Whitbread (WTB), the owner of Premier Inn, has warned of a downturn in demand for hotel rooms as it posted a near-40% fall in annual profits. In its first set of full-year results since it sold its Costa Coffee business to Coca Cola last year, Whitbread blamed Brexit uncertainty for the slowdown, that it said carried on into March and April too. The group, which is now mostly reliant on its regional hotels, said Premier Inn’s UK sales fell 0.6% in the year to February 28, with demand falling especially during the final three months. Premier Inn’s UK overall sales grew 3.5%, though that was down to the chain’s expansion. During the year Premier Inn opened 23 hotels in the UK and expanded its estate by 5% to more than 76,000 rooms. ‘In the fourth quarter, we saw a decline in business and leisure confidence, leading to weaker domestic hotel demand,’ said chief executive Alison Brittain. ‘This weakness has increased into March and April particularly in the regional business market, coinciding with an acute period of political and economic uncertainty in the UK. ‘At this stage in the new financial year it is too early to know how business confidence and its impact on the market will evolve.’
Energy giant BP (BP.) has suffered a slide in first quarter profits after being stung by falling oil and gas prices. The oil major generated profits of £1.6billion in the first three months of 2019 – a 12% drop on the £1.9 billion it made in the same period last year. But shares nudged up about 1 per cent in early trading on Tuesday as BP’s decline still beat City expectations and the firm boosted its dividend, adding to an already attractive yield of 5.6%. BP said that strong supply at the start of 2019 helped to partially offset the impact of weaker oil prices and margins. ‘BP’s performance this quarter demonstrates the strength of our strategy,’ thundered chief executive Bob Dudley.’With solid upstream and downstream delivery and strong trading results, we produced resilient earnings and cash flow through a volatile period that began with weak market conditions and included significant turnarounds,’ he said.
Estate agent group Countrywide (CWD) has warned profits will fall in the first half due to a Brexit-induced slowdown in the property market, especially in London and the South. The group, which operates several brands including Bairstow Eves and Hamptons estate agents, said it expects underlying earnings to fall by around £5million – the maximum fall within its previous expected range. It had previously forecast a profit fall of between £3million and £5million. The group said in a statement ahead of its annual general meeting today: ‘As outlined at our preliminary results in March 2019, the ongoing uncertainties surrounding Brexit continue to weigh heavily on consumer confidence as a whole. ‘For Countrywide, this uncertainty is affecting the residential and commercial property markets, particularly in London and the South.’
Former auditor slams miner Ferrexpo’s foot-dragging over £85m charity corruption probe. Ferrexpo (FXPO) was thrown into crisis as its former auditor accused it of foot-dragging over a multi-million-pound corruption scandal. Two directors resigned from the iron ore miner following the release of a report on Friday which said Deloitte had quit because it was unhappy about a review into allegations of possible misuse of funds. But last night Ferrexpo revealed that Deloitte walked away because it had waited months before opening an independent investigation into million of pounds handed to Blooming Land, a health charity set up in Ukraine as part of outreach work.
Sainsbury’s must tackle its ‘untidy and badly stocked’ stores after Asda merger collapse, analysts warn. Sainsbury (J) (SBRY) suffers from untidy and badly stocked stores and must rediscover the ‘art of good shopkeeping’ after its merger with Asda collapsed, analysts have warned. The supermarket is expected to post a further fall in sales when it publishes its full-year results tomorrow, amid fierce competition from rival Tesco and discounters Aldi and Lidl. Clive Black of Shore Capital said the firm had reacted badly when the £12billion Asda tie-up was stopped by the Competition and Markets Authority (CMA).He said the grocer showed ‘little grace’ after its merger plans were defeated when it said the CMA had deprived the British of £1billion of price cuts over the next three years, ‘as if its venture was a charitable exercise’. Black said Sainsbury’s has ‘inferior store standards – variable availability, untidiness and patchy check-out experiences’. He added: ‘Sainsbury’s needs to find the art of good shopkeeping.’
AA (AA.) finance boss nicknamed ‘the sledgehammer’ quits to support anti-Brexit party Change UK. Martin Clarke has stepped down immediately and does not have another job. He previously worked for private equity companies, where his robust approach earned him the nickname ‘the sledgehammer’. He was accused of bullying – which he denies – by former chief executive Bob Mackenzie, who was sacked following a punch-up in 2017. In a statement, the finance director said: ‘For me, now is the right time to return to my twin passions of private investing and politics.’
Auto Trader Group (AUTO) fell 1.7%, or 9.8p, to 570p after it announced a change of driver. Nathan Coe will replace Trevor Mather as chief executive of the online car sales group next March. Mather led the group’s flotation in 2015, which saw its elevation to the FTSE 100 at the end of last year. His departure is part of wider succession plans that will see Jamie Warner step up to the role of chief financial officer and Catherine Faiers filling Coe’s vacant role as chief operating officer.
ASOS (ASC) – founded by Nick Robertson, Andrew Regan and Quentin Griffiths in 2000 and listed on the alternative market in 2001 – has, for a long time, been described as AIM’s big daddy. But Boohoo.com (BOO) now appears to be vying for the crown with a quite stonking run that would have turned a £1,000 investment five years ago into £10,500. Yesterday the shares closed up 6.1p, at 245.7p, though City broker Numis reckons the stock is worth 290p. If Boohoo hits Numis’s target it would be worth £3.4billion – putting it neck and neck in the valuation stakes with Asos, off 42p, at 4002p. According to analysts, Boohoo is less a single brand these days and more an online platform for smaller labels, key among them Pretty Little Thing and Nasty Gal. The latter it bought for a bargain £15million two years ago. ‘Boohoo remains one of our top picks in the sector,’ said Andrew Bowler of Numis, reiterating his ‘buy’ guidance.
British Airways-owner International Consolidated Airlines Group SA (CDI) (IAG) advanced 10.6p, to 546p after receiving an additional boost from the London arm of Swiss bank UBS, which moved to ‘buy’ on the stock. The 12-month price target remains 705p after a fall from a high of around 667p in February. ‘We think share price pressure is now overdone,’ said analyst Jarrod Castle. He reckons IAG is trading close to the bottom, with the prospect for precipitous falls limited.
FTSE 250 home repairs group Homeserve (HSV) got a shock after HSBC downgraded the stock to ‘reduce’ on valuation grounds, with the shares sliding 36p, to 1095p in response.
There was some good news for the UK’s largest pharma company, AstraZeneca (AZN), whose shares rose 45p, to 5840p after its Lynparza drug was recommended for approval in the European Union to help treat advanced ovarian cancer.
