rocket 70% to 49p on the news. JD Sports bought the 8.3% stake for, it said, ‘investment purposes’, and said it was prepared to acquire up to 29.9% in the recently-listed firm – just below the mandatory takeover threshold of 30%. However, it insisted it is not intending to table an offer for the firm.
Convenience store chain McColl’s Retail Group (MCLS) said it is still suffering from the collapse of supplier Palmer & Harvey as it reported falling profits and sales and slashed its dividend by more than half. McColl’s, which has around 1,600 convenience stores and newsagents around the UK, also said sales may fall further in April and May if the UK leaves the European Union without a deal as supply chains are disrupted. The expected weak annual results follow two profit warnings and an 80% slide in the small cap firm’s share price in a year.
Clothing chain Primark is expected to report resilient sales figures later this month, bucking the trend of high street gloom. Its next trading statement may even outshine its Christmas performance, according to City analysts. Brokers at Jefferies said Primark could increase profits in the six months to March by as much as 25% to £425 million. It said the chain could also have been lifted by better weather and solid performances in the US, Italy, France and Poland. The broker added that Primark could also benefit from a ‘rational completion of Brexit’ and a subsequent recovery in sterling that would make imports relatively cheaper. Primark’s turnover will be around £8 billion this year. It is owned by food and agriculture group Associated British Foods (ABF) which also runs Twinings and Ovaltine. ABF’s shares closed on Friday at £22.66 valuing it at £18 billion.
US bank Citigroup is looking to buy its London skyscraper offices for a reported £1.2 billion. In a boost to the capital ahead of Brexit, the firm is said to be in talks with property owner AGC Equity Partners about acquiring 25 Canada Square tower in Canary Wharf.Citi has been based at the 42-storey office since 2001 and uses it as its main headquarters for Europe, the Middle East and Africa.
Takeaway delivery firm Just Eat (JE.) faces mounting pressure to merge with a rival after a second investor broke ranks to call for a shake-up. Last week activist investor Cat Rock Capital, which holds 2% of Just Eat, wrote an open letter to the firm’s board demanding a major overhaul. Just Eat has until now been able to dismiss the letter as a lone critic’s view. But now another of its largest shareholders has broken ranks to back the call for action and has vowed to write to the board. The Mail on Sunday understands that a further three shareholders have also written to the board in the past week to express their frustration at poor communication from the company over an action plan they deem worthy of discussion.
Spreadbetting firm Plus500 Ltd (DI) (PLUS) was warned that it would suffer a huge blow from tighter regulation nine months before it issued a shock profit warning last week. One of the hedge funds betting against the company’s shares told a New York conference in May last year that new rules could hit Plus500’s profits by more than 50%. The revelation will be seized on by critics who claim that Plus500 – which is listed on the FTSE 250 and sponsors Atletico Madrid football club – may have misled investors about its expectations for future performance.
Britain’s top banks are poised to reveal their biggest profits since the financial crisis erupted in 2007, detailed analysis by The Mail on Sunday shows. Figures out this week are tipped to indicate that Lloyds Banking Group (LLOY), Barclays (BARC), HSBC Holdings (HSBA) and Royal Bank of Scotland Group (RBS) made a combined profit of £23.9 billion last year – an astonishing 85% increase on the previous 12 months when the figure was just £12.9 billion. Lloyds will lead the way by revealing its biggest ever profit for a single year, according to a consensus of analyst forecasts. The last time the four biggest lenders made more than £20 billion was 2007 – the year Northern Rock went bust – when profits hit a combined £26.4 billion. Ever since then, the four have been weighed down heavily by legal costs, payment protection insurance compensation and various bills for mis-selling and misconduct. PPI compensation alone has wiped around £30 billion off their balance sheets, while legal settlements have cost them £49.3 billion since 2009, MoS analysis found. These costs are finally starting to tail off as banks move on from a torrid decade.
Hedge funds are betting on a fall in the share price of Big Six energy giant SSE (SSE) as it faces a £200 million bill to upgrade its ageing computer systems. Bets against SSE’s share price hit an all-time high last week, with Marshall Wace and WorldQuant’s taking £170 million of so-called short positions, where they profit if the share price falls. The short-sellers could benefit as SSE tries to regroup after its failed merger with rival Npower. It had planned to use Npower’s new systems as part of the £3 billion deal, but will now need another solution. All five of its biggest rivals – British Gas, Eon, Scottish Power, EDF and Npower – have gone through major upgrades of their systems. An industry source said SSE’s ageing technology is unlikely to be able to cope with the switch to smart meters, which send real-time energy usage data to companies every 30 minutes.
Beleaguered grocer Ocado Group (OCDO) is to ditch its familiar green and purple branded vans for its new rapid delivery service and instead use a French courier firm. The Hertfordshire company has signed up Stuart Delivery – a subsidiary of French postal giant La Poste – to operate Zoom which promises grocery orders to the doorstep within the hour. The launch using a third party is likely to raise eyebrows among customers and investors as Ocado prides itself on fine service and precision technology. Deliveries will be sent from Ocado’s giant distribution centre in Erith, South East London, to a smaller ‘mini-hub’ at a location near Chiswick, West London, before being handed over to Stuart’s drivers. The trial beginning next month coincides with growing questions about the Ocado business model, some of which may not be answered until fire chiefs discover the cause of a blaze a fortnight ago at its massive warehouse in Andover, Hampshire.
The mega-merger between Asda and Sainsbury (J) (SBRY) could be stopped in its tracks if the authorities order the chains to hive off more than 170 stores, say senior supermarket sources. UK competition rules mean the two retail giants could be forced to sell scores of stores to their grocery rivals. But sources said getting rid of so many outlets could prove too painful.
MIDAS SHARE TIPS: Can fracking bring you a deep well of profit? Hunting (HTG) sells to the oil industry and it could pay off. Midas verdict: The oil market is cyclical and few participants can escape the highs and lows. But Hunting shares have fallen too far too fast and they are now undervalued. Johnson has also undertaken several self-help measures that should boost resilience in the future. Buy.
MIDAS SHARE TIPS UPDATE: Sales gush at Diversified Gas & Oil (DGOC) as expert snaps up neglected shale sites. Midas verdict: Diversified’s share price has risen nearly 60 per cent since mid-2017. That is an impressive run but it does not fully reflect the transformation of the business or its prospects. The stock remains attractive.
