Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Compass Group
There’s a flurry of notes from Compass Group LON:CPG this morning, led by their half year results but augmented by news of a fundraiser. Revenues for the period were close on unchanged as the company benefited from five months of largely unencumbered trading, but income fell by 20% in March and more than 45% in April. Arguably what’s of more interest however is news that the company is undertaking two fundraising rounds – one without pre-emption rights, with a second for retail investors through PrimaryBid.com. The company notes that accelerated institutional book builds minimise cost, complete quicker and make better use of management time, but acknowledges that running a public offer at the same time underlines the value it places on retail owners. This side of the raise is limited to EUR8m but progress here will be closely followed.
Topps Tiles
Topps Tiles LON:TPT have published interim results this morning, with the six month period to March 28th – so the period largely ahead of the UK’s COVID-19 lockdown – showing the business already struggling amidst a challenging trading environment. Revenues declined 3.7%, margins were eroded and a £5m profit for the period a year earlier morphed into a £4m loss. The company’s store network was fully closed for a month and is now coming back on stream gradually, with an expectation of full reopening by the end of June. The company believes it has sufficient headroom to ride this storm out and perhaps with holidays on hold this summer, consumers will be ready to spend on bathroom and kitchen refurbishment projects instead.
Imperial Brands
Imperial Brands LON:IMB has also published half year number today. The stand out figure in here is the sharp decline in ‘NGP’ revenue – vaping products – after the company looked to rebase its exposure. Stockpiling by retailers in the early stages of the COVID-19 crisis provided a modest lift to revenues, although the public health emergency is expected to hit harder on the second half figures. Less affluent consumers and the reduction of the duty-free travel market are both cited here. EPS is down by around 10% and a decision has been taken to rebase dividends to accelerate debt repayments.
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