After a turbulent few days, major indices in London are flat mid morning as traders sit on their hands ahead of the US jobs report out later today. Click here for The Trader Nicole Elliott's latest views on the global markets.
IC TIP UPDATES:
An internal stocking error hampered Christmas trading for Joules (JOUL), demand in the group’s online business grew 8 per cent in the 7 weeks to January 5, but issues with stock availability meant it was unable to convert this, so retail sales ended up being down 4.5 per cent against the prior year and management has warned full-year adjusted pre-tax profits would be significantly lower than expectations. Move to hold.
JD Sports Fashion (JD.) has released a positive, if brief, announcement on trading over the Christmas period. Management acknowledged the challenges in the UK market, but said the global business saw positive like-for-like trends. Adjusted pre-tax profits for the full year are expected to come in the top quartile of the market’s £403-433m pre-tax profit expectations. Buy.
Superdry (SDRY) has issued a profit warning, following “lower than expected” trading over the Christmas trading period. High levels of promotional activity have challenged the group’s efforts to move towards full-price sales. New lines have reportedly been well received, ut at present account for too little of the mix to offset the difficulty shifting older stock. The upshot is that the group now expects underlying pre-tax profits for the full-year to come in at between £0 and £10m, a far cry from broker Peel Hunt’s previous expectations of £18.9m. Sell.
Following a strong Christmas and New year travel period, Ryanair (RYA) has increased its full year after-tax profit guidance from €800-900m (£680-765m) to €950-1,050m. The airline saw higher than expected close-in bookings during the festive season at better than expected yields. Forward bookings for January to April are running 1 per cent ahead of the same period last year and the group believes this will result in better than expected average fares in the fourth quarter. Full year losses at subsidiary Laudamotion are expected to widen to €90m. Shares are up over 6 per cent.
Mondi (MNDI) has announced that chief executive Peter Oswald will be stepping down at the end of March. Chief financial officer Andrew King will take on the role on an interim basis until a successor is appointed. Shares are down 2 per cent. Buy.
Shares in Team 17 (TM17) are up by a tenth this morning after the game developer reported strong sales over the Christmas period, specifically in its games for the Nintendo Switch platform. As a result, the group said sales and adjusted cash profits for 2019 would come in ahead of market expectations. The group currently has eight games lined up for release in 2020, with more to be announced during the year. Buy.
KEY STORIES:
Great Portland Estates (GPOR) has exchanged contracts to sell 24/25 Britton Street, EC1 to an overseas investor for a headline sale price of £64.5m. That is equivalent to a net initial yield of 4.07 per cent, or a 6.2 per cent premium to September 2019 valuation.
In the six weeks after its creation on 14 November, Premier Miton (PMI) grew its assets under management by 3.6 per cent, to £11.6bn. But in total, the final quarter of 2019 saw a £222m net outflow, as investors exited legacy Premier Asset Management’s equity, multi-asset and fixed income funds.
A trading update from Abcam (ABC) indicates revenue from the first half of the year increased by 8.3 per cent on a constant current basis to £138.2m. The six months to 31 December saw catalogue revenue – which accounts for 95 per cent of sales – rise by 9.1 per cent at constant currencies, with all regions and product categories growing faster than estimated underlying market growth rates. While the gross margin is expected to remain stable, the adjusted operating profit margin will likely be towards the bottom end of its guided 25-28 per cent range. Shares are down 4 per cent.
Those hoping that a rival suitor would emerge to spark a bidding war over Consort Medical (CSRT) have been disappointed. The first closing date has now passed with only 24.2 per cent of shareholders choosing to accept Recipharm’s 1,010p all-cash offer. The deadline for acceptances has been extended to 23 January and RBC Capital Markets expects the deal will be completed at this price.
