InterContinental Hotels Group (IHG) has checked into the $1,000-a-night luxury resort market after agreeing to buy Six Senses group for $300 million. The deal with Pegasus Capital Advisors, the American private equity firm, gives IHG a company that operates 16 hotels and resorts with a total of 1,350 rooms and 37 spas in locations such as the Maldives, the Seychelles and Thailand. Six Senses, which does not own any of its hotels, has a pipeline of a further 18 management contracts and more than 50 other deals “under active discussion” and IHG said that it saw the potential to expand the brand’s estate to at least 60 properties around the world over the coming decade. Rooms cost $600 a night on average but in many locations that can rise to more than $1,000.
The chief executive of Dunelm Group (DNLM) extolled the virtues of “keeping things simple” as the chain reported a 17% rise in profits. The homewares retailer posted profit of £70 million in the first half before tax after more customers turned to its online offering. Nick Wilkinson, who took charge of the business a year ago, is seeking to push it past a difficult period in which it struggled to integrate its purchase of Worldstores, a loss-making internet business.
Galliford Try (GFRD) jumped almost 7% in morning trading after the construction group said that it expected full-year profits to be at the upper end of analysts’ expectations. The FTSE 250 builder said that pre-tax profit for the first half rose 4% to £84.2 million as operating margins improved, despite a 5% in revenue to £1.4 billion. It sold 1,505 units in the period with an average selling price of £352,000.
Plus500 warning shocks market. Founders sold £260m of shares before insisting business was doing well. Plus500 Ltd (DI) (PLUS) has issued a surprise profit warning less than two months after making soothing noises about a regulatory crackdown and after share sales by its founders totalling almost £260 million in less than a year. Shares in Plus500, a FTSE 250 company, fell by 30.7%, or 503p, to £11.33, reducing its market value by about £570 million to less than £1.3 billion after it said that rule changes by the European Securities and Markets Authority would, after all, knock expected profits this year. Analysts warned yesterday that Plus500 risked losing its credibility with the unexpected profit alert. The company, which is led by Asaf Elimelech, 38, its chief executive, warned that revenues next year would be hit by the regulatory crackdown and that 2019 profits would be “materially lower” than the market had expected. It came as Plus500 announced a 65% jump in 2018 revenues to $720.4 million and a 90% surge in net profit to $379 million. Plus500 had told investors on December 27 that it had “continued to perform well” since the rule changes. In November, Mr Elimelech said that it was “in a good position for 2019”.
Debenhams secures £40m lifeline and agrees new supply partnership. Debenhams (DEB) has secured a vital cash injection of £40 million and struck a partnership with one of the world’s largest product-suppliers, sending its share price soaring. The struggling department store chain has agreed an additional 12-month £40 million credit facility from some of its lenders and noteholders that it said would act as a “bridge” as it tries to complete a wider refinancing of its business by the first half of the calendar year. The group, which has endured months of speculation about its trading and financial health, has also struck a supply agreement with Li & Fung, a Hong Kong-based supply chain manager that designs, sources and supplies thousands of products from a vast network of factories for many of the world’s largest retailers.
Interserve (IRV) boss who led cash-burning incinerator scheme to leave. The man who has been heading Interserve’s disastrous move into building energy-from-waste incinerators is to leave the troubled government contractor and construction company. Dougie Sutherland, who sat on the board as an executive director and head of developments, will leave at the end of the month as the company tries to pull off a £905 million rescue in the face of opposition from its biggest investor. Mr Sutherland, 54, who was paid £380,000 a year, is the last of the executives still working for Interserve who were running the company when its problems began in 2016.
Membership fall is bump in the road for the AA. AA (AA.), which has already warned about the impact that the national epidemic of potholes is having on its operations, expects dwindling membership to leave a hole of more than 10% in its profits. The damage has been offset by a rise in income from those who sign up for roadside assistance and from its corporate partners, but the AA said that nonetheless trading profits from continuing businesses for the year to the end of January would be not less than £340 million. That is down from £391 million a year earlier, but within its previously guided range of between £335 million and £345 million, which appeared to satisfy many investors. The AA’s shares closed virtually unchanged at 92p, still at about a fifth of their high in 2015.
We’re ready to take on rivals, says Tui boss. The boss of TUI AG Reg Shs (DI) (TUI) sounded a defiant tone yesterday after last week’s surprise profit warning, insisting that the travel company was well placed to profit from rivals’ woes. Fritz Joussen, 55, the Anglo-German operator’s chief executive, said that although the group would miss its double-digit earnings growth target, it would still outpace competitors that were going bust or issuing “profit warnings all over the place”. He said: “We are very well positioned in a market that will be challenging this year. We believe there will be enormous pressure in the market for consolidation and that with our strategic strength, our balance sheet strength and our financial strength, we will be in a position to take advantage of that consolidation.”
Scotch helps exports keep on flowing. Americans’ appreciation of Scotch whisky has helped to boost the value of exports by 7.8% to a record £4.7 billion. A report by HM Revenues & Customs said that the United States had become the first market to consume more than £1 billion of the spirit and total sales were up by nearly 4%. Scotch is Britain’s largest food and drink export and the industry employs 10,000 people. The report said that there was the equivalent of 1.28 billion 70cl bottles sold last year, up from 1.26 billion in 2011. Sales in America rose to £1.04 billion, with France behind on £442.1 million and Singapore on£319.9 million. The EU was the most valuable global region, with a 1.4% rise to almost £1.4 billion. North America was on £1.26 billion.
The chief executive of Spire Healthcare Group (SPI) could be set to beat a humiliating retreat after analysts warned yesterday that he will have to cut his much-vaunted earnings target this month. Justin Ash has put an ambition to achieve earnings before tax and other charges of at least £200 million by 2022 at the centre of his strategy since joining the private hospitals operator in October 2017. He also has set a target for revenue from private patients to represent 80 per cent of the total in three years’ time, as part of a strategy dubbed “vision 2022”. It’s not a vision shared by analysts at Credit Suisse, though. They believe that he will scrap that target at the full-year results this month because of a funding squeeze in the NHS. Spire’s customers include self-pay and private medical insurance patients, as well as NHS referrals. “We expect UK hospital market conditions to worsen in 2019 and to temper Spire’s nascent progress in private pay growth,” the analysts said. “Further, soft NHS revenues should impair fixed-cost absorption.”
Housebuilders were under pressure amid those worries about the impact of a no-deal Brexit as the March 29 deadline for the UK to leave the European Union approaches. Barratt Developments (BDEV) fell 14p to 560¼p; Persimmon (PSN) edged down 50p to £23.95; and Taylor Wimpey (TW.) retreated 3½p to 164¼p.
Loopup Group (LOOP), a provider of remote meetings software, leapt 27½p to 350p, after the company said that its profit for 2018 would be “comfortably ahead” of expectations. It announces its full-year results on March 21.
Tempus – G4S (GFS): Hold long-term. All the potential is there and it is up to G4S to deliver
Tempus – St. Modwen Properties (SMP): Hold. Improved earnings should come through from this year
