Debenhams should accept our help, says Sports Direct founder Mike Ashley. Mike Ashley, the founder of , has launched an extraordinary attack on Debenhams (DEB), accusing the troubled department store chain of spurning a £40 million emergency loan. In a letter to the Debenhams board the maverick billionaire urged the company to accept his offer of an interest-free loan and “some additional equity” from Sports Direct, which already has a 30% stake. Last month was the “worst November for retailers in living memory”, wrote Mr Ashley, who added that many in the industry had “speculated that Debenhams has zero chance of survival”. The tycoon shared his letter at a presentation for the sports retailer’s disappointing half-time results. Underlying profits at Sports Direct tumbled by more than a quarter as Britain’s biggest sportswear group absorbed the impact of buying the struggling House of Fraser out of administration. Shares in the company fell 28p to 248.3p.
Tui shares take off as it avoids storms in the holiday market. Investors in TUI AG Reg Shs (DI) (TUI) breathed a sigh of relief this morning as the travel behemoth revealed that it had largely avoided the turbulence hurting Thomas Cook and was maintaining its growth targets. Shares in the Anglo-German company rose by 5.4% in morning trading, adding 62p to £12.01, as Fritz Joussen, its chief executive, claimed that it had been “more or less immune” to the trends that had hit some of its rivals. It reported a 10.9% increase in underlying earnings before currency translation to €1.22 billion in the year to September 30, meeting its target of achieving double-digit growth, and maintained its guidance for further double-digit growth in the coming year.
Bonmarché shares lose half their value after profit warning. The troubled fashion retailer Bonmarche Holdings (BON) blamed uncertainties over Brexit for a slump in trading that has been “significantly” more severe than the recession that followed the financial crisis. The company lost as much as half its value this morning after warning that it could tumble into the red in its current financial year, forcing it to write down the value of its high street chain. In a bleak trading update that came three weeks after it reported interim profits of £3.3 million, Bonmarché said that sales over the Black Friday weekend had been “extremely poor”. Despite offering extensive discounts trading had not recovered since then. It now expects to post a loss of as much as £4 million in the 12 months to the end of March, compared to previous forecasts for a £5.5 million profit.
G4S (GFS) shot up almost 10% after the security services giant announced plans to separate its cash transportation business from its core division into a unit that it might list in the future. Its cash solutions business, which includes ATM and cash transportation services, accounted for £1.2 billion of revenues in 2017 and has about 30,000 staff. The company said that it was considering options for the cash business, including a full demerger or an initial public offering. It said it was not considering a sales process. Shares in the group rose by 17½p to 201p in morning trading.
Ocado Group (OCDO) advanced 19p to 812½p after the online grocery retailer said that retail revenue rose 12% in the last quarter, in line with its guidance for the year.
Spire Healthcare Group (SPI) tumbled 14¾p to 100½p, after JP Morgan cut its price target for the private hospital group to 146p from 256p, citing an uncertain market.
Purplebricks Group (PURP) fell 14½p, to 135½p after the online estate agency trimmed the upper end of its full-year revenue forecast. Its operating loss for the six months to the end of October more than doubled year-on-year to £25.6 million, despite a 75% rise in revenue to £70.1 million.
Sainsbury’s hit by Asda deal doubts. Supermarkets launch legal bid to buy more time. Shares in Sainsbury (J) (SBRY) fell by more than 7% yesterday amid growing concerns that its £12 billion merger with Asda could be scuppered by regulators. Sainsbury’s and Asda have had to resort to legal action to try to buy more time as the two companies struggle to cope with demands from the Competition and Markets Authority. In a move raising serious concerns about whether the merger between Britain’s second and third largest supermarkets will succeed, the pair are appealing against the regulator’s decision to deny their request for an 11-day extension. They had asked for an extension to “respond to a large amount of material recently provided to us”.
Rolls-Royce has whale of an idea for Brexit. Rolls-Royce Holdings (RR.) is in talks with Airbus to use the aircraft maker’s whale-shaped Beluga transporter planes to deliver its engines to final assembly sites on the Continent in the event of a disorderly Brexit. In preparation for March, when Britain is expected to leave the EU, Rolls-Royce has been storing up aeroengine parts so that it has enough in the UK to ensure that its plant in Derby is able to make 60 engines a month. The FTSE 100 engineer has also spoken to Airbus about using the Beluga to transport engines to France and Germany. The aircraft could allow Rolls to avoid any disruption at sea ports after a no-deal Brexit.
Superdry left out in cold after second profit alert. Superdry (SDRY) has issued a second profit warning in less than two months amid an increasingly acrimonious dispute with its founder. The struggling fashion retailer, best known for its jackets emblazoned with Japanese characters, said that “unseasonably warm” conditions in November and December had affected sales of its cold weather ranges. Superdry’s over-reliance on its distinctive jackets, poor currency hedging, investment costs, political and economic uncertainty and volatile consumer sentiment mean that it now expects its full-year underlying profits to be between £55 million and £70 million. This was a sharp downgrade compared with the market forecast of £87 million.
Christmas comes early for Dixons staff with £1,000 share gift. More than 30,000 employees working for Dixons Carphone (DC.) are to be handed “at least” £1,000 of shares in a boost for staff morale ahead of Christmas. The electronics and mobile phone retailer said it wanted to “energise” its staff and hopes they will “act and feel like owners” of the business, which is in the midst of a turnaround led by Alex Baldock, the chief executive. Under the proposal, every permanently-employed staff member with one year’s service or more will be granted at least £1,000 of shares over the next three years. The scheme is expected to cost about £10 million a year during the period. Staff will have to wait for three years before they can sell their shares.
Faroe says Norwegian rival DNO is trying to buy it ‘on the cheap’. The North Sea oil explorer fighting a hostile takeover from a Norwegian raider has stepped up its criticism of the offer, despite the prospect of a £50 million payday for its bosses and staff. Faroe Petroleum (FPM) urged shareholders yesterday not to accept the 152p-per-share offer by DNO, which values the Aim-listed group at £610 million, insisting that its would-be buyer was trying to “exploit the recent oil price fall to acquire Faroe on the cheap”. If the bid were to succeed, it would result in the company’s directors and about 90 employees banking about £50 million. Directors own shares valued at about £7 million and also would be bought out of share options valued at a further £18 million. The rest of the company’s staff, which include many geologists and scientists, would be bought out of a further £25 million of share options.
The new boss of Dixons Carphone (DC.) said yesterday that the electronics retailer had a vibrant future even as it reported heavy losses and a dividend cut. Alex Baldock said that he planned to “deliver a more valuable business“ by reducing costs, expanding its range, offering more credit services, driving online sales and restoring profitability to its mobile phone division. He unveiled his new strategy as the group reported a statutory £440 million pre-tax loss compared with a profit of £54 million last year, on revenue of nearly £4.9 billion in the six months to October 27. The loss came as the chain booked nearly £500 million of exceptional charges linked with its struggling mobile business, regulatory issues and its British store estate.
British American Tobacco ‘breathing easy’ over menthol ban. The tobacco company behind the Newport brand has insisted that it is “well placed” to handle a potential ban on menthol cigarettes in the United States. British American Tobacco (BATS) and other big manufacturers have suffered a sell-off in their shares after the US Food and Drug Administration moved to clamp down on menthol cigarettes last month amid wider efforts to curb the use of flavoured products by young people. It is among several stricter regulations on tobacco companies, including advertising and packaging. Menthol cigarettes will be banned in the European Union from May 2020. A ban in Canada came into effect last year, while in Brazil a ban has been delayed by legal challenges.
US court ruling against Dr Reddy keeps Indivior (INDV) opioid treatment rival at bay. A UK drugs company facing a damaging hit to sales of its blockbuster opioid addiction treatment from a generic rival has won a reprieve in court. In the latest twist in Indivior’s legal battle in America with Dr Reddy’s Laboratories, an Indian rival, the US court of appeals has delayed allowing a copycat product on to the market. The stay of execution for Indivior comes after it suffered a setback last month when the court lifted a preliminary injunction blocking Dr Reddy’s from selling a generic version of Indivior’s Suboxone Film product. The legal decision triggered a collapse in Indivior’s share price, wiping off almost half its market value on the London stock market.
John Wood feels oil price turbulence. The oil price rollercoaster that has put pressure on the industry from the great global producers to motorists at the pumps is set to take its toll, too, on the profits of Wood Group (John) (WG.). The engineering company warned yesterday that the volatility in the price of crude was threatening to slow the pace of new contract awards and that its profit would be towards the lower end of forecasts as a result. The price of a barrel of Brent crude edged up to $60.86, but it has fallen by almost a third since October. Last week Opec, the oil cartel, and other producers including Russia agreed to curb output from January 1 in an attempt to push up prices. All this uncertainty, Wood said, could hit confidence in the sector and affect the timing of contracts awards.
Sir Charles Dunstone has taken advantage of the recent share price weakness in TalkTalk Telecom Group (TALK) to buy shares worth almost £370,000. The founder and executive chairman of the broadband, mobile and television services provider has topped up his shareholding by acquiring 313,222 shares at 116¾p per share. The purchase cements his position as the top shareholder with a 28.6% stake in the business, according to a stock exchange filing yesterday. Talktalk shares are down 23% since the start of 2018, a year in which the company cut its dividend and tapped its shareholders for £200 million. The shares came under pressure over the summer when the company decided to scrap a plan to sell its direct-to-business unit, which has about 80,000 customers, to Daisy Group, a telecoms company and partner. More recently, it has been dragged lower by concerns over its ambitious strategy aimed at getting a full-fibre connection into three million homes. Some analysts have raised concerns about how much it will need to invest in the new network and the threat of competition from Openreach, which has its own infrastructure.
Housebuilders were among the biggest gainers as investors priced in the renewed likelihood of a Brexit deal. The sector, thought to be among the most exposed to a no-deal Brexit, has fallen by as much as 30% this year, so dealers are poised to buy back in if the outlook improves. Berkeley Group Holdings (The) (BKG), the London-focused upmarket housebuilder, topped the FTSE 100 leaderboard after rising 189p, or 5.7%, to £35. Barratt Developments (BDEV) added almost 21p, or 4.7%, to 468p. Persimmon (PSN) gained 80½p, or 4.3%, to £19.71.
DP Poland (DPP), the pizza delivery company that has an exclusive mandate to deliver Domino’s Pizza in Poland, fell 8p, or 34%, to 15½p after it said that it was experiencing intense marketing competition from online order aggregators, which had reduced its share of sales.
The group behind the Franco Manca and The Real Greek restaurant chains is to accelerate its opening programme. The Fulham Shore (FUL) is due to open four restaurants this year, all Franco Manca pizzerias, and eight Franco Mancas and two Real Greeks next year. David Page, founder and chairman of Fulham Shore, said that he had been encouraged to up the ante by a strong first half this year, with sales, profits and cashflow all increasing, debt reducing and site availability improving. He said that all the new openings would be funded from cashflow. Mr Page said that the woes of the wider casual dining sector had sparked a fall in rents. The company was being offered sites once run by Prezzo, Handmade Burger Co or independents, he said. Shares in Fulham Shore jumped by 14.4% to 10¾p.
Tempus – AO World (AO.): Avoid. A shrinking, increasingly competitive market closely linked with consumer sentiment is unlikely to improve in the short term
Tempus – Cohort (CHRT): Hold long term. Rounded, gradually expanding business that should grow over time
