Shares in London are struggling for momentum. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
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Charles Stanley (CAY) increased its funds under management and administration (FuMA) by 1.2 per cent in the three months to June, as a decent investment performance gain of £0.9bn offset net outflows of £0.6bn. The wealth manager has said that a focus on higher-margin discretionary services are paying off, with FuMA up 3.1 per cent here, and helping to push up group fee income by 7.7 per cent. Under review.
Citing a “difficult retail climate”, full-year results from Superdry (SDRY) indicate revenue remained flat at £872m for FY2019 with discounting and space growth in the first half offset by poor performance across all channels in the remainder of the year. On the back of declining store revenue and a cautious recovery plan, the group incurred non-cash onerous lease and impairment charges of £130m, impacting around half of the owned retail estate. This meant the group swung to a statutory pre-tax loss of £85.4m (versus a £65.3m profit in 2018). Although the group remains in a net cash position, this has more than halved to £36m whilst the final dividend has been slashed by almost 90 per cent. Under review.
Shares in PageGroup (PAGE) are down over 14 per cent this morning. This follows a second quarter trading update warning that challenging macroeconomic conditions will see 2019 operating profit towards the lower end of current market forecasts. Although gross profit increased by 7.4 per cent at constant currencies to £224.6m, the number of fee earners declined by 122. Contrasting strong growth in EMEA and the Americas (where gross profit increased by 9 per cent and 17.4 per cent respectively at constant currencies), the UK declined by 2.4 per cent in the face of ongoing Brexit uncertainty and Greater China fell by 1 per cent on the back of trade hostilities and social unrest in Hong Kong. Under review.
Central Asia Metals (CAML) has kept production steady at its Kounrad and Sasa operations in the first half of 2019, and is half way to guided zinc, lead and copper tonnage for the year. The company cut its dividend for the first time in five years in 2018 on the back of weaker base metal prices. Copper and zinc recovered from an end-of-2018 slump between February and April but prices are back around the lows of last year. As of June 30, CAML had $30m (£46m) in cash in the bank, compared to $39m at the end of 2018, and has knocked 12 per cent off its net debt in the same period, taking it down to $96m. Buy.
Dunelm (DNLM) reported a 15.4 per cent increase in like-for-like sales during it fourth quarter, benefitting from a weak comparator period last year and favourable weather this year. This growth was shares across both sales channels, with revenue from stores up 12.1 per cent and online revenue up 37 per cent. Total group sales have improved 4.8 per cent to £1.1bn over the year to June. Gross margin benefitted from a smaller proportion of sales from lower-margin Worldstore businesses, as well as better sourcing and a lower level of clearance, with a 240-basis point improvement at group level. Shares were up around 1 per cent in early trading. Buy.
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Alpha FX (AFX) reports a 60 per cent year-on-year increase in its top line in the six months to June, thanks to growth in the foreign exchange payments group’s core UK corporate market. A shift in London headquarters at the end of August – nominally to expand staff numbers – is set to increase costs in the second half of the year, though Alpha’s board still expects full year earnings to beat expectations.
MEIF 6 Fibre – a wholly-owned indirect subsidiary of Macquarie European Infrastructure Fund 6 SCSp – has upped its offer for KCOM (KCOM). It is now offering 109.5p per share, valuing KCOM at £571m in total. This represents a premium of 1p per share to rival bidder USS’s (Humber Bidco’s) updated offer, announced on Monday. Both bidders are partaking in a five-day auction process, finishing on Friday, which was announced by the Takeover Panel at the end of last week.
An AGM update from Biffa (BIFF) indicates that trading during the first quarter has been in line with expectations and the outlook for the year remains unchanged. The group continues to make progress with its growth strategy, recently completing the bolt-on acquisition of WasteCollection.com. Shares are up over 2 per cent.
JD Wetherspoon (JDW) reported a 6.7 per cent increase in like-for-like sales in the year-to-date, or 7.4 per cent total sales. The company has opened five new pubs and disposed of nine, and no further openings are planned before the end of the financial year on 28 July. Some of the pubs were disposed of below the value on the balance sheet, and so Wetherspoons expects to incur around £3m of exceptional, non-cash losses. Net debt at the end of the financial year is expected to be around £745m. Shares were up 3 per cent in early trading.
