Halfords cuts profit forecasts as customers in need delay tire replacements
THE wheels arrived today from Halfords – one of three companies to disappoint with a profit warning.
The bike and garage chain lost more than a quarter of its value after shocking the city, while Cillit Bang-maker Reckitt and asset manager ST James’s Place suffered slumps.
Halfords’ valuation was cut to £322m after the company said the cost of living crisis was putting drivers off replacing tires or servicing their cars.
Tight budgets have also seen bicycle sales fall by 8 per cent, with more people buying on installments, weakening Halfords’ profit margins.
The company now expects profits to be between £35 million and £40 million, rather than the expected £48 million to £53 million.
Last year it rejected a £1.4bn merger proposal from van leasing company Redde Northgate, but its valuation could lead to a new approach.
Elsewhere, shares flopped almost 10 percent for Durex and Dettol’s maker Reckitt after results fell short of expectations.
Analysts had hoped the FTSE 100 company would see another rise in sales, but reported a 1.2 per cent decline as consumers switched to its own supermarket brands.
Reckitt also revealed its annual turnover hit £55 million as its Middle East staff failed to report liabilities.
RBC analysts said the blow meant Reckitt’s results were “really dismal rather than just bad”.
And almost £1 billion was wiped from St James’s Place after it set aside £426 million to settle claims it had overcharged customers for advice.
The asset manager’s shares tumbled by as much as 30 percent before falling 115.20p (18.5%) to 505.8p.
The company said it had to absorb the multi-million pound hit “for potential refunds to customers”.
In October it said it would review its fees after the regulator raised concerns. The company reported a loss of £9.9m and said it would cut dividend payments.
Boss Mark FitzPatrick admitted it was a “disappointing outcome for everyone”.
Analysts at Numis criticized the company for not addressing the issues “comprehensively” and said it was another “piecemeal warning” from the company.
THE HIGH RISE OF BITCOIN
Bitcoin’s rally continues as the world’s best-known cryptocurrency rose above $62,000 (£49,000) for the first time in two years.
The digital currency has risen in value by a fifth this week, fueled by the launch of exchange-traded funds. That has created a new group of buyers, as digital coins are now accessible to institutional investors.
The last time Bitcoin was this high, investors lost more than $2 trillion (£1.6 trillion) when the market crashed shortly afterwards.
JUST EAT’S BIG AD TAKE AWAY
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TAKEAWAY giant Just Eat is spending almost double its entire revenue on its massive marketing budget, according to the latest accounts.
The company, which launched a campaign last year with singer Christina Aguilera after previously using Katy Perry and Snoop Dogg, spent £503m on marketing costs last year, compared to adjusted profits of £277m. The company made an annual pre-tax loss of £1.7 billion.
UK profits increased fivefold to £115 million. Brits placed 246 million orders last year, down 6 percent on the year before, but with customers paying more for their takeaways.
NEW HOUSES CUT
BUILDER Taylor Wimpey has said it will build fewer homes this year, days after the competition watchdog said it was investigating eight housebuilders for conspiring to restrict supply and drive up prices.
The company said it would “fully cooperate.” Boss Jennie Daly has also called the planning regime ‘challenging’.
The company posted a 42 percent drop in profits to £473.8 million and completed a quarter fewer homes: 10,848.
But it said there were “signs of improvement”.
AN INSTANT SNUB-TO-BUY OFFER
INSURER Direct Line has become the latest British company to snub an opportunistic foreign suitor, rejecting a £3.1 billion bid.
The company, which also owns the Churchill brand, confirmed it had received an offer of 233p per share from Belgian rival Ageas.
Direct Line said it had rejected the “unattractive” and “highly opportunistic” proposal, claiming it had “significantly undervalued” the company.
Nevertheless, shares in Direct Line rose by the most ever yesterday, rising 39 cents, or 24 percent, to 202.7 cents.
The company is awaiting the arrival of new boss Adam Winslow next one month and said he was tasked with “renewing the company’s strategy and operational focus.”
Penny James was fired last year after cutting his dividend due to falling profits.
CLEAR LOSS NO5
Buy now, pay later company Klarna has posted its fifth annual loss in a row as the company prepares for a potential £15 billion listing in New York.
Klarna reported a loss of £190 million, an improvement on last year’s £800 million loss. Meanwhile, revenues rose by more than a fifth to £1.79 billion, with boss Sebastian Siemiatkowski saying the company continues “our journey to long-term profitability”.
Klarna has 150 million customers, but critics say it encourages users to buy things they can’t afford.
BRAKE ON ASTON EV
LUXURY Carmaker Aston Martin has said it will delay production of electric vehicles until 2026 as it focuses on its turnaround plan.
Britain increased production of electric and hybrid vehicles by 4.5 percent last month, but the majority was exported, the Society of Motor Manufacturers and Traders said.
British car production is running at full speed, with production up 21 percent from 82,997 cars in January, the trade body added.