Asda’s sales growth slowed over the crucial Christmas quarter as the supermarket waits for the outcome of a lengthy competition inquiry into its merger with rival Sainsbury (J) (SBRY). The Walmart-owned chain posted a 1pc rise in like-for-like sales for the three months to Dec 31 – the seventh consecutive quarter of positive growth. However, while the lift in sales demonstrates the extent of Asda’s turnaround from the 7.5% sales tumble it posted in 2016 – the worst in its history – its rate of growth has slowed compared with the previous quarter. In November Asda reported a 2% rise in third quarter sales.
The popularity of its new vegan sausage roll helped Greggs (GRG) record an “exceptionally strong start to 2019”, with annual profits likely to beat expectations. The high street bakery chain said like-for-like sales grew 9.6% in the seven weeks to Feb 16, while total sales soared 14.1%. Greggs shares jumped 6pc following the news to a record £17, topping the FTSE 250 risers. The stock had been under 950p as recently as July last year. The company attributed its success to the “extensive publicity” surrounding the launch of its vegan-friendly sausage roll at the start of the year.
The mining industry needs a “nuclear level of safety” at tailings dams around the world after the deadly collapse in Brazil last month, the boss of has said. Andrew Mackenzie admitted the industry “needs to do more” and backed calls for a “credible, independent, international review body” to inspect dam standards and operating procedures. He called on miners to boost investment in research after admitting that the industry’s understanding of dam collapses around the world fell short of what was necessary. “These dams do fail with a certain regularity, which I think is unacceptable. We have to acknowledge the deficiencies in the science – it has to have a nuclear level of safety now.
Bus and rail operator FirstGroup (FGP) is in deadlock with the Government over a contractual row about one of Britain’s biggest rail networks. The sprawling South Western train franchise remains a thorn in the side of the transport giant, causing sales growth to slow over the last final four months. While problems on the network quickly became an open secret across the industry last summer, it was not until November that FirstGroup said it was in talks with the Government about renegotiating terms on the country’s fourth-largest rail franchise.
Cobham (COB) will take a further £160m hit on the troubled KC-46 air-to-air tanker project after striking an agreement with Boeing. The figure includes a £86m compensation payment for delays in building a refuelling system for the tanker’s fuselage, which has yet to be certified by regulators. Boeing will withhold a £37m payment owed to Cobham as part of the fee. The remaining £74m charge related to Cobham’s delivery of similar systems mounted on the KC-46’s wingtips. Testing for the system will begin this year and is expected to be completed in 2020.
Centrica (CNA) – British Gas and Scottish Power have joined the string of major energy suppliers raising the price of their standard energy tariffs to match the regulator’s price cap. The double blow will raise energy bills by about 10% for almost 4.5 million customers from April 1. British Gas will increase its annual dual-fuel tariff by £119 a year to an average of £1,254 for its 3.5 million customers. Scottish Power’s price hike, to be confirmed later on Tuesday, will bring its standard energy deal in line with Ofgem’s cap on annual energy bills at an average of £1,254 a year. It leaves SSE (SSE) as the only member of the “big six” energy suppliers yet to announce a price hike.
HSBC Holdings (HSBA) said profits rose last year but it suffered a bruising final quarter as worries over the global economy and the US-China trade war began to bite. The London-based banking giant said it was still aiming to meet targets despite the looming twin storms of Brexit and the long-running trade impasse between Washington and Beijing. “There are more risks to global economic growth than this time last year, and we remain alive and responsive to all possibilities,” said chairman Mark Tucker in the bank’s annual report. Analysts warned it remained vulnerable to any fallout from either issue becoming a full-blown crisis in the year ahead.
Dettol and Lemsip maker Reckitt Benckiser Group (RB.) is betting on “hyper-targeting” to win over new customers in emerging markets such as India and China as sales shift from physical to digital stores. The consumer giant behind Nurofen painkillers, Clearasil skincare products and Vanish stain removers said it would prioritise the digital growth of its hygiene and home business, which has been slower to adopt online channels than the healthcare unit. Rob de Groot, president of the hygiene and home business, said the company was ramping up its use of targeted advertising technology to identify the “very dedicated parts of the population” of the market.
Pearson (PSON) has finally offloaded its American school textbook business more than a year after putting it up for sale, but the value of the deal drew dismay from analysts. The $250m (£193m) being paid by Nexus Capital Management for the “K12” courseware division will give the FTSE 100 education publisher an initial cash payment of just $25m, with the remainder to be paid over the next three to seven years. After that time, Pearson will be entitled to a fifth of future revenues and a fifth of proceeds if the business is sold by the US private equity firm. The textbook business has just over 1,300 employees and generated revenues of £364m and profits of about £20m last year.
JD Sports Fashion (JD.) has denied it planned to make a takeover bid for Footasylum (FOOT) after buying an 8.3% stake in the struggling trainer retailer. The FTSE 250 firm said it bought the stake in the Aim-listed minnow for “investment purposes” and was prepared to increase its holding to 29.9% – the maximum level before triggering a takeover bid. However, JD Sports said it had “no intention” of making an offer. Footasylum said that it would “continue to operate as usual” following the deal.
Diamond producer Petra taps gold miner for new boss. Agold mining veteran will take over at Petra Diamonds Ltd.(DI) (PDL) boss as the struggling miner seeks to dig its way out of a hole. South African-born Richard Duffy, former chief financial officer of AngloGold Ashanti, will become chief executive on April 1. He previously held roles at Anglo American and is running a renewable energy company in southern Africa that he also co-founded. Mr Duffy replaces Johan Dippenaar, who announced his departure last year after Petra was forced to raise £125m from investors to tackle its teetering debt pile. Tyler Broda, an analyst at RBC, said Mr Duffy “appears to be a very solid hire with 27 years’ experience in mining across a wide range of roles”.
Spreadbetter Plus500 Ltd (DI) (PLUS) struggled to pull out of its five-day tailspin, crashing down to a 19-month low as City scribblers warned of a “breakdown in trust” between the company and investors. Plus500’s plunge continued as investors reacted to Friday’s late update and analysts at Canaccord Genuity halved their target price for the FTSE 250 company. Plus500, which sells risky contracts for difference, admitted on Friday that its 2017 accounts contained a “drafting error”. The company had said that it “did not generate net revenues or losses” from trades with clients but it in fact suffered a $103m (£80m) hit from them in 2017.
Stock shortages following the collapse of wholesaler Palmer & Harvey hit profits at convenience store chain McColl’s Retail Group (MCLS) last year. Pre-tax profits fell by more than half to to £7.9m for the year to Nov 25, while like-for-like sales, which exclude store openings and closures, were down 1.4%. Total revenue rose 8.1% to £1.24bn driven by the acquisition of 300 Co-op stores in 2017. The stores account for about 30% of sales. Jonathan Miller, chief executive, said 2018 was “undoubtedly a challenging year” after Palmer & Harvey, which supplied 700 of its stores, fell into administration.
Questor expects central banks to turn QE back on – so buy this gold miner. Questor share tip: Centamin (DI) (CEY) has no debt and a decent yield. Improved output and a higher gold price could restore shine to the shares
