Dunelm shares soar 7pc on quarterly revenue boost
Homeware retailer Dunelm (LON:DNLM) saw shares rise nearly 7 percent on Thursday morning, after recording a moderate rise in revenue despite a “challenging” consumer backdrop.
Total revenue for the third quarter rose by 5.1 percent to £268.2 million, with like-for-like revenue up 4.6 percent. Dunelm’s online performance remained strong, with organic growth at 35.7 percent during the three month period.
“We’ve seen a good sales performance over the quarter, with like-for-like sales of 1.2% in stores and 35.7% online, despite a challenging consumer backdrop”, said Nick Wilkinson, chief executive of Dunelm.
The results come after a warning from the company in January that weakness in the legacy Worldstores business, as well as continued investment in infrastructure, would lead to higher operating costs.
Gross margin was approximately 15 basis points lower than the comparable period previously, but the firm said it gross margni figures to improve significantly in the final quarter.
Dunelm confirmed that expectations for the full year remain unchanged, and retained its guidance that H2 margins will be broadly in line with H1 margins.
Shares in Dunelm are currently trading up 6.97 percent at 560.50 (0837GMT).
Carpetright to close 92 stores in CVA proposal
Carpetright (LON:CPR) shares sunk nearly 20 percent at market open on Thursday, after confirming a small pre-tax loss for the year alongside the closure of 92 stores.
It has finalised the terms of a company voluntary arrangement, during which it will close 92 stores on or after the 23rd September 2018.
“These tough but necessary actions will enable us to address the burden of a legacy UK property estate consisting of too many poorly located stores on unsustainable rents and are essential if we are to restore our profitability and deliver a successful turnaround,” Carpetright said.
The proposal will be put to the creditors for approval at a meeting on the 26th April 2018, with shareholders being asked on the 30th April.
Carpetright has over 400 stores in the UK and the recent underperformance of its stores has made meeting rent payments difficult. The group warned that high street trading conditions remain “difficult” but confirmed that performance would be broadly in line with March’s expectations, which is to deliver a small pre-tax profit for the year.
Carpetright also announced plans to raise net proceeds of around £60 million through equity capital.
Carpetright shares are currently down 17.52 percent at 34.60 (0828GMT).
WH Smith profits hit by fall in spoof humour books
Stationer and book store WH Smith was hit by falling profits in the six months to February, as weak publishing trends over the Christmas impacted on sales.
Results last year were boosted by sales of spoof humour books, especially over the Christmas period, a trend which seems to have dissipated this year.
Group profit dropped down 1 percent year-on-year over the second half of the year, despite a growth in its travel division.
Stores at airports and train stations reported a 5 percent growth in profits over the period, despite a 6 percent decline at its High Street stores.
Revenue was flat, and down 1 percent on a like-for-like basis. Management has raised its dividend 10 percent to 16p.
Chief executive Stephen Clarke said he was “confident” of the outcome for the full year, despite noting some “uncertainty in the broader economic environment”.
Chief executive Stephen Clarke said there was “no publishing trend to match last year’s strong sales of humour books over Christmas”, but he applauded the company’s “good” high street performance on stationery and seasonal sales.
Tesco profits rebound after turnaround initiative
Tesco (LON:TSCO) reported a sharp rise in profits for the year in spite of a challenging retail environment.
The UK’s largest supermarket reported pre-tax profits of £1.64 billion for the year to 24 February, up from £145 million for the previous year.
Sales at UK and Irish stores rose 2.4 per cent in the final quarter, ahead analyst expectations of the 2.2 per cent.
This marks a year of “strong progress”, as the retailer looked to turnaround its fortunes in light of the exposure of an accounting scandal in 2017.
Chief Executive Dave Lewis commented:
“This has been another year of strong progress, with the ninth consecutive quarter of growth,” he said.
“We have further improved profitability, with group operating margin reaching 3% in the second half.
“We are generating significant levels of cash and net debt is down by almost £6 billion over the last three years.
“All of this puts us firmly on track to deliver our medium-term ambitions and create long-term value for every stakeholder in Tesco.”
Despite the strong figures, competition among the UK’s supermarkets remains fierce, with the popularity of budget-friendly options Aldi and Lidl challenging the dominance of the Tesco and Sainsbury’s (LON:SBRY) brands.
Moreover, the retail sector continues to suffer, with many high-street retailers feeling the strain.
Consumers have been increasingly tightening their spending due to lower disposable incomes, as inflation continues to drive up the the price of groceries.
Following the collapse of Maplin and Toys R Us, Restaurant chains such as Prezzo and Jamie’s Italian also announced the closure of several locations, in a bid to streamline costs amidst challenging trading conditions.
In fact, last year the high street faced its toughest year since 2010, with a total of 1,700 chain chain shops closing.
On average, 11 chain stores a day opened, whilst 16 a day closed, according to an analysis conducted by the Local Data Company (LDC) for PricewaterhouseCoopers.
Shares in Tesco have ticked up 5.38 percent as of 11.13AM (GMT).
High street faced toughest year in six years in 2017
The UK high street survived its toughest year since 2010 last year, with store closures soaring as competition from internet retailers hots up.
A net 1,700 chain shops closed on British high streets in 2017, according to analysis of the UK’s top 500 towns compiled by the Local Data Company (LDC) for PricewaterhouseCoopers.
In the UK an average of 11 stores a day opened, but 16 a day closed, not including figures from independent shops.
Retailers were not the only ones hit throughout the course of the year, with travel agents and estate agents also affected by online competitors.
High streets have also been negatively affected by shoppers having a lower disposable income, as inflation boosts the price of groceries and leaves less money in consumers’ pockets.
Major British retailers have been hit hard lately, with many announcing the closure or falling into administrations. 2018 has so far seen the loss of Toys R Us, with Mothercare and Carpetright facing difficulties.
Asos shares fall despite 27pc sales boost
Fashion retailer Asos (LON:ASC) saw shares fall 9 percent in early trading on Wednesday, despite a strong half year performance taking profits up 10 percent.
The online group reported a 27 percent rise in retail sales for the six months to February, hitting £1.13 billion, with profits reaching £29.9 million. However, the group spooked investors on Wednesday morning bu saying it would reinvest up to £250 million of the profits in its operations. Nicholas Hyett of Hargreaves Lansdown told the BBC: “Any retailer growing at 20% plus a year will need to invest, but what’s disappointing about Asos is its tendency to underestimate capital expenditure requirements by some tens of millions a year”. Asos has already spent around £95 million this year on its business. CEO Nick Beighton applauded the strong results, saying that the site attracted more than a billion visits for the first time. “These results show strong trading at the same time as we are making substantial investment in our future”, he added. Shares in Asos are currently down 7.80 percent at 6,482.00 (0934GMT).Universe Group profits fall on contract delays
British fintech company Universe Group (LON:UNG) recorded a fall in profit in its most recent figures, after contract delays weighed.
The point-of-sale technology provider saw pre-tax profit fall to £0.63 million, down from £1.83 million in 2016, as revenue dropped to £19.6 million.
The company design, build, install and support systems in 5,700 retail and petrol forecourt sites, processing over 6 billion transactions each year in our data centres. “We have had a solid start to 2018 with a two-year contract extension with a large food retailer client as well as the prospect of new business from a major international forecourt operator with whom we have not traded before,” chief executive Andrew Blazye said. “Our pipeline remains solid and supports our budgeted turnover, with the exception of the significant uncertainty regarding our contract with Conviviality, which represents approximately £2m of our pipeline revenue for the current financial year.”
Universe Group (LON:UNG) shares sunk 7.09 percent at 5.11 (0915GMT).
EasyHotel shares up 5pc after “significantly” outperforming the market
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 shares up as profits soar 770pc in 2017
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).
McCarthy & Stone shares fall 8 percent as profit plunges
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).