BUSINESS LIVE: Haleon to sell ChapStick; Workspace boss to retire; Wizz Air losses widen

London-listed stocks are in the red this morning, with shares in IG Group and Wizz Air tumbling after underwhelming results, while Elementis has jumped on report of a potential bid for the chemicals maker.

IG Group has tumbled 9.3 per cent, the most since March 2023, after the online trading platform reported a drop in first-half earnings due to softer market conditions.

Shares of St. James’s Place have also fallen 7.5 per cent after net inflows at the FTSE 100-listed wealth manager slowed in 2023 as risk appetite remained subdued.

Wizz Air is down 5.1 per cent after the budget airline reported a bigger third-quarter operating loss, as it grapples with the effects of engine inspections that have grounded parts of its fleet and the suspension of flights due to the Middle East conflict.

New Government figures showing a sharp fall in the number of new housebuilding sites breaking ground has prompted accusations against developers of constraining supply to maintain high profit margins.

Data from the Department for Levelling Up, Housing and Communities, led by Michael Gove, showed the number of sites where building work started on site was 21,300, down 68 per cent between 1 July and 30 September, compared to the same point a year ago.

Aarin Chiekrie, equity analyst, Hargreaves Lansdown:

‘Fevertree’s full-year results were anything but dull, as the group delivered a somewhat mixed performance.

‘Revenue bubbled higher thanks to successful expansion in its growing US and European markets, capturing market share in the process. But there was a small decline in UK sales – it turns out there is a cap on how much premium tonic the group can sell, and it looks like Fevertree has reached it in its home market.

‘But thanks to the wide range of products the group has on offer, Fevertree remains the clear leader in the UK mixer category.

‘Around 80% of the group’s sales are bottled in glass, and fluctuations in energy prices have wreaked havoc on profits in the past. But Fevertree’s now locked in prices on its energy and shipping contracts, meaning there should be no nasty surprises in the near term.

‘Coupled with cost-cutting initiatives elsewhere, margins look to be on the mend, helping underlying cash profits double in the second half of 2023.

‘Although this might be too little, too late as full-year underlying cash profits look set to come in at around £30mn, right at the bottom of its recently lowered £30-36mn guidance range.’

Fever-Tree Drinks has forecast annual core profit to fall short of market expectations, even as profit doubled in the second half on strong U.S. market performance, offsetting inflationary cost pressures in materials.

The company, which was founded in 2003, has been grappling with high glass costs in Britain ever since the Russia-Ukraine conflict pushed up energy costs, forcing it to initiate price increases to protect margins, while also ramp-up its glass production in the US.

The tonic maker on reported a 6 per cent rise in total revenue for the 2023 calendar event, which included a 22 per cent growth in the US, its largest market by revenue.

Halfords has reported weak December sales, dragged down by lacklustre footfall into its showrooms as inflation-weary customers pulled strings on big ticket items during the festive season.

While third-quarter sales lagged expectations, with December like-for-like sales dropping more than 15 per cent, the start of the fourth quarter returned to growth, the Worcestershire-based auto retailer said.

Chief executive Graham Stapleton: ‘In what remains a very challenging time for our customers, we are pleased to have delivered a resilient performance in Q3.

‘Against the current backdrop, our continued strategic shift towards needs-based and motoring service-related revenues has never been more relevant.

‘However, we are still seeing drivers delay essential maintenance and there is a worrying increase in potentially unsafe vehicles on the road. Recent TyreSafe data estimates that one-in-four tyres on Britain’s roads could be illegal, equating to just over 10 million tyres.’

Dr Martens revenues slumped in the third quarter as the group continues to grapple with weak wholesale demand for its pricey boots.

The company, which makes the popular clunky 1460 boots with yellow stitching commonly known as “DMs”, posted a 21 per cent drop in revenue to £267.1million.

‘Trading in the quarter was volatile and we saw a softer December in line with trends across the industry,’ the company said in a statement

Netflix shares soared as it cemented its status as the world’s largest streaming service.

In a bullish update yesterday, the US giant revealed another 13.1m subscribers signed up in the final three months of last year – the biggest rise in customers since the start of lockdowns in early 2020.

It took total customers to 260m, well ahead of rivals Amazon Prime Video and Disney Plus.

Wizz Air losses widened in the third quarter as the budget carrier grapples with capacity issues tied to engine inspections that have grounded parts of its fleet and the suspension of flights due to the Middle East conflict.

The carrier, however, maintained its fiscal 2024 net income expectations after a positive start to its fourth quarter ending March.

Boss József Váradi said:

‘At the beginning of the quarter we faced geopolitical crises in Israel and the Middle East and have responded by cancelling affected flights to protect our passengers, employees, assets and general public.

‘Despite the associated flight cancellations and redeployment of capacity at short notice, we managed operations well, delivering improved on-time performance and significantly better utilization, year-on-year.

‘While a portion of our fleet will remain grounded this year, our key markets continue to grow and evolve. We remain committed to stimulating demand in smaller markets, and have relaunched inbound operations to Chisinau, Moldova in December, while delivering additional aircraft to Kutaisi, Georgia.’

Workspace Group chief executive Graham Clemett will retire in 2024 after five years in the role and 16 years with the office space provider.

The search for his successor will be led by chairman Duncan Owen, who will spearhead a ‘formal and rigorous selection process for the new CEO’, the group said.

Clemett said: ‘The Company is in great shape and well positioned in the current market.

‘ I am confident that, with the fantastic team we have across the business, Workspace has an exciting future and will continue to go from strength to strength.’

Consumer healthcare giant Haleon has agreed to sell the ChapStick to Suave Brands for $430million in cash an $80million stake in the private equity-backed group.

Haleon said the sale of ChapStick, which generated £112million in revenues last year, will be used to help pay down debt.

Boss Brian McNamara said:

‘Today’s announcement is consistent with Haleon being proactive in managing our portfolio, and being rigorous and disciplined where there are opportunities for divestment.

‘While ChapStick is a great brand, much loved by consumers around the world, it is not a core focus for Haleon. Selling the brand allows us to simplify our business and pay down debt more quickly.

‘We’re confident the brand will continue to thrive under its new ownership.’

Billionaire hedge fund manager Bill Ackman and his Israeli-born wife Neri Oxman have agreed to buy a stake of almost 5 per cent in the Tel Aviv stock exchange.

One of the biggest investments in Israel since the outbreak of war in Gaza, the deal was part of a share sale to raise funds to invest in the exchange’s technology.

The cash call drew interest from investors in Israel, the US, Europe, and Australia, ‘reflecting a strong vote of confidence in both the Tel Aviv Stock Exchange and the Israeli economy’.