Eddie Stobart’s former boss has launched a rescue bid for the company in an attempt to hijack a proposal by Dbay Advisors. Andrew Tinkler, who was chief executive of the troubled haulier until 2014, said Dbay’s offer was ‘not in the best interests of shareholders’. Eddie Stobart Logistics (ESL) revealed it had discovered a massive black hole in its accounts in August, caused by years of poor accounting practices and mis-stating the value of its contracts. Rather than buying the company and taking it private, as Dbay was suggesting, Tinkler now wants to pump £70million into Eddie Stobart by selling new shares. This could be used to pay some of the £200million debt pile and keep the business running. Tinkler, 56, has pledged he would provide a ‘significant amount’ of the cash, while the rest would come from new and existing shareholders. The ex-son-in-law of Eddie Stobart’s founder said he ‘has identified and can fix the issues’ which have dogged the company in recent years.
Around £2.5billion was wiped off Compass Group (CPG) value yesterday after it warned it will cut jobs amid tougher trading in Europe. The catering group said there was less demand for its staff in office canteens because businesses in Europe have been reducing their workforces. Compass serves 5.5billion meals a year for schools, army barracks and employers such as Google, HSBC, Boeing and Coca-Cola. It brings in around 40% of its revenue from catering for businesses. Compass has set aside £300m for writedowns in 2019 and 2020. Around half of this will fund a restructuring, which will include a redundancy plan for up to 0.5% of its 600,000 employees worldwide – equal to around 3,000 roles.
Pets at Home Group (PETS) shares rose after it said its turnaround strategy is bearing fruit and it now expects full-year profits to come in at the top end of market expectations. Despite the ongoing retail sector malaise, Pets at Home managed to increase like-for-like sales by 7.8% in the six months to October 10, while sales at its veterinary business rose 6.4% in the period. Thanks to the strong first-half performance, the company now expects full-year profits to come in the top end of the £87million to £93million underlying profit range.
Shaftesbury (SHB) has seen its property empire hit by turmoil on the High Street. The West End landlord, which owns London’s Chinatown and Carnaby Street, said the value of its portfolio fell 0.6% to £4billion in the year to September 30. It was dragged down by a 19.4% fall in the value of its retail arm, which includes large stores in Covent Garden. Tenants included Jack Wills, which went bust in August but was later bought out of administration by Mike Ashley’s Sports Direct for £13million. Shaftesbury said its annual property income rose 4.5% to £98million, but profits plunged 85.2% to £26million. This was after it pumped £30.9million into its portfolio, which includes a proposed 70,000 sq ft office block in Soho’s Broadwick Street.
Topps Tiles (TPT) suffered a sharp drop in customer demand since the General Election was called, the home improvement firm said today. In the first eight weeks of its new financial year sales slumped by 7.2% – a rapid acceleration on the 1.9% drop recorded in the same period last year. Outgoing boss of 12 years Matthew Williams said that trading has become tougher, ‘with consumer demand weakening further’ since the December snap election was announced at the end of October. Williams anticipates that ‘external events’ will continue to weigh on shopper confidence ‘for the immediate future’, as many people put off moving house or taking on big home improvement projects for the time being.
Shares in De La Rue (DLAR) tumbled more than 20% after the banknote printing company cast doubts over its future, suspended its dividend and announced plans to accelerate its restructuring amid growing debts. De La Rue – which lost the contract to print Britain’s post-Brexit blue passport to a French company last year – has warned it could breach its its banking covenant with banks if trading conditions keep getting worse and it doesn’t make enough money. ‘We have concluded there is a material uncertainty that casts significant doubt on the group’s ability to continue as a going concern,’ it said along its half-year results. It comes as De La Rue slumped to a £9.2million loss in the six months to the end of September, compared to profits of £10million a year earlier, due to charges incurred as a result of the restructuring announced in May.
Identity intelligence firm GB Group (GBG) rallied after first-half profits jumped from £3.6million to £8.6million. Revenues surged to £94.3million – boosted by takeovers and the timing of contracts for its fraud arm. It provides firms and public bodies with identity, age and location software that helps them decide with whom to trade and protects them against fraud. It can identify around 60% of the world’s population for its customers, which include Asos, HSBC and William Hill.
Petra Diamonds Ltd.(DI) (PDL) was given a boost yesterday, rising 0.41p, to 8.83p, after brokers at Peel Hunt started covering the stock with a ‘buy’ rating and a bullish 18p target price on its stock. Analysts believe the company, which operates the Cullinan mine behind the namesake diamond in the Crown Jewels, is ‘far healthier than it seems’. Its shares offer ‘a compelling story’, Peel Hunt says, and the management are doing everything in their power to trim costs as the diamond market tightens, offering a great opportunity to buy up now while they’re cheap, they believe.
easyJet (EZJ) was singed by a downgrade from Berenberg from ‘buy’ to ‘hold’, despite raising its target price from 1260p to 1410p. Analysts at the German investment bank reckon Easyjet shares do not have much higher to go – and the market has already factored in all the benefits it could see from Thomas Cook’s collapse and rivals’ modest growth plans. They’ve advised investors to pick up shares in British Airways-owner International Consolidated Airlines Group SA (CDI) (IAG).
Greencore Group (GNC) tumbled after it revealed a 3.5% fall in annual revenues to £1.4billion and said operations boss Peter Haden will leave next April as part of a plan to simplify the management structure. Its shares fell 8.4p, to 239.9p despite hiking its dividend by 11% and profits rising 16% to £92.3million. It is eyeing more acquisitions similar to a £56million deal it struck in September to buy salad and chilled snack maker Freshtime.
