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Broker tips: Pearson, French Connection, Reckitt Benckiser

Fri, 24th Apr 2015 17:44

Publishing and education group Pearson has been downgraded by broker Numis on valuation grounds, despite a first-quarter statement that was in line with forecasts.The broker noted no surprises in the trading update, which is a "very small" quarter in the context of the strongly second-half-weighted year, with management also confirming full-year guidance in spite of the 1% fall in underlying revenues."All in, no surprises and would not expect any major change to consensus on this statement, though clearly the strong US dollar is helpful for Pearson," analyst Gareth Davies wrote."Pearson shares have had a strong run in the first four months of this year, we feel are fully valued at current levels," he added.While making no change to his price target of 1,265p, the stock valuation means his recommendation moves to 'reduce' from 'hold'.Davies said he preferred others in the B2B space, namely publishers Informa and Daily Mail & General Trust together with exhibitions group ITE Group. Reckitt Benckiser Group rallied as the maker of Dettol handwash and Durex condoms reported a rise in first-quarter revenue that exceeded analysts' estimates, with broker Canaccord raising its target price by 100p.The group's first quarter rose 1% to £2.22bn in the first three months of 2015.Chief executive Rakesh Kapoor said the consumer health-brands division continued to deliver growth.With the health division was driven by an increase in cold and flu season, Cannccord Genuity said the results were "not to be sneezed at" ."The cost savings project, Supercharge, has begun successfully and should help to support the operating margin delivery."However, despite this broadly good performance, Canacord retained its 'sell' stance on the shares given the full year P/E ratio of 24 times and EV/EBITDA ratio of 18 times.The broker raised its target price to 4,600 to 4,500p.Numis put its recommendation on French Connection under review after the clothing retailer reported a tough first half trading and warned on flagged full year 2016 profits.The broker reduced its profit before tax forecast from £0.3m profit to an underlying loss of £3.5m.The company reported weak trading in the retail division indicated at March's results had continued through the Easter period, with first-half retail now expected to be materially below expectations.The store closure programme will therefore be accelerated, with six or seven outlets to be closed during the full year.On the upside, wholesale revenues were higher year-on-year, in line with expectations, and licensing continuesto perform strongly.The PBT forecast was downgraded using the assumption that the negative trend in retail LFLs seen in quarter-four has broadly continued through the first half, with some adverse margin impact, excluding losses on store disposals and closures.Numis still expect the year-end balance sheet to be in net cash and the management to continue to implement its improvement strategy.
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2 Feb 2017 16:33

UPDATE 1-Sports Direct in talks to bid for Bob's, Eastern Mountain Sports -sources

(Adds details of French Connection stake purchase, background) By Jessica DiNapoli Feb 2 (Reuters) - Struggling British sportswear retailer Sports Direct is in talks to bid for Eastern Outfitters LLC, the parent of U.S. discount chain Bob's Stores and outdoor retailer Eastern Mountain

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2 Feb 2017 11:51

Sports Direct bags stake in French Connection

(ShareCast News) - Mike Ashley's Sports Direct International has snapped up an 11% stake in French Connection Group. The sporting good retailer took out a contract for difference over 10.7m shares, or 11.156%, of the fashion retailer's shares, it reported on Thursday just before noon. Ashley has a

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25 Oct 2016 05:41

PRESS: French Connection Founder Denies Bidder Interest - Reuters

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24 Oct 2016 16:51

UPDATE 4-French Connection chief says nothing behind report of possible bid interest

* Private equity, retail investors interested - Telegraph * Marks says "no comment as there's no story" * Company worth about 36 mln stg as of Monday's close * Shares rise as much as 20.6 pct (Adds Neuberger Berman declined to comment, share close, updates market value)

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24 Oct 2016 09:27

Retailer French Connection shares jump on M&A report

By Noor Zainab Hussain and Esha Vaish Oct 24 (Reuters) - Shares in fashion retailer French Connection Group Plc rose more than 20 percent on Monday after a media report said overseas investors were looking to buy the British firm that has posted four year of losses. The Telegraph repo

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23 Oct 2016 15:02

Sunday newspaper round-up: GDP, RBS, Anglo, William Hill, bank exit

(ShareCast News) - In the first official reading on how the whole UK economy has performed since the Brexit vote, the Office for National Statistics (ONS) is expected to say growth more than halved from 0.7% in the second quarter to 0.3% between July and September. According to economists polled by

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20 Sep 2016 16:13

UPDATE 2-French Connection investor urges retailer to step up turnaround plan

* Run of pretax losses continued in first half * Shares drop 9.4 percent; down 90 pct from 2004 highs * Activist investor calls for more store closures (Recasts, adds investor, analyst and COO comment, share price) By Rahul B Sept 20 (Reuters) - Activist investor Gatemor

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20 Sep 2016 06:30

UK retailer French Connection's H1 revenue falls 8.7 pct

Sept 20 (Reuters) - British fashion retailer French Connection Group Plc reported a 8.7 percent slide in first-half revenue as it shut more stores. The company reported a pretax loss of 7.9 million pounds ($10.29 million) for the six months ended July 31, unchanged from last year. Re

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28 Aug 2016 13:45

Sunday newspaper round-up: Sterling, PMIs, May's Brexit talks, GSK, Sports Direct

(ShareCast News) - Hedge funds and other speculators have cranked up bets against the pound to their highest-ever level as sterling rises close to a three-week high. Short positions on the pound worth $7.8bn (£5.9bn) were racked up last week - the largest ever, according to US data used by the Sunda

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1 Aug 2016 06:43

Monday newspaper round-up: Banks, BoE, Morrison's, BT

(ShareCast News) - Britain's top bank bosses believe an interest rate cut this week is not the best way to boost the economy, arguing instead for alternative options such as investment incentives. Markets are almost certain that the Bank of England will cut its base rate from 0.5pc to 0.25pc this Th

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5 May 2016 15:13

AGM, EGM Calendar - Week Ahead

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17 Mar 2016 10:55

UPDATE 2-New stores, fashions boost Ted Baker's profit

* Full-year pretax profit up 18.6 pct * Company opened stores in Azerbaijan, Mexico, Qatar * Initial reaction to spring/summer collections "positive" * Raises total dividend to 47.8 pence (Adds finance director comments, details, share price) By Aastha Agnihotri Ma

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15 Mar 2016 12:51

UPDATE 2-French Connection losses grow as spring fashions underwhelm

* FY 2015 underlying operating loss 4.7 mln stg * Co cites "poor performance" of spring, summer collections * Co brings back FCUK logo, makes two appointments * Shares slump as much as 11.7 pct (Adds details, comments, updates share price) By Aastha Agnihotri March

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15 Mar 2016 09:47

French Connection full year loss widens

(ShareCast News) - Full year operating losses at retailer French Connection widened on the back of a disappointing trading performance in the first half of the year as the spring collection failed to impress. For the year ended 31 January 2016, the underlying operating loss came in at £4.7m compared

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15 Mar 2016 08:43

French Connection Loss Widens; Poaches Finance Director From ASOS

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