European shares are failing to rebound on Monday following a torrid week, as rising US yields, trade wars and ongoing Brexit-related uncertainties triggered a global equity markets correction. The ‘risk-off’ mood is prevailing with London’s FTSE 100 and FTSE 250 shedding 12.1 points and 145.8 points respectively to trade at 6,983.8 and 18,828.
Convenience foods giant Greencore (GNC) fattens up 4.6p to 212.10p as investors welcome plans to pay a special dividend of 72p after selling its entire US business to American contract food maker Hearthside for £817m. Besides enabling Greencore to return £509m to shareholders, the sale of the troubled US business bolsters the balance sheet – up to £293m will be used to reduce debt - and sharpens the food group’s focus on its core UK market.
Fashion brand Superdry (SDRY) slumps 21% to 801p on a warning full year profit will fall short of expectations due to unseasonably hot weather in the UK, Continental Europe and on the East Coast of the USA as well as foreign exchange costs. Balmy weather conditions have hurt demand for Superdry’s sweats and jackets and combined with the struggles of department store partners, will swipe some £10m from this year’s profits.
Also in poor health is medical devices maker Convatec (CTEC), which crashes 29.6% lower to 157.75p after downgrading full year organic sales growth and adjusted operating margin expectations. Convatec blames a change in inventory policy by the biggest customer in its Infusion Devices business, as well as tough market conditions in specific advanced wound care markets, for the profit warning. Also sapping sentiment is the surprise retirement of the Reading-based group’s CEO Paul Moraviec, who ceases to be a director with ‘immediate effect’.
Purplebricks (PURP:AIM) perks up 5.2p or 2.4% to 223.2p on the formation of a joint venture with Axel Springer to enter the German market and jointly take a 25.9% stake in the country’s leading online estate Homeday.
Purplebricks also assures it is trading in line with expectations for the full year. CEO Michael Bruce says ‘our investment in Homeday secures for us a strong foothold in Europe’s second largest residential real estate market. This is a good opportunity for Purplebricks, allowing us to partner early with a dynamic and committed management team, while remaining focused on realising the opportunity in our existing markets.'
Lower down the market cap ranks, cut-price footwear seller Shoe Zone (SHOE:AIM) skips 12.8% higher to 185.5p on the news full year pre-tax profit will beat expectations and come in north of £11m. Shoe Zone traded particularly well in the second half of the year to 29 September, the new financial year has started well and given strong cash conversion and a £15.7m net cash pile, expects to pay another special dividend in March.
Investors also have an appetite for Cake Box (CBOX:AIM), bid up 6.2% to 173.5p as the fresh cream cakes seller says full year profits will be ahead of expectations, prompting Shore Capital to upgrade its pre-tax profit forecast by 7.5% to £4m. CEO Sukh Chamdal insists his charge ‘delivered a strong trading performance for the period, during which we successfully completed our IPO in June. We continue to build momentum with a record number of new franchise store openings, and an increase in the average sales per store.'