Pegler's market report - 15.03.16 - Brighton Capital Management

Pegler’s market report – 15.03.16

As published in the Brighton Argus (15.03.16) Business on page 21 under the title Pegler’s Market Report:

A focus on the retail sector

Britain’s growth rate has dropped to just 0.3% in the last three months. Although some commentators believe our economic growth rate would be higher if the official statistics fully captured all the activity in the economy – including the digital boom.

Shares in furniture giants DFS and Dunelm Group edged lower, along with kitchen manufacturer and joiner Howdens Joinery, which supplies the construction industry. Debenhams also weakened as it looked as if UK consumer spending had taken a hit.

More than 90,000 John Lewis and Waitrose staff will see their staff bonuses cut to 10% of their annual salary. The payout was cut for the third year in a row after staff were handed 11% last year, 15% the year before and 17% in 2013. The group’s results came under pressure as the supermarket price war continued to impact Waitrose, which saw operating profits fall for the full year.

Meanwhile, Tesco has benefited from a renewed focus on price promotions. J Sainsbury continues to be the only member of the big four supermarkets to show positive growth and no market share losses.

Hotel Chocolat has announced plans to float on London’s junior stock market. The luxury chocolatier, which operates 84 UK stores and cafes, some in Sussex, said that it expected to join the Aim Market in the second quarter of this year. The company plans to raise around £50m from the sale of new shares and those of existing shareholders. The money will be used to boost the luxury chocolate brand’s manufacturing capacity and fund a new website.

G4S took an additional £65m results charge on onerous UK government contracts. The multi-national security services, previously headquartered in Crawley, has warned of further losses from government contracts, as it announced it would sell off more of its business in the next two years.

A trio of blockbusters last year helped Cineworld deliver record UK box office sales of £311.9m from more than 50 million tickets. Between them, Jurassic World, Spectre and Star Wars grossed £245m at the company’s UK cinemas, taking more than double the combined total of the three biggest films of 2014. The big hits helped increase the company’s overall sales and to increase its dividend by nearly a third to 17.5p a share.