FirstGroup takes a narrower road, Daily Mail’s advertising boost and De La Rue an analogue stock in a digital age

“Despite several stocks trading without the right to their dividends and continuing jitters over US and China trade relations the FTSE 100 managed to recover a bit of ground on Wednesday after a sharp sell-off,” says AJ Bell Investment Director Russ Mould.

“Luxury timepiece seller Watches of Switzerland makes its debut on the London market today and is off to a strong start. Longer-term investors will be hoping it can do rather better than recent high-profile IPO Aston Martin Lagonda."

FirstGroup

“Travel outfit FirstGroup has certainly crammed a lot into this set of results, with the strategic refresh announced alongside the numbers also testament to the power of activist investors.

“The company appears to be taking an increasingly narrow road in terms of its strategy. Bowing to pressure from activist and 10% shareholder Coast Capital the Greyhound bus operation will be sold, and the company also plans to spin off its UK bus operations.

“With its UK rail division running off track, it looks like its commitment to this area is wavering too. This leaves just US school buses and private transit operations in the States, suggesting FirstGroup believe the best businesses come in smaller packages.

“It remains to be seen if this will be enough to deflect calls from Coast Capital for a change in management.

“Chief executive Matthew Gregory could at least argue the case for more time, given he has only been in the driver’s seat since November 2018.”

Daily Mail & General Trust

“It feels like a tough market for advertising at present as Brexit uncertainty continues to stalk the UK economy.

“Hence everybody was expecting a pretty terrible set of figures today from publishing firm Daily Mail & General Trust.

“Little wonder the market is responding positively as first half numbers turn out to be somewhat better than feared, suggesting the strongest media brands can still attract advertising spend.

“The company has reported a better-than-expected showing from its consumer media division, with the Mail Online operation, in particular, turning in a solid performance.

“Circulation was down for its print publications following an increase in the cover price. However, in the longer-term this should help guard their brand value.

“The strong showing on the digital side will certainly please CEO Paul Zwillenberg whose background is rooted in digital media having headed up the media arm of multi-national consultancy outfit Boston Consulting Group.”

De La Rue

“Printing firm De La Rue is starting to feel like an analogue stock in a digital age. After all the company prints bank notes in an increasingly cashless world.

“Its other core activity printing passports is reliant on government contracts which can be lost, as was the case in the UK a year ago.

“An unpaid bill from the Venezuelan central bank is clearly entirely out of the company’s control given the turmoil in that country but that doesn’t mean an £18m writedown will sting any less.

“Chief executive Martin Sutherland is stepping down and the company is launching a strategic review of the business; his successor will not face an easy task.”

These articles are for information purposes only and are not a personal recommendation or advice.