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Edison

December 11, 2019

UK Sparks: Stagecoach Results Reflect Reduction in Business Scale

Public transport company Stagecoach has issued its interim results, reporting a decline in revenues to £800m from £1,010m in the previous year and adjusted earnings per share at 10.0p versus 12.9p. The company highlights the results reflect a reduction in scale of the group over the last eighteen months. That said, statutory earnings per share stood at 9.8 pence versus a loss of 5.5 pence in the last year. Stagecoach confirmed its full year expectations for earnings per share and maintained an interim dividend at 3.8 pence per share.

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Edison

December 10, 2019

UK Sparks: Ted Baker Chairman And CEO Exit Amid Third Profits Warning

Retailer Ted Baker has posted its third profit warning in a year and announced the departures of executive chairman David Bernstein and chief executive Lindsay Page. The group says full-year profits will be between £5m-£10 after trading in November and over the Black Friday weekend was below expectations with lower than anticipated margins. The announcement comes a week after the company warned of an £25m accounting error.

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Edison

December 9, 2019

UK Sparks: Naspers Ups Stakes in Just Eat Takeover Battle

The takeover battle for takeaway food platform Just Eat has taken another twist with South African technology investor Naspers lifting its cash offer to £5.1bn. The 740p-a-share offer, made through Naspers’ subsidiary Prosus, compares to the 710p bid it made in October, valuing the business at £4.9bn. Naspers says the new offer represents a 25.6% premium to Just Eat’s closing price the day before its October bid and a 24.6% premium to the recommended all-share offer from Dutch food delivery group Takeaway.com.

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Edison

December 6, 2019

UK Sparks: Phoenix To Buy ReAssure For £3.2bn

Phoenix Group Holdings has unveiled a £3.2bn takeover of rival closed life assurance and pension funds consolidator ReAssure Group from Swiss Re and Japan’s MS&AD Insurance Group. The deal creates Europe’s largest life and pensions consolidator with £329bn of assets under administration and 14.1 million policies. It will see Phoenix pay £1.2bn in cash and issue shares that will give the vendors a combined 28% stake in the enlarged group.

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Edison

December 4, 2019

UK Sparks: Rio Tinto Halts KwaZulu-Natal Production

Rio Tinto has moved to “curtail operations” at its 74%-owned Richards Bay Minerals heavy minerals sands joint venture in KwaZulu-Natal, South Africa after an escalation in violence in nearby communities. The company says there has been an increase in criminal activity towards employees, one of whom was shot and seriously injured.

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Edison

December 3, 2019

UK Sparks: Ferguson Profits Rise 4.8%

Plumbing and heating group Ferguson has issued first-quarter numbers showing underlying trading profits up 4.8% to $433m on revenues 5.3% higher at $5.2bn. The company says the demerger of Wolseley, its UK business, is on track to be completed next year. In the UK, trading profits fell by $3m to $15m on organic revenues down 4.2%. Group gross margins dropped slightly to 29.7% but the company says its full-year expectations remain unchanged.

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Edison

December 2, 2019

UK Sparks: Ted Baker Warns Of Inventory Overstatement

Fashion retailer Ted Baker has announced that it has discovered that the value of inventory held on its balance sheet has been overstated. Based on a preliminary analysis, the board estimates that there is an “impact on value” of between £20m-£25m. The company believes that any adjustment to inventory value will “have no cash impact and will relate to prior years”. City law firm Freshfields Bruckhaus Deringer has been appointed to undertake a comprehensive review. Ted Baker says that it will also be appointing independent accountants. The group has issued three profit warnings this year and seen the departure of founder and chief executive Ray Kelvin.

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Edison

November 29, 2019

UK Sparks: Ocado Signs Partnership Deal In Japan

Ocado Group has agreed a partnership deal with Japanese retailer Aeon, which is to use the company’s technology platform to develop an online grocery business in Japan. The deal sees Aeon join retailers including Marks & Spencer, Kroger, Groupe Casino and Coles Supermarkets, who have already signed technology partnerships with the company. It envisages sales capacity of around 600bn yen by 2030, growing to about 1 trillion yen by 2035.

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Edison

November 28, 2019

UK Sparks: Virgin Money Suspends Dividend As PPI Provisions Hit Results

Financial services company Virgin Money has issued its pro-forma full year results, revealing a £539m underlying profit before tax (compared with £581 last year) and a £194m statutory loss after tax (versus a £145m loss in the previous year). The decline resulted from an additional £385m PPI provision after the ‘unprecedented’ surge in PPI information requests and complaints in August as well as restructuring and acquisition-related costs. The company suspends dividend for the financial year 2019 but highlights the Board will reconsider dividend pay outs from financial year 2020.

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Edison

November 27, 2019

UK Sparks: Britvic Profits Hit By French Sale

Soft drinks group Britvic has announced a 25% fall in full-year pre-tax profits from £146m to £110m on revenues up from £1.5bn to £1.55bn. The reduction is due to a £31.2m impairment charge relating to the proposed sale of the company’s private label juice business in France, plus three manufacturing sites and the Fruité brand to bottler Refresco Group.

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Edison

November 25, 2019

UK Sparks: Just Eat Repeats Rejection of Prosus Offer

Just Eat has reiterated its rejection of the unsolicited 710p-per-share takeover offer from South African technology investor Prosus, saying it “significantly undervalues” the company, which remains committed to a recommended all-share combination with Takeaway.com. It says in a statement that the Prosus offer is 20% lower than its all-time high share price of 890 pence and 13% lower than 812p, its highest share price over the last six months. It also states that the Prosus offer represents a premium of just 12% to its share price before the Takeaway.com announcement.

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Edison

November 21, 2019

UK Sparks: Royal Mail Behind Schedule With Business Transformation

Postal service and courier company Royal Mail has reported a 5.1% growth in half year sales, driven by an increase in parcel revenues in the UK. This more than offset a decline in the letter business, where the forecast for the UK remains challenging. While the company highlights it is committed to investing £1.8 billion in the business transformation, it also underlines that it is behind schedule. Royal Mail has reaffirmed its full year guidance and declared an interim dividend of 7.5 pence per share compared to 8 pence last year.

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Edison

November 20, 2019

UK Sparks: Aviva Sells Hong Kong Venture In Shake-Up

Insurer Aviva has announced at a capital markets day that it is simplifying the group and selling its stake in Hong Kong business Blue to joint venture partner Hillhouse Capital. The company will be reorganised into five operating divisions: investments, savings and retirement, general insurance and UK, European and Asian life insurance. New chief executive Maurice Tulloch says he is “committed to running Aviva better”. He says: “We will be more commercially focused, manage costs rigorously and be more disciplined in how we invest.”

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Edison

November 18, 2019

UK Sparks: Sage Sells Payments Business For £232m

Accountancy software company Sage Group has agreed to sell its payments business to Elavon, a subsidiary of US Bancorp, for £232m. Sage Pay made operating profits of £15m on revenues of £41m in the year to the end of September 2018. Sage expects to report a statutory profit on the disposal of about £180m on completion, which is expected in the second quarter of the company’s financial year.

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Edison

November 15, 2019

UK Sparks: Labour Launches Plan To Nationalise Part Of BT Group

The Labour Party has launched plans to nationalise BT Group’s network arm Openreach plus parts of BT Technology, BT Enterprise and BT Consumer to create a government-owned network called British Broadband. The move would be funded from a new tax on multinational companies.

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Edison

November 14, 2019

UK Sparks: Burberry Profits Up 11% Despite Hong Kong Unrest

Fashion house Burberry has announced an 11% improvement in interim pre-tax profits to £193m on revenues 5% ahead at £1.28bn. Operating profits increased by 17% to £202m, thanks to strong demand for chief creative officer Riccardo Tisci’s collections, with new products now accounting for about 70% of the group’s mainline retail store offer. However, Burberry saw a “double-digit” drop in sales in Hong Kong, where it expects the current unrest to result in a further hit to margins. Chief executive Marco Gobbetti says the group is on track to deliver the first phase of its strategy, strengthening “momentum” around its brand and transforming its distribution.

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Edison

November 13, 2019

UK Sparks: British Land Losses Widen After Property Writedown

The British Land Company has widened its interim pre-tax losses from £42m to £440m, due to a £436m writedown on the value of its shopping centres, supermarkets and retail parks. Underlying pre-tax profits fell from £175m to £158m, while net asset value per share was 5.4% lower at 856p. Chief executive Chris Grigg expects the company’s markets to remain “uneven” and the retail sector to stay “challenging” but sees early signs that some liquidity may be returning to parts of the market. He says the group’s focus will remain on “thoughtfully progressing our strategy to reduce exposure”.

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Edison

November 12, 2019

UK Sparks: Vodafone Raises Earnings Guidance

Vodafone Group has trimmed its interim net loss from €7.8bn to €1.9bn and raised its earnings guidance for the full year. The group says the net loss for the six months was mainly due to the effect of an adverse legal judgment on its Indian operations. Vodafone now expects full-year adjusted earnings before interest, taxation, depreciation and amortisation of between €14.8bn-€15bn, up from its previous forecast of between €13.8bn-€14.2bn.

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Edison

November 11, 2019

UK Sparks: Greggs To Beat Estimates After Strong Sales Growth

Retail bakery chain Greggs says it expects to beat its previous estimate for full-year underlying pre-tax profits after increasing sales by 12.4% in the six weeks to November 9. The rise compares to an 8.5% advance in the same period of last year. Like-for-like sales in company-managed shops increased by 8.3% in the six weeks, against 4% growth last time. In the year to date, total sales have grown by 13.4%, while managed shop like-for-like sales are 8.3% ahead. The company says sales growth continues to be driven by increased customer visits and has been stronger than expected, given the figures achieved in the fourth quarter last year.

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Edison

November 8, 2019

UK Sparks: IAG Cuts Earnings Per Share Growth Expectations

British Airways’ owner International Consolidated Airlines Group (IAG) has announced at a capital markets day that it has cut its medium-term guidance for the financial years 2020-22, due to a planned reduction in capacity. The firm now anticipates average growth in earnings per share each year of 10% – down from its previous expectation of 12%. Available seat kilometres, a metric used in the aviation industry to measure capacity, are now expected to grow by 3.4% a year in the period, compared to the 6% previously projected for 2019-23. The group also now expects gross capital expenditure for 2020-22 to average €4.7bn a year, compared to an average of €2.6bn a year of net capital expenditure previously forecast for 2019-2023.

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Edison

November 7, 2019

UK Sparks: J Sainsbury’s Profits Tumble 92%

Pre-tax profits at supermarkets group J Sainsbury fell by 92% from £107m to £9m in the first half of its financial year, mainly due to a write-down in the value of its stores estate. Trading profits fell by 15% from £279m to £238m, due to the phasing of cost savings, higher marketing costs and tough weather comparatives with the same period of last year. Sales dropped by 0.2% to £16.8bn, while like-for-like sales fell by 1%. The group saw its attempt to take over rival Asda for £7.3bn blocked by regulators in April. It says its results in the second half will benefit from the annualisation of last year’s staff wage increase and a “normalisation” of marketing costs and weather comparatives.

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Edison

November 6, 2019

UK Sparks: M&S Profits Fall 17%

Marks & Spencer Group has declared that it is delivering “far-reaching change at pace,” despite interim underlying pre-tax profits falling by 17% to £177m on revenues down 2.1% at £4.86bn. The profits decline was due to weak clothing and home furnishing revenues, which were 7.8% lower and down 5.5% on a like-for-like basis.

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Edison

November 5, 2019

UK Sparks: ABF Profits Fall 8%

Associated British Foods has announced an 8% fall in full-year pre-tax profits to £1.17bn, despite revenues increasing by 2% to £15.8bn. The profits drop came after an exceptional charge of £79m for a writedown at Allied Bakeries and a group pensions charge. Operating profits were down 5% at £1.28bn, while adjusted pre-tax profits were up 2% at £1.4bn. The group’s grocery businesses, which include Twinings and Ryvita, grew profits by 13% to £380m, while Primark profits rose by 8% to £913m, despite a 2% decline in like-for-like sales mainly due to weak trading in Germany.

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Edison

November 1, 2019

UK Sparks: BHP To Invest $44m In Rebuilding Samarco

Mining company BHP Group is to invest $44m in restarting iron ore production at its Samarco Mineração joint venture with Brazilian mining group Vale in Minas Gerais, Brazil. The operation has been closed since a dam collapse in November 2015 that killed 19 people. The funding will enable the construction of a filtration plant over the next 12 months. Last week, Samarco won permission from the Brazilian government to resume operations at the Germano iron ore mine. BHP says the restart can take place once the filtration system is complete.

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Edison

October 31, 2019

UK Sparks: Lloyds Profits Hit By PPI Claims

Lloyds Banking Group saw third quarter pre-tax profits almost wiped out by a £1.8bn provision for payment protection insurance (PPI) mis-selling compensation. Pre-tax profits after the charge fell to £50m from £1.82bn in the same period of last year. Underlying profits in the first nine months of this year dropped from £6.3bn to £6bn.

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Edison

October 29, 2019

UK Sparks: BP Profits Hit By Hurricane Barry

BP has announced a fall in third quarter underlying replacement cost profits from $3.8bn to $2.3bn as lower oil prices and bad weather affected performance. Adjusted underlying production fell by 2.5% due to increased maintenance and the impact of Hurricane Barry in the Gulf of Mexico.

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Edison

October 28, 2019

UK Sparks: HSBC Warns Of Charges After 18% Profits Fall

HSBC Holdings has warned that it could take “significant charges” in the fourth quarter of this year and will miss its target of a return on tangible equity of more than 11% in 2020 after experiencing a “more challenging revenue environment”. The warning came as the bank announced an 18% fall in third-quarter pre-tax profits to $4.8bn after $606m of charges for “customer redress” and $120m of severance costs. Adjusted pre-tax profits were down 12% at $5.3bn on revenues 3% lower at $13.4bn.

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