EasyHotel (LON:EZH) shares rose 6 percent on Wednesday morning, after it “significantly outperformed” the budget hotel market and reported soaring system sales.
Total system sales rose 33.6 percent to £16.10 million from £12.05 million the same period a year ago, supported by a new booking engine and yield management systems as well as the growing recognition of the easyHotel brand.
The key performance metric, revenue per available room, rose 11.2 percent to £36.60, beating their competitive set by 11.7 percent. Like-for-like revenue for franchised hotels increased by 13.5 percent.
“We are mindful that consumers in the UK will continue to be cautious, given the wider macro-economic and political uncertainty, but believe our super budget offer positions us well, as consumers become increasingly discerning and value conscious,” said Guy Parsons, CEO of easyHotel.
“We continue to make good progress with our growth strategy. The Chester transaction marks our second investment following the successful fundraising announced in February 2018, taking easyHotel’s pipeline of owned and leased development projects to 1,150 rooms, in addition to the 1,857 franchise rooms currently under development.”
Shares in easyHotel (LON:EZH) are currently up 5.41 percent at 117.00 (0848GMT).
Tesco (LON:TSCO) reported soaring profits on Wednesday, up 770 percent in the year to February as its recovery plan starts to show real progress.
Tesco’s pre-tax profits rose to £1.3 billion over the course of 2017, up from just £145 million in 2016, after a year of “strong progress”.
Revenue rose 2.8 percent to £57.5 billion, while UK like-for-like sales grew by 2.2 percent amid a strong performance in food, offset by a weak performance in general merchandise.
The troubled supermarket has suffered for several years from big losses, brought on by the advent of cheaper competition, and a series of write-downs, negatively impacting figures. Thee figures are the first sign its turnaround plan is beginning to have a real impact.
Tesco declared a final dividend of 2p per share, adding to the 1p per share paid at the first half.
Tesco shares are currently trading up 4.52 percent to 219.80 (0834GMT).
Retirement property builder McCarthy & Stone (LON:MCS) recorded a 52 percent drop in profits in its latest half year results, due to fewer building completions and “subdued market conditions”.
Pre-tax profit dropped 52 percent to £10.5 million, but 12 percent fewer completions were offset by a 15 percent rise in selling prices.
The group warned that growth would be modest over the next two years, with a decline in land exchanges and planning consents in the half-year following a government proposal to set ground rents.
Revenue rose by 1 percent over the half year period, hiking its interim dividend to 1.9p per share, from 1.8p in the previous corresponding period.
“Trading was constrained by the ongoing subdued conditions in the secondary market and the lower number of new first occupations resulting from a pause in build start activity following the EU Referendum in June 2016,” the company said.
“We continue to work with the government to seek an exemption from these changes due to the unique viability model of retirement housing”.
McCarthy & Stone said its full-year guidance given in March remained unchanged, and was expected to be in line with the current range of analyst forecasts.
Shares in McCarthy & Stone (LON:MCS) are currently down 7.58 percent 126.71 (0823GMT).
The Property Franchise Group posted strong results on Tuesday following a year of organic growth boosted by acquisitions.
The online/hybrid estate agency revealed a 33% increase in profit before tax driven by a 23% jump in revenue to £10.2m.
The Property Franchise Group has recently changed its name from MartinCo to reflect the firms transformation from a single brand franchise to a multi-chanelled group harnessing the technological advancements in the estate agency business.
A key acquistion for the group has been EweMove that not only added 120 offices but also provided the digital technology to enhance the entire group with a robust digital outlet previously lacking in some its traditional brands.
EweMove came with the technology to help drive down the cost of winning new revenue across all brands. Whitegates, one of the groups brands focussed on the Midlands and North of England, saw a 649% increase in overall website conversions in what highlights Property Franchise Group’s push to compete with their digital led competitors.
Source: The Property Franchise Group
UK Investor Magazine spoke with CEO Ian Wilson who was upbeat about the groups ability to grow in a transforming industry not only through technologcial advancements but through a business model that supports the groups franchisees.
The firm counts brands such as Martin&Co, Ellis&Co, Parkers and CJ Coles as their franchises and has enjoyed a 7% increase in the number of offices over the past year.
Mr Wilson also touched on plans for further growth through the acquisition of smaller agencies by their franchisees with support from the parent company in the form of cash back schemes to help support cash flow during the process.
On the topic of cash – of which the group has plentiful -cash in the bank increased to £2.6m supplemented by a near doubling of cash from operating activities.
The strong cash position has given the board the confidence to increase the dividend to a full year payout of 7.5p, giving the stock a current yield of around 5.5%.
Despite the strong profit growth and increase in the dividend, there is a reason to be vigilant.
The outlook for the UK housing market and changes lettings fees present potential risks but the fundamentals are resilient with a large proportion of revenue coming from ongoing management fees so while the group, like all lettings firms, will likely take a hit from the ban on upfront letting fees, it doesn’t represent a material threat to ongoing growth.
British Gas (LON: CNA) has announced plans to increase energy bills rise by 5.5 percent to £1,161 a year from the end of May.
Customers will pay an extra £60 a year as the UK’s biggest energy supplier blamed the increase in price on the rising wholesale gas and electricity prices.
“We fully understand that any price increase adds extra pressure on customers’ household bills,” said Mark Hodges, chief executive of Centrica Consumer, the parent company of British Gas.
“This increase we are announcing today is reflective of the costs we are seeing which are beyond our control,” he added.
The changes to British Gas energy bills comes just days after the government raised a price cap on five million vulnerable households.
The group recently announced plans to cut 4,000 jobs amid tough competition and the potential government price cap.
In March, E.ON also announced higher bills for gas and electricity. Customers will pay an average increase of £22 a year.
E.ON blamed rising costs, as well as claiming the changes to prices would “make it simpler and easier for customers to understand our tariffs and compare them with other suppliers in the market”.
Comparethemarket.com’ head of energy, Peter Earl expressed disappointed to see tariff simplification used as an excuse to raise bills for consumers.
“There is little justification for removing discounts and certainly not in the name of making billing simpler,” he said.
Soon after the price raises, analysts predicted further price increases from the big six energy companies.
Card Factory (FRA: 0CT) profits have taken a hit due to the weaker pound and increase to the National Living Wage.
The retailer posted a 12.3 percent fall in profits to £72.6 million after it said costs increased £14.6 million in the year to 31 January 2018.
Not only did cost of imports increase due to the weaker pound, but the increase in the National Living Wage from £7.20 per hour to £7.50 per hour for over-25s in April 2017 led to a dent in profits for the retailer.
The National living Wage increased again this month to £7.80.
As the high street faces a “tough consumer environment”, Card Factory continues to grow and opened 50 new stores in the period as well as opening six trial stores in the Republic of Ireland.
Despite the fall in profits, the group’s chief executive officer remained positive and hailed the growth in like-for-like sales.
“We also saw a record-breaking number of customers shopping with Card Factory for both card and complementary non-card products, demonstrating our resilience against a backdrop of High Street footfall decline,” said Karen Hubbard.
“Our store roll-out programme continues, with 50 new UK sites opened in the year, and our Card Factory online business has seen further growth, with increased visitors and sales, and represents a clear opportunity for future growth,” she added.
The high street’s restaurants are also facing the difficult trading period with many, including Jamie’s Italian and Byron Burger announcing store closures.
Londoners pay on average four times more Stamp Duty than the rest of UK, according to research from London Central Portfolio.
According to the data, Greater London proved the biggest contributor to Stamp Duty at around 39 percent.
The research revealed that the Royal Borough of Kensington and Chelsea and the City of Westminster alone contributed in excess of £0.6 billion.
The data also found that whilst the average basic rate Stamp Duty paid by buyers in England and Wales came in at £7,161, London buyers pay four times that figure, coming at £27,232.
Naomi Heaton, CEO of London Central Portfolio, said: “Despite the continued rumble around whether the richest are paying their ‘fair share’, it is clear that they are the main contributor to Stamp Duty revenue. ”
She added: “LCP’s findings indicate that the majority of the Exchequer’s £9.5bn tax take is being generated by the 10% most expensive sales and that buyers in London are paying 4 times more Stamp Duty than the national average.”
As it stands, the average house price in the UK is £218,255, whilst London property prices prove substantially higher at £490,718.
Nevertheless, the property market in the UK continues to stagnate as Brexit negotiations continue to play out.
The housing market in the capital continues to be the worst hit by economic uncertainty that has ensued, with prices falling more than 15 per cent in the last 12 months.
Government figures reveal that the number of completed house sales in England dropped by 21.2 per cent to 62,482, compared with 79,243 back in November 2015.
Meanwhile, the number of completed house sales in London fell by 34.8 per cent to 6,394 compared with 9,806.
This week the government announced several measures with the aim of tackling improving the housing sector.
Yesterday housing and communities secretary Sajid Javid announced that real estate agents in the UK will now be required to hold a professional qualification in order to practice.
Alongside this, Javid pledged the government’s commitment to crackdown on the practice of “gazumping”, where sellers accept higher offers than necessary.
Read more about the government proposals here.
Rolls-Royce (LON: RR) will sell the technology firm L’Orange to America’s Woodward (NASDAQ: WWD) in a £610 million deal.
The engine maker is taking steps to “to improve the resilience of the balance sheet” and will use proceeds of the deal to reinvest in the group.
“This transaction builds on the actions we have taken over the last two years to simplify our business,” said Warren East, chief executive of Rolls-Royce.
“The divestiture of L’Orange enables Rolls-Royce Power Systems to focus on other long-term, high-growth opportunities and our company to allocate our capital to core technologies and businesses that drive greater returns for the group.”
L’Orange is a subsidiary of Rolls-Royce and has 1,000 employees in Germany, the US and China.
After the sale, L’Orange has agreed to a 15 year supply agreement with Rolls-Royce Power Systems, so the groups can remain “important” partners.
“As well as providing a healthy boost to the balance sheet, (the sale) suggests chief executive Warren East is not sitting on his hands despite reporting good progress on a transformation of the business at last month’s full-year results,” said Russ Mould, an investment director at AJ Bell.
“East has now been in charge at Rolls for more than two years having previously earned a stellar reputation at British technology champion ARM. His successful rehabilitation of a fallen corporate titan is only bolstering that reputation.”
The deal is expected to close later this year and has been approved the boards of both companies.
Andreas Schell, president and chief executive of Rolls-Royce Power Systems, said: “Rolls-Royce Power Systems will remain a key customer of Woodward L’Orange.
“We have enjoyed working with L’Orange who have a leading position in their markets, excellent technology, a skilled workforce and strong leadership. We wish them well as they join the Woodward organisation.”
Shares in French Connection (LON: FCCN) soared on Monday morning after the group revealed plans to sell Toast for £23.3 million.
The fashion retailer will be selling it’s majority stake in the brand to Bestseller United, which owns several brands including Vero Moda.
Toast founders Jamie and Jessica Seaton are also selling their 25 percent stake in the group.
The price achieved for Toast reflects the strength of the brand and the business we have built behind it,” said Stephen Marks, chairman and chief executive of French Connection.
“French Connection will use the transaction proceeds to underpin its core business, allowing us to focus on our priority of returning to sustainable profitability and growth.”
“I would like to extend my thanks to all of the Toast management team for their commitment and dedication to the Toast business. We wish them every success in the future,” he added.
The sale is expected to be completed by the end of April. Toast’s chief executive, Suzie de Rohan Willner, will continue in the role after the deal has taken place.
Toast was founded by Jamie and Jessica Seaton in 1997 and has 12 shops in the UK. The group also sells its products online and through John Lewis (LON: JLH).
Shares in French Connection has climbed over the course of the year. The group’s full-year profits, which were revealed in March, reported an increase in revenue of 0.5 percent to £154 million.
The UK Government has announced plans to “professionalise” the real estate sector, requiring all agents to hold a qualification.
On Sunday, Housing & Communities Secretary Sajid Javid announced the introduction of extra protections for buyers, as the government looks to crack down on “rogue” real estate agents.
As it stands, anyone can practice as a real estate agent, with an estimated 20,000 active real estate agent businesses across the UK.
According to the newly announced plans, agents will also be required to reveal the fees they receive for referrals to solicitors, surveyors and mortgage brokers, in a bid to encourage greater transparency across the sector.
In addition, the government said it plans to tackle “gazumping”. This refers to when a seller backs out of a sale, in an attempt to secure a higher bid from the buyer.
Buyers and sellers will now be asked to sign lock-in agreements, with the risk of incurring costs, if they back out of a deal without justification.
Mr Javid said the government plans aim at making the housing market “cheaper, faster and less stressful” for buyers.
Mr Javid commented: “We want to help everyone have a good quality home they can afford, and improving the process of buying and selling is part of delivering that.
“Buying a home is one of life’s largest investments, so if it goes wrong it can be costly.
“That’s why we’re determined to take action to make the process cheaper, faster and less stressful.
“This can help save people money and time so they can focus on what matters – finding their dream home. I want to hear from the industry on what more we can do to tackle this issue.”
According to figures, “gazumping” tactics by real estate agents contribute to over a quarter of house sales falling apart every year.
— Ministry of Housing, Communities and Local Govt (@mhclg) April 8, 2018
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This comes amid a year of difficulty for the UK housing market, as Brexit uncertainty continues to stunt house price growth and the sector more generally.
In particular, the housing market in London has stagnated, with house prices across the capital falling more than 15 per cent in the last 12 months.
Despite an increasingly subdued housing market, UK house prices in the first three months of the year were up 2.7 per cent, according to the latest house price index from Halifax.
This marked an increase on February’s figures, up from the 1.8 per cent growth recorded a month earlier.
The strong cash position has given the board the confidence to increase the dividend to a full year payout of 7.5p, giving the stock a current yield of around 5.5%.
Despite the strong profit growth and increase in the dividend, there is a reason to be vigilant.
The outlook for the UK housing market and changes lettings fees present potential risks but the fundamentals are resilient with a large proportion of revenue coming from ongoing management fees so while the group, like all lettings firms, will likely take a hit from the ban on upfront letting fees, it doesn’t represent a material threat to ongoing growth. 
