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April 12, 2016

Pegler’s market report – 12.04.16


in Insights Press Releases

As published in the Brighton Argus (12.04.16) Business on page 21 under the title Pegler’s Market Report:

Pegler's Market ReportBrighton’s iconic pier sold in £18m deal

Shares in Aim-listed Eclectic Bar Group were suspended last week after it announced that it has entered into a conditional agreement to acquire The Brighton Marine Palace and Pier Company, which owns and operates Brighton Pier. The company plans to fund the acquisition through a share placing to raise at least £8.5m, with the balance funded through £13m of debt financing from Barclays.

Retailer Marks & Spencer shrugged off a disappointing trading update as attention turned to new chief executive Steve Rowe. Shares rose despite a fall in sales during the fourth quarter. Analysts noted that the results had come in ahead of market expectations.

Shares in homewares retailer Dunelm were also stronger after it posted a 5.9pc rise in revenue during its third quarter.

Legal & General, which has significant operations in Hove, was one of the week’s stars as analysts said the insurer’s dividend growth outlook looks well underpinned and future cash flows from the annuity business alone are worth some £10bn.

Shares in Bonmarché moved in the other direction as investors took fright at its cautious outlook for the rest of the year. The company warned that full-year profits would be towards the bottom end of the £10.5m to £12m range it guided towards in December, sending its shares lower.

Flybe lost altitude after the regional airline rattled investors by warning it would take a £7m hit from the pound’s weakness against the dollar. Fuel, aircraft leases and jet maintenance are denominated in dollars so the strength of the US currency is affecting all carriers.

House prices soared 10.1pc in the year to March, fuelled by a sharp rise in the value of London flats and the tail end of the buy-to-let rush, according to Halifax. But the lender sounded the alarm, warning that this high level of growth could tail off. Industry commentators warned that worsening sentiment regarding the prospects for the UK economy and uncertainty ahead of the European referendum in June could result in some softening in the housing market over the next couple of months.

Prices of apartments in the capital have risen by 62pc since 2008, and half of sales in the capital are flats, compared with 17pc across the UK as a whole.

By David Pegler, Brighton Capital Management

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