WH Smith (SMWH) saw total sales across its branches in railway stations and airports rise by 16% in the five months to 19 January. 8% of the group’s travel arm sales boost came from InMotion, the US travel business it acquired in the autumn. Same-store sales were up 3%, excluding InMotion. On the High Street, WH Smith’s sales slipped by 2% on a like-for-like basis over the period. Overall, the group’s like-for-like sales remained flat in the 20-week period. Chief executive Stephen Clarke said that despite seeing sales fall, its High Street performance was still the third best performance in the last 15 years. Mr Clarke said that consumer spending and confidence was ‘as challenging as it has been.’ He added: ‘It’s been challenging now for around five years and we didn’t see it was any different this Christmas.’
Pub group Wetherspoon (J.D.) (JDW) has warned its investors that its pre-tax profits for the first half of its current financial year will be lower than expected. The group, run by Brexit-supporting boss Tim Martin, said its labour costs had increased by £30million in recent months. As well as higher costs for staff, the group said it had also been forking out more for interest repayments, utility and repair bills, and had been affected by depreciation. The pub chain reported a 7.2% rise in like-for-like sales for the 12 weeks to 20 January, with total sales up 8.3%.
Shares in Metro Bank (MTRO) plummeted by a third this morning after the High Street lender warned that profits are set to miss expectations. The challenger bank said it now expects underlying pre-tax profits to come in at £50 million for 2018 rather than the £59 million it had been banking on before. This still represents a healthy rise of 138% on a year earlier, but the forecast miss has clearly spooked investors. Metro also said it will be stung by an adjustment in the risk level of its commercial loans secured on properties and on some of it specialist buy-to-let loans.
Shares in Burberry Group (BRBY) have slipped this morning, despite the group posting a rise in sales in the three months to 29 December. The luxury fashion retailer said it had successfully ‘built brand heat’ over its campaigns and attracted endorsements from ‘key influencers’ for its clothing lines. The group said like-for-like global sales rose by 1% over the period, with mainland China seeing a ‘mid-single’ digit increase.The welcome sales boost from the Chinese market comes amid slowing growth in China and fears of a sharp correction as the threat of a trade war with the US weighs on consumer and market sentiment.
Shareholder fury over Patisserie Valerie collapse: 3,000 jobs under threat as fraud scandal sinks cafe chain. Patisserie Holdings (CAKE) investors turned on chairman Luke Johnson last night after the collapse of the 93-year-old café chain. They branded the £40million fraud that brought parent company Patisserie Holdings to its knees a ‘disaster’ and said Johnson’s reputation has been ‘shot to pieces’. Shareholders in the firm – including Johnson, whose 28.5% stake was worth £166million before the scandal – are now likely to be left with nothing as administrators KPMG look for a buyer. The company said its collapse was a ‘direct result’ of the fraud. Around 900 staff are expected to lose their jobs as 70 stores and a string of concessions close within days. In total, more than 3,000 jobs are at risk across the business, which has around 200 stores and concessions in the UK.
Kier boss Haydn Mursell axed as investors push for change following bungled £264m cash call. Kier Group (KIE) has ousted its chief executive after a bungled fundraising sparked an investor backlash. Haydn Mursell, 47, left the struggling construction firm immediately, and a search is under way for his successor. Major shareholders, thought to include Neil Woodford and Standard Life Aberdeen, were pushing for a change in the wake of a disastrous cash call late last year. Kier was forced to launch a £264million rights issue in November after banks told it they would be less willing to lend to construction firms in future following the collapse of contractor Carillion last year. But it was left red-faced when just 38% of shareholders took part.
Jupiter investments chief shown door after year that saw clients pull £4.6bn from its funds. The boss of investment house Jupiter Fund Management (JUP) has been edged out after a year that saw clients pull £4.6billion of their money from its funds. Dutchman Maarten Slendebroek took the reins at Jupiter in 2014 when Edward Bonham Carter stepped back to be vice-chairman. Under Slendebroek Jupiter did well early on, but shares fell 51.6% last year as clients withdrew more than they invested. The board has now accelerated the process of the boss’s departure, even though it is understood 57-year-old Slendebroek would have liked to continue for at least two more years.
Hundreds of Tesco jobs set to be axed in boss Dave Lewis’s drastic bid to cut costs. Tesco (TSCO) is set to axe hundreds of jobs in boss Dave Lewis’s latest move to cut costs. The supermarket giant consults with staff as early as this week on the redundancies, which are likely to be at management level. Lewis, who earned the nickname ‘Drastic Dave’ as he wielded the knife at Unilever, has already cut more than 10,000 jobs at Tesco since he was appointed to lead its turnaround in 2014.He is under pressure to save £1.5billion by 2020, as Tesco faces competition from newer online rivals like Amazon and Ocado, discounters such as Lidl and Aldi and the potential £7.3billion mega-merger of Sainsbury’s and Asda.
Trio of tycoons see off plot to show pub chain Mitchells & Butlers chairman the door. A trio of tycoons have kept a grip on pub group Mitchells & Butlers (MAB) despite opposition from a major City institution. Aberdeen Standard Investments, the third-largest investor in M&B with an 8.7% stake, voted to kick four directors and the chairman off the board at the annual shareholder meeting. But that was thwarted by Irish horseracing billionaires John Magnier and JP McManus.Along with veteran currency trader Joe Lewis, they own more than half the chain and are understood to have overruled ASI. Lewis is the largest shareholder with 27.1% of M&B, while McManus and Magnier together own 23.5% through investment vehicle Elpida. They have backed directors Keith Browne, Josh Levy, Ron Robson and Eddie Irwin – all of whom are connected to at least one of the billionaire shareholders. Aberdeen’s Deborah Gilshan said: ‘In our view, board independence has deteriorated significantly.’
Shares plummeted at Zoo Digital Group (ZOO), which works with media companies to make films and TV programmes and their advertising and social media engagement suitable for foreign audiences. Revenue related to processing legacy DVD and Blu-ray titles slumped, as the decline in demand for these products proved faster than expected. Revenue will be 10% below expectations for the year, while profit will fall significantly short.
Trading firm IG Group Holdings (IGG) shares plunge 18% as new EU regulations on non-professionals hit profits. Trading firm IG Group posted a slide in revenue, profit and new customer numbers as the effects of new European regulation bite. Profits at the business, which allows customers to trade financial contracts linked to the price of shares, currencies or other assets, fell 18% to £112.5million in the six months to November 30. Revenue was down 6% to £251million, while IG pulled in just 14,626 new clients compared to 18,027 over the same period last year. IG blamed new rules brought in by the European regulator to protect inexperienced traders from suffering large losses. The constrictions placed on non-professional traders have reduced the frequency at which they trade, pulling down IG’s revenues. Nevertheless, new chief executive June Felix said: ‘We are very confident we’re going to return to growth in 2020.’
IG Design Group (IGR), which makes the Queen’s Christmas crackers, shares edged up 0.5%, or 3p, to 592p as the greetings card manufacturer reported a 36% rise in revenues for the last nine months of 2018. Like-for-like sales were 9% higher, and 70% of group revenues now come from outside the UK.
Fortunes picked up for toilet paper firm Accrol Group Holdings (ACRL), which slumped this month after warning profits would fall short of expectations. Reporting a loss of £9million for the first half of its financial year, the six months to October 31, Accrol said it had completed its turnaround and is well-placed to deliver profits of £1million for the full year. Chairman Dan Wright said: ‘We have delivered a highly complex restructuring, whilst absorbing a 29 per cent increase in average tissue prices.’
Sirius Minerals (SXX), the firm planning a huge fertiliser mine in Yorkshire, slid after it changed its financing plan. A favourite of individual investors, it said its £2.4billion debt would be paid in three blocks instead of two. It is expected to include a chunk of debt provided by investors through high-yield bonds, a commercial bank portion and a third block guaranteed by the Government’s infrastructure authority. The idea is to reduce the risk to the taxpayer, but analysts said it would mean financing costs could be higher in the short term. Sirius is building the biggest mine for a generation – expected to be open by 2021 – to access polyhalite, a type of fertiliser.
GYG (GYG) had the wind in its sails, saying trading improved in the last two months of 2018 following a profit warning in October. It said its 2018 revenue would now be marginally ahead of expectations, lifting shares 19.7%, or 7p, to 42.5p. Managing director Rupert Savage bought 146,250 shares after the profit warning caused their price to slump, and will have made a £12,431 profit on that.
