Asda, the UK’s third biggest supermarket, unveiled its seventh consecutive quarter of sales growth today, but the rate of growth halved to 1% as the chain battled with a ‘highly competitive market’. The performance pips Asda ahead of its main rivals: Tesco’s sales nudged up 0.7% over the all-important Golden Quarter, while Sainsbury (J) (SBRY) suffered a 1.1% sales fall. Boss Roger Burnley said sales were driven by higher demand for the grocer’s own-brand products, especially its premium Extra Special range. The firm, which is the subject of a proposed takeover by UK’s second biggest supermarket Sainsbury’s, admitted it was a ‘challenging year’. He said: ‘2018 was another challenging year for the retail market and the pace of change shows no sign of abating. ‘It’s clear that retailers have to be prepared to innovate and challenge their status quo if they want to continue to remain relevant and deliver for their customers who rightly demand great value.’
Shares in Cobham (COB) rose today after the technology and defence giant said it has finally reached an agreement with Boeing over delays in the KC-46 tanker programme for the US army. But the Doreset-based firm also said it will incur a further £86million charge to settle the dispute and £74million in additional costs to complete the retained contract. The total £160million charge adds to a £40million charge already incurred in July last year, when Boeing’s damages claim first came to light. Boeing, the world’s largest maker of planes, had withheld payments over Cobham’s delays in delivering the air-to-air refuelling system for Boeing’s KC-46 tanker aircraft. ‘Boeing has ended its payment withhold against Cobham invoices,’ Cobham said in a statement.
Holiday Inn and Crowne Plaza owner InterContinental Hotels Group (IHG) revealed its profits dropped by a quarter last year as it splashed out on a company shake-up and expanded at the quickest rate for a decade. The Denham-based hotel firm – one of the biggest in the world – added 56,000 new rooms to its global portfolio in 2018. The rapid rate of expansion helped sales grow 6% in the year and took the group’s total footprint to 837,000 rooms. As well as growing its budget Holiday Inn business, InterContinental has been revamping many of its luxury UK hotels with hopes of wooing Chinese and American visitors.
Centrica (CNA) – British Gas and Scottish Power are the latest Big Six energy suppliers to announce they are increasing their standard variable tariffs after Ofgem upped the price cap. British Gas is raising its prices by 10.5%, which will see the average dual fuel bill increase by £119.12 a year – costing the average SVT customer £1,254 a year. cottish Power is also raising its prices by 10% – £117 a year – meaning its standard plan will also cost on average £1,254. The price rise will come into effect on 1 April and will hit nearly 5million households – 3.9million British Gas customers and 900,000 Scottish Power customers.
HSBC Holdings (HSBA) shares have slipped after the Big Four bank revealed its profits have fallen short of the market’s expectations. The bank said pre-tax profit in 2018 was up 15.9% to £15.4bn, but this was beneath forecasts of £16.5bn. Investors delivered a relatively muted response to the news, with shares in HSBC down 2.9% to 643p early on Tuesday. Reported revenue was £41.7bn, a rise of 5% from 2017, while the bank’s dividend has been maintained at 39p ($0.51) per share. HSBC chief executive John Flint said: ‘These are good results that demonstrate progress against the plan that I outlined in June 2018. ‘Profits and revenue were both up despite a challenging fourth quarter, and our return on tangible equity is significantly higher than in 2017.
Greggs (GRG) shares jumped this morning after the high street baker lifted its profit forecasts, helped by the success of its vegan sausage roll launch. The company said it had an ‘exceptionally strong start’ to the year, with total sales up 14.1% in the seven weeks to mid-February, up from 6.2% during the same period last year. Like-for-like sales rose 9.6%, compared to a 2.9% rise last year, when trading was hit by extreme weather. Greggs launched its vegan sausage with a ‘bespoke Quorn filling’ at the beginning of January and said trading had been supported by ‘extensive publicity’ around the new product. ‘As a result, customer transaction numbers have increased, with additional sales mainly comprising savoury products such as the vegan-friendly sausage roll and our other iconic sausage rolls and bakes,’ Greggs said in a trading update.
BT Group (BT.A) vetoes plan to fix rural mobile ‘not spots’ as it argues its rivals will benefit far more from the agreement. Efforts to tackle poor mobile coverage in rural Britain have been hampered after a row broke out between network providers. Proposals discussed by EE, Vodafone Group (VOD), O2 and Three would have seen the companies share infrastructure to boost signals in the hardest-to-reach areas. But EE parent company BT has vetoed the idea, arguing its rivals will benefit far more from the arrangement. The Government had suggested it could force operators to work together if they do not come up with a voluntary solution to tackle so-called ‘not spots’.
Pearson ditches its U.S. school textbook business for £193m as it looks to focus on digital publishing and slash its debt pile. Pearson (PSON) has sold its US school textbook business for £193 million. The division is being bought by private equity firm Nexus Capital which will pay the academic publisher an initial £19.3 million with the remainder spread over seven years. Pearson wants to focus more on digital publishing and slash its £432 million debt pile. It has blamed its US business for dragging down performance as fewer students buy brand new textbooks and choose to rent or buy them second hand instead.
Angling Direct is set to reel in a bumper £42m in sales thanks to greater demand from international customers. Angling Direct (ANG) will post higher sales than expected this year after more demand from international customers. Sales at the fishing tackle business are expected to jump to £42 million this year, 39% higher than in 2018. Despite a slump on the High Street, Angling Direct said sales at its shops increased by 6.2% in the year to January 31. International sales accounted for almost 21% of online sales during the period. The firm also enjoyed record online sales during the Black Friday weekend in November, when sales jumped by 56% to £1.3 million.
Profits at convenience store McColl’s Retail Group (MCLS) plummet by 57% but boss says chain is ‘continuing to make progress’. Profits at McColl’s more than halved as the collapse of wholesaler Palmer & Harvey took its toll. The convenience store owner posted a 57% drop in profits to £7.9 million in the year to November 25, while same-store sales declined 1.4% compared with a year earlier. The collapse of Palmer & Harvey in November 2017 created ‘major disruption’ with the loss of supply to 700 of its stores, McColl’s said, forcing it to speed up a deal with Morrisons.
JD Sports snaps up an 8.3% stake in struggling Footasylum, triggering shares to almost double. Shares in struggling Footasylum (FOOT) almost doubled after rival JD Sports Fashion (JD.) splashed out £4.3 million on an 8.3% stake in the business. JD Sports, whose co-founder went on to set up the shoe shop in 2005, bought nearly 8.7 million shares for 50p each. The High Street retailer said it plans to raise its stake from 8.3% to as much as 29.9%, but does not intend to make a takeover bid for Footasylum, whose shares jumped 90.3%, or 26.2p, to 55.2p.
‘I’m worth it,’ says Reckitt Benckiser’s outgoing boss as he defends his £90m pay to angry shareholders. Reckitt Benckiser Group (RB.) outgoing boss insisted he was worth every penny of his lavish pay having picked up almost £90 million since taking the top job. Rakesh Kapoor said he had delivered huge returns for shareholders during his eight years running the consumer goods giant, which makes Durex condoms and Nurofen painkillers. The comments came as Reckitt delivered a 10% rise in sales to £12.6 billion in 2018. Profits were up 11% to £3 billion.
Gold mining expert Richard Duffy turns his hand to precious gems as he becomes boss of Petra Diamonds Ltd.(DI) (PDL). Duffy, who has worked in mining for 27 years, will become chief executive in April. He will oversee a debt reduction programme at London-listed Petra, which produces gems in South Africa and Tanzania. The firm has been struggling to reduce its £433 million debt load following rapid expansion, and said this month that paying down the sum was a ‘priority’.
Antibiotics developer Motif Bio (MTFB) alarmed investors as it said it would need to raise capital in the near term and ‘aggressively’ manage the money it has available. The cash-strapped firm said it had amended its agreements with lender Hercules Capital. It has made an early repayment of £5.4 million to help lower future interest payments. Lenders have been worried since US regulators refused to approve its latest drug earlier this month.
Investors in Plus500 Ltd (DI) (PLUS) were nursing their fifth consecutive day of losses as the fallout from its £80 million accounting error continued. In a note to clients yesterday, analysts at Canaccord Genuity called the financial firm’s mistake a ‘disturbing revelation’, which had caused a ‘breakdown in trust between company and investors’. Though Plus 500 later added the error did not affect its overall reported profits, Canaccord’s analysts said that a ‘cocktail of declining earnings, ongoing regulatory reviews and questions about integrity’ now meant their bets were on the shares falling further. But one investor was snapping up the cheap stock. Odey Asset Management, the hedge fund firm run by 60-year-old Brexiteer Crispin Odey, revealed it had raised its stake from 13.3% to 14.5% as the shares slid last Thursday. Odey had been selling down his stake in the weeks leading up to Plus 500’s wipeout, offloading millions of shares just days before their value plummeted. Unlike Odey, who will be hoping the shares rise again so he can flog them for a profit, a number of other hedge funds are betting on Plus 500 to fail. Six firms have bought sizeable so-called short positions in the business since the beginning of the year, meaning they will pocket more cash if the shares tumble further.
After releasing better-than-expected results last week for the 18 months to October, software firm Micro Focus International (MCRO) was among the top risers as brokers gave it a boost. Analysts at Stifel lifted their target price for Micro Focus’s shares from 2013p to 2236p, following signs the firm was recovering from its disastrous takeover of Hewlett Packard Enterprises.
Engineer Spirax-Sarco Engineering (SPX) also helped pull the blue-chip index up, announcing it was in late-stage talks to acquire specialist cable manufacturer Thermocoax for £139 million.
Pendragon (PDG) – which owns the Evans Halshaw showrooms and online marketplace Car Store –edged higher as it appointed a replacement for retiring veteran boss Trevor Finn. Mark Herbert, former chief executive of car dealership Jardine Motors UK, will start at Pendragon on March 4 and join the board in April.
