Shares in London gave up the ghost rapidly after a mildly positive start to the day as worries over the European banking sector, led by Deutsche Bank, continue to plague markets. Click here for The Trader Nicole Elliott's latest thoughts.
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Things are a little flat over at soft drinks maker AG Barr (BAG) this morning after like-for-like revenue dropped 2.8 per cent to £125.6m. What’s more, pre-tax profits were only ahead of the same period last year due to an exceptional £4.1m gain, largely due to the closure of its defined benefit pension scheme to future accruals.Management said the soft drinks market in the period was down 0.7 per cent in value and 0.4 per cent in volume, reflecting a deflationary market with increased promotional activity. The stills sector was buoyed by water but carbonate volumes were down 2.4 per cent and almost 1 per cent in price. The group said it thought the deflationary pressures dogging the market could turn into mild inflation next year. Operating margins did improve, however, thanks to a keen eye on costs. Sell.
The engines haven’t stalled at tour operator Thomas Cook (TCG) in spite of a sustained wave of terrorist-related attacks in 2016. Demand for Turkey has been weak but appetite for other destinations seems to be taking up the slack with group bookings up 8 per cent. Summer bookings closed out as expected - just 3 per cent below this time last year, according to the group’s full-year trading update, while winter bookings are in line with the prior year at 27 per cent sold. This has led management to leave adjusted operating profit guidance untouched. UK selling prices are down 5 per cent though, so there has had to be some encouragement. Sales in Northern Europe and Continental Europe are down 6 per cent and 9 per cent respectively. Elsewhere, its Thomas Cook China business has now launched, as has its hotel sourcing agreement with Webjet. Buy.
Shares in Alternative Networks (AN.) slumped 13 per cent after the managed IT services provider warned that adjusted cash profits for the year to 30 September would likely be lower than expected. Management expects less new business in the advanced solutions segment - which it attributes to referendum-related uncertainty - to fuel a fall in the division’s full-year, non-recurring revenues. Under review.
Legal & General (LGEN) has reported strong performance from its retirement products business where sales are on course to double this year compared with 2015. Sales have been bolstered by strong performances from its lifetime mortgages and bulk annuities businesses. We retain our buy rating.
GW Pharmaceuticals (GWP) shares have been boosted by news released yesterday of a second positive result in Phase III trials of its cannabis-based Epidiolex treatment for Lennox-Gastaut syndrome. Buy.
Investors are excited by news from Redx Pharmaceuticals (REDX) that it has confirmed the discovery of a number of compounds which could have the potential to create the first new class of antibiotics in 30 years. We reiterate our buy recommendation.
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Online fashion retailer Boohoo.com (BOO) has maintained its street cred where sales are concerned but it’s come ata price. The group registered revenue of £127m for the half-year - up 40 per cent on the prior comparable period. And encouragingly, more than a third of this now comes from overseas, which gives the company better geographic diversity. But gross margins dropped 480 basis points to 55.3 per cent because of “planned investment in price and promotions” - which means price cuts to you and I, as well as a drop in the margins on third party sales via other websites and to wholesalers. It feels like a race to the bottom, perhaps, as it happening in the grocery sector. But its 4.5m customer base is more than a quarter bigger than this time last year
Time Out (TMO), which listed its shares in June, reported a 13 per cent rise in constant-currency sales in the first half of 2016. The media and entertainment group’s digital revenues leapt a third as e-commerce, local business advertising and digital advertising sales all rose strongly, narrowing the group’s adjusted cash loss to £4.4m.
Digital marketing outfit XLMedia (XLM) grew sales by 39 per cent in the first half of 2016, driving adjusted cash profits up 37 per cent to $17.7m (£13.7m). Sales and profits rose across the group’s publishing, media and partner network segments, and management established a US subsidiary to deepen its foothold in the key US market.
Next Fifteen Communications (NFC) grew organic sales by 13 per cent in the first half of 2016, sending the digital marketing and public relations group’s adjusted operating profits up 54 per cent to £11.1m. One bright spot was the North American market, where organic sales rose 17 per cent. Management also announced the acquisition of Pinnacle, a technical content and digital marketing agency, for an initial £4.4m.
