The Chinese year of the rat has ended strongly for Rentokil Initial, which said in an unscheduled update that full-year results will beat previous targets.
Trading across both the pest control and hygiene categories has continued to be strong in the fourth quarter, primarily reflecting continued strong sales from one-off disinfection services, Rentokil said. It guided for adjusted profit before tax and amortisation, its preferred earnings measure, to be “slightly above the top end of the range of current market expectations”. The current market forecast is for a profit of between £292m and £337m.
Rentokil also said it had spent around £180m on acquisitions last year, well ahead of its versus previous guidance. On 2021 the company said: “We are looking to the future with confidence. However, while global vaccination programmes offer hope that we will see an end to the pandemic, the financial outlook for 2021 inevitably remains uncertain, in particular with limited visibility on the sustainability of one-off disinfection services, the recent strengthening of sterling, and the undetermined impacts arising from recently rising cases of Covid-19 globally and new and prolonged country lockdowns.”
Barratt Developments said in a trading update that its performance for the fiscal first half ending December had been “excellent” and ahead of expectations. The housebuilder reported that more than 90 per cent of its plots had been forward-sold for this financial year with the average selling price rising 1.1 per cent to £283,000. Strong underlying demand had been supplemented by the stamp duty holiday, the wind-down of Help To Buy invectives and pent-up demand from the first UK lockdown, Barratt said.
Marks & Spencer reported a slump in clothing and homewares sales for its Christmas quarter. Revenue from its clothing and home division tumbled 25.1 per cent year on year in the 13 weeks to Boxing Day, which was a deterioration on the 21.3 per cent drop reported in the previous quarter. Store closures meant high street sales were down 46.5 per cent was partly offset by online sales growth of 47.5 per cent, while food sales grew 2.2% per cent.
Blackstone said it has formed a consortium with Bill Gates’ Cascade Investment fund buy Signature Aviation, the flight support and services group one-fifth owned by Cascade. Signature had said on Thursday that it had received a takeover approach from US private equity group Carlyle, raising the prospect of a bidding war with Blackstone. The company had last month revealed talks with Blackstone over a takeover valued at around £3bn.
Marston’s said it expects its pubs to remain closed for trading until March at the earliest, with some restrictions remaining thereafter. The company, which last month rescued Welsh chain SA Brain & Co from administration, reported revenue for the 12 weeks to January 2 of £54m. Cash burn of between £3m and £4m a week before scheduled securitised payments compared with £175m in available liquidity, Marston’s said.
Retailer Pets At Home said momentum has accelerated across its channels during the last calendar quarter of 2020, with "high-teens" like-for-like sales growth during December. While renewed Covid-related restrictions may constrain trade, underlying pre-tax profit for the fiscal year ending March will be at least £77m, ahead of previous guidance, the company said.
Newspaper publisher Reach said it expects underlying operating profit for 2020 to be ahead of market expectations, in the range of £130 to £135m. The group, whose titles include the Daily Mirror and Liverpool Echo, credited the performance to its digital business.
Clarkson, the shipping services group, said full year underlying profit for 2020 will be ahead of market expectations and in a range of between £42m to £45m.
Beyond the Square Mile
Boeing has agreed to pay $2.5bn to resolve a criminal charge of misleading federal aviation regulators assigned to adjudicate the safety of the 737 Max. The US Department of Justice said after the close of the market on Thursday that it had reached a deferred prosecution agreement with the Chicago aerospace manufacturer, the result of a criminal investigation into Boeing following two crashes in five months that killed a combined 346 people.
The world’s largest carmakers are facing a potentially crippling shortage of semiconductors, as chipmakers reserve supply for tech groups producing smartphones, tablets and gaming devices. According to industry insiders, some carmakers could see production reduced by 10-20 per cent a week from February if fears over shortages are realised. Separately, Hyundai Motor confirmed on Friday that it has held early stage talks with Apple about building an electric vehicle.
China’s government has told the country’s media to censor reporting on an antitrust probe into tech group Alibaba, according to people familiar with the matter. The company’s founder Jack Ma, one of China’s richest men, has not been seen in public since October.
Essential comment before you go
It’s often joked that there are only two certainties in life: death, and taxes. But over the past year FT Alphaville is pretty sure it has come across a third: RNSs from UK-listed Hipgnosis Songs Fund. The closed-end fund has raised £1.2bn and splashed it on around 60,000 songs from artists including Bob Dylan, Blondie and Neil Young.
Activist investment funds are said to be homing in on Britain to take advantage of its underperforming stock market and battered economy. Companies including St James’s Place and Countryside Properties have recently had to welcome pushy new shareholders. Who’s next? Here’s a list of possible candidates.
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