Marks & Spencer Group (MKS) is considering launching a national online grocery delivery business through a tie-up with Ocado Group (OCDO), it has confirmed. Speculation about a possible deal between the High Street stalwart and Ocado emerged last month, but neither company would confirm or deny reports. In a statement to the stock market today, however, the UK retailer said that ‘it is in discussions with Ocado Group plc regarding a joint venture in UK Retail’. But it added: ‘There is no certainty that these discussions will result in any agreement or as to the timing of any such agreement.’ M&S shares rose 4% to £3.04 on the news, while Ocado shares jumped 12.5% by lunchtime. A report in the Evening Standard suggested that the tie-up could be announced as soon as Wednesday, with M&S paying up to £900million for a 50% stake in the venture. If a deal goes ahead, M&S would finally be joining the ranks of its grocery rivals, many of which launched online delivery businesses at the turn of the millennium.
An aggressive move to take over the country’s leading sub-prime lender Provident Financial (PFG) has been frozen by the competition watchdog as it considers an investigation into the move. The Competition and Markets Authority has issued an indefinite ‘enforcement order’ which demands that Non-Standard Finance (NSF) makes no further move to merge with Provident. It comes after NSF, which is lead by the former boss of Provident, John van Kuffeler, made an offer over the heads of the Provident board to its shareholders of 511p per share last Friday, valuing the company at £1.3billion.
New store openings and bumper sales of a new hot chocolate maker helped sweeten Hotel Chocolat Group (HOTC) performance in the last six months of 2018. The British chocolate specialist said profits rose a tasty 7% to £13.8million, despite forking out for new shops, both at home and overseas. Hotel Chocolat launched stores in New York and Tokyo during the period and said today there were ‘encouraging early signs’ for its fledgling ventures. Sales jumped 13% to £80.7million, with 4% of that generated by 14 new shops opened across the UK and Ireland.
Persimmon (PSN), the housebuilder which is at risk of seeing its lucrative Help to Buy contract removed, saw pre-tax profits surpass £1billion last year. The FTSE 100 company also confirmed that interim chief executive Dave Jenkinson will stay on in the role permanently after previous boss Jeff Fairburn was forced out at the end of last year following an outcry over his £75million bonus. Pre-tax profits rose 13% to £1.091billion in 2018, on a 4% rise in revenues to £3.74billion, Persimmon said. The profit rise comes after it built 16,449 new homes in the year, an increase of 406 compared to 2017. It sold them for an average price of £215,563 – 1% higher than in 2017.
Shares in Travis Perkins (TPK) climbed more than 10% today after the builders’ merchant saw operating profit improve in the second half. The company, which owns DIY chain Wickes, said that after a difficult first half, adjusted operating profits jumped 10.7% in the second half as its cost-cutting measures began to pay off. Sales rose 4.8% to £6.74billion in 2018, while adjusted pre-tax profits for the year rose 1.2% to £347million. It comes as Travis is looking to shifts its focus to trade customers from DIY. In December it announced it was putting its plumbing and heating division up for sale and cost cuttings worth between £20million to £30million.
High Street crisis rocks Hammerson: Firm could sell £900m of property as it plunges to £267m loss with value of its shopping centres falling £622m. Hammerson (HMSO) has plunged into the red following a disastrous year for the firm and its bosses. The shopping centre owner, whose retail empire includes the Bull Ring in Birmingham and London’s Brent Cross Shopping Centre, swung to a £266.7million loss in 2018 having made a profit of £413.4million in 2017. It was hit by a £622million slump in the value of its estate, a 6.2% decline in rental income and an increase in the number of empty stores at its shopping centres and retail parks. With notorious activist investor Elliott Advisors ramping up the pressure, Hammerson is looking to beef up its board and sell as much as £900million worth of property assets to pay down its £3.4billion debt mountain. The bleak update underlined the crisis gripping the industry as shoppers flock online.
Podcast maker Audioboom Group (BOOM) surges after clinching £1.5m from investors including property tycoon Nick Candy. Audioboom’s shares surged after it clinched another £1.5million from investors including property tycoon Nick Candy. The AIM-listed podcast maker raised the funding by issuing 115m shares at a price of 1.3p – a discount to its 1.75p per share closing price on Friday. It said it will use the cash to pay upfront to secure new and established content for its podcast network.Candy Ventures, an investment firm owned by 46-year-old Candy, stumped up £600,000 of the £1.5million fundraising.
Black Friday hits Primark sales: High Street suffers ‘worst November on record’ as customers are distracted buying gadgets online. Primark warned that sales are on the slide after the High Street suffered what was described as the worst November on record. The budget retailer’s owner Associated British Foods (ABF) said it expects to report a 2% drop in same-store sales for the 24 weeks to March 2. Finance director John Bason said Primark was hit by the Black Friday weekend at the end of November when customers spent less on clothing as they were distracted by big discounts on products such as televisions and tablet computers. Primark does not have a shopping website and did not take part in the Black Friday sales. The firm also blamed a slowdown in spending in Germany for weighing on sales. But UK sales have come ‘roaring back’ since November, Bason added, with the retailer enjoying a record Christmas.
Persimmon to name new boss as shares sink amid fears builder could be barred from the Help to Buy scheme. Shares in Persimmon (PSN) tumbled yesterday as the embattled company prepared to install a new chief executive following a damaging row over fat-cat pay. The stock was down 116p, to 2352p on suggestions the builder could be stripped of its right to participate in the Government’s Help to Buy mortgage scheme. A source close to James Brokenshire, the secretary of state responsible for housing, told The Times he was ‘increasingly concerned by the behaviour of Persimmon in the last 12 months’. Issues include the sale of houses with leases, the quality of Persimmon homes and treatment of customers, and its leadership in the wake of the backlash over pay. The threat to bar it from Help to Buy is another headache for chairman Roger Devlin, who could name a chief executive as early as today.
Insurance group Hiscox Limited (DI) (HSX) triples profits despite string of natural disasters and insists it is ready for Brexit. Hiscox beat forecasts to triple profits last year despite a string of natural disasters, as it insisted it is ready for Brexit. Profit before tax at the insurance group was £105million, coming in around 7% higher than company-compiled consensus. Gross premiums written grew by 15% to £2.9billion. The FTSE 100 company said its strategy of balancing steady retail income with big-ticket insurance had paid off, helping it to deal with events such as the California wildfires and several hurricanes, typhoons and storms. Chief executive Bronek Masojada said: ‘Our business is ready for Brexit, even if British politicians are not.’
Supermarket Income Reit’s copper-bottomed returns hit the mark for SIPP and other investors. Supermarket Income Reit (SUPR) could be a prime candidate for anyone topping up a self-invested pension before the tax year ends, but it’s not just SIPP investors who should consider its appeal. Set up two years ago to take advantage of the consistently steady performance of grocery retail, the trust specialises in copper-bottomed supermarket assets. Sainsbury’s and Asda might have been thwarted in their merger attempts last week but grocery can still offer attractive returns if tackled the right way. At present, Supermarket Income Reit remains more of an institutional secret. Wealth managers, too, have already recognised the potential and account for a third of the shareholder base through both discretionary and advisory funds. Undoubtedly, it makes a very nice wealth management product while the tax allowance available for pensions adds to its appeal a cornerstone of a SIPP. But the fact is, the quality of the tenant base, the long life and inflation-linked leases and stability offered by the grocery sector are a good-looking combination for any portfolio.
Daily Mirror owner Reach swings to a loss after being stung by pension and impairment charges. Reach Plc (RCH) has swung to a full-year loss after being stung by hefty pension and impairment charges. The company posted a statutory pre-tax loss of £119.9million in 2018, which compares with a profit of £81.9million the previous year. A Reach spokesman said: ‘This reflects the more-challenging-than-expected trading environment for advertising revenue generated locally and the short-term uncertainty arising from the UK’s exit from the European Union.’
North Sea deal sees oil minnow Rockrose Energy (RRE) double in size as it acquires UK assets of American titan Marathon. Rock Rose is acquiring the UK oil assets of American titan Marathon for £107m, which effectively doubles the UK business’ size. Marathon is leading the North Sea exodus, which is expected to include Chevron, Conoco Phillips and EOG, as end-of-life projects vie with newer and cheaper operations in emerging oil frontiers. While minority holdings in assets such as the Greater Brae Area probably don’t move the dials for the majors, they do for Rock Rose, which has been set up to grow in harsh environments where crude is priced at or below $50 a barrel. ‘This acquisition marks a major step change in the group’s reserves and production profile,’ said Austin. The shares were suspended at 815p pending the closure of the Marathon deal.
The Colter well, being drilled by Corallian Energy unexpectedly found an 30 ft column of the black stuff, which was described as a ‘bonus’ discovery. The news buoyed shares in Baron Oil (BOIL) (up 44.4%, or 0.1p, at 0.33p) and United Oil & Gas (UOG) (up 8.5%, or 0.35p, at 4.45p), which both own stakes in the licence area.
It was a tough day for holders of Centamin (DI) (CEY), the Egypt-focused gold producer, which warned its output this year would be below expectations at between 490,000-520,000 ounces. The market was forecasting the group to churn out 560,000 ounces in 2019. Its shares fell 28.4%, or 38.19p, to 96.16p. ‘We see potential downgrades flowing through from this morning’s 2019 outlook, particularly on the cost front,’ said Canadian broker RBC. ‘We also think three downgrades to production guidance in 2018 have negatively impacted the group’s credibility with investors and that this will take a number of quarters to reverse.’
Joshua Mahony at IG Group Holdings (IGG) said the delay of the parliamentary vote on May’s deal to March 12 had brought ‘increased optimism and anxiety at the same time’ as the wrangling brought the timetable down to the wire but also increased chances of a delay to the UK’s exit.
Among the bigger movers and shakers was clothing and furniture retailer Ashley (Laura) Holding (ALY), which leapt over 20% higher at the start of the day after weekend media reports spotlighted a potential takeover offer. But the shares reversed late on, ending up only 3.4%, or 0.11p, to 3.35p after Florida-based investment firm Flacks Group confirmed it is considering making a bid for the struggling group but said any possible offer would be limited to 2.748p in cash for each Laura Ashley share.
Weir Group (WEIR) embraced its own approach from private equity by agreeing to sell its flow control division to US-based First Reserve in a £275millio deal, but shares in the FTSE 250-listed engineer fell.
