Taylor Wimpey (TW.) is on course for a £610million payout to shareholders despite tough market conditions. The firm notched up strong sales in the second half of its financial year, despite ‘increasing customer caution’ because of political uncertainty, chief executive Pete Redfern said. The £610million dividend payout would work out at about 18.6p per share. The order book for 2019 so far stood at 10,433 homes, compared to 9,843 over the same period a year ago.
Investors in haulier Eddie Stobart Logistics (ESL) are facing a massive loss, as private equity firm Dbay Advisors has tabled a rescue bid which would slash the company’s value. Under the proposals, troubled Eddie Stobart would be transferred to a new company in which Dbay would hold a 51% stake. In return, Dbay would provide the lorry firm with a £55million loan to keep it afloat. But the remaining investors, who together currently own 89% of Eddie Stobart, would be left with just 49% of it. Eddie Stobart said it was considering the proposal, and Dbay was supposed to have either made a firm offer or announced its intention to walk away from the deal at 5pm yesterday.
British Land Company (BLND) saw almost £600million slashed from the value of its retail property portfolio as it was struck by the current turmoil facing UK retailers. The shopping centre operator was weighed down by the recent flurry of shop closures and restructurings by major high street retailers in the six months to September. The value of British Land’s shopping centres, retail parks and shops slid by £599million, or 10.7%, to £4.8billion, significantly widening the company’s losses for period. A wave of Company Voluntary Arrangement (CVA) restructuring deals have resulted in a raft of rent reductions, while cost rises have also contributed to the collapse of a number of high street retailers, such as Mothercare. British Land said it expects the retail sector to remain challenging but has seen ‘early signs that some liquidity may be returning’ to some parts of the market.
Mulberry Group (MUL) has sunk deeper into the red as fewer shoppers visited its UK stores and it refused to slash its prices. The retailer became the latest to blame tough conditions on the High Street for its woes. The Somerset firm’s shares tumbled as much as 6% as a slowdown in the UK, together with higher investment costs for international expansion, pushed it to a £9.9million pre-tax loss for the six months to September 28. This compares with losses of £8.2million a year earlier. Its policy is not to cut prices, however, with its handbags selling for between £395 and £3,500UK sales dropped 4%, although online sales strengthened.
Blustery weather across the UK in the last three months has put the wind in the sails of SSE (SSE) boss Alistair Phillips-Davies, whose company generated more electricity than expected from its wind turbines. Adjusted operating profit rose 14% to £492million in the first six months of the financial year due to ‘generally wet and windy weather’. SSE swung from a £285million pre-tax loss in the first six months of 2018 to a £129million profit this year, and invested £446million in its regulated electricity networks and renewable energy. It is a good set of results for chief executive Mr Phillips-Davies, his first since the company decided to sell its power supply arm to challenger brand Ovo. It leaves SSE primarily as a generator and transmitter of power.
Inspirit Energy Holdings (INSP) rose after it said it was in talks across several industries about how they could use its low-carbon boilers in the solar, renewable and refrigeration sectors. The technology they use was developed by Scottish clergyman Robert Stirling almost 200 years ago. It has also been invited to demonstrate its tech to a Swedish engine manufacturer. Design director Paul Booker said it was a ‘pivotal’ moment for Inspirit.
Tullow Oil (TLW) plunged after samples tested from two wells off Guyana contained heavy crude with a high sulphur content. This type of oil is much more expensive to refine than the light, pure crude found in the US, Saudi Arabia and other hotspots. In August, the City thought Tullow and its partners – AIM-listed Eco (Atlantic) Oil & Gas NPV (DI) (ECO) and France’s Total – had hit the jackpot off Guyana, the only English-speaking country in South America that has become a new focal point for the industry. But the results cast doubt on how much money could be made from Guyana oil, though the company said it is still confident there is light oil to be found. Tullow also cut its annual output forecast for a third time this year (it now expects to make 87,000 barrels per day, compared with guidance of 89,000-93,000 before) amid problems in Ghana.
Cineworld Group (CINE) tumbled after Morgan Stanley brokers started covering the cinema chain with an ‘underweight’ rating and a target price on its stock of 200p. Analysts are downbeat about how strong trading will be next year and warned that the explosion in popularity of streaming services such as Netflix challenge its business model.
