A collaboration with Little Mix and growth overseas have turbocharged sales at Boohoo.com (BOO), prompting the fast-fashion retailer to boost its forecasts again as it heaps more pain on its high street rivals. Boohoo is now valued at £3.87 billion, more than Marks & Spencer, after its shares rose to 333¾p thanks to its “record” sales over the festive period. The online fashion retailer, best known for its bargain body-con dresses that appeal to its young customer base, unveiled a 44% surge in group sales to £473.7 million for the four months to the end of 2019. The company said the strong trading performance led it to expect full-year sales growth of 40% to 42%, compared with earlier forecasts of 33% to 38%. Boohoo said that it had a medium-term growth target of 25%, assuming that its market-defying sales performance cannot continue indefinitely.
One of the world’s most powerful fund management groups has warned company bosses to get to grips with climate change and sustainability or it may move to vote them off the board at their next shareholder meeting. In its annual “Dear CEO” letter, published yesterday, Blackrock told corporate executives that it would be putting an assessment of a company’s environmental, social and governance practices at the centre of decisions about whether to buy or sell its shares. Larry Fink, 67, Blackrock’s chairman and chief executive, urged the companies whose shares it owns to publish their progress on sustainability in line with globally recognised benchmarks. He said that Blackrock, as the steward of its customers’ money, had a responsibility to engage with directors over issues such as climate risk. “Given the groundwork we have laid engaging on disclosure and the growing investment risks surrounding sustainability, we will be increasingly disposed to vote against management and directors when companies are not making sufficient progress on sustainability-related disclosures,” he wrote.
Lekoil Ltd (DI) (LEK) paid heavily yesterday for admitting that it had paid $600,000 for a crucial $184 million loan agreement that turned out to be fake as its shares lost almost three quarters of their value. The Nigerian oil explorer is likely to have to ask shareholders for cash to replace the loan or risk losing its most important asset, analysts warned. Lekoil announced a loan from the Qatar Investment Authority on January 2, only to be told by the sovereign wealth fund on Sunday that no such loan existed. It said that it had paid $600,000 to Seawave Invest Limited for arranging the deal and introducing it to supposed QIA representatives and that there was no guarantee of recouping the cash. Seawave has denied any wrongdoing.
The former chief executive of Stobart Group Ltd. (STOB) has dumped his entire stake in the group that owns Southend airport, raising an estimated £21 million and ending his association with the business after a boardroom row. According to a regulatory filing yesterday, Andrew Tinkler, 56, disposed on Monday of his remaining 4.975% stake in Stobart Group, which also owns Carlisle and Teesside airports and is involved in rail and other civil engineering projects. Mr Tinkler was one of the leading developers of the Stobart brand.
Games Workshop Group (GAW) defies the gloom on the high street with the help of Chaos and Destruction, the mythical factions of its Age of Sigmar franchise, to thank for helping it to defy the gloom. The retailer has become a surprise success story, with its share price doubling last year to value it at £2 billion. Games Workshop reported that group revenue had risen by 18.5% to £148.4 million in the six months to December 1. Pre-tax profits have grown by 44% to £58.6 million. Kevin Rountree, 50, the chief executive who joined the business 22 years ago as assistant group accountant, said: “We are pleased to once again report record sales and profit.”
DFS Furniture (DFS) has moved to reassure the City that its profits will be “broadly” in line with expectations, despite sales being hit by a slump in shopper visits at its stores in the second half of last year. Sales at DFS fell by 6% in the six months to December 30, with the sofa chain blaming a “challenging consumer environment, particularly in August and September”. DFS said that its sofa orders had strengthened recently and that its key winter sale trading period had started “satisfactorily”, suggesting that consumers might be feeling more confident to make big-ticket purchases after the election result. DFS said that despite continuing economic uncertainty, it was encouraged by online sales growth and a good customer response to its showroom refurbishments. It based a prediction that sales would rise in “low single digits” on an expected boost from new shops and recent trading momentum.
Mcbride (MCB) investors headed for the exit as one of Europe’s largest suppliers of cleaning products warned that profits would be about 15% lower than expected because of rising costs and falling sales. McBride said that the UK had proved a particularly difficult market, with the final two months of the year slowing further. There was better news elsewhere for the maker of Limelite kitchen and Clean’n’Fresh, with growth in its Asian markets at about 10.7%. The company said: “In the absence of significant raw material cost changes, the board now expects full-year adjusted to be approximately 15% lower than current market expectations, reflecting the impact of lower revenues.” It also said that it had initiated a review of its strategy and operations.
A leading shareholder in Consort Medical (CSRT) has come out against a “galling low-ball” £505 million takeover offer from a Swedish rival. JO Hambro Capital Management said that Recipharm’s recent £10.10-a-share cash bid was opportunistic and that Consort’s board had been surprisingly quick to recommend it to shareholders. The investor suggested that should the takeover fail, new management should pursue a different strategy, including repairing and selling Consort’s struggling Aesica division.
A profit warning by Elementis (ELM) yesterday sent the shares 15% lower. The London-listed chemicals group fell after it said that its annual profits would fall short of expectations. Elementis blamed “somewhat subdued” trading in the final three months of the year as it said that adjusted operating profits were set to fall to between $122 million and $124 million, from $133 million last year. Paul Waterman, chief executive, said that trading across “the more cyclically exposed parts” of its operations had deteriorated during the second half. “Our overall performance in 2019 has been negatively impacted by a challenging market backdrop,” he said. Analysts revised their forecasts, with Numis cutting its rating on the shares from “buy” to “add” and reducing its projections for the coming year by about 5%.
Grafton Group Units (GFTU) lifted its full-year profit forecast by 5% thanks to trading conditions that were better than expected. Its shares closed up 36½p at 894½p. Analysts at Numis were reassured by the upgrade, three months after Grafton had issued a profit warning that it blamed on a Brexit-induced fall in demand. Numis said the latest report indicated that “market conditions have not worsened
A Canadian goldminer has walked away from a £1.5 billion bid for Centamin (DI) (CEY), its smaller, London-listed rival. Endeavour Mining claimed that it had received insufficient information to support a firm offer for Centamin, a company focused on Egypt, by a “put up or shut up” deadline of yesterday. Centamin said that the talks had ended owing to a disagreement over valuation, as its board had concluded that the possible offer was too low. Under takeover panel rules, Endeavour will be barred from making another approach for six months. Ross Gerrard, Centamin’s chief executive, denied that it had not provided enough information. He added that Centamin had agreed with the “strategic rationale” of moving away from the risks of having a single asset in a single country, but that it had issues with substantially increasing its exposure to the “high-risk jurisdiction” of Burkina Faso.
Tempus – Dunelm Group (DNLM): Buy. Hugely revitalised and resilient, with improving margins and first-class online offering, and more to give
Tempus – Morgan Advanced Materials (MGAM): Hold. With the industrial cycle set to turn, the shares should recover even further
