Asda workers fear Sainsbury (J) (SBRY) will hold all the power. Store managers can see the logic, but shopfloor staff worry about what they will stand to lose
Sportech (SPO) gambles on US to recover its winning ways. The betting operator, which is listed in London, posted pre-tax losses of £602,000 in the six months to June 30, compared with a loss of £320,000 a year earlier as its new sports bar in Connecticut performed worse than expected and its margins remained under pressure due to wage inflation and property costs.
Intertek Group (ITRK) finance boss heads for the door. In an abrupt announcement, the FTSE 100 quality assurance company said that Edward Leigh, 47, had been succeeded by Ross McCluskey, 37, group financial controller.
Profits wilt after Ashley (Laura) Holding (ALY) loses its allure. Laura Ashley was founded by Bernard Ashley and his wife Laura in 1953 and was a force on the high street in the 1980s, when its romantic designs were in strong demand. Since then it has struggled in the face of volatile consumer demand, including for “big-ticket” homewares, and fewer shoppers visiting the high street.
Crime pays for cybersecurity group Avast Software (AVST). The surge in cybercrime has boosted profits at Avast, the security software developer whose recent £2.4 billion flotation was London’s biggest listing this year. Underlying earnings after tax rose by 17% to $130 million between January and June after revenues increased by 10 per cent to $394 million.
Loss does not mean we’re sunk, says Paragon Entertainment Ltd (DI) (PEL). The company that designed and fitted out Titanic Belfast, the visitor attraction on the site of the former Harland & Wolff shipyard, is showing tentative signs of recovery after its profit warning in April.
Broader business pays off for Costain Group (COST) as profits rise. Costain’s stated aim of playing in the same market as premier consulting engineers, such as Atkins, and higher-margin contracts enabled it to report a 17% jump in comparable pre-tax profits to £21 million as operating margins rose to nearly 3% from below 2.5%.
Debenhams (DEB) hands job to ex-Domino’s Pizza executive. Rachel Osborne, who gave up her role at the food group in June, will replace Matt Smith as chief financial officer at the department stores chain next month.
Capita (CPI) hires Go-Ahead type to put it back on the rails. The finance chief of Go-Ahead Group is jumping from the frying pan of the Thameslink and Southern Railway operator to the fire of Capita, the much-maligned government contractor.
Mondi (MNDI) packs a punch amid rise of online shopping. Analysts at Jefferies unwrapped their latest view of its prospects yesterday and investors liked what they saw. Smurfit Kappa Group (SKG) also received a “buy” recommendation as Jefferies forecast that it would boost earnings this year, citing higher box prices and volumes and benefits from its €460 million acquisition of Reparenco. The broker kept a “hold” recommendation for Smith (DS) (SMDS) saying that estimates had not yet factored in its proposed £1.7 billion acquisition of Europac.
Wood Group (John) (WG.) led the mid-cap gainers for a second day as its positive interim results continued to impress. Barclays raised its target price to 750p from 690p, saying that reduced “noise” from the workers’ union and a rebound in revenues had helped to “present a credible growth and margin recovery story to investors” after the company’s merger with Amec Foster Wheeler last October.
Continued speculation about a new takeover bid for Spire Healthcare Group (SPI) from Mediclinic International (MDC) helped to boost both. Spire rose 3¾p to 170p; Mediclinic climbed 16p to 491p.
Menzies(John) (MNZS) fell 7p to 587p after a shareholder rebellion over executive pay at its annual meeting. Executives and senior bosses have been lined up to receive up to £30 million of shares if they hit performance targets once the group’s distribution division is sold.
Harwood Wealth Management Group (HW.) – Harwood Capital is expected to launch an investment prospectus within the next week for a £175 million float of its property division’s rental business. The market for renting inner-city flats is attracting developers. Multifamily Housing Reit is expected to target buildings in regional towns and cities that are already being used as rental homes, with a £70 million seed portfolio of around 650 homes. Peel Hunt is understood to be the bookrunner. Elsewhere, traders have been eyeing Watkin Jones (WJG), which said in its latest interim results that it was considering establishing a new investment vehicle for its build-to-rent developments. The group, better known for its student accommodation, has five build-to-rent development sites and expects to deliver more than 1,500 flats in the next five years. British Land Company (BLND), the UK’s second largest property group, made a move into the domestic rental market this year with talks to buy Fizzy Living, a residential operator that has a portfolio of about 1,000 flats across eight sites in London.
Tempus – What to buy if there’s a hard Brexit: British American Tobacco (BATS) and Imperial Brands (IMB) will serve well. They are popular in worrisome times because they have such diversified international earnings and tend to be reliable dividend-payers. Diageo (DGE) is an option and its shares have risen not far short of 50% since the vote. The company would not be hit with punitive tariffs under WTO rules, as these currently levy no charges on spirits. It could actually be a beneficiary once Britain starts to negotiate new trading arrangements with non-EU countries; this could take it into new markets and possibly on favourable terms. Burberry Group (BRBY) – While the company is a feature of the British high street, it makes the majority of its annual revenues from Asia and about a quarter of its earnings come from the United States.
Tempus – Grafton Group Units (GFTU): Buy. Exceptionally well run business, with diversified earnings and growth potential
