Royal Mail has warned that letter deliveries are tumbling faster than expected, putting fresh pressure on its profits. The former state monopoly reported an 8% fall in letter volumes over the last nine months as businesses and consumers continue to turn their backs on addressed mail. The company also blamed the introduction of new data protection rules for stoking “business uncertainty” around the use of marketing mailshots. Revenue from letters fell 6% over the period. Royal Mail (RMG) said its full-year adjusted operating profit would be between £500m-£530m, having previously indicated it would be between £500m-£550m.
Domino’s Pizza Group (DOM) has downgraded its full-year pre-tax profit guidance amid “growing pains” with its international business. The takeaway company now expects profit before tax to be at the lower end of guidance, between £93.9m and £98.2m, as its roll-out in Norway, where it had acquired the Dolly Dimple’s chain in 2017, hits bumps in the road. The FTSE 250 firm remained dominant in the UK and Ireland where it opened 59 stores in the last three months. Like-for-like sales climbed 4.5% in the UK and 7.5% in Ireland over the period, with total revenue in those regions up 6.2% to £312.9m.
Sammy Tak Lee, the largest shareholder in West End landlord Shaftesbury (SHB), has renewed a war of words with its board, saying he will vote down its right to raise cash by issuing new shares at its AGM next week. In a letter to fellow shareholders the Hong Kong-based billionaire, who owns 26% of Shaftesbury, attacked its decision to raise £265m through a share placing in 2017, which he said was a deliberate attempt to dilute his stake in the company. Mr Tak Lee, who also owns the neighbouring Langham Estate north of Oxford Street, said the cash call was “unnecessary” as Shaftesbury was “not under any financial strain” and could have raised debt instead.
Shares in PZ Cussons (PZC) have lost their lather after the maker of Imperial Leather soap and Original Source shower gel warned that annual profits will be £10m lower after “extremely challenging” conditions in Nigeria, its largest market. Analysts speculated that the ongoing troubles of the Nigerian division means it could be sold after the company said it had approved “strategic initiatives” to focus on its European and Asian business. Shares in PZ Cussons fell almost 11% to 186.7p in afternoon trading.
The boss of housebuilder Crest Nicholson Holdings (CRST) said it would continue to deliver for shareholders despite a “humbling” year in which profits were dented by a slowdown in sales of high-priced homes in London and the south-east. Patrick Bergin said that while demand was likely to remain subdued until buyers have more clarity over Brexit, “the signs of latent demand are there”. “Uncertainty is a real passion killer for consumers and businesses – that’s why it’s so important there is some clarity of direction emerging over the next hours and days,” he added. Profits were down 15% to £176m in the year to October, despite a 3% rise in the number of homes Crest sold to about 3,000. Pre-tax profits dropped by a fifth to £26.7m during the six months to 30 November as operating profits in the African region crashed by 70% to just £1.2m despite sales hitting almost £100m.
Patisserie Valerie sales were sliding for three years, leaked report reveals. Patisserie Holdings (CAKE) sales were in secret decline for at least three years before the discovery of the accounting black hole that triggered its collapse, The Daily Telegraph can reveal. Documents containing the stricken cafe chain’s finances show revenues from “un-loved” established stores were falling even as the management team under executive chairman Luke Johnson pursued an “ambitious roll-out plan”. Marketing material rushed together by administrators KPMG reveals like-for-like revenue has been on an accelerating downward slide since 2015, including a 4% drop in the past two years.
For sale sign sends shares in energy broker Utilitywise crashing. Energy broker Utilitywise plc (UTW) has become the latest casualty of the troubled energy market after putting itself up for sale as it seeks funding for a revival strategy. Shares fell 70% on Monday to a record low of 1.65p, giving it a market cap of £1.3m. The stock was worth as much as 370p in 2014. Bank lenders said they would be willing to refinance its £25m revolving credit facility if it could find investment from elsewhere. However, its attempts to raise £10m from investors has been unsuccessful. The company said it still hoped to find a buyer willing to invest the cash. Utilitywise has been under pressure to undergo a major overhaul to rescue the business after auditors discovered profits were inflated by booking revenues for long-term energy supply contracts before the money had been earned.
9,000 Tesco jobs may go under cost-cutting plan. Tesco (TSCO) has confirmed up to 9,000 jobs are at risk at its head office and stores as part of its restructuring plan to “simplify” the business and cut costs. The UK’s biggest supermarket said it expected up to half those affected to be redeployed into other customer service roles. Fresh food counters in about 90 stores will be closed, with the remaining 700 trading on either a full-time or flexible basis. The retailer added that it did not plan to make any “significant changes” to bakeries this year. Hot food services for staff that are available in a third of stores will also be cut amid reduced demand and kitchen workers, employed by third-party caterers, will undergo consultation.
Paragon Banking Group (PAG) avoids ‘loan sausage machine’ trap as lending soars. Paragon’s decision not to become a “loan sausage machine” by trying to lure amateur landlords away from the big banks has paid off as lending soars. The FTSE 250 bank, which started life as a buy-to-let mortgage specialist in 1985, said total new lending for the three months to December 31 rose 40% on a year earlier. The boost comes after chief executive Nigel Terrington said the company’s plan was to focus on professional landlords – those with three houses or more – and avoid becoming a “loan sausage machine”. Paragon said most of its new business during the period came from buy-to-let lending, which shot up 24%.
Flybe backs its chairman in spat with biggest shareholder. Flybe Group (FLYB) has publicly backed its chairman, Simon Laffin, after its largest shareholder demanded he step down. The struggling airline said that Hosking Partners, a London-based asset manager, which owns almost a fifth of its shares, has requested an extraordinary general meeting to discuss appointing aviation executive Eric Kohn as a director following a dispute over its proposed sale. Mr Laffin, a City veteran who was part of the rescue team charged with saving Northern Rock, has been at the helm of Flybe for five years.
Questor: keep buying OneSavings Bank (OSB) – there’s no need to take fright from Metro’s woes. Metro’s shares collapsed last week after a profits warning but OneSavings is a very different animal
