Debenhams names 22 stores to close next year in its struggle for survival. Debenhams (DEB) plans to close 22 stores next year as part of the struggling department store chain’s bid to stay afloat. About 1,200 jobs will be affected by the closure plans, which come after the retailer fell into administration earlier this month. Debenhams is now controlled by a group of lenders, led by hedge funds Silver Point Capital and GoldenTree, following a swift “pre-pack” deal. Terry Duddy, executive chairman, insisted the company had a “bright future” but had to restructure its store portfolio and balance sheet, neither of which were appropriate for the current retail environment.
Just Eat blames warm weather on slowing sales growth. Just Eat (JE.) has blamed the spring sunshine for missing its growth targets as the food delivery company comes under fresh pressure from rivals Uber Eats and Deliveroo. The FTSE 100 company said takeaway orders increased by 21% in the first three months of the year, but an unusually warm start to the year was blamed for the stalling UK orders, which increased by just 7.4%. UK growth slowed from 13pc in the final quarter of 2018, analysts had expected closer to 9.6%. Just Eat said growth was impacted by “the unseasonably warm weather in February; and Easter falling entirely in [the second quarter] this year”. Just Eat reported revenues were up 28% compared to the previous year, to £228m.
Pearson claims ‘strong start’ to the year with higher sales. Sales at Pearson (PSON) edged up in the first quarter as the educational publishing group continued its digital makeover. Underlying revenues rose 2% in the three months to March, with 4pc growth in core markets, including the UK, Australia and Italy. North American revenues rose 2% despite a slight slowdown in the higher education division, which accounts for more than a quarter of global revenues. Plans for cost cuts worth £330m remained “on track”, the company said. It also reiterated its full year guidance and expected adjusted operating profit of between £590m and £640m. John Fallon, chief executive, said Pearson had enjoyed a “strong start” to 2019, with profit expected to keep rising.
Cancer treatments bolster AstraZeneca sales. AstraZeneca (AZN) increased sales for a third consecutive quarter as demand for new cancer drugs remained strong in the first three months of the year. Shore Capital healthcare analyst Tara Raveendran called it a “reassuring” set of first quarter results for Astra after the pharma giant beat the broker’s expectations. Sales rose 14% at constant currencies to $5.5bn (£4.2bn), while operating margins were up 13 percentage points to 30%, reflecting a better product sales mix and improved operating leverage.
Brexit gloom clouds outlook as Royal Bank of Scotland Group (RBS) boss heads for the exit. Brexit is causing people to hold fire on investment and borrowing decisions, the outgoing boss of RBS has warned, as it unveiled a painful slide in profits. Ross McEwan said that customers “pausing” investment because of the sustained uncertainty created by Brexit “impacted both our lending and income in the [first] quarter”. His comments came a day after the bank’s chairman Sir Howard Davies warned investors that Brexit was weighing on the economy and would therefore hit the bank’s performance.
Ferrexpo shares sink after auditor Deloitte quits in row over charity payments. Shares in Ferrexpo (FXPO) plunged on Friday after Deloitte abruptly resigned as its auditor. In a brief statement to the stock exchange, the FTSE 250 company said Deloitte had “resigned from its office as statutory auditor with immediate effect”. The miner lost a quarter of its value in lunchtime trade, with shares changing hands for just under 200p. The slide comes days after Ukraine-based Ferrexpo revealed a disagreement with Deloitte over its chief executive’s possible involvement with a charity backed by the miner that is being examined for missing payments.
Sainsbury’s-Asda deal blocked by competition watchdog. The UK’s competition watchdog bared its teeth on Thursday by torpedoing Sainsbury (J) (SBRY) £10bn merger with Asda, blocking a deal outright for the first time since the regulator’s inception five years ago. The Competition and Markets Authority said it was vetoing the tie-up after a nearly year long investigation, which included polling 6,000 shoppers and hundreds of thousands of pages of evidence from the supermarkets. The CMA claimed the combination of the UK’s second and third biggest supermarkets would lead to increased prices in stores, online and at petrol stations.
Barclays hit by ‘disappointing’ profits in investment bank as activist circles. Investors have called Barclays (BARC) results “disappointing” and a “non-event” just as it fights to stop an aggressive activist getting backing for a board seat. The banking giant unveiled a “weak” first quarter at its under-pressure investment bank, where pre-tax profits fell 29%. Total pre-tax profits at the bank slipped 11% to £1.5bn. Barclays warned that if the “challenging income environment” continued, it would have to cut costs further this year. The dip in performance has already hit bonuses.
Laura Ashley issues another profit warning amid tough trading. Ashley (Laura) Holding (ALY) has issued its second profit warning in two months following “very demanding” trading conditions in its third quarter. In a brief statement the struggling fashion retailer said it expected results to be “significantly below market expectations”. It will announce results for the year to June 30 on August 22. Shares plummeted by a fifth before closing 3.6% lower at 2.7p, valuing the company at just under £20m. A Laura Ashley spokesman said: “Trading remains challenging in the current market environment.”
Buyback scheme bolsters Stagecoach Group (SGC). Shares in Stagecoach bounced back from a 16-year low after the launch of a share buyback programme worth up to £60m a year. The transport operator’s shares have been stuck in reverse gear after it was recently disqualified from bidding for three rail franchises because of “non-compliant bids”, effectively marking the end of its rail division. Its bus division has also faced challenges. Following the botched bids, the company said that a buyback scheme was an “appropriate use of our cash at this time to buy back our own equity”.
Higher costs offset sales surge at Taylor Wimpey. Taylor Wimpey (TW.) expects to build more homes this year after strong sales in the year to April but rising costs could hit its profit margins. The FTSE 100 housebuilder said it remained on track to meet full year expectations, but that it expected the second half to be better than the first. Prices have remained flat since the end of last year. Shares fell 3.2% on Thursday after reaching their 2019 peak on Wednesday. Rival builders Persimmon and Barratt Development also edged lower, suggesting investor concern over costs in the sector. “In spite of wider macroeconomic uncertainty, the housing market has remained stable,” said Pete Redfern, Taylor Wimpey chief executive.
