WINNERS & LOSERS SUMMARY: Ferguson Rises After Trian Acquires Stake

(Alliance News) - The following stocks are the leading risers and fallers within the main London ...

Alliance News 13 June, 2019 | 10:43AM
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(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Thursday.
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FTSE 100 - WINNERS
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Ferguson, up 6.0%. Funds managed by Trian Investors Management have taken a stake worth GBP736 million in the plumbing and heating products supplier. The US activist investor said it has acquired a 6.0% stake in Ferguson, saying: "Trian believes Ferguson is an attractive business that trades at a discount to comparable US peers." Trian could increase or decrease its investment over time, it said. On Monday, Ferguson reported a 6.2% rise in revenue for its third quarter ended April to USD5.27 billion, with organic growth 2.3%. Trading profit was up 2.3% to USD359 million. The company also started a USD500 million buyback programme, to take place over the next 12 months.
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WM Morrison Supermarkets, up 1.3%. The UK supermarket chain said it has expanded its same-day delivery service with e-commerce giant Amazon.com to more UK cities. The "Morrisons at Amazon" delivery service is currently available to Amazon Prime Now customers in four cities: Leeds, Manchester, Birmingham, and parts of London and the home counties. Under the agreement, Morrisons products shopped online are picked up at a local Morrisons store and delivered by Amazon. Morrisons said the same day delivery service will now be rolled out to other UK cities, including Glasgow, Newcastle, Liverpool, Sheffield, and Portsmouth. The expanded agreement between the grocer and Amazon comes after Morrison in May tweaked an exclusive online delivery service agreement with Ocado Group to allow the online grocer to recover from disruption caused by a fire at its Andover facility in February. Under the amended agreement, the companies agreed Ocado will no longer be Morrisons' exclusive digital partner, enabling Morrisons to ink further online deals. Ocado was up 0.3%.
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FTSE 100 - LOSERS
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Persimmon, down 4.6%, WPP, down 3.4%, 3i Group, down 2.7%, Severn Trent, down 2.2%. The stocks went ex-dividend, meaning new buyers no longer qualify for the latest dividend payout.
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Marks & Spencer, down 2.2% at 214 pence. The food, clothing and homewares retailer said its 1-for-5 rights issue received acceptances of 85%. The rights issue was announced in late May, with M&S seeking to raise GBP601.3 million, issuing 325 million new shares at 185 pence each. This was a 32% discount the its closing price the day prior to the announcement. The fundraising was launched to finance the creation of a 50/50 joint venture with Ocado, announced in February, that will give the high street stalwart a home delivery service for the first time. Of the 325 million shares offered, M&S has got acceptances for 276.7 million, or 85%.
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FTSE 250 - WINNERS
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Just Group, up 15%. The retirement products specialist said it remains focused on delivering capital self sufficiency by 2022 and will target further cost reductions to achieve this. In its annual general meeting statement, Just Group said loss making activities such as the US care business and UK income drawdown have been rationalised and there is scope for further cost reductions. It also said it is adapting its intellectual property led business model in light of regulatory changes and to deliver a business which is performing well commercially and operationally.
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FTSE 250 - LOSERS
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PZ Cussons, down 3.5%. The personal care products maker announced the immediate departure of Chief Financial Officer Brandon Leigh, while also reiterating annual guidance. PZ Cussons, which makes Imperial Leather soap, did not say why Leigh has decided to leave after 13 years on the board as CFO. Commercial Finance Director Alan Bergin will take on the CFO role on an interim basis until a new permanent successor is found. PZ Cussons also reiterated profit expectations for its year ending May 31, with adjusted pretax profit still set to be "close" to GBP70 million, as guided in April and in January. This would be a 13% decline from the GBP80.1 million recorded in its previous financial year.
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Pets at Home, down 3.5%. The stock went ex-dividend.
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OTHER MAIN MARKET AND AIM - WINNERS
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Record, up 14%. The currency manager increased its annual special payout by 38%, it said Wednesday, after solid revenue and profit growth. Record will be returning a 0.69 pence per share special dividend for the year to March 31, up from 0.50p a year prior. This is on top of a final dividend of 1.15p, which brought the total regular dividend is 2.30p, flat on the previous year. The two combined together mean the overall return has risen 7% year-on-year to 2.99p. Record's pretax profit for the year increased 9% to GBP8.0 million, as revenue climbed 5% to GBP25.0 million. Assets under management equivalents fell 8% to USD57.3 billion. Political and economic uncertainty continued to affect financial markets during the period, Record said, but the company did well nonetheless.
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OTHER MAIN MARKET AND AIM - LOSERS
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Majestic Wine, down 7.5%. The wine retailer swung to a annual loss on increased investment in its Naked Wines online business, weaker Retail trading, and a large impairment. The company also made board changes and said it is in advanced discussions over the possible sale of its high-street store business, Majestic Retail & Commercial. Sale talks are expected to be finalised in the summer.
For the financial year ended April 1, the retailer recorded a pretax loss of GBP8.5 million compared with a GBP8.3 million profit the year before, on revenue of GBP506.1 million and GBP476.1 million, respectively. The company recorded a non-cash impairment charge relating to the Retail store estate of GBP11.1million in the period. Naked Wines, to which the company intends to shift its focus, delivered underlying sales growth of 15% in the year. The company plans to increase its investment in Naked Wines by further GBP7 million in 2020 financial. Majestic Wine suspended its final dividend, having paid out 5.2p the year prior, but said it will replace this with a special dividend equal to last year's payout if the sale of Majestic goes through. Separately, the company said Greg Hodder will step down as chair as the conclusion of August's annual general meeting, to be replaced by John Walden.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
3i Ord 1,045.00 GBX 1.75
Ferguson PLC 5,612.00 GBX 0.65
Majestic Wine PLC 268.00 GBX -2.55 -
Just Group PLC 56.45 GBX 6.51 -
Record PLC 33.75 GBX -1.17 -
Pets at Home Group PLC 182.00 GBX 3.12 -
Morrison (Wm) Supermarkets PLC 199.25 GBX 1.22
Persimmon PLC 1,944.50 GBX 0.41 -
Severn Trent PLC 2,102.00 GBX 2.19 -
PZ Cussons PLC 218.00 GBX 3.32 -
Marks & Spencer Group PLC 222.20 GBX 1.60 -
WPP PLC 987.00 GBX 1.36
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