BUSINESS LIVE: Bellway profits slump; Revolution Bars weighs options; Ocado customer numbers grow

Just before close, the FTSE 100 was 0.1% up at 7,925.57.

Meanwhile, the FTSE 250 was 0.64% higher at 19,738.25.

AJ Bell will cut dealing charges on its platform and increase the interest it pays on cash balances from April.

Customers will pay a £5 dealing charge for shares, ETFs, investment trusts, gilts and bonds from 1 April, instead of the current £9.95 charge.

Danish shipping giant Maersk has dropped Baltimore from all its services following Tuesday’s horror bridge collapse, which caused the company to suffer a three percent share drop.

Hours after the cargo ship struck Baltimore’s Francis Scott Key Bridge overnight, sparking massive rescue efforts, the company said it will stop servicing the Port of Baltimore ‘for the foreseeable future.’

The Financial Conduct Authority has warned social media influencers could be breaking the law if they promote unregulated financial products.

There is less than a fortnight to go before the end of the tax year and that means it’s time to sort your Isa, pension and finances before it’s too late.

With another tax raid on the way for investors on capital gains and dividends, this is one of the most important tax year ends in years.

The UK regions with the highest car insurance premiums for young drivers has been revealed in new data – and it unmasks the size of the London premium.

Young Londoners pay nearly £1,500 more for cover compared to young drivers in Northern Ireland, research from Quotezone shows.

London-listed gambling giants Flutter Entertainment and 888 Holdings saw core earnings supercharged by overseas expansion last year.

Paddy Power owner Flutter revealed its adjusted earnings before nasties jumped by 45.4 per cent to $1.87billion in 2023, while William Hill’s parent company saw a 41 per cent increase to £308.3million.

Asos sales dropped by nearly a fifth in its first half, as the struggling retailer ramped-up discounts in efforts to reduce stock levels.

The struggling online fashion retailer, which is clearing stock as it transitions to a new operating model from next year, saw revenues fall by around 18 per cent to in the six months to 3 March, worse than market forecasts of a 13.5 per cent drop.

(PA) – Wood Group has revealed plans to shave about $60million (£47.4million) off its yearly costs as part of an efficiency drive to boost profitability.

The Aberdeen-headquartered oil and gas engineering business said the “simplification programme” has allowed it to lift its profit outlook for the year.

The plans will involve reducing the number of roles in its central functions, which it said will put greater accountability on individual business units.

Sky News reported last week that about 200 roles could be cut. This represents a small proportion of the group’s roughly 35,000-strong global workforce.

Wood Group did not specify how many roles are likely to be affected.

The programme is also set to simplify the group’s ways of working, and save on IT and property costs.

The combined efficiencies are expected to generate annual savings of around $60million (£47.4million) from 2025, the group said.

Implementing the programme will lead to one-off costs of about $70million (£55.3million), which will mostly be felt during the first half of this financial year.

Pizza giant Papa Johns will shut 43 ‘underperforming’ restaurants across Britain after launching a review at the start of the year.

The company has not confirmed how many staff will be impacted by closures, but has said that all staff impacted by this decision have been informed.

As this article was written the week of Cheltenham Festival, a magnet for Irish racegoers, I looked at European Green Transition (EGT) in the same way one might the form and lineage of a fancied Gold Cup entrant.

EGT’s breeding could not be better. It is from the stable of Cathal Friel, the entrepreneur who helped build and sell Amryt Pharma for just shy of $1.5billion and who is performing the same magic with hVIVO and Poolbeg Pharma, two fast-growing healthcare plays.

Ocado Retail sales soared in the first quarter of 2024 as the Marks & Spencer joint venture enjoyed a jump in active customer numbers and weekly orders.

Revenues grew 10.6 per cent to more than £645million in the 13 weeks to 3 March, reflecting an 8.4 per cent annual jump in average weekly orders and active customer growth of 6.4 per cent to more than 1million.

Revolution Bars shares lost almost 40 per cent of their value this morning after the firm said it was considering strategic options on the back of continued weak trading performance.

The London-listed group, which owns the Peach Pubs and Revolucion de Cuba brands, told investors it is ‘actively exploring all strategic options’ to ‘improve…future prospects’ after a ‘period of external challenges’.

Fevertree Drinks faced a cocktail of cost pressures in 2023, but solid performance in the US helped annual profits meet market expectations.

The British tonic maker said that its adjusted core profit for the year to December 2023 was at £30.5million, just ahead of analyst forecasts of £30million.

The Co-operative Bank has said it plans to cut around 400 jobs, more than one in 10 of its workforce, as part of plans to slash costs.

The bank said that it was embarking on a consultation and restructure which will lead to a net reduction of 12% of its roles across the organisation.

The Government is no longer a ‘controlling shareholder’ in NatWest after its stake fell below 30 per cent for the first time.

It marks the latest landmark for the lender 16 years after it was rescued in a £46billion taxpayer bailout during the financial crisis.

Susannah Streeter head of money and markets, Hargreaves Lansdown:

‘The wait and see mood on the markets is continuing with recent exuberance fading, as investors look ahead to key consumer inflation data stateside, while they assess the implications of the latest ‘chip wars’ between the US and China.

‘Shares in a number of semi-conductor specialist Advanced Micro Devices and Intel slipped after Beijing signalled that foreign company chips would be phased out of government computers and services and replaced with home produced versions.

‘This latest chip skirmish isn’t not going to stop the AI juggernaut in its tracks, but it highlights one of the risks ahead for demand in the world’s second largest economy.

‘It’s likely two spheres of AI influence will eventually emerge, one initially much larger led by US tech giants but China will attempt to play catch up in the years to come and forge alliances and partnerships with its own technology.

‘The US is pedalling fast to create more supply chain independence with the proposal of up to $8.5 billion in direct funding through the CHIPS programme to advance Intel’s semi-conductor projects in Arizona, New Mexico, Ohio and Oregon. Tax credit initiatives spearheaded by the Biden administration is also aimed at ensuring US chip giants up production on American shores.

‘The FTSE 100 has gone further into reverse, a change from the exhilarating progress it made last week when it flirted with record highs. There are still hopes it will power up again given economic conditions appear more clement than just a few months ago.’

London stock indices have inched lower this morning, with the FTSE 100 dragged by mining gtocks, while mixed messages from US monetary policymakers raise concerns about the Federal Reserve’s interest rate outlook.

Fed officials said on Monday they still had faith that US inflation will ease, but also acknowledged an increased sense of caution around the debate, fuelling concerns over the interest rate outlook. S

Shares of Ocado Group are up 3.4 per cent after online supermarket Ocado Retail, a 50:50 joint venture between Ocado Group and Marks & Spencer, reported a 10.6 per cent increase in revenue in its latest quarter.

Online betting giant Flutter expects its core profit to jump by around 30 per cent this year, sending shares up 3 per cent.

Bootmaker Dr Martens’ shares have dropped 5.6 per cent to the bottom of the mid-cap index after Goldman Sachs downgraded the stock to ‘sell’ from ‘neutral’.

More than three in five people in the UK do not have any investments, according to new research from HSBC.

It said that only 38 per cent of adults invested some of their cash, with stocks and shares the most popular way to do it.

Tech giants are under pressure to block bank copycat websites amid a surge in fraud and theft.

The scam websites look like real bank operations and con victims into clicking on links and inputting log-in and passwords details.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown:

‘Fevertree served up a mixed set of full-year results to markets. Revenue fizzed 6% higher to £364.4mn as the group scored market share gains across all its major regions. In line with January’s trading update, cash profits came in at just £30.5mn. But that was still right at the bottom end of the group’s previous guidance range, which had already been lowered.

‘This was in large part due to its high exposure to elevated energy costs given that most of its sales are bottled in glass. Coupled with inflated freight costs, profitability really got squeezed. Trading in the UK has remained underwhelming. The region looks saturated with premium mixer, with Fevertree already dominating market share here, so growth’s unlikely to shoot the lights out.

‘This means the US will need to continue picking up the slack moving forward. The US is now Fevertree’s largest region by revenue, yet still offers exciting growth opportunities given the vast size of this market.

‘The balance sheet is in very good shape thanks to low debt levels. And after a one-off buyback of inventory in Australia, it looks like the worst of the operational challenges are now behind the group.

‘But this year’s profit targets look stretching, so Fevertree’s going to need to keep a tight grip on cost if it wants to nearly double its profit margins. And the sky-high valuation’s already pricing a lot of this in. Many investors will want to see more concrete signs that expansion in the US is boosting the bottom line before getting too excited about this mixer maker.’

Fevertree Drinks profits edged ahead of market expectations last year, thanks to a robust performance from its US market and increased regional production to offset inflationary pressures due to elevated glass-making costs.

The London-listed tonic maker, which sells most of its drink mixers in glass bottles, said on Tuesday its adjusted core profit was at about £30.5million in the 12 months to 31 December, narrowly beating forecasts of £30million.

‘2023 was a year when the Fever-Tree brand once again grew in breadth and depth, with market share gains across the globe. Perhaps the most significant milestone was establishing the US as our largest region, and with it, extending our market leadership position in both the US Tonic Water and Ginger Beer categories.

‘The G&T of course remains an integral growth driver for the Group but 2023 was a year where we saw a step change in our non-Tonic portfolio. Not only have our Gingers and Sodas continued to see strong growth but the last 12 months have seen the launch of our range of Cocktail Mixers alongside the roll out of our Adult Soft Drink range in the UK.

‘Taken alongside softening inflationary pressures, the operational efficiencies we are delivering means I am confident that we are entering 2024 in a very strong position from an operational perspective and have an excellent platform for strong profitable growth going forward.’

Scottish Mortgage Investment Trust (SMIT) was once the toast of the City but its fall from grace over the past two-and-a-half years has upset many retail as well as institutional investors.

Renowned for its stock picking under star investment manager James Anderson, who left in 2022 after 21 years at the helm, SMIT was the go to fund for UK investors wanting access to high growth global tech firms.

Asos sales slumped by 18 per cent in the first half, with the struggling online fashion retailer on track for a revenue contraction of up to 15 per cent this year as it attempts to revive its fortunes.

The group, which has struggled since the end of the pandemic, cast 2024 as a transition year, with the focus on speeding up processes, launching new collections and getting rid of a build up of excess stock.

It also repeated guidance that it would post positive adjusted core earnings (EBITDA), positive cash generation and would return inventory to pre-Covid levels.

‘I’m excited by the performance of our new collections, while we have also made great progress in monetising inventory that built up over the pandemic and in improving the core profitability of our operations,’ Boss Jose Antonio Ramos Calamonte said.

Anthony Codling, managing director at RBC Capital Markets:

‘Bellway delivered first half results in-line with our expectations. Looking forward the messaging is its tough out there, but getting better.

‘This year is likely to be the trough year in terms of volumes and profits for Bellway, with growth of both to returning in FY2025.

‘Bellway’s activity in the land market is increasing which suggests that it can see the light at the end of the tunnel, supporting the 2025 growth thesis.

‘As ever with Bellway, the wording of its outlook statement is restrained, but we note that Bellway has a track record of under promising and over delivering. We expect the Group to quietly get on with the business of building homes and delivering value to shareholders.’

Unilever’s boss has signalled that Amsterdam is ahead of London in the race to win the stock market listing of its £15billion ice cream business.

Hein Schumacher, the Dutch chief executive of the consumer goods giant, said the Netherlands has ‘a good chance’ of hosting the division when it is spun-off.

His comments came a week after he pitched the two stock markets against each other with the announcement that Unilever will separate out its ice cream business behind household names such as Ben & Jerry’s and Magnum.

Ocado Retail revenues jumped 10.6 per cent in the most recent quarter, reflecting growth in customer numbers.

The business, a 50:50 joint venture between Ocado Group and Marks & Spencer, said on Tuesday retail revenue was £645.3million pounds in its first quarter to 3 March, as active customers rose 6.4 per cent to 1.02 million.

Volume, or total items sold, grew 8.1 per cent to 242.1 million, average orders per week were up 8.4 per cent to 414,000 and average basket value was up 2.1 per cent to £125.47.

‘Our strategy is resonating with customers and volume growth is building well,’ CEO Hannah Gibson said.

Ocado Retail stuck with guidance for full-year revenue growth in the ‘mid-high single digits’ percentage and an underlying earnings before nasties margin of about 2.5 per cent.

Revolution Bars Group could ask investors for more cash and is exploring the possibility of selling itself to a new owner, the firm told shareholders this morning

The London-listed bar company, which also owns Revolucion de Cuba, said it is exploring ‘all the strategic options available’ after what it called ‘a period of external challenges’.

Bosses said they are looking at ‘a restructuring plan for certain parts of the group, a sale of all or part of the group, and any other avenue to maximise returns for stakeholders’.

It said it is also talking to ‘key shareholders and other investors’, including Gail’s bakery chairman and entrepreneur Luke Johnson, about raising funds.

Revolution Bars added: ‘The company is not in talks with, nor in receipt of an approach from, any potential offeror relating to an acquisition of the issued and to-be-issued share capital of the company.’

Boeing has announced a clear-out of its leadership team as it grapples with a safety crisis that has left airlines furious and sent its share price plummeting.

Chief executive Dave Calhoun will step down by the end of the year with chairman Larry Kellner and commercial aircraft boss Stan Deal also bailing out.

Bellway profits slumped by almost 60 per cent year-on-year in the first half but the housebuilder has flagged an improvement in demand, fuelling hopes of improvement in the UK property sector.

The British housing market has seen signs of stability at the start of 2024 on easing mortgage rates after battling subdued demand for most of last year, but the delay by the Bank of England in lowering interest rates and incessant macro-economic concerns have tempered hopes of a better-paced recovery.

Bellway’s private reservation rate jumped 20.7 per cent to 163 per week in the six weeks since 1 February, compared with the same period a year earlier.

‘Although the economic backdrop remains uncertain, the gradual reduction in mortgage interest rates throughout the first half has helped to ease affordability constraints … encouraged by the improvement in reservations since the start of the new calendar year,’ Bellway CEO Jason Honeyman said.