Frasers buys Missguided in £20m deal | travel firms fall
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5pm: London closes lower
The truncated trading week ended with a day of deals to give the markets something to think over as investors head into the long Bank Holiday weekend.
Danni Hewson AJ Bell financial analyst said: “Frasers Group’s move to snap up fast fashion casualty Missguided (more below) seemed to go down well with investors and shares remained elevated.
“It’s a fascinating move. Until now Mike Ashley’s empire has focused primarily on selling other people’s stuff; taking over Missguided will give them access to new avenues and opportunities.
“Shares in travel companies have unsurprisingly hit the skids today as investors consider how the current run of poor form will impact traveller’s decision making for the rest of the year.
“This summer was supposed to be one to remember for all the right reasons but at the moment many would-be-tourists might well be considering sticking closer to home until the dust settles.
“Staffing is clearly an issue and some of the barriers couldn’t have been anticipated but travellers don’t want excuses and they won’t accept the chaotic scenes that have been the mark of those big getaway periods so far.”
The FTSE 100 closed on a low note, down 74.71 points (0.98%) at 7,532.95.
GSK closed down 1.6% after submitting to the UK Financial Conduct Authority its plan for the demerger of its consumer healthcare arm and its listing in London and New York as Haleon.
In the FTSE 250, Dr Martens shot up 20%, after the bootmaker posted annual earnings ahead of market expectations and proposed a dividend of 5.5p.
Capricorn Energy closed 1.1% higher after it agreed to an all-share merger with fellow FTSE 250 energy firm Tullow Oil (down 2%). Full story here
9am: Frasers swoop, big oil deal dominate market news
After an initial rise, the FTSE 100 was trading 27.54 points lower at 7,580.12.
AJ Bell investment director Russ Mould, says: “By the time investors have returned after the festivities they could be facing a big hangover depending on the turn Wall Street takes over the next few days and the latest US jobs reading due on Friday. Inflationary concerns look set to continue to dominate the market mood.”
On Frasers swoop for the collapsed Missguided chain (more below), he says: “Time will tell if the name of the acquisition will prove prophetic. Though Ashley, for all his detractors, has a way of making the brands he has snared in the past work.
“As the shakeout in the retail sector continues he may have further opportunities to snap up assets on the cheap.”
Regarding the big oil deal (more below), he adds: “A merger of equals between oil and gas firms Capricorn Energy and Tullow Oil reflects how far both have fallen since their glory days – when they were both propelled by exploration success to the ranks of the FTSE 100.
“Even as a combined entity they are a long way short of that today but given Tullow’s very existence seemed under threat at one stage and Capricorn was hamstrung by a dispute with India over tax, shareholders in both companies will hope the tie-up can lay the foundations for renewed growth.
“The deal takes place against the backdrop of a big fall in the oil price amid speculation OPEC might end its affiliation with Russia as a precursor to increasing production.”
7am: Frasers acquires Missguided
Frasers Group has acquired the online women’s fashion retailer, Missguided out of administration for £20 million.
Following completion, the business will be operated by the administrator under a transitional agreement for about eight weeks. It is then the intention that Missguided will operate as a standalone business within the group.
Michael Murray, chief executive of Frasers Group, said Missguided “will benefit from the strength and scale of FG’s platform and our operational excellence.
“Missguided’s digital-first approach to the latest trends in women’s fashion will bring additional expertise to the wider Frasers Group.”
7am: Wood sells built environment business
John Wood Group has sold its Built Environment Consulting business to WSP Global for gross proceeds of approximately $1.9 billion.
7am: Oil merger
Tullow Oil and Capricorn Energy have announced the terms of a recommended $827m (£657m) all-share merger.
7am: Parsley Box orders fall, but losses reduced
Scottish ready meals company Parsley Box Group says it has reduced its losses, but orders have fallen and sales will be below expectations.
7am: Dr Martens surges
Dr Martens said annual pre-tax profits surged 207% in the year ended 31 March, driven by a “very strong performance” in the Americas and Europe, the Middle East and Africa.
PTP came in at £214.3m, while adjusted pre-tax profits were 43% higher, and both revenue and underlying earnings grew 18% to £908.3m and £263.0m, respectively.
7am: New Pets at Home CEO
Pets at Home Group has appointed Lyssa McGowan as group CEO with effect from 1 June. She was appointed to the board as CEO designate on 25 April.
Lyssa succeeds Peter Pritchard, who after eleven years at Pets at Home announced his intention in November 2021 to step down from his role, and has remained with the business to ensure a seamless transition. Peter resigned as a director of the Company on 31 May 2022.
Oil prices gained slightly early today after European Union leaders agreed to a partial and phased ban on Russian oil and as China ended its COVID-19 lockdown in Shanghai.
Brent crude for August delivery was up 0.2%, at $115.88 a barrel at 0338 GMT.
In China, Shanghai’s strict COVID-19 lockdown ended on Wednesday after two months, prompting expectations of firmer fuel demand from the country.
Further turbulence on Wall Street saw the Dow Jones Industrial Average fall 0.7%, the S&P 500 dip 0.6% and the Nasdaq Composite ease 0.4%.
The Dow and the S&P 500 finished the month little changed, supported by a major rally the week prior. The Nasdaq lost about 2.1% on the month.
Tuesday’s market action underscored fears that high inflation is weighing on economic growth.
In Asia this morning, Japan’s Nikkei rose 0.69%. Hong Kong’s Hang Seng remained on the back foot, down 1.13%. The Shanghai Composite meanwhile dipped 0.77% despite the reopening of the city.