Superdry has fallen out of fashion with investors after admitting that it failed to shift jackets and sweaters in the middle of a heatwave. The clothing retailer, famed for putting snippets of gibberish Japanese on hoodies and checked shirts, warned its profits for the year would be £10m less than expected due to “unseasonably hot weather”. Shares in Superdry (SDRY) slumped 20% to 816p in afternoon trade after resorting to the time-honoured retail excuse of blaming the weather for poor sales. It said the warm spell that lasted into September and the first half of October in the UK, Europe and the east coast of the US hit the sale of jumpers and jackets, which account for around 45% of its annual revenues. It also said hedging mechanisms it put in place had not provided the degree of protection expected, which will lead to around £8m in additional foreign exchange costs, split evenly over the year. The company expects low to mid-single digit sales growth over the period.
HSBC Holdings (HSBA) is leading a wave of British institutions from the City to the High Street which plan to pour hundreds of millions of pounds into cutting greenhouse gas emissions. The banking giant unveiled plans to invest around £250m in wind and solar power parks, alongside a swathe of green pledges from another 30 companies including Amazon, BT Group (BT.A) and John Lewis Partnership. The low carbon pacts have been timed to coincide with the Government’s Green GB initiative, which marks ten years since the UK legislated climate change targets for the first time.
Speculation is growing about a hard-hitting report on Babcock International Group (BAB) which wiped almost £150m off the company’s value. An outfit called The Boatman Capital Research published an analysis of the engineering outsourcer which alleges Babcock “systematically misled investors by burying bad news about its performance”. It also raised questions about the future of the company’s Appledore shipyard, attacked management, claimed there were problems with work for the MoD, Babcock’s largest customer, and labelled relations with the department as “terrible”.
BP and its Italian partner Eni are expected to start exploratory drilling in Libya early in the first quarter of 2019, according to the chairman of the country’s National Oil Company. “The first well will be drilled at the beginning of the first quarter,” Mustafa Sanalla told the Telegraph. “I’m optimistic. The Italians are courageous and have experience on the ground, but the return of BP (BP.) is the most important thing. “It sends a strong signal to other international oil companies that the Libyan market is promising.” The UK-listed oil company’s return to Libya comes seven years after its exploration programme was interrupted in 2011, when civil war broke out and it decided to withdraw personnel.
Shares in footwear company Shoe Zone (SHOE) rose by more than 12% to £1.85 after it reported revenues of £161m, up 1.8% compared to the previous year. Pre-tax profits were ahead of expectations and in excess of £11m. The retailer, which has over 500 stores across the UK, announced strong performance in its retail park ‘Big Box’ stores and traditional Shoe Zone stores, as well as through its digital channels. It ended the year to September 29 with around £15.7m net cash balance, compared with £11.8m the previous year, and estimated £4m of excess cash would be distributed as its third special dividend to shareholders in March 2019.
Investors upped their bets on after early figures indicated that New Jersey’s newly-liberalised sports betting market is booming. British bookies are hoping to hit the jackpot in a huge new market emerging across the Atlantic after New Jersey won a landmark Supreme Court case in May. Its decision to overturn a ban on sports betting paves the way for other US states to open up their own markets. It led the sector higher amid signs of American punters piling into the new market. Paddy Power rallied 275p, or 4.6%, to £62.90, lifting it away from a three-year low, while GVC Holdings (GVC) and William Hill (WMH) edged up 5.5p to 937.5p and 2.2p to 233.7p, respectively.
Uproar over the disappearance of a journalist in Saudi Arabia knocked defence giant BAE Systems (BA.) to a seven-month low. The Saudi foreign ministry warned that it will “respond with greater action” to any punishment over the disappearance of Jamal Khashoggi – a US resident and a critic of Crown Prince Mohammed bin Salman. The kingdom has committed to buying 48 Eurofighter jets from BAE and investors were spooked by the UK expressing “grave concern” over the situation in a statement with other European countries.
IQE (IQE) jumped 3.6p to 84.4p after appointing ARM finance chief Tim Pullen to take charge of the company coffers. City scribblers at house broker Peel Hunt said that IQE “must be commended” for poaching Mr Pullen.
Nex Group (NXG) climbed 40p to £10.45 as traders reacted to American giant CME receiving approval from regulators in the US and UK for its takeover of the electronic trading business late on Friday.
Greencore Group (GNC) is to lose its crown as the world’s biggest sandwich maker after striking a $1bn (£817m) deal to sell its US arm. Illinois-based Hearthside made an “unsolicited approach” at the end of August to buy the unit, chief executive Patrick Coveney revealed, adding: “[It is] an incredibly high price for a business of this type.” Mr Coveney said that the FTSE 250 company had not intended to exit the US, having taken steps to turn its business there around after enduring a “difficult end of 2017 and start of calendar year 2018”. This shake-up meant “we were on a very good trajectory and had no plans whatsoever to sell”, he added.
