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British Gas owner Centrica adds £300m to share buyback plan amid nuke boost
FTSE 100 stalwart Centrica has bolstered its share buyback initiative with an extra £300m, taking the total shares repurchased over the past two years to a staggering £1.5bn. In a trading update today, British Gas's parent company signalled that it foresees its full-year earnings and net cash for 2024 mirroring market expectations, as reported by City AM. Analysts project an adjusted earnings per share of 18.5p for Centrica in 2024, alongside an anticipated net cash position of £2.6bn. "The usual uncertainties remain for the balance of the year, including weather, commodity prices and asset performance," the energy firm highlighted. Since commencing in November 2022, Centrica's ambitious share buyback plan is on track to acquire roughly 20% of its stock by September 2025. Just last week, the company announced the extension of the operational life for four of its nuclear reactors until March 2027 – a year longer than previously planned. Nuclear output in the United Kingdom has been incrementally rising throughout 2024, registering a 2% increase since the year's start, as per analysts from Jefferies. In another sector insight, domestic gas consumption in UK households was six per cent higher than the three-year average from September to November. Coinciding, electricity and gas prices have surged by 20-30%. These updates surrounding its nuclear ventures contributed to a 12.7% rise in Centrica's share price over the past month. Despite this jump, the company's shares are still trailing seven per cent behind since January started.
Poundland owner Pepco reports £458.7m loss amid declining UK sales
Pepco, the discount retail giant and owner of Poundland, has reported a loss exceeding £450m following a weak performance from its UK subsidiary, Poundland. The European group revealed a pre-tax loss of €554m (£458.7m) for the year ending 30 September 2024, a stark contrast to the profit of €159m (£131.6m) it made in the previous year. This loss was largely due to a non-cash impairment charge of €775m (£641.8m) booked for Poundland after a significant drop in performance. The UK brand's like-for-like sales fell by 3.6% over the year, and its profit outlook weakened amid rising competition and costs, as reported by City AM. Non-executive chairman Andy Bond expressed renewed confidence in the future, stating: "I am proud of the progress we have made over the last 12 months." He added: "We grew underlying EBITDA by a quarter to €944m across the group, ahead of expectations, with a strong recovery in gross margin of almost 400 basis points, driven by the performance of our core Pepco brand." He concluded by outlining the objectives achieved during the year, which included rebuilding Pepco’s profitability in its core Central and Eastern European (CEE) market, recovering gross margin, adopting a more disciplined approach to investment, reviewing underperforming areas of the business, and delivering stronger cash generation. "We have delivered on these objectives, but there remains more to achieve." "As a result of renewed confidence in our future, we are announcing an inaugural full year dividend for the Group." "I am pleased to have handed the reins of the business over to our new CEO, Stephan Borchert, effective 1 October, 2024." "Stephan brings a wealth of experience in retail businesses internationally alongside a strong track record of delivering results, and I look forward to working with him as he leads this business to future success." Despite the pre-tax loss, Pepco Group pointed to its record underlying EBITDA (earnings before interest, taxes, depreciation and amortisation) for the year which rose by 25.2 per cent to €944m. It also announced an inaugural full-year dividend "reflecting the group’s free cash generation, strong balance sheet and increasing confidence in its outlook". Chief executive Stephan Borchert added: "Pepco Group has very attractive, market-leading retail businesses, providing great product range, value and convenience to over 60m customers each month across Europe. ". "Within the group, I see the Pepco concept itself as our key engine for future strategic and financial growth, particularly in Pepco’s CEE heartland." "Pepco generates the vast majority of the group’s earnings and our highest returns on capital – we plan to further build on that strong base." "In the year ahead, our core focus at Pepco will be to deliver improved like-for-like revenues." "Pepco’s like-for-like performance has been positive since the start of September – an encouraging start." "At Poundland, recent performance has been very challenging, impacted by declines in clothing and general merchandise following the transition to Pepco-sourced product ranges at the start of the year." "We are taking swift action to get Poundland performance back on track, focusing on a return to Poundland’s strengths. " "We will also closely evaluate Poundland’s overall competitive positioning and requirements for future success as an FMCG-led format." "We will provide further updates on Poundland during the first half of 2025. " "I am excited to join Pepco Group at this important stage in its evolution toward a company focused on targeted new-store expansion, higher capital returns, and growing earnings and free cash flow."
Manchester Airport owner reports record passenger numbers - but warns of challenges ahead
Manchester Airports Group (MAG), which encompasses Manchester, London Stansted, and East Midlands airports, has flown to new heights with its pre-tax profit hitting £139.6m for the first half of their financial year ending on 30 September, 2024. This marks an increase from the previous £115.9m, buoyed by a 6.9% rise in traffic to 37.3m passengers, as reported by City AM. MAG's success story also includes its subsidiary travel services business CAVU contributing to a revenue surge to £768.5m from £705.6m. Notably, Manchester Airport celebrated a milestone, managing 17.8m passengers during this period and reaching an unprecedented annual total of 30 million travellers in September for the first time ever. In comparison to international counterparts such as La Guardia New York and Melbourne Airport Australia, Manchester Airport establishes its stature by entering their league. Meanwhile, London Stansted broke its own record for passenger numbers in a half-year with 16.7m visitors. MAG also witnessed its busiest day on record during October when it serviced 107,000 passengers within a single 24-hour timeframe. Additionally, East Midlands Airport saw a steady flow of 2.8m individuals over the six months. Despite facing increased taxes and operational costs, MAG CEO Ken O'Toole highlighted the group's achievement stating: "Across the summer, one in five UK air passengers chose to fly through a MAG airport for business, leisure, to study or visit friends and family." "This is testament to the strength of our route networks, our commitment to providing great choice and value to all our customers, and to always striving to deliver a positive passenger experience." "While our industry faces challenges both in the UK and globally, such as increasing taxation and rising costs linked to the push towards full decarbonisation of air travel, MAG’s strong financial and operational performance makes us well-placed to drive forward our investment programmes as we continue to grow."
Naked Wines slashes losses to £5.6m after 'solid' trading during peak period
The CEO of Naked Wines has stated that the company is "in a better position, both financially and strategically" after significantly reducing its losses in the first half of its financial year. The Norwich-based firm reported a pre-tax loss of £5.6m for the six months to 30 September, 2024, a decrease from the £9.7m loss it recorded for the same period in 2023, as reported by City AM. However, Naked Wines also saw its revenue drop from £132.3m to £112.3m. These half-year results follow the appointments of Rodrigo Maza as CEO in April and Dominic Neary as CFO in November. Maza commented: "Naked Wines is in a better position, both financially and strategically." "We now have robust financial foundations, and our members remain loyal and engaged." "Our strategic initiatives centred around customer acquisition and retention are generating learnings, and we are currently experiencing solid trading during the peak season period." "I am pleased to welcome Dominic as our new CFO. His experience in digital and international businesses have helped him quickly transition, and I look forward to working with him as we focus the business on cash, profitability and growth." Regarding its future prospects, Naked Wines noted that its early peak season trading has been "solid" and its liquidity and cash situation is "continuing to improve". It anticipates that its full-year performance will align with previous guidance. However, the company acknowledged that its US inventory, "whilst in line with previously communicated plans, remains overstocked". Naked Wines has stated it is "reviewing options" to free up capital from its inventory, a strategy aimed at enhancing cash flow over the next two years. However, this could lead to higher liquidation costs and potentially result in EBIT at the lower end of guidance.
Domino's Pizza says Budget will cost it £3m - and it's big news for 38,000 workers
Domino's Pizza has projected a £3m tax burden resulting from the recent Budget, as it sets its sights on an aggressive expansion strategy to open numerous new outlets across the UK, as reported by City AM. "As with other major employers in the UK, the recent UK budget has significantly increased the cost of labour for both Domino’s Pizza and our franchise partners, who are particularly impacted," the company disclosed in a stock exchange notice today. "Although we have identified specific mitigation plans, we now believe that the annual impact for Domino’s Pizza will be £3m per annum from full-year 2025 onwards." The pizza giant, which employs over 38,000 staff through its franchises, will feel the effects of October’s Budget that raised national insurance rates for employers. This announcement was part of a broader profitability and growth framework unveiled by the pizza franchiser, which includes plans to launch hundreds of new stores. Domino's is targeting at least 1,600 stores generating £2bn in sales by 2025, and aims for 2,000 stores with £2.5bn in sales by 2033. Presently, the firm operates more than 1,350 stores in the UK and Ireland. To reach these ambitious goals, Domino's intends to invest between £3m-£4m annually in marketing, digital enhancements, and incentives for opening new franchise stores. Additionally, the company has committed to spending £4m-£5m each year to ensure "the continued stability and innovation of our technology platform, strengthening our cyber security and the commencement of the process of increasing our supply chain capacity". Following the Budget and increased investment, Peel Hunt analysts have reduced profit before tax forecasts for the company by approximately 11 per cent. The company's share price dropped 3.3 per cent after the announcement and has fallen nearly nine per cent since the beginning of the year.
Boohoo shares rebound from historic low as battle over its future continues
Shares in the fast fashion giant Boohoo have rallied from a record low as the company faces another pivotal moment ahead of a decisive vote this festive season. The Manchester-based conglomerate, which owns brands such as Debenhams and PrettyLittleThing, experienced a drop in its share value in July from 35p to 27p. However, Boohoo's shares have since rebounded to their pre-slump levels amidst ongoing debates about its strategic direction and management. Despite the recovery, Boohoo's shares are still trading lower than the 41p mark they hit in January 2024, and far below the peak of 413p during the height of the Covid-19 pandemic, as reported by City AM. This morning's uptick occurred as a leading shareholder advisory firm, Institutional Shareholder Services (ISS), advised Boohoo investors to oppose Mike Ashley’s attempt to secure a board position at the emergency meeting scheduled for later this month. Boohoo confirmed that ISS had recommended a vote against the proposal on 20 December. The fashion retailer is currently locked in a dispute with businessman Mike Ashley’s Frasers Group, which holds a 27% stake in Boohoo. On Sunday, Ashley penned an open letter to shareholders criticising the company for what he described as an "egotistical founder who has an unhealthy grip on the board" and claimed the company was "in desperate need of the guidance I can provide". He also cautioned against a scenario where there is a "fire sale of assets at knockdown prices", including the Debenhams brand, which he argued should not be sold. Ashley expressed his intention to take on the role of Boohoo’s chief executive to aid the brand and "prevent any dishonest profiteering" off investors. In retort, Boohoo maintained that Ashley was acting in pursuit of his own commercial interests, not those of its shareholders. On Monday, Boohoo articulated in a release: "ISS states that Frasers has offered a superficial view of performance and no specific plans for change and the two Frasers candidates, Mike Ashley and Mike Lennon, have real conflicts of interest, concluding that board change at Boohoo Group is not warranted." Chairman Tim Morris endorsed the support from ISS, stating it aligns with the board's recommendation to dismiss the proposals from Frasers Group. Shareholders are set to cast their votes on Ashley’s bid for a board position at the company before Christmas. A representative for Frasers commented: "The ISS opinion pre-dates the statements from Mr Ashley yesterday." They added, "Mr Ashley set out clearly in his letter of 8 December his determination to work on behalf of all boohoo shareholders and support Dan Finley to deliver on the opportunities to turn around the fortunes of the group and restore shareholder value." "He has been very clear he would not want Debenhams sold or any fire sale of assets and has put on record his commitment to transparency and shareholder consultation, something badly missing under the current board." "To achieve this, boohoo shareholders must vote for the resolutions on 20 December." AJ Bell investment analyst Dan Coatsworth commented: "Boohoo says it is not deliberately seeking confrontation with Frasers, yet this is more than just a simple war of words." "Its battle against the Sports Direct retailer is being played out in the public domain for all to see." "Each week brings a new form of attack from one side or the other, the latest being Boohoo latching onto a recommendation from proxy adviser ISS to vote against Frasers’ quest to get Mike Ashley a seat on Boohoo’s board." "Recommendations from ISS or fellow proxy adviser Glass Lewis rarely form the backbone of an announcement to the stock market, but Boohoo has seized upon ISS’s latest recommendation to launch another attack on Frasers." "This follows comments at the weekend from Mike Ashley that Boohoo must avoid a ‘fire sale’ of assets." "The fate of Boohoo will be in the hands of its shareholders when they vote on 20 December." "At 35.88p, Boohoo’s share price is on its knees, trading at a fraction of the 400p+ level seen in 2020." "Long-suffering shareholders might welcome someone of Ashley’s calibre joining the board and offering a different viewpoint to revive the business." "Equally, some shareholders may not take kindly to his vulture-like tendencies and view a board appointment as a pre-cursor to Frasers muscling in and taking Boohoo out on the cheap."
Channel 5 loses £160m in major blow ahead of major rebrand
Channel 5 has maintained that its operating model remains stable despite revealing a loss of nearly £160m in 2023. The channel, which is set to rebrand as '5' in April 2025, attributed the loss to a £273m impairment in the value of its investment in Viacom Interactive, a subsidiary of parent company Paramount Global, and not to Channel 5’s trading business. This led to a pre-tax loss of £159.5m for 2023, following a pre-tax profit of £78.1m in 2022. Recently filed accounts with Companies House show a rise in turnover from £370m to £398m, boosted by a payment of £80.9m, plus £9.1m in interest, from Channel 5’s sales partner due to a correction in that firm’s internal reporting between 2017 and 2023, as reported by City AM. Excluding this payment, the channel’s turnover totalled £318m. The channel’s operating profit increased from £80.1m to £112.4m in the year. However, excluding the payment, its profit totalled £22.7m. The 2023 results were made public after being filed with Companies House on 6 December, past the 30 September deadline. A statement approved by the board said: "Despite the tough commercial environment, Channel 5’s portfolio – which includes 5STAR, 5USA, 5Select and 5ACTION – achieved a fifth consecutive year of share growth (five per cent), making it the only public service broadcaster (PSB) to increase its total share of the UK viewing audience." "In addition, Channel 5 was the only commercial PSB to increase its audience share in peak time (one per cent) as well as its share of ABC1 viewers in peak time (four per cent)." "For a fourth consecutive year, My5 achieved growth in its viewing, reflecting the success of the free streaming service and the appeal of Channel 5’s content to a streaming audience." On its future, the business added: "Looking ahead, the business continues to work to future proof its offering and enhance the experience for viewers, advertisers and content partners."
Train company says 'do not attempt to travel' as multiple lines closed
Train services in parts of England and Wales remain disrupted following Storm Darragh, with several lines closed due to fallen trees and debris. Great Western Railway said passengers should “not attempt to travel” between Swansea and Carmarthen until at least noon, or on the Looe, St Ives and Gunnislake branch lines in Cornwall until at least 11am. The Barnstaple and Okehampton branch lines in Devon are expected to be open by 8am following safety checks. Westbury and Chippenham stations in Wiltshire have reopened following storm damage, and services have resumed on the Falmouth branch line in Cornwall. Passengers who choose not to travel on Monday can claim a full refund on their ticket or travel on Tuesday. Damage caused by Storm Darragh means the railway line between Stafford and Stoke-on-Trent remains closed. This is affecting London Northwestern Railway services between Stafford and Crewe, and CrossCountry trains connecting Manchester Piccadilly with stations such as Paignton, Bournemouth, Southampton Central, Bristol Temple Meads and Birmingham New Street. London Northwestern Railway passengers can use rail replacement transport between Wolverhampton and Crewe. Affected CrossCountry services will be diverted via Crewe and will not call at Stoke-on-Trent or Macclesfield. Rail replacement transport is operating between Stafford and Stoke-on-Trent. Transport for Wales said all railway lines are blocked on 11 routes, such as between Swansea and Milford Haven, between Swansea and Shrewsbury, between Birmingham International and Shrewsbury, and between Chester and Holyhead. Following major disruption from Storm Darragh over the weekend, National Rail Enquiries warned “services may be busier than normal today and experience severe overcrowding”. West Midlands Railway is unable to operate on the line serving Bromsgrove, Redditch, Birmingham New Street and Lichfield Trent Valley because of damage to overhead electric wires. Passengers were warned to expect cancellations and delays to train services on the West Coast Main Line between London Euston and Scotland early on Monday. Network Rail said this is because it is completing repairs to overhead line equipment in Polesworth, Warwickshire. Services are being diverted via Birmingham while the work is taking place. Chris Baughan, Network Rail’s West Coast South route operations manager, said: “Storm Darragh has wreaked havoc on the railway this weekend and we are very sorry to passengers for the disruption to train services this morning on the West Coast Main Line as frontline teams continue with emergency repairs and the clean-up.