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- 🥾 Dr Martens shares get the boot
🥾 Dr Martens shares get the boot
PLUS: there’s a potential £1bn deal for the UK’s largest independent TV producer and mortgage lending fell off a cliff in April amid rising interest rates.
Good morning. In today’s update - Dr Martens shares slumped after reporting a fall in profits, there’s a potential £1bn deal for the UK’s largest independent TV producer and mortgage lending fell off a cliff in April amid rising interest rates.
Markets
UK stocks rebounded on Thursday following a downbeat start to the week, led higher by gains for the mining sector and news that the debt ceiling deal had been passed in Congress.
Fresnillo (+4.5%), Anglo American (+3.4%), Antofagasta (+3.2%) and Rio Tinto (+2.2%) all finished well ahead.
B&M (+3.8%) continued its surge following yesterday’s upbeat results, buoyed by broker upgrades.
Corporate News
Dr Martens shares slumped 11.7% on Thursday as the bootmaker announced “operational mistakes” in the US had taken a chunk out of margins; profit before tax dropped 30% to £129m for the year to March, with the company warning margins would take a further hit over the next year. (Link, Dr Martens)
A mixed set of results for Auto Trader - revenue beat expectations, growing 16% to £500m driven by price increases and the adoption of more premium products; on the downside, operating profit fell 9% to £278m due to increased costs relating to the acquisition of Autorama - the car leasing platform bought in 2022. Shares dropped 3.4% on the day. (Link, Auto)
FTSE 250 water company Pennon saw a dramatic reduction in earnings for the year to March, due to “extreme” weather patterns and inflationary cost pressures; the company saw a loss before tax of £17m, down from a £128m profit the year before. Pennon also said it would be investing £750m over the next two years to improve its environmental performance. (Link, Pennon)
Toys ‘R’ Us is preparing for a return to the high street in partnership with WH Smith; following the launch of its eCommerce site last year, the toy store is ready to launch concessions in a number of high street stores. (Link)
Deals
Warner Bros. Discovery and Liberty Global are considering a sale of jointly-owned All3Media, producer of ‘The Tourist’ and the UK’s largest independent TV production company; should a sale go ahead, the asset is expected to fetch upwards of £1bn, with companies such as ITV and Banijay suggested to be interested, along with private equity firms. (Link)
Rhubarb Hospitality Collection - a luxury British caterer feeding events such as Royal Ascot and the Royal Albert Hall - has been acquired by Silver Lake-backed Oak View Group for at least £100m; the US-based entertainment group plan to use Rhubarb to cater for its stadiums and venues, whilst also building out third party contracts. (FT)
Both Natwest and Ireland’s finance ministry agreed to sell 3% each (around €70m) of Permanent TSB via an accelerated bookbuild; Natwest became a large shareholder in the Irish bank in 2021, as part of a disposal of assets from its Irish arm to Permanent TSB. (Link)
In today’s VC update:
Economy / General
Official Bank of England figures showed mortgage lending dropped off a cliff in April, with consumers paying back £1.4bn more than was borrowed across the month - the lowest on record; mortgage approvals also fell - from 51.5k in March to 48.7k in April, reflecting the effects of interest rate hikes. (Link, BoE)
Nationwide’s house price index showed a further fall in May, dropping 3.4% year-over-year compared to April’s 2.7% decrease; the building society warned their outlook wasn’t much brighter - mortgage rates are expected to trend higher following the worse-than-expected inflation figures last week, putting further downward pressure on house prices. (Link)
UK manufacturing activity slowed for the third month in a row during May, as a result of weakening demand from Europe and the US; the manufacturing PMI recorded a reading of 47.1, down from 47.8 in April (below 50 signals contraction). (Link)
🌎 Global Snapshot
Microsoft signed a multi-billion dollar deal with CoreWeave, a cloud computing company backed by Nvidia - the agreement grants Microsoft access to CoreWeave's cloud computing infrastructure, ensuring that OpenAI has sufficient computing power to meet growing demand. (Link)
Despite posting record operating profits over the last year (€430m), Remy Cointreau shares gave up early gains and ended down 5%, as the French spirits company forecasted flat sales for the next near amid weakening demand in the US. (Link, Remy)
Australian mining giant BHP came under fire after admitting it had underpaid its employees for over a decade, forcing it to cough up $430m in back pay; the fiasco relates to the company mistakenly deducting annual leave on public holidays. (Link)
Laptop maker Dell beat first quarter estimates against a “challenging economic backdrop”, driven by cost-cutting measures and a solid supply chain performance; Q1 revenue came in at $20.9bn, compared to analyst forecasts of $20.3bn. (Link, Dell)
Airbnb is suing New York City over legislation it says would create a “de-facto” ban on short-term rentals in the city; the new law requires hosts to register with the mayor’s office, certifying that their homes comply with complex building, zoning and other codes. (Link)
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