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Electric vehicles drive rebound in car sales
The car market is roaring back to life as new registrations grew by 17% in March, while car dealership Lookers raised its full-year profit guidance on the back of strong Q1 figures.
Electric cars drove much of the growth, as registrations hit a record high.
Lookers, which has 150 dealerships in the UK and Ireland, has reaped some of the benefits of the market rebound. It said its profit for the year is now set to beat previous expectations. CEO Mark Raban noted that the dealership outperformed the market on EV sales, while used cars and after-sales services also performed well.
“Customers are interested in electric vehicles,” he said. “When customers get their hands on them they really really do love them.”
The group’s profit dipped slightly in 2022 as supply chain issues limited the availability of cars, though Raban said those issues eased as the year went on.
With £66 million in net cash, Raban said Lookers may turn to M&A in order to expand its electric car operations further.
Banks lead FTSE 100 higher, upgrade for Direct Line
The FTSE 100 index is 12.38 points higher at 7646.90, aided by progress in the banking sector after Barclays rose 2.7p to 149.2p and Lloyds Banking Group lifted 0.4p to 48.5p.
Yesterday’s surge in the gold price to over $2,000 an ounce helped Endeavour Mining to rise 30p to 2078p.
The precious metal today steadied at around $2,020 amid concern over the slowing of the US economy and signs that the Federal Reserve may be in a position to pause interest rate hikes.
RS Group, which used to be known as Electrocomponents, was at the top of the FTSE 100 fallers board as shares dropped 4% or 35.8p to 859.2p following the company’s end of year trading update.
The FTSE 250 index was 16.67 points lower at 18,798.37. Direct Line Insurance shares jumped 6% after analysts at Citigroup switched from a “sell” to “buy” recommendation, while Wood Group rose 4% or 7.4p to 207.4p after takeover suitor Apollo yesterday increased its proposed offer price to 240p a share.
Record first half for Topps Tiles
Topps Tiles has notched up record first half revenues, with sales at the retailer’s shops well ahead of pre-pandemic levels.
The UK’s largest tile retailer, which has 300 shops including around 50 in London, recorded revenues of £130.5 million for the six months to April 1, up 9.5%.
Trading benefited from the purchase of tiling supplies business Pro Tiler Tools last year and the launch of online-only Tile Warehouse.
The company added that sales per Topps Tiles branch were around 30% higher than in the year ending September 2019. Figures were boosted by transferring sales from closed stores as the chain rationalised its estate, as well as underlying sales growth.
The firm said whilst gross profit has been rising in recent years, gross margin percentage has trended down owing to factors such as cost inflation.
In the first half, gross margins were lower year on year, however margins improved over the course of the period.
Chief executive Rob Parker said: “The economic outlook remains uncertain but early signs of easing supply chain pressures, allied to the group’s strong balance sheet, world class customer service, specialist expertise and growth strategy give us confidence in our ability to drive value for all stakeholders over the medium term.”
De La Rue activist investor steps up pressure
Banknote printer De La Rue is facing another vote on the position of chairman Kevin Loosemore.
Crystal Amber, the company’s second largest shareholder, said it had sent a requisition notice requiring De La Rue to convene a general meeting. It wants Loosemore removed from his post, with automotive industry chief executive Pepyn Dinandt stepping in as chair.
The activist investor wrote to shareholders today telling them that the turnaround plan instigated by Loosemore and chief executive Clive Vacher in 2020 has failed. Since March 2021, De La Rue’s share price has fallen by 75%.
Loosemore was given the backing of shareholders in December, when De La Rue held a general meeting in response to pressure from Crystal Amber.
Franco Manca owner Fulham Shore to be snapped up by Japanese food company Toridoll in £93 million deal
Fulham Shore, the owner of the Franco Manca and The Real Greek restaurant brands is to be snapped up by Japanese food conglomerate Toridoll in a £93 million deal.
Fulham Shore board members have voted unanimously to approve the takeover and put it to a vote by shareholders, who will be offered 14p per share, a premium of 35% on yesterday’s closing share price.
Takaya Awata, President and CEO of TORIDOLL, said: ”Fulham Shore has two exciting and fast growing brands that are aligned with TORIDOLL’s slogan of “Filling Our Planet with Dining Experiences that will Move You”. We are confident that both have the potential for significant future growth, domestically and internationally.
“Together with the strength of these brands and our partnership with restaurant sector specialist fund Capdesia, we have the opportunity to leverage our combined expertise and significant resources to accelerate their growth even further. We look forward to working closely with Fulham Shore’s management and employees as we embark on the next stage of the company’s growth.”
Entain makes Brazilian push with media site acquisition
Ladbrokes owner Entain has bought football news site 365scores, in a deal that could be a key springboard for its operations in Brazil.
The deal extends Entain’s operations into the media space for the first time, but also offers it a local presence in Brazil, which could become a requirement when the country introduces new sports betting laws this year. Brazil is 365Scores’ top market according to Similarweb and the company has an office in São Paulo.
An Entain spokesperson said the betting group had no indication of whether the deal will have an impact on licensing.
Entain will pay £120 million up front, plus £8 million in contingent payments.
“The combination of 365scores’ deep expertise in data-driven sports media content alongside Entain’s global scale and market leading platform capabilities will provide customers with a broader offering of interactive content and experiences,” the Entain board said.
“The acquisition unlocks further growth opportunities and supports our global strategic ambitions.”
Services sector in focus, FTSE 100 seen flat
Stock markets fell yesterday after it emerged that the number of US job openings in February fell below 10 million for the first time since 2021, raising concerns about the world’s biggest economy.
The Dow Jones Industrial Average and the S&P 500 both closed down by around 0.6%, while the FTSE 100 index also surrendered earlier gains to finish in negative territory.
London’s top flight is expected to open broadly unchanged at 7638 this morning as attention turns to various PMI releases from Europe’s services sector.
The reading for the UK, which is due to be disclosed at 0930, is expected to show further expansion in activity.
Michael Hewson, chief market analyst at CMC Markets, said: “While manufacturing has been struggling, and is in large part contracting, services activity has been picking up across the board, whether it be in the US, Europe, or the UK.
“Energy prices have also been falling, notably petrol prices, as well as that of natural gas, consumers have had more disposable income than expected.
“This has had the effect of exerting upward pressure on services inflation which is prompting concerns over stickier than expected prices.”
Ofcom refers cloud market to CMA after probe
Ofcom is to refer the cloud market to the UK competition watchdog after uncovering what it called “concerning practices” by key market players during an investigation.
Ofcom said it was calling in the Competition and Markets Authority because it was “particularly concerned about the practices of Amazon and Microsoft because of their market position.”
Charging customers to leave the cloud, restrictions on interoperability between different providers and offering discounts to move all their cloud services to one provider were among the issues raised during the probe.
Ofcom director Fergal Farragher, said: “We’ve done a deep dive into the digital backbone of our economy, and uncovered some concerning practices, including by some of the biggest tech firms in the world.
“High barriers to switching are already harming competition in what is a fast-growing market. We think more in-depth scrutiny is needed, to make sure it’s working well for people and businesses who rely on these services.”
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