BUSINESS LIVE: Halfords costs warning; Serco ups guidance; WOSG hurt by UK price hikes

(PA) – Moonpig has seen yearly revenue leap by a 3rd as the net greeting playing cards enterprise cashed in on larger costs and half one million paying subscribers.

Shares within the London-listed firm had been up by a tenth on Thursday after it up to date traders on its funds.

It reported a revenue earlier than tax of £46.4million within the yr to the tip of April, up 33% from £34.9million the earlier yr.

Increased earnings got here off the again of gross sales totalling £341.1million, 6.6% larger than final yr.

Moonpig stated gross sales development was pushed by extra folks putting orders in addition to common promoting costs rising by 5%.

The retailer upped the costs of its playing cards throughout 2023, whereas stamp and transport costs for presents have additionally risen.

It has about 90 million reminders arrange for patrons, who’re alerted forward of birthdays and events like Mom’s Day and Valentine’s Day.

Currys introduced it might restart shareholder handouts within the coming 12 months after it rebounded to revenue final yr.

The excessive avenue retailer axed its last dividend in 2023 after reporting a £450million pre-tax loss it blamed on weak demand, cost-of-living pressures and ‘unforgiving competitors’.

Watches of Switzerland Group’s gross sales fell after ‘important value will increase’ delay hard-pressed British buyers as ‘diminished shopper confidence’ continues to hit discretionary spending

The luxurious retailer’s UK and Europe gross sales had been down 5 per cent within the 52 weeks ended 28 April to £846million, regardless of market share beneficial properties, which it stated mirrored ‘macroeconomic situations within the UK’.

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The boss of Royal Mail’s proprietor might rake in additional than £5million from the sale of the postal service to the ‘Czech Sphinx’.

Martin Seidenberg, the chief govt of Worldwide Distribution Providers (IDS), will get a payout attributable to his shareholding within the agency.

The discredited former boss of LV who tried to promote the British mutual insurer to a US buy-out agency has been ousted from his newest enterprise after an analogous plan to promote the enterprise was rejected by shareholders.

Mark Hartigan left LV in 2021 along with his repute in tatters after members voted in opposition to his scheme to promote the 181-year-old mutual to Bain Capital for £530million.

Serco has upgraded its annual steering following a strong efficiency over the primary six months of 2024.

Efficiency has been strengthened by Serco’s immigration providers contracts, which offset weak point in medicare providers because of sector takeovers.

Currys expects AI-powered devices to ship one other yr of revenue development after a ten% per cent rise in 2023-24 that mirrored a gentle enchancment in buying and selling.

The retailer, which sells fridges, washing machines, tumble driers, televisions, computer systems and different shopper electricals, stated buying and selling within the early a part of its new monetary yr had been in step with its expectations.

‘We’re planning prudently however confidently for the yr forward, on track to develop each earnings and cashflow whereas rigorously stepping again as much as extra regular funding ranges,’ CEO Alex Baldock stated.

Mark Crouch, analyst at eToro:

‘Halfords’ current run of poor efficiency appears to be like set to proceed because the bicycle and automotive merchandise retailer reported one other drop in annual revenue this morning. Halfords has struggled to realize any traction amidst a cost-of-living disaster that has decimated demand for discretionary spending merchandise, and because of this left firms like Halfords battling to take care of revenue forecasts.

‘It wasn’t too way back when Halfords loved one thing of a bonanza through the COVID pandemic. Client spending was rampant throughout lockdowns with tens of millions of us taking over biking for which Halfords was there to satisfy the surge in demand.

‘From one excessive to the opposite, the pendulum has now swung again, placing Halfords in a susceptible place. The corporate’s choice to shift focus towards motoring providers might have softened the blow, nevertheless solely barely.

‘Quite a few revenue warnings might be a significant concern to shareholders. And in a interval when shopper spending has dried up, the demand for bicycle services and products appears to have all however evaporated.’

Healthcare large Haleon is offloading the nicotine alternative manufacturers it sells exterior the US for £500million.

Indian pharmaceutical firm Dr Reddy’s Laboratories is taking over merchandise together with Nicotinell, Habitrol and Thrive, that are bought in 30 markets all over the world as lozenges, patches and gum for individuals who need to stop smoking.

Watches of Switzerland Group’s UK gross sales fell this yr after ‘important value will increase’ delay hard-pressed British buyers as ‘diminished shopper confidence influences discretionary spending’.

UK and Europe gross sales had been down 5 per cent within the 52 weeks ended 28 April to £846million regardless of market share beneficial properties, reflecting ‘macroeconomic situations within the UK’.

It additionally blamed a ‘minimal return of vacationer spending attributable to lack of VAT free procuring’ within the UK, the place Ecommerce revenues additionally fell 11 per cent on final yr.

Nonetheless, WOSG stated the UK market is now ‘beginning to present indicators of stabilisation’ and the corporate predicts that stress on shopper spending will ease subsequent yr.

It added that it was ‘cautiously optimistic’ about buying and selling in new fiscal yr 2025 after reporting a 40 per cent drop in its annual pretax revenue following a difficult yr for the luxurious retailer.

Boss Brian Duffy stated: ‘I’m pleased with the efficiency that our group delivered this yr in what was undoubtedly a tougher market.

‘We cemented our place as a number one worldwide luxurious watch and jewelry retailer and delivered additional market share beneficial properties in each the UK and US, pushed by our confirmed, differentiated enterprise mannequin.

‘Specifically, our US enterprise went from energy to energy, rising 11% and can quickly characterize half of Group gross sales.’

Serco Group has raised its annual revenue forecast, with the outsourcer boosted by worldwide immigration providers contracts and acquisitions.

Nonetheless, it urged warning on the potential influence of elections within the markets it operates in.

The London-listed firm has benefited from buying immigration service companies, whilst weak point in medicare providers persists.

Serco, one of many suppliers which had supported the UK authorities’s test-and-trace programme through the pandemic, expects full-year adjusted working revenue of £270million, larger than its earlier forecast of £260million.

The corporate, which supplies defence, safety, immigration, well being and transport providers for governments, nevertheless, stated it was aware of a number of elections impacting its efficiency.

The UK, France and the USA have scheduled nationwide elections within the coming months.

‘As we enter the second six months of the yr, whereas aware of a possible influence internationally from elections in 2024, we stay optimistic concerning the high quality of our pipeline of potential new work to help our medium-term development targets,’ CEO Mark Irwin stated.

Derren Nathan fairness analysis, Hargreaves Lansdown:

‘Halfords, the one-stop-shop for motorists and cyclists, has delivered full yr outcomes in step with beforehand lowered steering. Robust development in providers supplied by the group’s Autocentres was tempered by a low single digit uplift in retail operations.

‘The excessive ranges of promotional exercise did not bolster the topline thereby resulting in a cloth fall in underlying earnings.

‘Halfords is sticking to its technique of increasing the higher performing providers division, which profit from larger ranges of recurring income. This could stand it in good stead additional down the road, however short-term headwinds are nonetheless blowing robust.

‘An ideal storm of low shopper confidence and poor climate has resulted in tender buying and selling to date within the present yr. In the meantime, excessive freight prices and the rise within the nationwide minimal wage are weighing on prices. The shares are buying and selling slightly under the long-term common however for now there’s no signal of a catalyst for a re-rating.’

Deliveroo shares got a raise because it grew to become the most recent London-listed firm to be focused for takeover.

The meals supply group – dubbed ‘Floperoo’ after its disastrous inventory market float in 2021 – rose 7 per cent in early buying and selling amid reviews it has been approached by San Francisco-based rival Doordash.

Nonetheless, the discussions, which began final month, ended after a disagreement over value, in accordance with Reuters.

Halfords has warned inflation ‘stays a cloth headwind’ for the motor and biking retailer, citing a ten per cent nationwide minimal wage bump and ‘important will increase’ in sea freight charges for the reason that begin of the yr.

It got here because the retailer reported a drop in annual revenue on Thursday as footfall throughout its shops fell attributable to difficult market situations and moist climate.

The corporate posted an underlying pre-tax revenue from whole operations of £36.1million for the yr to 29 March, down from £44.2million a yr earlier and simply shy of analyst forecasts of £36.2million.

Freight charges have soared to their highest ranges exterior the pandemic period, partially attributable to disruption in Crimson Sea transport.

Halfords stated it has efficiently secured charges ‘properly under market spot charges’, however nonetheless forecasts freight prices to be £4million to £7million larger than we anticipated at the beginning of the yr.

It stated: ‘In opposition to this backdrop, we proceed to deal with optimising the platform we have now constructed, and controlling what we will. As such, we plan for proportionately fewer assets to be allotted to strategic transformation, as set out in additional element on the finish of the Strategic and Operational evaluation.

‘We don’t count on these headwinds to persist in the long run. Client value inflation is easing and our core markets are anticipated to enhance within the mid-term.

‘We stay assured that the monetary targets introduced on the April 2023 CMD are achievable assuming markets in the end recuperate as forecast, albeit it will take longer than we envisaged final yr.’