Sports Direct underlying profit drops 26%
Sports Direct has revealed its interim results for the 26 weeks to 28 October on Thursday. The results show that underlying profit before tax has dropped by 26.8% over the period.
Group revenue increased by 4.5%. Excluding acquisitions and at a constant currency, revenue increased by 0.2%. Additionally, UK sports retail revenue dropped 0.2% on the back of store closures. The group’s Premium Lifestyle business was up 29.4% following new Flannels stores.
Earlier this year, Sports Direct acquired House of Fraser after it announced it was going into administration. Earlier in October, Sports Direct also purchased the Glasgow House of Fraser building in a £95 million deal. Since the acquisition, its revenue was £70.1 million.
The group’s underlying EBITDA dropped 4.7% to £148.8 million. Excluding acquisitions and on a currency neutral basis. EBITDA was up 14.6%.
Rics: Housing market will continue to slow amid Brexit concern
A report from the Royal Institution of Chartered Surveyors (Rics) has shown that the UK property is the weakest since 2012 and Brexit concerns will continue to hit the market into 2019.
According to the report, the number of houses being bought and sold will continue to fall over the next three years whilst the houses on sales are taking longer to sell.
House prices have been falling over the year across the UK, particularly in London and the South East.
“It is evident from the feedback to the latest RICS survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market,” said Rics’ chief economist, Simon Rubinsohn.
“I can’t recall a previous survey when a single issue has been highlighted by quite so many contributors.”
“Caution is visible among both buyers and vendors and where deals are being done they are taking longer to get over the line. The forward-looking indicators reflect the suspicion that the political machinations are unlikely to be resolved anytime soon.”
“The bigger risk is that this now spills over into development plans making it even harder to secure the uplift in the building pipeline to address the housing crisis,” he added.
The Bank of England governor, Mark Carney, said earlier this month that in the event of a no-deal Brexit, house prices in the UK could plummet 30%.
Whilst house prices are falling and remaining flat in some parts of the UK, prices in Northern Ireland, Scotland, West Midlands, Wales and Yorkshire have been rising.
The number of new properties that have been listed fell for the fifth month.
Mark Duckworth, from Martin & Mortimer in Ely, said: “The Brexit effect is best described as a cold and wet blanket which is a depressing appetite for property.”
Bonmarche shares drop 36% following revised profit forecast
Bonmarche has altered its profit guidance on Thursday morning following its interim announcement in November. This is after the indication that sales during the Christmas shopping period could be less than anticipated. Shares in the group plummeted 36% this morning as a result of the announcement.
The group said that life-for-like sales have remained weak, and the start of the autumn to winter season had been slow.
This announcement is set against a backdrop of high street gloom. In fact, the group is not the only retailer suffering from the current high street crisis. John Lewis reported in September that its profits had dropped by a staggering 99%.
Additionally, Bonmarche has noted that Black Friday sales were “extremely poor”, particularly in retail stores. Indeed, it has become clear that customer’s Black Friday shopping trends do not match the patterns from previous years.
Moreover, the group has outlined that Brexit uncertainty has played a significant factor in affecting the demand for their products. As a result, it believes that sales may not strengthen until the current Brexit chaos ends. Given the uncertainty of when the Brexit chaos may end, their group has had to assume that sales will not significantly improve. Therefore, forecasts have been lowered accordingly.
Bonmarche now estimates that underlying profit before tax will be in the range of breakeven to a loss of £4.0 million.
Chief Executive of Bonmarche, Helen Connolly, commented on the announcement: “The current trading conditions are unprecedented in our experience and are significantly worse even than during the recession of 2008/9. I hope that in the fullness of time, our cut to the forecast may prove to have been overdone, but in the current market, this seems the appropriate stance to adopt.” “I believe that Bonmarche is well prepared to weather the storm, and that we can look forward to some recovery in FY20. Accordingly, the Board remains confident in the strategy, and in the Company’s long-term prospects.” At 09:02 GMT today, shares in Bonmarche Holdings plc (LON:BON) were trading at -36.02%.Sound Energy shares dip to one year low
AIM and London-based upstream gas firm Sound Energy Plc (LON:SOU) saw their share price dip to a 52-week low yesterday.
The news puts the company at the fore of many an avid investor’s agendas for the day, with online forum’s reeling at the news that the firm’s shares dipped as low as 11p during trading on Tuesday.
The gas company are largely based in Europe and Africa and have made efforts this year to commercialise Moroccan gas by signing an agreement with a consortium to build a 20-inch gas pipeline in the East of the country. The company said that the consortium, made up of Spain’s Enagas (BME:ENG), Elecnor (BME:ENO) and Fomento (BME:FCC), has been awarded the deal under a build-own-operate-transfer (BOOT) structure.
In a statement earlier in the year, the Sound Energy said:
“The Consortium will finalise plans to secure access to some $184 million of development capital that will be required to fund the project”.
The firm was pleased to announce the commencement of drilling at their TE-10 venture some five days ago – the second of three planned explorations at the Eastern Moroccan site – stating that preliminary estimates hedged a 26% chance of success, though the company said updates will be reported as and when appropriate. This well covers the North East Lakbir prospect in the Company’s Greater Tendrara permit and is located approximately 25 kilometres northeast of their Tendrara production concession.
Today the company’s share price has seen moderate recovery with the acquisition of Corporate Banking and Advisory firm Smith and Williamson. Following the acquisition, Sound Energy went on to appoint Cenkos Securities Plc (LON:CNKS) as their Nominated Adviser with immediate effect.
Sound Energy shares are currently trading up 8.08% or 0.94p at 12.59p per share 12/12/18 15:49 GMT. Analysts from RBC Capital Markets have reiterated their ‘Sector Perform’ stance on Sound Energy stock.
Channel 4 CMCO to step down & focus on own business
The marketing and communications officer of Channel 4 will be stepping down at the start of 2019.
Dan Brooke is leaving the broadcaster to focus on his own business that will focus on “helping companies be mission and purpose driven”.
Brooke has been at Channel 4 since 2010 and previous to that worked for seven years at Film4.
During his eight years at Channel 4, the marketing and communications officer was the board champion for diversity and inclusion. The channel won Best Diverse Company at the 2016 National Diversity Awards.
“I’m proud of the things my incredibly talented marketing and communications teams have achieved and that the most groundbreaking of this work has achieved such powerful results and consistent global recognition,” he said.
“I’m also proud to have been the board champion for diversity and inclusion, leading the drive that saw Channel 4 voted Britain’s Best Diverse Company.”
“With the ‘4 All The UK’ plan now successfully launched, it’s a good time to leave on a high and use these successes as a springboard for my burgeoning ambition to help other mission and purpose-driven companies grow.”
The group’s chief executive, Alex Mahon, said: “Dan has made a huge and far-reaching contribution to the life and success of Channel 4 over many years. I’d like to thank Dan personally for the support and advice he has offered me in my first year and, on behalf of the whole organisation, wish him the very best with his future plans.”
Channel 4 has not yet shared plans following Brooke’s departure.
Zara owner shares slump on trading update
Inditex, the owner of Zara, has become the latest retailer to reveal a knock to profits after the summer heatwave.
In the Spanish group’s latest trading update, Inditex revealed lower-than-expected sales and profits causing shares to dip 4%.
“The company decided not to participate in the promotional activity widely seen in the sector since September,” said the retailer.
Pablo Isla, the group’s chief executive, said the group had a “strong business model, which continues to deliver solid structural growth in all markets, along with our constant focus on developing the integrated store and online platform through continued enhancement of technology and systems”.
Inditex is not the only retailer feeling the effect from the warmer than usual summer. Superdry (LON: SDRY) posted a 49% fall in profits on Wednesday. The group posted underlying pre-tax profits of £12 million in the six months to the end of October and expects full-year profits of between £55 million and £70 million.
Shares in Inditex (BME: ITX) are trading -4.48% at 25,15 (1412GMT).
Angus Energy shares rally with low RSI
Shares in Angus Energy Plc (LON:ANGS) rallied on Wednesday as recent figures showed that its mid-day trading volume for shares stood at 137% of its average level.
Angus Energy owns the Brockham and Lidsey oil fields and deals in the distribution of hydrocarbons in the UK, to third parties. The London-based company’s shares are reeling as its SuperTrend indicator sits ahead of its share price.
The company’s Relative Strength Index score stands at 48.32 for the last fortnight, and down to 27.96 for the last three days. Scoring acts as measure for a stock’s true value and volatility, with a score exceeding 70 indicating a stock being oversold and in turn overvalued. A score of 30 or lower indicates a stock that is undersold and likely under-priced.
With current market uncertainty, traders are having to dip deeper into their archive of stocks to find the best returns. Angus appears to represent a promising opportunity for those keen enough to take advantage, before its increase to stabilise meet demand.
Angus Energy shares are currently trading up 0.8p or 6.82% at 12.5p 12/12/18 13:47 GMT.
Rolls-Royce confirms higher profit guidance
Rolls-Royce has confirmed that it expects profits to be towards the upper end of its guidance on Wednesday, sending shares up.
According to the statement, the engineering company expect to produce around 500 large engines to customers in 2018, slightly lower than its March projection of around 550.
The statement added:
“This reflects supply chain challenges that are affecting the whole civil aero engine sector and also early stage production ramp-up challenges on our new Trent 7000 engine. As we move into 2019 we are confident that Trent 7000 production and delivery volumes will increase significantly to meet our customer commitments.
“We have continued to make progress reducing large engine OE unit losses and will provide more details on this with our full-year results in February 2019.”
Alongside its civil aerospace division, Rolls-Royce also noted that its power systems operations witnessed “strong growth” during the first half of the year. In addition, defence remained on track to meet its full-year guidance, with “stable” revenues. Earlier this year, Rolls-Royce announced a restructuring plan in a bid to streamline costs. This is set to involve a 4,600 headcount reduction at the firm, which it expects to complete by the end of 2018. Moreover, the statement also touched on uncertainties in the UK relating to Brexit negotiations. Acknowledging the decision of the government to delay the vote on its Brexit proposal, the firm said the following:“We will continue to implement our contingency plans until we are certain that a deal and transition period has been agreed.
“Specifically, we are working with EASA to transfer design approval for large aero engines to Germany, where we already carry out this process for business jets. This is a precautionary and reversible technical action which we do not anticipate will lead to the transfer of any jobs.
“We have begun to build inventory as a contingency measure, in line with the timetable that we gave in the summer.”
Rolls-Royce said they will update investors once there is greater certainty on Brexit developments. Shares in Rolls-Royce (LON:RR) are currently trading +4.71% as of 13:52PM (GMT).British American Tobacco sticks by full-year guidance
Full-year guidance at British American Tobacco remains on track, revealed the group in a trading update.
British American Tobacco released a trading update on Wednesday, confirming expectations to exceed the target for high single-digit growth in adjusted earnings per share for the year.
“We remain on track for a strong performance in 2018 – driven by both our combustible and potentially reduced risk products businesses,” said Nicandro Durante, the chief executive.
“In the US, we are performing well, with positive pricing and continued value share growth. Our deleveraging remains on track and we remain committed to a dividend payout ratio of at least 65%”.
“We expect to exceed our high single-figure adjusted diluted earnings per share growth at constant rates of exchange.”
The group, which owns brands including Dunhill and Lucky Strike, has also stood by expectations that cigarette alternatives will reach £900 million of revenue this year.
“I am delighted with the progress we are making with our Potentially Reduced Risk Products business and we have a great pipeline of new product launches over the coming months which will build on this success,” said Durante earlier this year.
Shares in British American Tobacco have fallen almost 47% this year, amid the uncertainty around menthol cigarettes menthol in the US.
In other news from the group, Lionel Nowell will retire from the board with effect from 12 December 2018.
Shares in the group (LON: BATS) are trading +1.96% (1351GMT). Thomas Cook shares edge up on CEO’s confidence for 2019
Thomas Cook shares have taken a strong turn on Wednesday after the group’s chief executive expressed confidence about the coming year.
The travel company has issued three profit warnings this year after the unusually hot summer hit holiday bookings.
Today saw shares increase by over 15% after a turbulent year where the share price has tumbled from 117p this time last year to a low of 22p earlier this month.
The Thomas Cook chief executive Phil Gardner has said that bookings are looking more promising for 2019.
“We have a strategy we believe in, we just haven’t been quick enough at executing it,” he said.
“The latest market hit us this year. We need to be stronger in managing our commitments and have already made changes in that area. We also need to be faster at executing our strategy around our own-branded product. We’ve had a good start for bookings next year, and have confidence in 2019, but need to focus on margin and profit.”
“The best possible margins are on our unique product. It’s also where we give our best customer service and receive our best NPS [net promoter scores]. We didn’t focus enough on it this summer, so we will next year. I need to do that with trade partners and online,” he added.
Shares in the group (LON: TCG) are currently trading +12.57 (1325GMT).