Consumer-facing stocks were in full force today as a number of large and small caps reported earnings. Leading the pack was Next (NXT), the FTSE 100 fashion firm guided by Simon Wolfson, which put on 2% at £42.31p on the delivery of solid annual numbers showing taxable profits up 9% to £622 million. Investors bid the shares up despite evidence of recent slowing growth rates at online and catalogue business Next Directory.
At the bottom of the leaderboard was shower gel-maker McBride (MCB) which fell 13% to 120p amid a profit warning. This goes to show that not all defensive stocks are immune to demand weakness, as we discuss in detail here.
British designer brand Ted Baker (TED) shed 1.4% to £13.35p, despite strong annual numbers to 26 January and a bullish outlook statement, no doubt down to profit taking by investors. The group reported a 16.5% rise in pre-tax profits to £31.5 million, bang in line with consensus, and a 13.7% dividend hike to 26.6p. Ted Baker continues to expand internationally, having opened first stores in Japan, China and Canada last year and unveiled a second store in China since the year end.
Branded soft drinks business A.G. BARR (BAG) was in sparkling form, spiking up 8.5p to 529p on better-than-expected full year results. The company behind the IRN-BRU, Barr and Rubicon brands, whose planned merger with Britvic (BVIC) has been referred to the Competition Commission, cheered with news of 4.3% growth in profit before tax to £35 million and a 7.6% hike in the dividend to 10p.
Ceramics manufacturer and distributor Portmeirion (PMP: AIM) perked up 0.9% to 542.5p as investors warmed to news of 6.6% growth in pre-tax profits to a better-than-expected £6.8 million for calendar 2012. The £55.9 million cap generated record sales of £55.5 million last year, up 3.6% year-on-year. Closing the period with an improved net cash balance of £7.5 million (2011: £6.8 million), the Stoke-on-Trent based homewares firm raised its total dividend more than 11% to a record 21.8p, ahead of the 20.2p payout anticipated by the market. The overriding goal of the group, Portmeirion's dividend is now 48.3% higher than it was in 2008.
Strong performances were enjoyed By Portmeirion in the UK and South Korea, although Superstorm Sandy, the Presidential elections and government budget uncertainty combined to depress trading in the US, its largest market. Portmeirion, now making notable progress in India, Hungary and Norway, delivered revenue growth across all four British brands – Portmeirion, Spode, Royal Worcester and Pimpernel – last year and has already launched over 360 new products in 2013. The launch of an improved website should give online sales, up 75% last year to more than £500,000, a further boost.
Electronics distributor Premier Farnell (PFL) advanced 3.1% to 225.5p after beating market expectations with its full-year results, albeit forecasts that were downgraded by some analysts late last year. Revenues appear to be stabilising but analysts say it is too early to determine the strength of its business recovery.
The market welcomed pharmaceutical giant AstraZeneca’s (AZN) plans to revive the struggling company, sending it up 2.5% to £31.14. Management’s priorities include refocusing its research and development towards therapies to treat conditions such as respiratory, cardiovascular and oncology, with less emphasis on infection, vaccines and neuroscience. Pascal Soriot, who was appointment chief executive last year, also announced he was cutting 2,300 sales and administration jobs.
Harry Potter publisher Bloomsbury Publishing (BMY) rose 5.4% in early trade to 114p in the wake of a positive year-end trading update. The group announced it had achieved its rights and services income budget for the year and that post Christmas digital sales and print returns were also on budget.
New Britain Palm Oil (NBPO) was pulled 6.3% lower to 430p on a disappointing operational update. The £813.5 million cap warned further heavy rainfall in March has affected oil palm fruit production at its main site in West New Britain Province in Papua New Guinea.
Within the micro cap ranks, Expansys (XPS: AIM) slumped 35.5% to 0.5p on a profit warning and news the £9 million cap will launch a strategic review. The online smartphone seller and e-commerce service provider, 41.63%-owned by Dragons Den star Peter Jones, warned profits for the year to April will be 'substantially below market estimates' following disappointing second half trading. Broker N+1 Singer has more than halved its full year profit estimate to £1.5 million on the news.
A maiden dividend and a move into profit helped to push up Inspired Energy (INSE:AIM) by 8.6% to 4.75p. Having focused on high energy consumers like manufacturers, the energy broker plans to add smaller companies to its roster, particularly those in the retail sector.
London Mining (LOND:AIM) dipped 1.3% to 132.75p after publishing full-year results. The market didn't like news that expansion plans at its Marampa iron ore project in Sierra Leone will cost an extra $20 million, taking the bill to $340 million.
Airline catering group Journey (JNY) soared by 15% to 5.75p after reporting 212% higher pre-tax profit in 2012 to £1.1 million. It has resumed dividend payments after seeing a large rise in its cash position.
European local newspaper publisher Mecom (MEC) reported in-line numbers but a disappointing multiple achieved for the sale of the Polish business, announced concurrently with the finals, drove the counter down 5.3% in early trade to 85.5p. The £109 million cap sold its Polish operations for an aggregate consideration on a debt and cash-free basis of approximately €4 million.
Speciality pharmaceutical Alliance Pharma (APH) improved 1.1% to 34.62p after management increased its full-year dividend by 10p to 0.825p per share despite flat profits in the year to January. Canaccord Genuity’s Julie Simmonds expects the company to target products in France this year as well as expanding into Germany, saying: ‘We expect acquisitions to be the primary driver of the share price in 2013.’