Poundland shares plummeted on Thursday morning after it revealed its own like-for-like sales were falling and that 99p Stores’ performance had deteriorated since it agreed the £55m takeover.
Announcing a £50m share placement to help fund the deal, Poundland said like-for-likes for the 14 weeks to 20 September were 2.9% down, compared with a rise of 4.7% in the first half. It also said first half pre-tax profits would be lower than in the corresponding period last year and that 99p Stores’ financial position had weakened since its original due diligence. The shares had plunged to an all-time low of 276.2p by Thursday lunchtime - well below its 300p IPO price, and almost 35% down since its February high of 421p when the news broke of the 99p Stores deal.
Retail analyst Nick Bubb predicted: “The bookrunners for today’s equity placing in Poundland may find that demand is a bit slow, given the gloomy vibes in today’s update on 99p Stores and H1 trading”, but analysts at Jefferies were unperturbed, retaining their buy recommendation.
PureCircle revealed its intention to move from the junior market of the London Stock Exchange to the main market on Monday as the ongoing war on sugar helped fuel a rise in sales. Revenues in the year to 30 June increased 26% to $127.4m (£82.1m). Its shares were trading up 3.8% from Monday’s opening to 410p, but remain 33% down year on year.
Irn-Bru maker AG Barr’s shares were down 5.7% to a near three-year low of 530p on Tuesday after the group posted disappointing first-half numbers. First-half revenues fell 2.8% to £130.3m following an “extremely demanding” six months to 25 July, driven by mixed British weather and price deflation. The shares remained in doldrums at 527.5p on Thursday, but Investec expected growth to return in the longer term. The broker cut its forecasts and target share price from 737p to 670p but retained its ‘buy’ rating on the stock and said: “We see no longer-term competitive issues here, however, and anticipate growth resuming in the second half and into FY17.”