DP Poland secures Polish pizza reversal

Andrew Hore
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DP Poland secures Polish pizza reversal

DP Poland (LON: DPP) has agreed the acquisition of rival Poland-based pizza restaurant group Dominium for £22.7m in shares and loan notes of €7.5m. This reverse takeover will nearly double the number of stores to 126 and provide economies of scale.
The combined group will be one of the top three pizza chains in Poland. Competition has been fierce, and the group will be better placed to combat this. On its own DP Poland has struggled to grow revenues to the point where it can be consistently profitable.
Domino’s Pizza Inc is supportive of the deal and there will be temporary branding of Dominiu...

Driver benefits from international spread

Andrew Hore
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Driver benefits from international spread

Construction dispute and property services provider Driver Group (LON:DRV) maintained its profit in the second half of the year to September 2020 even though trading conditions were difficult. There was a mixed performance around the world, but costs are being adapted to the current levels of demand.
In the year to September 2020, underlying pre-tax profit declined from £3m to £2.5m on revenues 9% lower at £53.1m. Driver shed lower margin work as part of the strategy of new chief executive Mark Wheeler.
The higher margin Diales expert witness business continues to grow and there are additional...

CyanConnode builds orders

Andrew Hore
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CyanConnode builds orders

Radio frequency communications networks developer CyanConnode (LON: CYAN) continues to manage its cash, while increasing revenues. The order book should ensure that further growth in revenues.  
Chief executive John Cronin and finance director Heather Peacock are receiving part of their annual remuneration payment in shares.
Figures
In the six months to September 2020, revenues were £1.5m and the loss was £1.37m. This was achieved even though there was Covid-19 disruption in the period. Operating costs were reduced so that they are in line with levels of turnover. There are no direct comp...

Lombard Odier: Our Natural Capital fund will “deliver strong growth”

Safiya Bashir
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Lombard Odier: Our Natural Capital fund will “deliver strong growth”

Last month saw Lombard Odier launch a Natural Capital strategy, allowing the opportunity to invest in public companies that focus on the regenerative power of nature; Natural Capital.

According to the global wealth and asset manager, Natural Capital “will deliver strong growth and become the winners of the future.”

The fund was developed by Lombard Odier in partnership with the Circular Bioeconomy Alliance, established under the Prince of Wales’ Sustainable Markets Initiative and will connect investors to sustainable investable solutions, leading to a “nature positive economy”.

“Nature is the most productive asset of our economy. We rely on nature directly and indirectly across multiple sectors, including healthcare, agriculture, industrials, tourism and real estate. With eight billion people on the planet, our linear take-make-waste economic model is now dangerously depleting this most productive asset, despite its regenerative nature. This is a risk for our global economic activity,” said Lombard Odier.

“Preserving nature means shifting towards greater circularity in our production and consumption model as well as eliminating waste in our industrial activities. This is about creating a much leaner form of industry, or in other words about more efficient use of resources, a shift in our consumption model and about zero waste strategies.”

The fund was launched by Lombard Odier in November at an event hosted by The Prince of Wales.

Commenting on the Natural Capital strategy, Prince Charles said: “We need to accelerate our efforts and set the course for a sustainable future rooted in a new economic model – in other words, a circular bioeconomy that puts Nature and the restoration of Natural Capital at the centre of the entire process. Building a sustainable future is, in fact, the growth story of our time. If we are to drive global economic growth, it is imperative that we value and invest in our natural capital. This is why I am enormously encouraged to see that, under my Sustainable Markets Initiative, the Circular Bioeconomy Alliance is working hand-in-hand to support the Natural Capital Strategy developed by Lombard Odier.”

Lloyds to scrap staff bonus despite Q3 profits

Safiya Bashir
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Lloyds to scrap staff bonus despite Q3 profits

Lloyds Bank (LON: LLOY) has announced plans to scrap the staff bonus due to the plunge in profits over the pandemic.

Despite returning to profit in the third quarter, the lender said on Friday that it would axe the bonus as pre-tax profit for the first nine months of the year is 85% lower.

In the latest quarter, Lloyds profits were well ahead analyst expectations of £588m and hit £1bn in profits.

In a memo seen by the Financial Times, Matt Sinnott told employess: “Despite the good news about the vaccine rollout, like most of our peers our year-to-date business performance continues to be challenging. While we have returned to profit, we are not where we expected to be and are short of the commitments we made to ourselves and our shareholders.”

A spokesperson for the group said: “Given our expected levels of profitability for 2020, we are unable to pay Group Performance Share (or bonus) awards to our people for this year.”

In November, Lloyds named Charlie Nunn as the new the next chief executive. Current chief executive Antonio Horta-Osorio will be stepping down next year and said on the news: “Charlie will find a warm welcome at Lloyds Banking Group and a deep commitment from all of our people to deliver on our purpose and to help Britain recover. I am sure that he will find his time here as fulfilling and fascinating as I have done and I wish him the very best.”

Nunn said: “Lloyds’ history, exceptional people and leading position in the UK means it is uniquely placed to define the future of exceptional customer service in UK financial services. I look forward to building on the work of António and the team and their commitment to helping Britain prosper.”

Lloyds shares (LON: LLOY) are trading 2.03% lower at 35.48 (1407GMT). In the year to date, shares have fallen from highs of 64.51.

Dignity shares dip on CMA concerns of sector

Safiya Bashir
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0
Dignity shares dip on CMA concerns of sector

Dignity shares (LON: DTY) opened 4.86% lower on Friday as the Competition and Markets Authority (CMA) has said that it has “serious concerns” about the funeral sector.

The watchdog told funeral directors that they would need to provide much clearer pricing to customers after investigating the sector.

Martin Coleman, a CMA panel inquiry chairman, said: “Organising a funeral is often very distressing and people can be especially vulnerable during this time.

“That’s why our remedies are designed to help people make choices that are right for them and ensure they can be confident that their loved one is in good hands.

“The CMA will be keeping a close eye on this sector to make sure our remedies are properly implemented and help it to decide whether further action is necessary when circumstances return to a more steady state.”

The CMA has been investigating the sector for the past two years, however, the final results of the report have been delayed amid the pandemic.

In response to the CMA’s concerns, Clive Whiley, Executive Chairman of Dignity commented:

“We welcome the Competition and Markets Authority (CMA) Final Decision Report for the funeral and crematoria market investigation. Dignity has engaged openly and collaboratively with CMA throughout the investigation . In fact Dignity has been working to raise awareness regarding issues of transparency and consistency in the quality of care across the funerals sector for a number of years. In the months ahead, we look forward to working with the regulator and the Government to ensure the package of remedies work for consumers, and that they are implemented effectively across the market.

“Finally, we also note the acknowledgement from the CMA that there is evidence, even before COVID-19, that perceived excess returns have declined since the review period (2014 to 2018) expired two years ago,” Whiley added.

Dignity shares (LON: DTY) are trading 5.76% lower at 639.88 (1204GMT).

Fulham Shore swings to loss, shares fall

Safiya Bashir
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0
Fulham Shore swings to loss, shares fall

Fulham Shore shares (LON: FUL) were 7.5% lower on Friday morning after the group swung into a loss for the six months ended 27 September 2020.

The restaurant owner, which owns Franco Manca and The Real Greek restaurants, posted a £3.9m loss compared to a £0.4m profit for the same period a year previously. Revenue at the group was down 45% to £19.9m.

As the majority of locations were closed in Tier 3 locations and all locations were forced to close amid the November lockdown, Fulham Shore is on the hunt for cheaper rent for future expansion.

David Page, Chairman of Fulham Shore, said: “We are pleased to have delivered a creditable performance during the first half of the current financial year despite all Franco Manca and The Real Greek restaurants being closed to dine-in customers for more than half the period. The Group generated positive Headline EBITDA during the second quarter (July to September) reflecting the popularity of our businesses and their great value proposition.

“The ongoing damage to the property and restaurant sectors will allow us to prospect for new sites at much reduced rents and lower capital costs per site. As such, over the next few years and once normal trading conditions return, we will target a higher return on capital than we have historically achieved.

“Following the period end, on 5 November 2020 most of our restaurants closed again to dine-in customers following the UK Government’s second national lockdown. These restaurants were then permitted to re-open on 2 December 2020 to dine-in customers, with certain restrictions. However, as at the date of this report and from 16 December 2020, the majority of our estate is once again closed to dine-in customers as London entered Tier 3 restrictions, while Surrey and Berkshire will enter Tier 3 restrictions from 19 December 2020. The situation is fluid and changes frequently and with little notice,” added Page.

Fulham Shore shares (LON: FUL) are trading -5.00% at 9.50 (1017GMT).

Openreach to hire 5,000 for broadband rollout

Safiya Bashir
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0
Openreach to hire 5,000 for broadband rollout

Openreach has announced plans to create 5,000 engineering jobs next year.

The communications company will be employing thousands of new people as it rolls out next-generation full-fibre broadband across the UK.

Around 2,500 of the roles will be at Openreach and a further 2,800 will be in its UK supply chain.

The new roles will be for the £12bn plan to connect 20m homes and businesses in the next ten years. This huge rollout requires providing one home with upgraded broadband every 15 seconds.

Openreach chief executive Clive Selley said: “As a major employer and infrastructure builder, we believe Openreach can play a leading role in helping the UK to build back better and greener.

“Our Full Fibre network build is going faster than ever and we’re now looking for thousands more people to build a career with Openreach and help us upgrade broadband connections and continue improving service levels.”

Rishi Sunak has welcomed the move by Openreach and said:

“Throughout this crisis I’ve been clear that our number one economic priority is to protect jobs, so I’m delighted to welcome this announcement of 5,000 new skilled roles. We’re investing billions of pounds across the UK as part of our Plan for Jobs to ensure nobody is left without hope or opportunity.”

Boris Johnson promised in his election manifesto that he would make sure full-fibre broadband available across the country by 2025. Since the election, it has dropped to 85% coverage across the UK.

Culture secretary Oliver Dowden commented: “I welcome this tremendous investment by Openreach. It will help us build back better from the pandemic and create thousands of new high-skilled jobs delivering faster broadband to people across the UK.”

Retail sales take a dip in November

Safiya Bashir
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0
Retail sales take a dip in November

Retail sales fell 3.8% in November amid the lockdown.

As the rates of Coronavirus rose and many high streets shut, November saw retail sales fall after six months of growth.

New figures from the Office for National Statistics showed supermarkets and food stores post a sales surge of 3.1% and household goods were up by 1.6%, as people were encouraged to stay at home. However, sales in clothing sales plummeted 19% and petrol sales were 16.6% down.

As the country faced another lockdown, online shopping accounted for 31.4% of all spending – a new record high. Online shopping has surged almost 75% since the same period a year earlier.

“In a month where England went back into lockdown and the UK as a whole was subject to tightening restrictions, it’s little surprise that physical retail sales growth stalled in November,” said Lynda Petherick, Head of Retail at Accenture UK.

“However, the show must go on when it comes to Christmas shopping, and some retailers have triumphed by preparing their e-commerce operations for the boom in online sales. Black Friday and early festive shopping continued to stimulate a sector so desperately trying to build recovery momentum.”

Aled Patchett, who is the head of retail at Lloyds Bank, commented on the latest figures: “November’s sales highlight once again the polarising effect of Covid-19 on retail. Sectors like grocery and homeware perform well – and should be expected to have a strong finish to the year – while others including big-name high street brands fall foul of significantly reduced footfall.

“Despite most shoppers having wrapped up their Covid Christmas shopping online this year, shops – particularly in smaller towns – will be hoping that the vaccine rollout inspires greater consumer confidence in the new year as people return to city centres for both work and play,” added Patchett.

SSP swings to £423m loss but remains optimistic

Safiya Bashir
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0
SSP swings to £423m loss but remains optimistic

Upper Crust owner, SSP, has swung to a £425.8m in the year ended 30 September.

As the pandemic hit sales and affected the travel food operator through a huge reduction in passenger numbers, the group’s profits fell from last year’s profits of £197.2m.

Revenue plunged 47.9% to £1.43bn and like-for-like sales were down 50.8%.

SSP is a FTSE 250 company that owns brands found at train stations and airports including Upper Crust and Caffe Ritazza. The group has over 3,000 retailers across the UK, currently, just 950 are trading.

Looking forward, the group has said that it expects sales for the first quarter of 2021 to be approximately 80% down year-on-year. However, SPP remains confident for the second half of 2021 as the Covid-19 vaccine is rolled out and will boost the travel sector.

The group said in an update: “Looking further out, we firmly believe that demand for travel will return and the actions we have taken since March, together with the evolving market backdrop, will ensure SSP is well positioned to capitalise on future market opportunities.”

The chief executive, Simon Smith, commented on the latest results:

“Whilst we expect passenger numbers to remain subdued over the winter, we are optimistic that, alongside good progress with the vaccination programme, we will see a significant upturn in both domestic and international travel from the spring.

“We are ready to respond quickly. The actions we are taking to rebuild the business will put us in a strong position to capitalise on the recovery as well as future new business opportunities, enabling us to deliver long term sustainable growth for the benefit of all our stakeholders,” he added.

SSP shares (LON: SSPG) are currently trading 2.21% lower at 319.00 (1432GMT). In the year to date, shares have fallen from highs of 326.78.

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