Entertainment One shares fall 2pc after ABC cancels Designated Survivor
Shares in Entertainment One (LON: ETO) dropped over two percent in early trading after the Canadian producer warned of the “modest” profit hit it could face next year.
The group warned of lower earnings after ABC cancelled the political drama Designated Survivor after the second season, a political conspiracy thriller starring Kiefer Sutherland as the US president.
The FTSE 250-listed group insisted there would be no impact on its annual results, which will be released next week.
“There may be a modest impact on next year’s earnings, depending on the outcome of discussions with other parties,” said Entertainment One.
“However the Group remains on track to deliver against its stated strategic management expectations for the future.”
The group told the London Stock Exchange in a statement that it is in “active discussions with other parties for further series of the show”.
The cancelled series saw high ratings and viewing figures throughout the first season, which then plummeted during the second season.
The group’s flagship show is Peppa Pig, which has continued to perform well in the UK and Australia but “significant demand” in China has been driving growth.
“The Peppa Pig children’s series remains a big driver for the company as it performs well in mature markets like the UK and Australia and expands in newer geographies like China and Japan,” said Russ Mould, AJ Bell investment director.
“Being too closely tied to one blockbuster franchise is a risk though, as investors in Harry Potter publisher Bloomsbury could attest. Bloomsbury traded close to £4 when Pottermania was at its height in the mid-noughties but now changes hands for just 176p.”
Dignity results boosted by uptake in premium services
Funeral planner Dignity (LON:DTY) recorded stronger than expected results for the first quarter of the year, with a higher death rate and an increased interest in premium services boosting figures.
Revenue rose 2 percent to £95.1 million, up from £93.3 million, with underlying operating profit coming in at £37.5 million, a slight increase from £37.4 million.
The absolute number of deaths rose by 8 percent on the same period last year, with the group saying that it expects ‘at least’ the same number of deaths as last year, which was 590,000.
‘While the first quarter produced a much stronger result than we had anticipated when implementing the price changes in January, the current year is all about completing our review of our funeral business and ensuring we provide the excellent service our clients expect from us.
“We will also continue to demonstrate industry leadership by calling for stronger regulation in the funeral plan sector to protect customers,’ said Mike McCollum, Chief Executive of Dignity.
Shares in Dignity (LON:DTY) are currently trading up 3.04 percent at 1,253.00 (1028GMT).
Church of England investment returns failed to impress in 2017
The Church of England’s investment returns dropped slightly in the 2017 financial year, after its set of impressive figures in 2016.
Investable assets increased to £8.3 billion in 2017, up from from £7.9 billion in 2016. However, its total return on investments in 2017 was 7.1 percent, lower than its target of 9.1 percent and far lower than 2016’s impressive return of 17.1 percent.
In a statement, the Church Commissioners said they were preparing for higher interest rates, higher volatility and lower returns than recent years.
First Church Estates Commissioner Loretta Minghella said its investment focus was about “consistency over the long term”.
“The macro economic environment is changing and anticipating muted returns in the future we will continue to develop our focus on non-traditional asset classes,” she added.
The group said that active management in 2017 was an important contributor to gains in public equities and real assets, while bond markets remained weak.
“Sterling strength had an impact on performance, as did being globally diversified across multiple asset classes, resulting in the fund doing less well than equities markets which were the strongest source of returns in 2017.”
Caledonia shares wobbled despite 35pc rise in profits
South African mining company Caledonia (LON:CMCL) reported a 35 percent rise in profit over the first quarter of the year, boosted by lower costs and higher gold prices.
Adjusted earnings rose 51 percent over the three month period, with net attributable profit up 34.9 percent to $3.15 million.
Caledonia mined 12,924 ounces of gold, up 1 percent from the same period last year, with results boosted by an 8.2 percent rise in the released price of gold per ounce.
The group expects to produce between 55,000 and 59,000 ounces of gold for the full year, with earnings expected to be between 165 to 190 cents per share.
“We expect that production will deliver the usual increase in the second half of the year as we see the benefit of the increased level of mine development in the first half of the year, which will improve our access to higher grade areas,” the firm said.
“As we continue to grow production to our target of 80,000 ounces by 2021, maintain cost control and benefit from economies of scale we look forward to further increasing cash flows and earnings,” said Steve Curtis, Caledonia’s Chief Executive Officer.
Shares in Caledonia Mining (LON:CMCL) are currently down 1.46 percent at 675.00 (1011GMT).
IWG shares spike after trio of takeover offers
Shares in serviced office group IWG (LON:IWG) jumped 20 per cent on Monday morning, after it received takeover offers from three separate equity groups.
Shares had already risen 10 percent before the weekend as speculation surrounding possible offers heightened. The group, who were previously named Regus, then admitted to receiving bid offers from Lone Star, Starwood and TDR Capital.
“The board is evaluating the possible offers with its financial advisers and shareholders will be updated in due course,” the statement said.
Earlier this year IWG rejected a takeover bid from Brookfield Asset Management and private equity house Onex, that valued the group at around £2.5 billion.
The flexible working market has seen a spike of interest in the UK of late, with startups and small businesses preferring to take part of a serviced office with other businesses instead of forking out the entire rent for a space on their own. However, IWG face tough competition from rivals like millennial favourite WeWorks and The Office Group.
Shares in IWG (LON:IWG) are currently trading up 20.56 percent at 303.80 (1001GMT).
Npower to increase bills by 5.3pc
Npower has announced plans to increase energy bills by an average of £64 a year, affecting up to a million customers.
The gas and electricity supplier will increase bills by an average rate of 5.3 percent and will come into effect on 17 June.
“Announcing this price change today isn’t a decision we’ve taken lightly,” said Simon Stacey, managing director, domestic markets at Npower.
The group has blamed government policy changes and increases in energy costs for the rise.
Stacey said that wholesale costs are on the rise, “particularly wholesale and policy costs which are largely outside our control” – have been on the rise for some time “and we need to reflect these in our prices”.
“Less than half of our customers are on our standard tariff – one of the lowest levels among the larger energy suppliers. We continue to encourage all our customers to look at our range of competitive fixed deals and switch to a tariff that best suits their needs.”
The tariff rise is made up of the 4.4 percent increase in gas and 6.2 percent rise in electricity.
“This is a chunky rise from Npower – all we need now is something from SSE and it’s a full house from the Big Six,” said Stephen Murray, an energy expert at MoneySuperMarket.
“Npower says 60 percent of its customers won’t be affected but that still means 40 percent – or one million people – will.”
Price increases from the other Bix Six have already been announced.
British Gas customers will face a 5.5 percent increase from 29 May. The move will affect 4.1 million people who will have to pay an average increase of £60.
Npower’s 5.3 percent increase will affect one million customers and will be enforced from 17 June.
Scottish Power is increasing prices by 5.5 percent and will affect almost one million people from 1 June.
Silver Lake makes Zoopla £2.2bn takeover offer, shares soar 30pc
The US venture capital firm Silver Lake has made a £2.2 billion to buy ZPG plc (LON: ZPG), owner of property sites Zoopla and PrimeLocation.
The all-cash offer is premium of 31 percent to the closing price of ZPG’s stock value on Thursday. Silver Lake will offer shareholders 490 pence per share.
ZPG’s founder and chief executive said the group would benefit from the takeover.
“In 2008, we transformed the property portal landscape with the introduction of a highly differentiated proposition providing data and delivering transparency to empower consumers to make smarter property decisions,” he said.
“The terms of the acquisition represent an attractive premium that recognises the quality of ZPG’s businesses and the strength of its future prospects and allows shareholders to realise today in cash the potential future value of their holdings.”
The biggest shareholders in ZPG are the Daily Mail newspaper (LON: DMGT), Daily Mail and General Trust.
Paul Zwillenberg, the chief executive of Daily Mail and General Trust, was optimistic of the deal.
“The sale of our stake, pending shareholder approval at ZPG, fits with our long track record of successfully identifying new opportunities, incubating young businesses and supporting their growth to create value for shareholders,” he said.
The Zoopla group also own PrimeLocation, Hometrack and money.co.uk.
ZPG is being advised by Credit Suisse (NASDAQ: TVIX) and Goldman Sachs (NYSE: GS). The deal is expected to close in the third quarter of 2018.
Shares in ZPG shot up 30 percent at the open on Friday.
House of Fraser reports £44m loss ahead of Chinese takeover
House of Fraser department store group lost almost £44 million in 2017 due to falling sales.
The store’s potential new Chinese owner, C.Banner (HKG: 1028), revealed at the Stock Exchange on Thursday that the £43.9 million reversed the pre-tax profit of £1.5 million for the previous year.
Sales fell 6.3 percent to £787.8 million in the tough UK market.
The figures released included the start-up and operating costs of House of Fraser China. Separate UK figures have not been reported.
C.Banner has said that House of Fraser will become “more stable” following the restructuring plan and will “take advantage of its well-known brand to capture growth potential”.
The group also blamed Brexit and London terror attacks for the volatility in the UK retail market.
“The Brexit referendum and the UK’s resultant decision to leave the European Union and the terrorist attack in London, combined with a rapidly evolving retail market, produced a period of uncertainty and volatility that resulted in a difficult trading environment for the whole retail industry in the UK,” said the document released by C.Banner.
C.Banner has said it plans to buy 51 percent stake in House of Fraser in order to “enhance the company’s presence in the retail market in [China] as well as to facilitate the company to lay a good foundation for a new brand and retail roadmap overseas”.
The deal depends on the agreement by bondholder and shareholders, as well as the restructuring plan where about 20 stores are expected to close.
Apple scraps €850m Irish data centre
Apple (NASDAQ: AAPL) has announced plans to scrap the €850 million (£743 million) data centre in West Ireland.
The tech giant made plans for the new European data centre back in February 2015 but following three years of planning approval delays, the project will be scrapped.
“Despite our best efforts, delays in the approval process have forced us to make other plans and we will not be able to move forward with the data centre,” said Apple in a statement on Thursday.
“While disappointing, this setback will not dampen our enthusiasm for future projects in Ireland as our business continues to grow,” added Apple, referring to the plans to expand the European headquarters in County Cork, employing over 6,000 people.
Heather Humphreys, Ireland’s minister for business and enterprise expressed disappointment in the decision.
“There is no disputing that Apple’s decision is very disappointing, particularly for Athenry and the west of Ireland,” she said.
“These delays have, if nothing else, underlined our need to make the state’s planning and legal processes more efficient. The Government has therefore already been working, over the last number of months, to make improvements to those processes. This will ensure we are better placed to take advantage of future such investment opportunities, whether from data centre providers or other sectors,” she added.
When plans were put on hold in 2016, it attracted 2,000 people to gather and march in support of the new Apple centre in Athenry, Ireland.
The new data centre would have created approximately 300 construction jobs as well as 150 permanent jobs in the country.
When announcing the plans for the data centre in 2015, the company also announced plans for a data centre in Denmark, which opened last year.
Morrison Supermarkets report yet another quarter of growing sales
Morrison Supermarkets (LON:MRW) reported another quarter of growing sales on Thursday, with its new business as a wholesaler appearing to make a positive mark on the group’s figures already.
The supermarket chain increased its group like-for-like sales excluding fuel by 3.6 percent in the 13 weeks to 6 May, comprising contributions from retail of 1.8 percent and wholesale of 1.8 percent.
Like-for-like sales for the entire group – including fuel – grew 1.9 percent. The group’s recent move into wholesaling, beginning with a supply partnership for convenience store chain McColl’s, contributed 1.8 percent to group like-for-like sales, and the group is on track for its targets of £700 million of annualised sales by the end of the year and £1bn in due course.
David Potts, chief executive, said: “We are pleased to have made a strong start to the year, again becoming more competitive for customers while delivering growth on growth. We expect to continue to improve in the year ahead.”
Volume growth also accelerated in the first quarter, while inflation remained flat. However, margin pressures still remain a worry for the store’s investors, with Morrisons saying again on Thursday that it would be taking further measures to “improve competitiveness”.
Shares in Morrison Supermarkets (LON:MRW) are currently up 2.65 percent at 251.90 (0844GMT).