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(Alliance News) - Clothing, homewares and food retailer Marks & Spencer on Wednesday reported a fall in revenue and swing to loss for its recently ended financial year, but hailed its transformation in the period.
Revenue fell by 10% to GBP9.16 billion in the year to April 3 from GBP10.18 billion, with M&S swinging to a pretax loss of GBP209.4 million from profit of GBP67.2 million the year before.
"Our results for the year bear the impact of the pandemic spanning the beginning of the ï¬rst national lockdown through to near to the end of the third lockdown in the UK. However, they also reflect an acceleration of the transformation which enabled the business to deliver a resilient performance," the retailer said.
Trading in the first six weeks of the new financial year and since reopening has been ahead of the comparable period two years ago and its central case, M&S said. At this "early stage", the company expects to achieve profit before tax and adjusted items between GBP300 million and GBP350 million, which would be up sharply on GBP50.3 million reported for the recently ended year.
M&S said it received GBP306.1 million in UK government support during the pandemic, enabling it to maintain employment. M&S also noted that Ocado Retail, its new joint venture with online grocer Ocado Group, contributed GBP78.4 million in net profit in the recent year.
"With the right team in place to accelerate change in the trading businesses and build a trajectory for future growth, we now have a clear line of sight on the path to make M&S special again. The transformation has moved to the next phase," said Chief Executive Steve Rowe.
M&S shares were up 4.5% early Wednesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 7,040.37
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Hang Seng: up 0.9% at 29,171.04
Nikkei 225: closed up 0.3% at 28,642.19
DJIA: closed down 81.52 points, or 0.2%, at 34,312.46
S&P 500: closed down 8.92 points, or 0.2%, at 4,188.13
Nasdaq Composite: closed marginally lower, down 4.00 points at 13,657.17
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EUR: up at USD1.2245 (USD1.2236)
GBP: up at USD1.4155 (USD1.4128)
USD: down at JPY108.89 (JPY108.96)
Gold: up at USD1,905.00 per ounce (USD1,892.55)
Oil (Brent): up at USD68.82 a barrel (USD68.71)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
1030 EDT US EIA weekly petroleum status report
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The UK Treasury is planning rules that could block companies from listing on the London Stock Exchange on national security grounds, the Financial Times reported. UK Chancellor Rishi Sunak will launch a consultation on the proposal in the next two weeks, the FT said, citing the Treasury. The decision over whether a company can float in London is currently made by the UK Listing Authority, part of the Financial Conduct Authority. But Sunak wants ministers and officials on the National Security Council to be part of the process. Under the proposals, the government would have the power to prevent a listing if it would give a foreign state access to state or commercial secrets. Companies owned by people whose activities threaten UK interests could also be blocked.
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A GBP401 million funding boost will help rail services in the North of England and the Midlands become "faster, greener and more reliable", the UK government has said. The Department for Transport said GBP317 million would be invested in the Transpennine Route Upgrade to improve "punctuality, reliability and connectivity" for passengers travelling between York, Leeds and Manchester. A further GBP69 million of funding would go towards increasing freight capacity between the Port of Southampton and the Midlands. The DfT also announced that GBP15 million from the New Stations Fund would go towards the construction of new stations at Marsh Barton in Exeter and White Rose and Thorpe Park in Leeds.
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BROKER RATING CHANGES
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GOLDMAN SACHS RAISES CRODA TO 'BUY' ('SELL') - TARGET 8,000 (5,750) PENCE
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HSBC RAISES FLUTTER ENTERTAINMENT TO 'HOLD' (REDUCE) - PRICE TARGET 14,000 PENCE
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JEFFERIES RAISES CLOSE BROTHERS TO 'HOLD' ('UNDERPERFORM') - TARGET 1,500(1,020) PENCE
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COMPANIES - FTSE 100
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British Land reported a fall in portfolio value in a year when Covid-19 emptied office buildings. EPRA net tangible assets per share fell 16% to 648 pence at March 31 from 773p a year earlier, while portfolio value fell 11% to GBP9.13 billion. British Land's pretax loss for the year was GBP1.05 billion, narrowed slightly from GBP1.12 billion. "While Covid-19 has clearly impacted our performance, with the portfolio value down 10.8%, we have a strong balance sheet and have already delivered excellent progress against our four priorities," said Chief Executive Simon Carter. The company's dividend for the year totalled 15.04p, down 5.8% from 15.97p the year prior. Looking ahead, British Land noted that the UK's gradual exit from lockdown has strengthened economic confidence. It expects office rents to fall by up to 5% before recovering. It noted that retail occupational markets remain tough, and it expects rents to decline further, though it is seeing signs of stabilisation on some retail parks. The rebound in retail footfall has been encouraging, it added.
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St James's Place says gross inflows in the five months to the end of May are up 23% from a year ago. Strong new business activity in March has continued into the second quarter, the wealth manager said, saying it is "confident for another good year". St James's is holding a virtual capital markets day on Wednesday.
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FTSE Russell indicated that, ahead of next week's quarterly UK index review, Royal Mail could re-join the FTSE 100, replacing up-for-sale Renishaw. Based on data from Friday last week, FTSE Russell said that Royal Mail could rise back into the FTSE 100 index in the review to be unveiled after the market close next Wednesday. Royal Mail dropped out of the blue-chip index for a second time in December 2018, and has remained in the mid-cap FTSE 250 ever since. Meanwhile, Renishaw could drop out of the large-cap index. The engineering and scientific technology firm in March put itself up for sale.
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COMPANIES - FTSE 250
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Vectura said it has agreed to be taken over by Murano Bidco, a company controlled by funds managed by Carlyle Europe Partners V, in a deal worth GBP958 million. Vectura is a pharmaceuticals business based in Chippenham, England and focused on the development of inhaled products. Murano has offered 155 pence per Vectura share, comprising 136p in cash and a 19p Vectura dividend. This represents a 32% premium to Tuesday's ex-dividend closing price of 103p, and a 27% premium to Tuesday's actual closing price of 122p. "While the Vectura directors remain confident in the long-term fundamentals of the Vectura group, we believe that this is an attractive offer for Vectura shareholders, which secures the delivery of future value for Vectura shareholders in cash today," said Chair Bruno Angelici. Vectura also said revenue for the CDMO business in 2021 is expected to remain in line with previous guidance of more than tripling on 2020.
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Playtech said it has agreed to sell its financial trading division for up to USD210 million. This comprises an initial USD185 million, of which USD15 million is deferred for up to two years from completion, along with a further USD25 million contingent on meeting certain targets. The sale is being made to a consortium led by Barinboim Group and backed by Leumi Partners and Menora Mivtachim Insurance, together with "key members" of the division's management team. "Looking forward, Playtech will focus on its technology led offering in B2B and B2C gambling, driven by our online expertise and supported by a strong balance sheet. We have been building momentum in our business, as highlighted by our progress over the last twelve months in key markets such as the US, Latin America, and Europe," said Chief Executive Mor Weizer.
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A raft of recently listed stocks are set for entry into the mid-cap FTSE 250, according to preliminary indications, FTSE Russell said, including Auction Technology Group, Moonpig Group and Trustpilot. Also up for entry are Tyman and Volution Group. Poised to drop out the FTSE 250 are Foresight Solar Fund, JLEN Environmental Assets Group, Provident Financial, Sabre Insurance Group, and Wickes Group. DIY retailer Wickes was spun off from FTSE 250 constituent Travis Perkins last month.
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COMPANIES - MAIN MARKET AND AIM
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Spire Healthcare has agreed to a cash takeover offer from Ramsay Health Care. The offer of 240 pence per share is 24% above Spire's closing price on Tuesday of 193.00p. The offer values Spire's entire share capital at GBP999.6 million and gives the hospital operator an enterprise value, including debt, of GBP2.06 billion. Mediclinic International, a 29.9% shareholder, said it has agreed to the takeover offer for its holding. The offer values this at GBP287.8 million, it noted. Mediclinic said it has provided Ramsay with an irrevocable undertaking to vote in favour of the offer.
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COMPANIES - GLOBAL
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Volkswagen has affirmed plans to maintain ownership of its Lamborghini sports car brand after rumoured buyout interest, Bloomberg reported. Citing an earlier press report from magazine Autocar, Bloomberg noted VW received a EUR7.5 billion offer for the Lamborghini brand from Quantum Group. Bloomberg added that Zurich-based Quantum has formed a consortium with Centricus Asset Management, an investment company in London. A VW spokesperson told Bloomberg that its plan to keep hold of Lamborghini has not changed.
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Wednesday's Shareholder Meetings
Anglo Pacific Group PLC - AGM
Arbuthnot Banking Group PLC - AGM
Bango PLC - AGM
Coca-Cola European Partners PLC - AGM
Deltic Energy PLC - AGM
Equiniti Group PLC - AGM
eve Sleep PLC - AGM
Fundsmith Emerging Equities Trust PLC - AGM
Intertek Group PLC - AGM
JTC PLC - AGM
Judges Scientific PLC - AGM
Keywords Studios PLC - AGM
Life Settlement Assets PLC - GM re merger of A and B shares
M&G PLC - AGM
Playtech PLC - AGM
Rambler Metals & Mining PLC - AGM - vote on share consolidation
Sherborne Investors (Guernsey) B Ltd - AGM
Sherborne Investors (Guernsey) C Ltd - AGM
Zotefoams PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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