FTSE 250 movers: Burberry in fashion; Keller slides
By Frank Prenesti
Date: Thursday 14 Nov 2024
(Sharecast News) - FTSE 250 (MCX) 20,486.39 0.62%
Shares in Burberry surged on Thursday as the luxury goods brand launched a review of the business in an "urgent" effort to turnaround its struggling fortunes after slumping to a £80m half-year loss driven by plunging sales in its key Chinese market.
New chief executive Joshua Schulman said "Burberry forward" would target £40m in savings and focus on "reconnecting our brand with its original purpose", mainly by targeting the outerwear market. The news sent shares in the firm up 17% in London trade.
Revenues plunged 22% to £1.08bn with sales down 24% in mainland China as consumers in the world's second largest economy reined in spending, especially in the second quarter which say a 27% slump. Burberry made a £223m profit a year earlier. The dividend suspension announced earlier in the year was also kept in place.
Sales were also down 26% in South Korea and 2% in Japan as a 9% decline in the second quarter offset a 6% rise in the first three months of the financial year.
Burberry said with the key Christmas period ahead and an uncertain macroeconomic environment it was "too early to determine whether our second-half results will fully offset the first half adjusted operating loss".
Former Michael Kors boss Schulman took over in July after the company ousted Jonathan Akeroyd after just two years in the role. It also suspended dividend payments and issued a profits warning after weak global demand battered first-quarter sales.
"Newly minted CEO Joshua Schulman plans to tap into the brand's heritage to regain its footing in this category, before expanding into other areas. But it's a careful balance, and Mr Schulman won't want to make the same mistake as his predecessors of skewing Burberry's offering to a narrow base of luxury customers at the expense of a loyal fanbase," said Hargreaves Lansdown analyst Aarin Chiekrie.
"Back to recent performance and it was a painful read for investors. Cost cuts are underway to try and stem some of the financial bleeding, with £25mn of excess material set to be trimmed from the expense line this year. But with no full-year guidance given, it's unclear whether it can return to profit in time."
Construction firm Kier Group said on Thursday that it had made a good start to the new trading year and expects its overall performance to be second-half weighted.
Kier said its order book currently stands at roughly £10.9bn, up by £100.0m since 30 June, and stated roughly 95% of FY25 revenues have now been estimated and secured, up from 90% and providing it with "a high degree of certainty".
Petershill Partners announced the partial sale of its stake in Accel-KKR (AKKR) on Thursday, generating a nominal consideration of $282m.
The FTSE 250 company said the sale included all balance sheet investment capital in AKKR funds and a portion of management fee earnings (FRE) and performance-related earnings (PRE).
Cash payments of $196m would be received within three months, with an additional $86m due over the next year.
The carrying value of the interests sold was $253m as of 30 June, allowing Petershill to achieve a premium relative to the holding value.
It said the transaction aligned with its strategy to focus on management fee-centric earnings, and demonstrated its capacity to exit positions at favourable valuations.
Although the sale reduced Petershill's investment capital in Partner-firm funds by $155m, the company said it retained the majority of its original FRE and PRE interests in AKKR, maintaining alignment with AKKR's future growth.
The pro-forma fee-paying assets under management (AuM) were expected to decline by about $0.4bn.
Petershill said the sale was part of its broader 2024 divestment strategy, with it securing $575m from sales at a 19% premium on the carrying value of assets sold.
Keller said on Thursday that it remained on track to deliver a full-year performance in line with expectations as it announced the appointment of a new chairman, but shares in the geotechnical specialist contractor slumped as it pointed to weak activity levels in Europe.
In an update for the period ended 31 October, Keller pointed to continued "robust" delivery buoyed by some historical items and contractual claims, with a modest weighting towards the first half of 2024 as previously cited.
"Whilst the current macroeconomic environment presents both opportunities and challenges across our markets, the overall performance of the group, together with our continuing record order book and the groupwide focus on improving project execution, gives us confidence for the short and medium term," it said.
Shares in Qinetiq dipped on Thursday despite the aircraft engineering company delivering first-half results in line with expectations and announcing a new £50m buyback.
The security and defence contractor said it was extending its £100m share repurchase programme by a half as a result of "our continued focus on disciplined capital allocation".
Qinetiq saw revenues rise 7% year-on-year to £946.8m in the six months to 30 September, rising 8% on an organic basis.
WH Smith reported a jump in full-year profit and revenue on Thursday as it hailed a particularly strong performance from the UK travel business and over the summer.
In the year to the end of August, group profit before tax and non-underlying items rose 16% to £166m, while total group revenue was up 7% at £1.92bn.
Total revenue in the travel segment was up 11%, with Travel UK revenue 12% higher, North America up 9% and Rest of World 18% higher.
FTSE 250 - Risers
Burberry Group (BRBY) 868.00p 18.68%
Kier Group (KIE) 150.00p 7.91%
TI Fluid Systems (TIFS) 181.20p 6.97%
Petershill Partners (PHLL) 235.50p 6.56%
FirstGroup (FGP) 145.10p 6.07%
Pennon Group (PNN) 555.00p 5.01%
Dr. Martens (DOCS) 57.05p 4.97%
Close Brothers Group (CBG) 193.10p 4.38%
Wizz Air Holdings (WIZZ) 1,478.00p 4.16%
4Imprint Group (FOUR) 5,320.00p 3.30%
FTSE 250 - Fallers
Keller Group (KLR) 1,488.00p -9.05%
Lancashire Holdings Limited (LRE) 604.00p -8.76%
QinetiQ Group (QQ.) 435.40p -6.57%
Hochschild Mining (HOC) 202.00p -5.83%
WH Smith (SMWH) 1,242.00p -4.53%
Wood Group (John) (WG.) 51.85p -3.36%
Greencoat UK Wind (UKW) 126.50p -2.47%
Schroder Oriental Income Fund Ltd. (SOI) 266.00p -2.39%
Centamin (DI) (CEY) 138.20p -2.33%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 678.60p -1.95%
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