BUSINESS LIVE: Chapel Down seeks AIM listing; OnTheMarket takeover row; Taylor Wimpey ups guidance

Mark Crouch, analyst at eToro:

‘Traditionally, WHSmith may have been known for its high street stores but these days, its travel business is by far the most important division within the group.

‘Those stores you see in train stations and airports, which were hammered during the pandemic but have since recovered strongly, now account for a whopping 74% of group revenue and 79% of profit.

‘The retailer plans to open a further 110 new travel stores, 100 of which will be delivered this financial year, which means we can probably expect a significant leap in travel revenue next year also.

‘That’s a good thing for the group, given the stagnant performance of its high street arm, but it does leave it overexposed to a slowdown in the global travel sector.’

Derren Nathan, head of equity research, Hargreaves Lansdown:

‘Astrazeneca has put its best foot forward today following investor disappointment with Dato DXd data earlier in the year. Over the third quarter, oncology sales were up 17% despite the non-recurrence of milestone payments on Lynparza.

‘And there was were an eye-catching performance from Farxiga for Chronic Kidney Disease, which grew quarterly sales by 41% to $1.6bn now representing over 10% of total revenue.

‘The market should take some reassurance from the strong commercial and clinical progress being made. Astra has an outstanding track record of delivering novel therapies and its not standing still. It’s made two further deals this month.

‘Ecogene is likely to grab the most attention given the markets obsession with GLP-1 obesity treatments. The idea of a magic pill for weight loss, as opposed to the current injectable options in the class, clearly has its commercial attractions. If successful, then the potential $1.8bn consideration may well be worth it.

‘But given it’s still in phase 1, there is a long path to follow. Meanwhile, the deal with Cellectis to develop up to 10 novel cell and gene therapy candidate products would seem a natural fit with Astra’s impressive portfolio.’

Chapel Down has unveiled plans to move its share listing to the Alternative Investment Market (AIM) after enjoying a record harvest this year.

The Kent-based winemaker’s shares are currently traded on the Aquis Exchange and the group hopes a move to AIM will enable it to attract a wider pool of investors and improve liquidity over time.

The group plans to plan to double the size of its business between 2021 and 2026, in part, by ‘a re-focus of the business on wine’, in particular sparkling wine, and investment in consumer and customer marketing.

The FTSE 100 is trading lower this morning, dragged by a drop in shares of Flutter after a dour forecast, as investors await comments from Federal Reserve Chair Jerome Powell to gauge the path for global interest rates.

Flutter has slumped 9 per cent, dragging the travel and leisure index to over a week’s low, after the online betting company said it expects full-year earnings, excluding the nascent US market, at the bottom of its previously forecast range.

AstraZeneca is among the top gainers on FTSE 100, jumping 1.8 per cent after the drugmaker raised its annual core profit outlook, buoyed by strong demand for its oncology and rare blood disorder drugs.

Taylor Wimpey is up 2 per cent after the homebuilder forecast annual operating profit at the top end of its previous outlook range.

The price of a barrel of oil crashed below $80 for the first time in nearly four months last night.

On another day of turmoil on global commodity markets, Brent crude fell as low as $79.20 having been trading at close to $97 in late September.

Discount retailer B&M has raised full-year profit guidance after reporting a 16.1 per cnet rise in first half core earnings, with the group flagging strong trading momentum.

B&M now expects 2023/24 adjusted earnings before nasties of £620million to £630million pounds, up from £573million last year.

Adjusted EBITDA for its first half was £269million, with revenue up 10.4 per cent to £2.55billion as B&M’s products and prices chimed with consumers in an ongoing cost of living crisis.

‘I am delighted that many of our existing shareholders have been with us since our IPO and continue to see our long-term growth potential.

‘With our new store number guidance (of not less than 1,200 B&M UK stores) and continued LFL growth, we have the runway to at least double our size in the UK in the medium term, while France also offers sizeable long-term potential.’

WH Smith has posted a full-year profit slightly above analysts’ expectations, helped by increased footfall at its stores in transit locations as leisure and business travel rebounded from pandemic lows.

The group posted a headline profit before tax of £143million for the year to 31 August, up 96 per cent from last year, and just ahead of the £142.9million forecast by analysts.

‘This has been another year of significant progress for the Group. Our Travel divisions have all seen strong growth with Travel UK total revenue up 36%, North America up 32% and ROW up 99%, and I am very pleased with the start to the new financial year.

‘Our global travel business is growing in all our key markets. It is highly scalable with multiple medium and long term growth opportunities and we are seeing great results from sharing our expertise and innovation across our different geographies.

‘Our North American business is benefitting from our forensic approach to space management which has always been a key feature of our UK Travel operations. In the same way, the ability of our North American business to provide bespoke retail formats is now being successfully harnessed outside of the US.

‘WHSmith is a highly cash generative business. In 2024, we expect to invest a further £140m which will drive further growth and at the same time we expect our leverage to fall within our target range.

‘These results would not be possible without the extraordinary efforts of our entire team across the globe, and I would like to offer my sincere thanks for their support.’

The UK’s largest chip manufacturing site has been bought by a US firm after its Chinese owner was forced to sell amid a national security row.

Newport Wafer Fab, which makes semiconductors used in cars and smartphones, has been acquired by Seattle-based Vishay Intertechnology in a deal worth £144million.

Oli Creasey, property equity analyst at Quilter Cheviot:

‘Taylor Wimpey released a Q3 trading statement this morning, which paints a picture of resilience in a challenging market.

“The guidance suggests that the company has been able to maintain profit margins at the same level as in H1 2022 (operating profit margin was 1.4%), which is some way below the 20.9% reported in 2022, but still healthy, particularly in the wider context of higher interest rates and their impact on the UK property market.

‘Today’s statement contained no direct information on house prices, but management has pointed to ‘optimised prices’ as a reason for the improved guidance. We estimate that this means similar prices to those achieved in H1 2023, which had actually increased +6.7% YoY, albeit partly driven by a change in mix.

‘Management also noted that cost discipline was a key factor in maintaining profitability, and note that the company has not been buying replacement land plots at the same rate as sales – in the past 12 months, the size of TW’s landbank has shrunk by c.9,000 plots (-4k in the short term landbank, -5k in strategic pipeline). However, with 82k plots still in the short term landbank alone (equivalent to eight years of volume at 2023 rates, or six years at 2022 rates), the company has less need to buy land compared to some peers.

‘Management has noted that the current market backdrop remains uncertain, but are confident in the medium to long term fundamentals of the UK residential property market.’

Taylor Wimpey has warned of ‘significant market uncertainty’, as affordability woes from high mortgage rates dent demand.

However, the homebuilder forecast annual operating profit at the top end of its previous outlook range.

The FTSE 100 builder, which had already forecast operating profits to halve this fiscal year, now expects full-year earnings, including joint ventures, at the top end of its outlook range of £440million to £470million.

This is ahead of market forecasts of £456million pounds.

An OnTheMarket investor has urged fellow shareholders to block US-based Co-Star Group’s planned takeover of the London-listed firm.

Writing to ‘shareholders, employees and all UK estate agents’, Brett Stone said the takeover ‘is not in the UK’s national interest’.

He also argues the deal undervalues the group and is ‘likely to result in significantly higher total portal costs for UK estate agents, more than 10,000 of which are small businesses’.

British wine maker Chapel Down is seeking a new listing on the AIM market as part of its ‘ambitious growth plan’, with the group hoping to boost its shares’ liquidity and encourage a wider pool of investors.

Boss Andrew Carter told investors:

‘We are pleased to announce Chapel Down’s plan to admit its shares to trading on AIM, a move which reflects the maturity of the business and the ambitious growth plan we are committed to delivering in the years ahead.

‘Chapel Down has greatly benefitted from its AQSE listing over the past 20 years as it has grown from a start-up in an embryonic industry into England’s leading and largest winemaker with a consistent track record of profitable growth.

‘We believe that a move to AIM will attract a wider pool of investors to participate in Chapel Down’s growth as the leading producer in the world’s newest global wine region and as we continue to pursue our well progressed and fully funded plan to double the size of the business in the five years to 2026.

‘Today’s confirmation of a record 2023 harvest, with tonnage 86% higher than 2022 and 75% higher than the previous record posted in 2018, is creating great excitement within our business, and will underpin our strategic ambition to double the size of the business by 2026 as we continue to build Chapel Down’s position as England’s number one and most celebrated winemaker.’

Mark Crouch, analyst at eToro:

‘Traditionally, WHSmith may have been known for its high street stores but these days, its travel business is by far the most important division within the group.

‘Those stores you see in train stations and airports, which were hammered during the pandemic but have since recovered strongly, now account for a whopping 74% of group revenue and 79% of profit.

‘The retailer plans to open a further 110 new travel stores, 100 of which will be delivered this financial year, which means we can probably expect a significant leap in travel revenue next year also.

‘That’s a good thing for the group, given the stagnant performance of its high street arm, but it does leave it overexposed to a slowdown in the global travel sector.’

Derren Nathan, head of equity research, Hargreaves Lansdown:

‘Astrazeneca has put its best foot forward today following investor disappointment with Dato DXd data earlier in the year. Over the third quarter, oncology sales were up 17% despite the non-recurrence of milestone payments on Lynparza.

‘And there was were an eye-catching performance from Farxiga for Chronic Kidney Disease, which grew quarterly sales by 41% to $1.6bn now representing over 10% of total revenue.

‘The market should take some reassurance from the strong commercial and clinical progress being made. Astra has an outstanding track record of delivering novel therapies and its not standing still. It’s made two further deals this month.

‘Ecogene is likely to grab the most attention given the markets obsession with GLP-1 obesity treatments. The idea of a magic pill for weight loss, as opposed to the current injectable options in the class, clearly has its commercial attractions. If successful, then the potential $1.8bn consideration may well be worth it.

‘But given it’s still in phase 1, there is a long path to follow. Meanwhile, the deal with Cellectis to develop up to 10 novel cell and gene therapy candidate products would seem a natural fit with Astra’s impressive portfolio.’

Chapel Down has unveiled plans to move its share listing to the Alternative Investment Market (AIM) after enjoying a record harvest this year.

The Kent-based winemaker’s shares are currently traded on the Aquis Exchange and the group hopes a move to AIM will enable it to attract a wider pool of investors and improve liquidity over time.

The group plans to plan to double the size of its business between 2021 and 2026, in part, by ‘a re-focus of the business on wine’, in particular sparkling wine, and investment in consumer and customer marketing.

The FTSE 100 is trading lower this morning, dragged by a drop in shares of Flutter after a dour forecast, as investors await comments from Federal Reserve Chair Jerome Powell to gauge the path for global interest rates.

Flutter has slumped 9 per cent, dragging the travel and leisure index to over a week’s low, after the online betting company said it expects full-year earnings, excluding the nascent US market, at the bottom of its previously forecast range.

AstraZeneca is among the top gainers on FTSE 100, jumping 1.8 per cent after the drugmaker raised its annual core profit outlook, buoyed by strong demand for its oncology and rare blood disorder drugs.

Taylor Wimpey is up 2 per cent after the homebuilder forecast annual operating profit at the top end of its previous outlook range.

The price of a barrel of oil crashed below $80 for the first time in nearly four months last night.

On another day of turmoil on global commodity markets, Brent crude fell as low as $79.20 having been trading at close to $97 in late September.

Discount retailer B&M has raised full-year profit guidance after reporting a 16.1 per cnet rise in first half core earnings, with the group flagging strong trading momentum.

B&M now expects 2023/24 adjusted earnings before nasties of £620million to £630million pounds, up from £573million last year.

Adjusted EBITDA for its first half was £269million, with revenue up 10.4 per cent to £2.55billion as B&M’s products and prices chimed with consumers in an ongoing cost of living crisis.

‘I am delighted that many of our existing shareholders have been with us since our IPO and continue to see our long-term growth potential.

‘With our new store number guidance (of not less than 1,200 B&M UK stores) and continued LFL growth, we have the runway to at least double our size in the UK in the medium term, while France also offers sizeable long-term potential.’

WH Smith has posted a full-year profit slightly above analysts’ expectations, helped by increased footfall at its stores in transit locations as leisure and business travel rebounded from pandemic lows.

The group posted a headline profit before tax of £143million for the year to 31 August, up 96 per cent from last year, and just ahead of the £142.9million forecast by analysts.

‘This has been another year of significant progress for the Group. Our Travel divisions have all seen strong growth with Travel UK total revenue up 36%, North America up 32% and ROW up 99%, and I am very pleased with the start to the new financial year.

‘Our global travel business is growing in all our key markets. It is highly scalable with multiple medium and long term growth opportunities and we are seeing great results from sharing our expertise and innovation across our different geographies.

‘Our North American business is benefitting from our forensic approach to space management which has always been a key feature of our UK Travel operations. In the same way, the ability of our North American business to provide bespoke retail formats is now being successfully harnessed outside of the US.

‘WHSmith is a highly cash generative business. In 2024, we expect to invest a further £140m which will drive further growth and at the same time we expect our leverage to fall within our target range.

‘These results would not be possible without the extraordinary efforts of our entire team across the globe, and I would like to offer my sincere thanks for their support.’

The UK’s largest chip manufacturing site has been bought by a US firm after its Chinese owner was forced to sell amid a national security row.

Newport Wafer Fab, which makes semiconductors used in cars and smartphones, has been acquired by Seattle-based Vishay Intertechnology in a deal worth £144million.

Oli Creasey, property equity analyst at Quilter Cheviot:

‘Taylor Wimpey released a Q3 trading statement this morning, which paints a picture of resilience in a challenging market.

“The guidance suggests that the company has been able to maintain profit margins at the same level as in H1 2022 (operating profit margin was 1.4%), which is some way below the 20.9% reported in 2022, but still healthy, particularly in the wider context of higher interest rates and their impact on the UK property market.

‘Today’s statement contained no direct information on house prices, but management has pointed to ‘optimised prices’ as a reason for the improved guidance. We estimate that this means similar prices to those achieved in H1 2023, which had actually increased +6.7% YoY, albeit partly driven by a change in mix.

‘Management also noted that cost discipline was a key factor in maintaining profitability, and note that the company has not been buying replacement land plots at the same rate as sales – in the past 12 months, the size of TW’s landbank has shrunk by c.9,000 plots (-4k in the short term landbank, -5k in strategic pipeline). However, with 82k plots still in the short term landbank alone (equivalent to eight years of volume at 2023 rates, or six years at 2022 rates), the company has less need to buy land compared to some peers.

‘Management has noted that the current market backdrop remains uncertain, but are confident in the medium to long term fundamentals of the UK residential property market.’

Taylor Wimpey has warned of ‘significant market uncertainty’, as affordability woes from high mortgage rates dent demand.

However, the homebuilder forecast annual operating profit at the top end of its previous outlook range.

The FTSE 100 builder, which had already forecast operating profits to halve this fiscal year, now expects full-year earnings, including joint ventures, at the top end of its outlook range of £440million to £470million.

This is ahead of market forecasts of £456million pounds.

An OnTheMarket investor has urged fellow shareholders to block US-based Co-Star Group’s planned takeover of the London-listed firm.

Writing to ‘shareholders, employees and all UK estate agents’, Brett Stone said the takeover ‘is not in the UK’s national interest’.

He also argues the deal undervalues the group and is ‘likely to result in significantly higher total portal costs for UK estate agents, more than 10,000 of which are small businesses’.

British wine maker Chapel Down is seeking a new listing on the AIM market as part of its ‘ambitious growth plan’, with the group hoping to boost its shares’ liquidity and encourage a wider pool of investors.

Boss Andrew Carter told investors:

‘We are pleased to announce Chapel Down’s plan to admit its shares to trading on AIM, a move which reflects the maturity of the business and the ambitious growth plan we are committed to delivering in the years ahead.

‘Chapel Down has greatly benefitted from its AQSE listing over the past 20 years as it has grown from a start-up in an embryonic industry into England’s leading and largest winemaker with a consistent track record of profitable growth.

‘We believe that a move to AIM will attract a wider pool of investors to participate in Chapel Down’s growth as the leading producer in the world’s newest global wine region and as we continue to pursue our well progressed and fully funded plan to double the size of the business in the five years to 2026.

‘Today’s confirmation of a record 2023 harvest, with tonnage 86% higher than 2022 and 75% higher than the previous record posted in 2018, is creating great excitement within our business, and will underpin our strategic ambition to double the size of the business by 2026 as we continue to build Chapel Down’s position as England’s number one and most celebrated winemaker.’