The cost of success is weighing on AO World, which cautioned of “significantly higher costs” as it builds out infrastructure to meet demand.
The online electricals retailer — one of the London market’s star performers last year with a gain of more than 300 per cent — said sales growth for the three months to December had accelerated, resulting in record peak trading through the Black Friday period and Christmas. Sales grew 67.2 per cent to £457.3m in the UK and by 77.4 per cent to €73.6m in Germany, it said.
However, as well as the cost of adding warehouse staff, vehicles and drivers, AO World said Covid-19 had resulted in some supply chain disruption and more cancellations of long term mobile and warranties contracts.
“Combining these three headwinds, we see a potential impact on consensus 2021 ebitda of £5-10m,” said Jefferies analyst Andrew Wade. “Despite the effects of scaling inefficiencies and one-off headwinds on 2021 profitability, we are confident that AO is doing the right thing by building its customer base where it can. With high customer repeat levels, we see this as a clear investment in building AO’s longer-term asset.”
Experian, the FTSE 100 listed credit checking agency, said trading last quarter was better than it expected. It reported organic revenue growth of 7 per cent and total revenue growth of 10 per cent at constant exchange rates for the three months ending December. For the current quarter, Experian said it expected organic revenue growth to slow to between 3 and 5 per cent due to a boom in mortgage-related checks in the corresponding period last year.
Superdry reported widening half-year losses and said trading remained too uncertain to give 2021 guidance. The fashion label posted a £10.6m loss for the six months ended October as revenue dropped 23.3 per cent. For the 11 weeks to January 9, Superdry said sales were down 27.2 per cent as growth from its online business failed to counter sharp drops in wholesale and store revenue.
Premier Foods posted 9 per cent sales growth for its fiscal third quarter to December and nudged earnings guidance higher as TV advertising of brands such as Sharwood’s and Bisto helped improve demand. “Looking to the remainder of the year, out of home eating is likely to remain heavily restricted and we therefore expect to see continued high levels of consumer demand for our products,” said Alex Whitehouse, Premier’s chief executive officer. “With more brand investment to come, we now expect trading profit to be in the range of £145m-£150m this year and net debt/ebitda to fall below 2.0 times by the year end.”
Kier, the construction services group, said in a trading update that half-year results would be slightly above the board’s expectations on new business wins and an improvement in site productivity. The company said it was making progress on the disposal of its housebuilding arm and was continuing to weigh up a potential equity raise.
Centamin, the Egyptian gold miner, said production from its flagship Sukari mine matched targets that were revised in October. The company reported annual production of 452,320 ounces and costs of $1,036 per ounce.
Gambling company 888 said it had extended a multiyear partnership with Caesars Interactive Entertainment to power the US casino group’s World Series of Poker online tables as it plans its entry into new regulated markets.
Hammerson, the shopping centre owner, said it had collected just 41 per cent of rents due in the first quarter. It described market conditions as “challenging” but said liquidity levels remained high following its sale of the Via Outlets joint venture in November for £829m.
Moonpig put a value on its planned LSE float of £1.2bn, with the greetings card printing service targeting a free float of at least 25 per cent of its issued share capital at admission.
Beyond the Square Mile
Birkenstock, the family-owned German company known for its sturdy sandals, is exploring a sale to private equity group CVC in a deal that may value it at more than €4bn including debt. Buyout group Permira and at least one other private equity group have also expressed interest in buying the company, which traces its roots to 1774.
Thyssenkrupp is considering a spin-off of its ailing steel business, sending the German group’s shares up more than 7 per cent on Monday. Potential mergers with Sweden’s SSAB and domestic rival Salzgitter have been mooted, though neither company has expressed an interest. UK industrial tycoon Sanjeev Gupta has launched a bid, which the company is assessing but workers’ representatives have objected to, fearing job losses. Thyssenkrupp said that independently developing the steel business, which lost almost €1bn last year, “remained an option”.
Public market investors are underestimating the speed and extent to which people will return to work in offices and head back to shopping malls as the pandemic subsides, Bruce Flatt, chief executive of Brookfield Asset Management, the Canadian investment giant, told the FT as he prepares to complete a $5.9bn deal to delist Brookfield’s property arm.
Essential comment before you go
After nine months of near-constant virtual meetings, I’m ready for something more entertaining than the standard gallery view.
Ofcom’s finding that BT has delivered years of poor value to some typically elderly and vulnerable customers has opened it up to a class-action lawsuit similar to the one currently being pursued against Mastercard.
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