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magazineBooHoo, JD Sports, Flybe and other recent news
Festive updates from the retail sector continued to trickle in with JD Sports Fashion (JD.) and BooHoo (BOO:AIM) joining the list of Christmas winners in the sector.
The update from JD on 14 January didn’t break out the Christmas period but said like-for-like growth remained ‘consistently positive’ over both Christmas and Black Friday in the context of a 5% increase in like-for-like sales in the 48-week period to 5 January as a whole.
The company also managed to maintain gross margins year-on-year, suggesting it was able to avoid heavy discounting to sustain this strong sales performance. Investors reacted very positively to the announcement.
Online ‘fast’ fashion specialist BooHoo (BOO:AIM) also managed a strong showing on sales growth and profitability on 15 January.
Its shares fell though as the market seemed to focus on a slight trim to the upper end of margin guidance and a worse than expected performance from some of its brands.
Faring badly was car parts-to-cycling retailer Halfords (HFD) which blamed the weather and a weak consumer backdrop while warning profit would fall short of expectations in both the current financial year to 30 March 2019 and the next year.
Revolution Bars (RBG:AIM) served up its own profit warning on 14 January thanks to a dreaded combination of falling sales and rising costs as well as a cautious outlook.
With the shares falling to an all-time low below 100p, the decision by shareholders to reject a recommended offer from Stonegate Pub Company at 203p per share in 2017 is cast in an unfavourable light.
Shareholders in regional airline Flybe (FLYB) received a nasty shock on 11 January as it agreed a £2.2m / 1p per share takeover bid from a consortium which includes Virgin Atlantic and Southend Airport-owner Stobart (STOB). This deal was sweetened slightly on 15 January with a £2.8m revised offer.
The fact these offers came in so far below the company’s market value pre-bid, when it had traded at more than 16p per share, and that £10m of a £20m bridge loan is having to be released immediately to support ongoing operations, shows the dire financial circumstances the business was in.
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